BACL Financials_Areport mono - Brisbane Airport Corporation

Transcription

evolution...
facts/futures
Brisbane
Airport
Corporation
Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
From the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Questions of leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
2
3
4
6
BACL ...evolution
Corporate structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Financial control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Inside the organisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Commercial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Planning for the future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
A master plan to 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
A strategy for environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
The people asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Professionals in the right place at the right time . . . . . . . . . . . . . . . . . . . . 14
Commitment from the team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
The marketplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Airline activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Fast facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Statutory information and financial section . . . . back section/attached
1
Annual Report 1997/98
Communications objective:
This publication is intended to offer Brisbane Airport Corporation Ltd’s view of its first
year following privatisation of the airport. Covering the period from January 9, 1997
to June 30, 1998, it exceeds legal requirements in order to foster communication and
openness between BACL and its stakeholders.
Contacting BACL:
Banksia Place (off Airport Drive)
Eagle Farm Qld 4009
PO Box 61 Hamilton Central
Queensland 4007 AUSTRALIA
Telephone +61 7 3406 3000
Fax +61 7 3406 3111
Email: brisbane.airport@bne.com.au
Internet: http://www.bne.com.au
A.C.N. 076 870 650
Foreword
From the Chairman
Our first year as a privatised airport – itself an historic event for Australia – has been
completed against a backdrop of great upheaval far beyond our shores.
Few could have predicted the economic changes which have affected a number of our
trading partners in Asia. Yet this Annual Report is a story of success. Of cultural change.
Of flexibility and enterprise.
When Brisbane Airport Corporation Ltd (BACL) set out to do business, backed by
expertise, experience and financial probity, it did so for the long term. We have put
foundations in place on which can be built economic growth for future generations.
We do this with care for the community we serve and the environment that surrounds us, since
the airport is managed in Brisbane with decisions taken by local people. BACL, as an
integrated element of the region, seeks an active, open partnership with every stakeholder.
While we will, no doubt, always be subject to political comment, stunting the growth of this
great enterprise will win no friends. The fact of the matter is that Queensland needs the future
Brisbane Airport can provide.
2
Now we are poised for the future. It is a future not entirely identical to the one we believed we
faced. As Asian markets recover, BACL looks further afield for customers – to booming North
America, to the growing long-haul market in Europe.
BACL ...evolution
Year One has been significant for the communication of our ambitions and the open discussion
which has taken place around them. Myths have grown, most have been exploded and people
are generally much better informed.
In air transport, we see the long-predicted airline alliances taking shape, raising the
possibility of new connections ‘hubbing’ through Brisbane. A worldwide movement
toward Open Skies policies will encourage new entrants to the Australian air transport
marketplace. Rapid progress to Just-In-Time industrial thinking is encouraging
growth in air cargo world-wide.
And the consumer is becoming more quality focussed when travelling.
Better retailing, dining and access to airport facilities will gain both
loyalty and income.
“Poised for
the future”
In publishing this Annual Report, we have acted as a
listed company, a deliberate policy which we hope
will help point you to our future as we evolve from
a city airport to an Airport City.
One day, this will be regarded as an
historic document.
Barry Thornton
The Board
Barry Thornton
FCA, FAIM, FAICD, FCIS
(Chairman)
Barry chairs GWA International Ltd., which he joined in 1974 as
finance director and was appointed Chief Executive in 1981 and
Executive Chairman in 1986. He is a qualified accountant and
was previously a partner with accounting firm Thompson Douglas.
Other current directorships are: Chairman, Ports Corporation of
Queensland; Director, Suncorp-Metway Ltd; Chairman,
South Pacific Equities Ltd; Director, Stockland Trust Group;
Chairman, Brisbane Advisory Board of the Salvation Army;
Trustee, Leukemia Foundation. Barry is a member of the BACL
Board’s Finance, Audit & Risk Management Committee.
Koen Rooijmans (Managing Director & CEO)
(See The People Asset section, page 14)
B.Com, CPA, FAIM, FAICD
BA, LLB, LLM, FAICD
Elizabeth is admitted as a Solicitor in Queensland, New South Wales, Victoria, Northern Territory, Australian Capital Territory and
the High Court and spent some 25 years as a solicitor and later partner in a national legal practice. She is currently a professional
company director and her current directorships are: Chairman, Port of Brisbane Corporation; Deputy Chairman, Queensland
Treasury Corporation; Director, Telstra Corporation Ltd; Director, David Jones Ltd; Director, Australian National Industries Ltd;
Director, GPT Management Ltd; Director, The Foundation for Development Cooperation; Councillor, National Competition Council;
Member, Australian Greenhouse Office Experts Group on Emissions Trading.
Colin Ryan
B.Com, LLB, FCA, FAICD
Colin was managing partner of Arthur Andersen in Queensland to 1987. His current board positions are: Chairman and
Principal, Rycorp Properties Pty Ltd; Chairman, Royal Children’s Hospital District Health Council; Deputy Chairman, Port of Brisbane
Corporation. Colin is Chairman of the BACL Board’s Finance, Audit & Risk Management Committee.
Jim Soorley
BA, MA
Jim is currently serving his third term as Lord Mayor of Brisbane, Australia’s largest local government authority. Prior to being Lord
Mayor, Jim was a management consultant, advising prominent businesses in both Australia and the United States on training,
recruitment and organisation design.
John Ward
BSc, FAIM, FAICD, FAMI, FCIT
John is the General Manager Commercial of News Limited, a position with a focus on technology and communications. From 1994
until 1996, he was seconded from News Limited to the Australian Air Academy – a joint venture between Ansett Australia and British
Aerospace – as Chief Executive. Prior to joining News Limited in mid 1994 Mr Ward was Managing Director and Chief Executive of
Qantas Airways Limited, a company he had served in for 25 years. He is an Honorary Life Governor of the Research Foundation of
Information Technology, a Member of the NSW Independent Pricing and Regulatory Tribunal, and a Director of Tourism NSW.
Pieter Verboom
PhD
Pieter studied econometrics at the Erasmus University of Rotterdam and was employed as assistant professor in the information
technology department. From 1983 he held several management positions at Philips of which seven years were spent abroad as
CFO/vice chairman of the management of Argentina, Hong Kong/China and the Far East. He joined Amsterdam Airport Schiphol
in September 1997 as executive vice president and CFO and is a member of the board of management. He also serves the
boards of several subsidiary and minority-held companies in the Netherlands and abroad of the Amsterdam Airport Schiphol
parent company.
Irene Lee
BA
Since November 1993, Irene has been Head of Corporate Finance, Institutional Banking, Commonwealth Bank of Australia and
has held global responsibility for project finance, structured finance, syndications, infrastructure, equity and property. She held
senior positions with Citibank/Citicorp Investment Bank in New York, London and Sydney. Other current directorships include:
Director, National Electricity Code Administration; Director, Australian Assets Corporation Ltd; Director, Beyond International Ltd.
(Resigned August 29, 1998)
Elizabeth Nosworthy
3
A professional company director, John has over 20 years experience as a Chief Executive, most recently with Grainco Ltd and
formerly with QDL Pharmaceuticals, General Travel Group, Thomas Cook Travel and Financial Services and Safcol Holdings. John’s
other current directorships are Chairman, Micromedical Industries Limited; Chairman/Principal, J. C. Massey & Associates Pty Ltd;
Chairman, Michels Warren Pty Ltd (Media/Communications); Director, Northstate Capital Limited; Councillor, Australian Institute of
Company Directors; Governor, American Chamber of Commerce in Australia; Chairman Trustee Relations Committee, Committee
for the Economic Development of Australia.
BACL ...evolution
John Massey
Questions
of
leadership
Managing Director and Chief Executive Officer
of Brisbane Airport Corporation Ltd Koen
Rooijmans offers his view of 1997/98.
At the end of your first year, how do you feel about
BACL’s progress?
BACL ...evolution
4
I am truly astonished that we have come so far in such a short time. Just a year ago, Brisbane
Airport was a good quality city airport and part of the rather formal Federal Government
structure which, as could be expected, had bureaucratic charateristics. Now we are a people
organisation, committed to enterprise, heading towards our vision of turning Brisbane’s city
aiport into an Airport City.
Our most spectacular progress has been in cultural change. We have assumed a leadership
role by creating an economic engine that will impact trade far beyond our own region.
BACL’s people and large sections of the surrounding community have begun to act together
with trust and vision. Brisbane Airport is no longer a Federal island. We are a professional,
quality-minded partner in economic development. A world class company.
Do others share your view?
Our central values include openness, trustworthiness and honesty. Where changes have been
made or new proposals offered, we have given as much information and explanation as
possible. In doing so, we hoped we would gain support. It seems we have.
Airlines have recognised our willingness to listen, responding to our ideas with vigour and
understanding. Key partners such as retailers have seen our commitment to fair contracts and
responded with new investment. Legislative and community organisations have discovered
our determination to be responsible good neighbours and responded by involving us in their
own thinking. Our team has faced up to our challenge of empowerment and reponded with
enhanced productivity. BACL is in the business of achieving Win-Win positions with its
stakeholders. We now see this position starting to be understood and appreciated.
What changes have you made to your aims since you began?
Very few. Our aim of becoming an economic engine for Queensland is central. Naturally, a
new economic environment has emerged in Asia-Pacific. This has meant some difficult choices
and a tempering of some of our ambitions. On the other hand, BACL is here for the duration.
Our long-term investment and vision is unchanged by the short-term financial expediency which
has become necessary.
Our first draft Master Plan was created and published during the year. This sets out many of
the details for Brisbane Airport’s future. This is not, of course, a final development document
– we must still observe due processes as the Plan is put into effect – but it showed our intentions
very clearly. Once published, the Master Plan entered a consultation phase and was adapted
to include the views of stakeholders, including the wider community.
Are you happy with your financial results?
Given the changes which have occurred over the past year, we certainly are. An airport must
take a long-term view, rather than the short-term required of many other sections of the air and
travel industry. We are happy that we have controlled costs and overhauled our income stream
in readiness for the future.
BACL has adopted the “user pays” principle, much of which was already enshrined in the
thinking of the previous Federal owners – and which we agree creates a level playing field
for all airport users. We have taken up their fuel throughput fee concept and the ground
facilities fee proposal also became part of our consultation process with users during the year.
We hope these will assist us in creating sufficient cashflow for future investment.
Brisbane Airport also operates in a highly regulated field. We must meet Australian Competition
and Consumer Commission (ACCC) requirements, for example, and support its wish to see
a level playing field among businesses at the airport. This does, of course, impact our revenue
creation but in a way which assists growth and the wider community. As a new enterprise,
we seek to establish a relationship of mutual understanding and respect with the regulators.
What’s more, our strengthening role over the next 20 years will, we hope, set the pace for
the rest of South East Queensland’s economy. Independent forecasts show a tripling of jobs
provided through airport activities over that 20 year period.
How’s your own job going?
I love being part of this team. I take my hat off to all the members of the BACL community who
have adopted change with such enthusiasm. I enjoy being part of a company that is based on
clear principles: trust, adding value and quality.
My role is to provide leadership. It is the team which will provide satisfied customers,
satisfied colleagues, a satisfied society and satisfied shareholders. We share a future:
Airport City, Brisbane.
change”
For an Annual Report, I should first point to our cost controls, enhanced by reorganisation and
reorientation, and our initiatives to both improve and secure our revenue. For our future service
to passengers, I would also say that our discussions leading to the creation of a rail link
with the city and the Gold Coast is going to have a major impact. When it comes to creating
an economic focus, look at our progress in property development, with blue chip tenants like
Australia Post choosing to locate here.
pace for
5
In practical terms, which have been the most significant steps
forward over the year?
“Setting the
BACL ...evolution
We are in an excellent position to benefit from Asia-Pacific’s inevitable economic recovery
because we and those we work with now have a clear understanding of the need for change.
The company
Corporate structure
Brisbane Airport Corporation Ltd (BACL) is an 80 per cent Australian-owned private sector
organisation formed to bid for the 50 + 49 year lease of Brisbane Airport, which was granted
on July 2, 1997. It is a non-listed public company with equity and shareholder loans of some
$500 million.
BACL shareholders and relative shareholdings are:
•
BACL ...evolution
6
•
•
•
•
Schiphol Australia Ptd Ltd (SA), a wholly owned subsidiary of Schiphol International, in turn
a wholly owned subsidiary of AAS, owner and operator of Schiphol Airport in Amsterdam,
the Netherlands.
Commonwealth Investments Pty Ltd (CIPL), a wholly owned infrastructure investment
subsidiary of the Commonwealth Bank of Australia.
Commonwealth Custodial Services Ltd (CCSL), which are funds managed by
Commonwealth Financial Services.
Port of Brisbane Corporation (PBC), a wholly owned State enterprise.
Various funds managed by Prudential Corporation of Australia (Prudential), RAC Insurance
(RAC), ANZ Managed Investments (ANZ) and Norwich Union Life (Norwich).
BACL
CIPL
18%
CCSL
19%
SA
16%
PBC
37%
OTHER
10%
City of Brisbane Airport Corporation (CBAC), an entity wholly owned by the
City of Brisbane established specifically for investment in BACL, is the holder of
Convertible Notes.
Vision
BACL’s vision for the future development of Brisbane Airport has four cornerstones:
• to transform Brisbane Airport from a city airport into an Airport City
• to develop Brisbane Airport as a premier international gateway and transport hub,
in competition with other airports in Australia
• to stimulate and enhance the airport’s capability to act as an economic engine for
South East Queensland in its own right
• to ensure that, while pursuing these achievements, a balance is achieved between the
interests of all stakeholders, in particular a balance between economic development
and environmental impact.
Mission
BACL aims to develop, manage, operate and maintain Brisbane Airport as a first class airport
and to transform it into a regional gateway, with full regard for the interests of all stakeholders.
This will benefit customers, the community and shareholders through the generation of regional
prosperity.
Values
We believe in: respect for our people; open, honest, communication and trust; stakeholder
satisfaction; teamwork and learning; environmental responsibility; safe and secure operations.
And this is what BACL stands for.
Highlights
BACL achieved operating revenue of $117 m, producing an operating profit of $80 m.
After finance costs, net profit before depreciation, amortisation and abnormals was
$10.5 m. Depreciation and amortisation of $24 m and abnormals of $2 m mean that
the company recorded a net loss before tax of $11.8 m. Capital expenditure amounted
to $6 m.
•
The company drew up its draft Master Plan for the development of the airport to the year
2018 through a process of extensive public and industry consultation. A draft Airport
Environmental Strategy was also created. Both plans were submitted to the Federal
Transport Minister within the timeframe required.
•
Future revenue has been enhanced and secured through the proposals for a fuel throughtput
fee and a ground facilities fee. Agreements have been reviewed with concessionaires to
secure revenue, new investment and greater quality of service to passengers.
•
Cultural change linked with reorganisation and reorientation has increased employee
productivity while enhancing safety, security and workplace quality.
•
Subject to Government approval, a new public sector rail link between the airport, the city
and the Gold Coast was agreed with Airtrain Citylink Ltd., for projected completion in the
year 2000. Capital projects were negotiated for new and existing airport tenants, including
Australia Post.
Financial Control
1997/98 was a difficult first trading year for the company, given the impact on traffic volumes
from economic and financial problems among some Asian countries.
Therefore, capital expenditure has been kept to a minimum, limited mainly to projects
generating a good commercial return.
A focus on commercial revenue and tight cost control strengthened BACL’s cash position during
the year.
The company’s shareholders and syndicate of lenders have been kept well-informed and their
continued support and enthusiasm for BACL points to a great future.
•
7
Against a background of economic uncertainty among some of the airport’s trading
partners, a combination of new airlines and increased frequencies has sustained total
passenger figures at 10.3 million. Of these, 2.5 million were international. Airline
efficiencies reduced aircraft movements slightly to 154,000.
BACL ...evolution
•
Inside the
organisation
Brisbane Airport Corporation Ltd generates
its income from two basic activities:
Operations and Commercial Services. Each
has a management structure within BACL
which works closely with the other,
supported by administrative disciplines.
Operations
Aeronautical charges for the first five years are subject to a price cap representing a real fall
in income. This part of the business therefore relies on productivity improvements and additional
activity to maintain its contribution.
The main measure of success in its core competence is the availability of airport facilities.
During the year, the unit’s success rate provided a benchmark that will be impossible to surpass
in the future: there were no closures of runways, taxiways or the apron nor have there been any
major delaying failures in any key systems such as airport lighting, baggage handling, air
bridges or check-in facilities.
BACL ...evolution
8
Operations is charged with the provision of safe, secure, reliable and environmentally friendly
operation for Brisbane Airport. It also provides engineering support for airport projects.
It is such performance that led to Brisbane Airport achieving the best on-time record for inwards
processing of any Australian international airport, according to an independent Customs report.
The airport’s entire approach to maintenance has been revolutionised with the introduction of
upgraded training and new information technology.
Brisbane Airport’s computerised maintenance system introduced during the year, provides such
a high level of physical and cost control of the assets that maintenance staff are now able to
monitor activity remotely and work a normal nine-to-five day, rather than a shift system.
The company’s safety and security focus has been enhanced. For example, it now has a major
crisis exercise on a monthly basis – airport personnel have been on full alert a dozen times
during the period, facing the rigours of simulated incidents.
Environmental control also falls within Operations’ activities and is more extensively discussed
under the Environment section of this report. Again, the airport’s performance has been greatly
improved over the year, without any infringement action.
Aircraft noise-generating activity has been a particular focus, with new procedures instituted for
ground running of engines and, in consultation with Airservices Australia, the limiting of noisier
Chapter 2 aircraft to take-offs and landings over Moreton Bay at night, avoiding residences.
Dealing closely with Commercial Services, Operations has provided an engineering service
committed to bringing capital projects in on time and on budget. Turning the City and Gold
Coast rail link proposal into reality will be a major focus for the coming year.
BACL ...evolution
9
Commercial services
The revenue stream, which will drive Brisbane Airport’s evolution into an Airport City, comes
substantially from the work of the Commercial Services team, since aeronautical charges are
capped and must reduce.
Equally, if consumers’ needs are to be met, then services must be of the highest standard.
Partnership with the businesses which operate from Brisbane Airport now and in the future is
therefore vital – and Brisbane Airport Corporation Ltd has, from the outset, shown its determination
to be a flexible, quality-focused business partner.
Commercial Services is based on an account management structure, dealing with five areas: the
international terminal, the domestic terminal, ground transportation, property development and
outgoings, which cover recharged costs such as electricity.
Much of the domestic terminal is under lease to Qantas and Ansett Australia and under the direct
control of those airlines. On the other hand, the international terminal gives BACL an opportunity to
show exactly what it could do.
BACL ...evolution
10
The company began by re-negotiating with duty free retailers Nuance Global Traders, food and
beverage providers Spotless Services Ltd and currency service Travelex Exchange Corporation,
reaching 10-year agreements with each. The response was immediate and favourable, with major
investment being undertaken to re-develop nine outlets and add four completely new outlets.
“Services of
the
highest
standard”
Central to these negotiations were win-win partnerships, with account management and monthly
financial and quality performance monitoring. As a result, a broader range of goods and better
customer service became apparent. The consumer clearly liked the result: at a time of great
economic upheaval in the airport’s main markets, average spend per passenger was maintained
and, in some areas, even rose strongly by 10 to 15 per cent.
Further revenue will be generated through the provision of seven new outdoor advertising sites,
contracted to Boyer Group, another 10 year deal.
On ground transportation, Brisbane Airport faced current and potential congestion and safety
hazards with a limited length of kerbside to serve the needs of 10.5 million passengers. Facing
double parking as the public, buses, taxis and limousines vied for position, the airport decided
there had to be a fair and equitable system which not only reduced the problem but provided the
revenue for better facilities.
As a pro-active measure, BACL set out to implement a ground transportation strategy to minimise
congestion at the kerbside. Following over 200 meetings with interested parties, the airport
adopted a ‘user pays’ principle as a central platform of its revenue policies. Charges for
implementation during 1998/99 were negotiated, raising funds for the maintenance, improvement
and enhancement of bus, limousine and taxi facilities to cope with current and projected traffic.
The company introduced greater competition and a level playing field for car rental providers
following a tender process. In the coming year, there will be five operators, adding National
to the existing four – Avis, Hertz, Budget and Thrifty – with five year agreements.
A fuel throughput fee originally proposed by the Federal Airport Corporation (FAC) was finalised
with the assistance of a Queens Counsel to ensure a fair and equitable outcome for implementation
this year.
Real estate development – central to BACL’s vision of an Airport City – took significant steps
forward during the year.
A new aero-medical facility for the Royal Flying Doctor Service was agreed and is
under construction in the general aviation area.
Australia Post also contracted with BACL to construct a 5,000 sq m mail distribution
centre in the Brisbane Airport Export Park.
BACL began working closely with DHL on new freight concepts, the question of
manufacturing in bond and the development of free trade zones.
BACL ...evolution
11
BACL ...evolution
12
Planning for the future
A master plan to 2018
No airport can develop without the
support and approval of the community it
serves. This means communicating the
organisation’s basic intentions to as wide
an audience as possible. And listening to
the response.
BACL ...evolution
For BACL, the opportunity presented itself
rapidly. Under the Airports Act 1996, the
company was to produce a Master Plan.
Airport management decided to use this to
communicate its overall strategy to all
stakeholders.
An important report made the plan’s creation
a powerful imperative for Queensland as a
whole. Ernst and Young’s Economic Impact Survey showed Brisbane Airport could become an
economic engine for the State and Eastern Australia, generating three times as many jobs as today.
13
BACL examined the forecasts, compared them to the airport’s capacity and drew up expansion
requirements with a planning horizon of 2018. The resulting preliminary draft Master Plan was
published for public consultation in as wide a manner as possible.
Feedback was received from not only the community and political representatives but from wider
industry interests. Amendments based on these comments were made in a Supplementary Report.
This process, a first for the airport, enabled management to identify what stakeholders’ concerns are
and who holds them. Brisbane Airport’s commitment to communication can now move ahead based
on this information. In the coming year, management moves into a further planning phase, dealing
with demand analysis, detailed infrastructure plans and budgeting for precinct planning. Two main
platforms require a closer look: the plans for Airport Town and a development strategy for the central
terminal area.
The next move is to channel resources into controlling BACL progress against its strategic objectives.
This means taking the original business plan and, from it, developing a strategic plan for the step-bystep actions the company must follow. It must integrate with the overall planning cycle and will,
ultimately, form a road map towards Airport City.
A strategy for environment
There is no question that an international airport driving economic growth will have an impact on
its surroundings and community. Every stakeholder recognises this. The real question is: how much
impact and how can it be minimised?
Again, BACL was presented with a legislative opportunity, since the Airports Act 1996 required the
submission of a draft Airport Environment Strategy (AES) to the Federal Transport Minister within the
year. This was achieved.
Brisbane Airport’s site has been under continuous development for many years but BACL found a
number of issues requiring its attention and protection. Five of the airport’s eight habitats are
wetland communities while scattered remnants of mangrove areas contribute to the fauna
productivity of Moreton Bay.
There are no proven archaeological sites, from either indigenous occupation or the 170 years of
non-indigenous convict and general farming, small settlements and aviation. But they may be present
and the AES includes a process of consultation should it be needed.
BACL found there is a very low probability of direct soil or water pollution by the airport, and no
records of major pollution events exist . . . the only realistic possibility of such an impact would
be through a serious accident or natural disaster. The AES commits the company to risk reduction,
emergency control procedures and, of course, good housekeeping. These and the use of
environmentally friendly materials and processes in future will make BACL a friend of the
Earth. Management is establishing an Environmental Management System consistent with
international standards.
“Minimising
our
impact”
The people asset
Professionals in the right place
right time
at the
Koen Rooijmans took over its leadership in July 1997. He had been chiefly responsible for
Amsterdam Airport Schiphol’s involvement in the bid process for the privatised airport, moving
from his post as managing director of CSU Total Care, a 5,500 employee facilities
management organisation.
With more than 20 years management experience in aviation, Koen was a member of the KLM
Royal Dutch Airlines senior management team where his responsibilites spanned facility
services, finance and managing directorship of regional airline KLM Cityhopper. He has held
directorships with various Dutch companies. He has a Doctorandus degree with Honours in
Economics from Katholieke University Brabant in the Netherlands.
BACL ...evolution
14
A new vision for Brisbane Airport
requires a mix of solid, international
experience and creative flair. BACL has
assembled such a team.
The companyÕs managers have skills that
both complement and often overlap each
other, producing a unique blend.
Tim Rothwell is responsible for financial policy and control, management information and
information technology. He joined the airport in 1994 from a background in the development
and tourism industries.
Past roles included finance director of a UK construction company. He has a degree in
economics and accounting and is a Fellow of the UK’s Institute of Chartered Accountants and a
Member of both the Australian Institute of Company Directors and the Financial Executives
Institute of Australia.
Brad Bowes polices the airport’s legal risk management and compliance issues, building
on extensive experience in property asset management. As Company Secretary, he handles
corporate administration and Board-related matters.
Joining Brisbane Airport as Manager – Terminal Services, Brad was seconded during
privatisation to prepare the airport’s business plan and corporate strategies. He was due
diligence co-ordinator and secretary to the Brisbane Airport Internal Board. He holds an MBA
and Bachelor of Business from Queensland University of Technology and is a member of the
Australian Institute of Chartered Secretaries, the Australian Society of Certified Practising
Accountants and the Australian Institute of Company Directors.
Stephen Goodwin heads up management of the airport’s people asset, having joined in 1997
as Manager – Human Resources. His sphere of operation extends through strategy, policy,
procedures, monitoring, training and recruitment plus occupational health and safety.
He has undertaken similar operational roles for some of Queensland’s leading organisations,
including the Central Queensland Electricity Commission and Queensland Alumina. Before
BACL, Stephen rose to a senior Human Resources position with ICI Dulux, encompassing
Queensland, New South Wales and the Selleys Group.
Isabelle van Bentum markets the airport by strengthening airline and travel industry
relationships, virtually duplicating the role she performed for Amsterdam Airport Schiphol.
Additionally she manages communications and corporate relations together with the provision
of marketing services.
At the award-winning Dutch hub, Isabelle formulated and developed corporate and brand
positioning, heading a department which implemented these world-wide. She has worked
closely with Vienna International Airport on marketing strategy and consulted for the Schiphol
Area Development Company. Isabelle is a Bachelor in tourism and marketing.
His Masters degree included a speciality year studying marketing and consumer behaviour.
He joined Schiphol in 1994 and rose through the environmental, business development and
real estate departments to become manager of commercial development.
Neil Bentley is responsible for strategic planning and for the development of the new Master
Plan. He joined from Cairns Port Authority, where he was project director for Cairns Airport
Redevelopment Stage III.
A Bachelor of Engineering (Civil) and Master of Engineering Science, he is a member of
the Institution of Engineers Australia, a chartered professional engineer and a registered
professional engineer of Queensland.
Diederik Pen wants Brisbane Airport to be a shopping experience. His development of the
commercial strategy for Schiphol’s Terminal West led him to be responsible for the retail and
trading strategy in BACL’s bid for Brisbane Airport. He was then given the job of carrying it out,
covering both terminals, ground transport, property management and property development.
15
Moving to the airport from a major national construction company, Cam has also held senior
positions in the public sector including Inspector of Operational Training for the Department of
Aviation and administration manager Queensland for the Australian Broadcasting Corporation.
BACL ...evolution
Cam Spencer’s job embraces airfield operations, safety, security and the maintenance of our
terminal, airfield and landside infrastructure plus BACL’s drawing office. Our precision in these
areas perhaps stems from his 20 year military career.
Commitment from
the team
Evolution from a Government-run facility to a competitive, enterprising World Class company
is not an overnight process. Yet BACL’s progress has been nothing short of revolutionary.
BACL ...evolution
16
The best measure of productivity has been the company’s ability to react to a rapidly changing
economic situation while progressing its future plans. There are, however, simpler measures which
provide stark examples of how much life has changed at the airport.
“People
own
•
Absenteeism was running at 3.5 to 5.5 per cent per annum prior to the BACL
purchase. 1997/98’s record is an insignificant 1.2 per cent.
•
Overtime in the busy team had averaged 4.2 per cent. In the past year, the figure has
virtually halved to 2.5 per cent, thanks to the sheer enthusiasm and commitment of
BACL’s people.
•
Few members of the previous 125-strong team (including 113 full-timers) would have
said they were under-employed. Establishment at the end of the year under review
was 117, with 107 full-time. More is being done yet working hours and conditions
are better.
•
When BACL took the reins, there were 18 temporary staff on site. They’re not used
now, as the company’s direct employees have increased their personal productivity
and flexibility.
Jobs”
The reason is a complete re-orientation of employment policies. Rather than placing its team in a
‘classification’ structure, BACL has ensured that people own jobs. As they add value, their reward
inevitably follows.
Beginning with an enterprise agreement struck with the Site Consultative Team which provided
for a general 3.8 per cent salary increase – the first agreement reached by any of the newly
privatised airports – management and team set out to achieve the higher accountability required
by a stand-alone business.
The Hay Group consulted on the assessment of jobs benchmarked against 160 other Australian
companies. A performance appraisal mentality is now in place, with a formal system for
management following early in the next financial year. Not only will this identify how managers
should benefit from adding value but it will also create a training and development plan so they
can maximise their potential.
A cross-functional cultural and change management program named “BAC to the Future” was
initiated during the year and has had a major impact on attitudes, performance and overall
company direction.
Every team member throughout the company now finds him- or herself part of a capable,
committed workforce able to make decisions and get them right first time. These are World
Class people.
Successes are celebrated. Team-building exercises are common. Exceptional performance is
recognised through an Employee of the Month award – originally met with some scepticism but
now highly valued. This has led to an Employee of the Year.
As a responsible employer, BACL was also concerned with every injury suffered
by team members each year. Three or four were lost time injuries, which was
unacceptable. The airport reviewed procedures, heightened awareness and
increased both training and the rigour associated with injury investigation.
The lost time injury figure has reduced to just one during the past year.
At the same time, injuries were re-classified and a risk audit is planned for the
coming year.
The company wants to be perceived by the wider community as an employer of first
choice – exciting, a major player, safe and worthy of commitment. This position is
already emerging, as BACL finds its careful, competency-based recruitment programme
producing high quality applicants.
Managing Director and
Chief Executive Officer
Koen Rooijmans +61 7 3406 3034
Strategic
Planning
Financial
Services
Neil Bentley
+61 7 3406 3091
Tim Rothwell
+61 7 3406 3022
Marketing &
Communications
Human
Resources
Company
Secretary
Isabelle
van Bentum
+61 7 3406 5765
Stephen
Goodwin
+61 7 3406 3127
Brad
Bowes
+61 7 3406 3138
BACL ...evolution
17
Commercial Services
Cam Spencer
+61 7 3406 3011
Diederik Pen
+61 7 3406 3061
Terminal Maintenance
Retail
Terminal Operations
Landside Transportation
Engineering Services
Property Development
Drafting Services
Indoor/Outdoor Advertising
Airfield Maintenance
Food & Beverage
Airside Operations
Car Parking
Environment
Property Management
Operations
The marketplace
Four million international visitors choose Australia every year, with three of
their top five destinations located in Queensland, which welcomes two million
such holidaymakers. These customers ensure that Brisbane Airport is one of
the world’s leading vacation airports.
Yet the airport’s strategy is to develop as an economic engine and this means
it will need to encourage business traffic.
BACL ...evolution
18
Foundations already exist. The region has the highest growth in the country,
creating a burgeoning market for products and services. Infrastructure such as
the Gateway Ports is already in place. In Asia-Pacific, economic activity has
been at high levels for many years.
During the year under review, an economic and banking crisis hit some Asian
economies and dramatically reduced business activity. BACL took a long,
hard look at its market.
Destination and passenger profiles were put in place and a marketing
department created, turning first to its core customer base. Working closely
with State tourism bodies, the airport focused on international travel trade
promotion. Brisbane participated in the Kamiki campaign in Japan,
promoting Queensland destinations and increasing length of stay.
Japanese charter airline Harlequin Air began operations, as did Taiwan’s Mandarin Airlines.
China Southern joined the airport’s roster for a short period until market conditions necessitated a
withdrawal, hopefully temporarily. Philippine Airlines also withdrew following the economic crisis.
So it was left to these new carriers and increased frequencies from existing customer airlines to
ensure that Brisbane Airport’s international passenger figures remained stable at 2.5 million.
Air cargo proved a growth area. Korean Airlines initiated full freighter services to serve the
European and North American markets while other operators experienced an upturn. The State
and Federal Governments supported the formation of the Air Freight Council of Queensland, an
active measure welcomed by BACL which made a representative available to chair the Council.
At the same time, the company has been putting cargo marketing resources in place.
While BACL’s new marketing function undertook not only this activity but also produced
publications, communicated the Master Plan and became involved with key community
sponsorships, its main role for the future proved to be the gathering of information.
Databases, research and other intelligence helped define changing patterns in BACL’s customer
base. This information will be greatly enhanced as, during the rest of 1998, the airport’s
sophisticated Terminal Information Management System program is fully introduced to allow
detailed tracking.
With the development of continuing information services to the world’s media and an ongoing
dialogue with stakeholders, communications is a central airport role which has been substantially
extended during the year. Taking a pro-active stance, the company uses every available
communications technique to ensure its policies and positions are understood among its
audiences.
This planned activity includes media briefings and support material, a regular –
award-winning – newspaper, talks with business, community and industry
groups, a website and a broad range of other tools.
BACL is dedicated to good communications, touching many aspects of the
airport’s operational and commercial work.
Airline activity
While the Asian economic situation has created major changes in airline thinking, the end result
has been a broadly unaltered airline movement chart for Brisbane. Reduced frequencies by some
have been balanced by increases from others.
However, BACL has noted a reduction in the numbers of seats flown, as airlines switch to smaller
equipment.
A Year 2000 Steering Committee was appointed to oversee what has become known as BACL’s
Y2K Project. External technical experts in Year 2000 Compliance were assigned to the project,
resulting in a Management Plan to deal with relevant issues. Firstly, the Management Plan
identifies and prioritises the key Year 2000 risks. Secondly, it develops a plan to remediate,
test and implement Year 2000 solutions.
Two focus groups – an Airside and Landside Focus Group – have been formed to assess the
interaction between BACL and external companies operating from Brisbane Airport leading
up to the Year 2000.
The airport’s communications team is closely involved with this project, making certain that
every employee is fully aware of what needs to be done . . . not only in their work but
also in their home lives. Tools include a briefing on the company’s Intranet and fortnightly
reminders to all staff.
BACL has been actively addressing the Year 2000 problem – the Millennium Bug.
19
Year 2000
BACL ...evolution
Among the changes are:
• All Nippon increased operations between Brisbane and Japan.
• British Airways upped services to daily, linking London via Singapore, while Qantas reduced
its daily Singapore services.
• Garuda Indonesia extended its services onward to and from Auckland.
• Brittania Airways stepped up charter operations from the UK.
• Mandarin Airlines now link Brisbane with Taipei.
• Royal Brunei increased services to three per week.
• Harlequin Air are operating new charter services from Japan.
• Air New Zealand, Ansett and Qantas all withdrew services to Seoul following the
economic crisis.
• Qantas increased services to Auckland, Christchurch and Wellington.
• Freedom Air increased Trans Tasman services to seven per week.
• Ansett flights to and from Norfolk Island were taken over by Flight West, using F28 aircraft
on a codesharing basis.
• Korean Air dedicated a full freighter to Brisbane operations.
• Impulse Airlines started freight and newspaper handling and distribution, using the old
International terminal.
• Australian Air Express upgraded its Brisbane base to a hub, increasing its 24 freight flights
to 40 per week.
Trading revenue by
stream for 1997/98
Designation
BNE
Location
13 km north east of Brisbane city centre next to Moreton Bay.
Occupies 2,700 ha.
Passengers handled
10.5 million (2.5 m international)
Airlines
27 international carriers
7 domestic carriers
Destinations
25 international
35 domestic
Frequencies
168 international, per week
1,044 domestic, per week
Full-time employees
107
Recharge Other
Aeronautical
Property
BACL ...evolution
20
Fast facts
Commercial
Trading expenses by
stream for 1997/98
Staff
Contract
sevices
Utilities
Finance
costs
General
admin.
Employee productivity
Effective employees, 1996/97
Effective employees, 1997/98
125
117
Passengers per employee, 1996/97
Passengers per employee, 1997/98
82,039
87,757
Maintenance
Depn &
Amort
Movement comparisons
96/97
97/98
% growth
International
2,461,293
2,455,789
– 0.22
Domestic
7,640,163
7,636,013
– 0.05
Domestic on carriage
153,427
175,739
14.54
Transit
333,848
317,085
– 5.02
77,578
77,051
– 0.68
5,255,994
5,134,422
–2.31
Passengers
Landings
Total
Landed tonnes
Total
Brisbane Airport Corporation Limited
ACN 076 870 650
Statutory
Information
and Financial
Statements
For the period 9 January 1997
to 30 June 1998
Corporate
Governance
This statement outlines the main Corporate
Governance practices that were put in place
for the period 9 January during the inaugural period of the Company,
and in particular the period after the
1997 to 30 June 1998
operation and management of Brisbane Airport
was assumed.
Statement
BACL ...evolution
2
Board of Directors
The Board is responsible for the overall Corporate Governance of the Company including
participation in charting its strategic direction, objective setting and establishing policy
guidelines, establishing goals for management and monitoring the achievement of these goals.
The Board also determines matters of a major or unusual nature which are not in the ordinary
course of business and it approves the Business Plan, Operating and Capital Budgets each
financial year.
Having set the Company’s strategic direction the Board delegates responsibility for the
management of the Company to the Managing Director and CEO. The Board has also
established a management framework including a system of internal control, a business risk
management process and a delegation policy.
Size and Composition of the Board
The Company’s Articles of Association (Articles) and the Shareholders Agreement determine the
number and composition of the Board including that there must be not less than three nor more
than nine Directors (excluding Alternate Directors). Currently there are nine directors – eight
Non-Executive Directors, including the Chairman and one Executive Director, being the
Managing Director and CEO.
These documents prescribe that SA, PBC and CBAC can appoint up to three, two and one
directors respectively which is the current composition based on existing shareholdings. This
entitlement reduces with any reduction in shareholding by those parties. The balance of the
Board is determined on a preferential proportional voting basis by the remaining shareholders.
In determining the Board’s composition careful consideration is given to ensuring an
adequate balance of knowledge, skills and experience across a range of relevant industries
and professions.
CIPL and SA are entitled to appoint one of the directors as the Chairman of Directors on a
rotating basis for a period of two years each for the first six years (or until either CIPL or SA
holds less than 6% of the shares in BACL). SA was entitled to appoint the first Chairman of
Directors. The Chairman of Directors has a deliberative vote (as Director) but not a casting vote
(as Chairman) at any meeting of Directors.
A Director may from time to time appoint an Alternate Director by giving notice in writing in the
prescribed form and this has been done on a number of occasions throughout the period (see
further details in table of meeting attendance).
Non-executive directors’ fees are determined by the Board within the aggregate amount
approved by shareholders.
The names of the directors of the Company in office at the date of this statement are set out in
the Directors’ Report on pages 5 to 7 of this financial report.
Major Meeting Protocols
Resolutions at Board meetings are decided by a simple majority of votes cast by directors. Each
director is entitled to cast one vote except that the vote cast by the director appointed by CBAC
shall not be counted in regard to major financial matters (dividends, budgets and issues in
excess of $10 million value) if such vote would result in a majority of only one vote (where
CBAC forms part of the majority).
A quorum for Board meetings is five Directors including one Director appointed by SA, one
Director appointed by PBC and the remaining three being non-executives of the Company
appointed by any party.
Corporate
Governance
Committees of the Board
Acquisition Committee
Immediately prior to the transfer of Brisbane Airport from the Commonwealth to BACL, a special
purpose committee was formed (the Acquisition Committee) to handle matters regarding
finalisation of the Airport’s acquisition. This Committee was disbanded once its function was
concluded and the airport transfer completed.
Statement
for the period 9 January
1997 to 30 June 1998
Finance, Audit and Risk Management (FARM) Committee
To assist in the execution of its responsibilities, the Board has established a Finance, Audit
and Risk Management (FARM) Committee. As suggested by its name, the role of the FARM
Committee is wide ranging to include matters of a financial, audit, risk and insurance nature.
The overall objective of the Committee is to assist the Board of Directors to discharge its
corporate governance responsibilities to exercise due care, diligence and skill in relation
to the Company’s:
• reporting of financial information to users of financial reports;
• application of accounting policies;
• financial management;
• internal control system;
• business policies and practices;
• compliance with the Company’s constitutional documentation and material contracts;
• compliance with applicable laws and regulations; and
• monitoring and controlling of business and other risk.
Internal Control Framework
The Board acknowledges that it is responsible for the overall internal control framework, but
recognises that no cost effective internal control system will preclude all errors and irregularities.
To assist in discharging this responsibility, the Board has instigated an internal control
framework that can be described under five headings:
• Financial reporting – there is a comprehensive budgeting system with an annual budget
approved by the Board. Monthly actual results are reported against budget and revised
forecasts for the year are prepared regularly. The Company reports to equity and debt
holders on a quarterly basis;
• Quality and integrity of personnel – the Company’s standards in respect of values and
expectations of employee actions are clearly defined. Formal appraisals are conducted at
least annually for all employees;
• Operating unit controls – financial controls and procedures including information system
controls;
• Functional speciality reporting – the Company prepares Board information papers as
required on various issues which arise in the course of operations in addition to Board
requested information; and
The external auditors, the Managing Director and CEO and the Chief Financial Officer are
invited to the meetings at the discretion of the Committee. The Company Secretary has been
appointed secretary for the Committee.
3
The members of the Committee were:
• Mr C Ryan (Chairman)
• Mr B Thornton
• Ms I Lee (resigned from the Board and Committee in August 1998)
• Mr J Ward (appointed September 1998)
BACL ...evolution
The role of the Committee is documented in a Charter which is approved by the Board of
Directors. In accordance with this Charter, all members of the Committee must be non-executive
directors. This role includes monitoring the establishment and maintenance of a framework of
internal control and appropriate ethical standards for the management of the Company. It also
gives the Board of Directors additional assurance regarding the quality and reliability of
financial information prepared for use by the Board in determining policies or for inclusion in
the financial report.
Corporate
Governance
Statement
1997 to 30 June 1998
•
Investment appraisal – the Company has clearly defined guidelines for capital
expenditure. These include annual budgets, detailed appraisal and review
procedures and levels of authority.
Environment
The Company aims to ensure that the highest standard of environmental care is achieved.
A dedicated environment officer has been employed to ensure the Company’s continuing
compliance with environmental legislation. (Further details on the Company’s approach
to environmental matters are described elsewhere in this Annual Report.)
Business Risk Management and Compliance Programme
The objective of this project is to develop and implement an integrated business risk
management and compliance framework which will provide the Board and management with
an ongoing programme to monitor and manage significant business risks.
The scope of the project includes four phases:
Phase 1
Development of a risk profile of the Company, including an initial assessment of the
relative importance of identified significant risks.
Phase 2
Consideration and assessment of the current risk management and compliance
practices in so far as they relate to identified significant risks.
Phase 3
Development of a risk management framework/programme to enable the Board and
management to monitor and manage significant business risks on an ongoing basis.
Phase 4
Ongoing review of compliance with the established risk management
framework/programme.
BACL ...evolution
4
Under supervision of the FARM Committee, the Company instituted a Business Risk Management
and Compliance Programme project during the period.
Phase 1 of the project was completed in the period with the remaining phases to be completed
in 1998/99.
Millennium Issue
(Refer elsewhere in this Annual Report for details)
Shareholder Relations
The rights and obligations of shareholders are described in the Shareholders Agreement and
Articles of Association. In addition to these technical responsibilities, the Board of Directors aims
to ensure that the shareholders are informed of all major developments affecting the Company’s
state of affairs. Information is communicated to shareholders as follows:
• the annual report is distributed to all shareholders. The Board ensures that the annual report
includes relevant information about the operations of the Company during the year,
changes in the state of affairs and details of future developments, in addition to the other
disclosures required by the Corporations Law;
• quarterly reports contain summarised financial information and a brief review of the
operations of the Company during the relevant quarter or half year;
• tours of the airport site including the airfield and passenger terminals were conducted
for shareholders throughout the year together with briefings by management to assist
shareholders in understanding the Company’s business and the industry in which it
operates; and
• shareholders are provided with regular Company Newsletters and Bulletins which cover a
range of stories and information including significant events affecting the Company or the
aviation industry.
Directors’
Report
The directors present their report together with the Financial Statements of Brisbane Airport
Corporation Limited (“the Company”) for the period 9 January 1997 to 30 June 1998 and the
auditors’ report thereon.
1997 to 30 June 1998
Directors
The directors in office at the date of this report are:
Name
Age
Mr Barry Thornton FCA, FAIM, FAICD, FCIS Chairman
58
Mr Koen Rooijmans, Drs Managing Director and Chief Executive Officer
53
52
52
Mr Colin Ryan B.Com, LLB, FCA, FAICD
52
Cr Jim Soorley BA, MA
47
Mr Pieter Verboom PhD
48
Mr John Ward BSc, FAIM, FAICD, FAMI, FCIT
52
(Refer elsewhere in this Annual Report for details of directors’ qualifications, experience and
special responsibilities.)
BACL ...evolution
Mr John Massey B.Com, CPA, FAIM, FAICD
Ms Elizabeth Nosworthy BA, LLB, LLM, FAICD
5
The number of directors’ meetings (including meetings of committees of directors) and number of
meetings attended by each of the directors of the Company during the period are:
Date
Date
Appointed Resigned
Mr C Greiner
9.1.97 23.5.97
Directors’
Meetings
Finance Audit and
Risk Management
Committee Meetings
A
B
3
3
Ms S Standen
9.1.97 29.1.97
1
1
Mr M Astill
9.1.97 29.1.97
1
1
A
B
Mr P Graham
24.6.97 27.6.97
1
1
Mr B Thornton
30.7.97
11
11
4
4
Ms I Lee
29.1.97 28.8.98
13
14
3
4
Mr D Corsie
9.7.98
(alternate for I Lee)
Mr J Massey
1
21.11.97
6
7
2.7.97
11
12
Mr K Rooijmans
29.1.97
14
14
2.7.97
12
12
Cr J Soorley
2.7.97
11
12
Mr R Carter
(alternate for
J Soorley)
2.7.97
1
Mr J Ward
21.11.97
7
7
Mr H Smits
23.5.97 30.1.98
2
8
5
Mr P Verboom
30.1.98
2
Mr H Bakker
(alternate for
H Smits and
P Verboom)
30.7.97
3
A
B
1
2
2
2
1
Ms E Nosworthy
Mr C Ryan
Acquisition
Committee
Meetings
4
4
A – Number of meetings attended
B – The number of meetings held during the time the director held office during the period.
Meetings attended may include use of video/telephone conferencing technology.
Directors’ Meetings
Directors’
Report
1997 to 30 June 1998
Principal activities
The principal activity of the Company during the period 9 January 1997 to 30 June 1998 was
the acquisition of a leasehold interest in, and operation and development of, Brisbane Airport.
Results
$’000
BACL ...evolution
6
Operating revenue
117,124
Operating profit before interest, income tax, depreciation,
amortisation and abnormal items
80,485
Operating profit before income tax, depreciation,
amortisation and abnormal items
10,565
Operating loss after income tax
(11,833)
Derivatives and other financial instruments
The Company’s activities expose it to changes in interest rates and credit, liquidity and cash
flow risks from its operations. The Board has established policies and procedures in each of
these areas to manage these exposures. Management reports to the Board on a monthly basis
on the monitoring of and compliance with the policies in place.
Virtually all of the Company’s current variable interest rate exposure on current borrowings has
been swapped from a variable interest rate to a fixed interest rate until June 2004.
The Company has a strict credit policy for customers trading on credit terms. Financing facilities
and operating cash flows are managed to ensure that the Company is not exposed to any
adverse liquidity risks. Adequate standby facilities are maintained to provide strategic liquidity
to meet unexpected and material cash outflows in the ordinary course of business.
No dividends have been proposed during the period and no dividends have been declared or
provided for in these accounts.
State of Affairs
On 2 July 1997, the Company acquired a 50 year lease plus 49 year option over Brisbane
Airport and purchased the assets and liabilities of the Federal Airports Corporation,
Brisbane Airport.
Review of Operations
Whilst the financial and economic problems of certain Asian countries have had an impact on
financial results, the overall performance of the Company to post an initial loss of $11.833m
is considered satisfactory. The Company has a long term vision for the development of the
Brisbane Airport, which has not been dented by the current period loss. The reorganisation and
reorientation of the Company during the period places the Company in an excellent position to
reap the rewards from the development of new markets and to benefit from the future growth in
the Asia-Pacific region.
Events Subsequent to Balance Date
In the interval between the end of the period and the date of this report, no item, transaction or
event of a material nature has arisen, in the opinion of the directors of the Company, to affect
significantly the operations of the Company, the results of those operations, or the state of affairs
of the Company, in subsequent financial years.
Likely Developments
The Company will continue to pursue its objectives consistent with the draft Master Plan and
Business Plan prepared during the period. Further details of these initiatives are contained
elsewhere in the Annual Report.
Directors’
Report
Directors’ Benefits
1997 to 30 June 1998
Directors’ benefits are set out in Note 27.
Insurance Premiums
During the period the Company has paid insurance premiums in respect of directors’ and
officers’ liability and legal expenses insurance contracts, for current and former directors and
officers, including executive officers of the Company.
The directors’ have not included details of the nature of the liabilities covered or the amount of
the premium paid in respect of the directors’ and officers’ liability and legal expenses insurance
contracts, as such disclosure is prohibited under the terms of the contract.
Rounding Off
Signed in accordance with a resolution of the directors:
BACL ...evolution
The Company is of a kind referred to in Regulation 3.6.05(6) of the Corporations Regulations
and amounts in this report and the accompanying financial statements have been rounded off to
the nearest one thousand dollars in accordance with Section 311 and the Regulations unless
otherwise indicated.
7
25 September 1998
Director
Koen Rooijmans
Director
25 September 1998
Barry Thornton
Profit
and Loss
Account
1997 to 30 June 1998
Note
Operating revenue
Aeronautical revenue
Commercial trading revenue
Property revenue
Other revenue
Gross proceeds from sale of property, plant and equipment
Interest received – other parties
$’000
2
36,830
44,672
25,661
7,075
333
2,553
Operating Costs
Staff costs
Contract services
Utilities
General administration
Maintenance
8,133
7,403
8,172
8,242
4,689
36,639
Operating profit before interest, depreciation, amortisation,
abnormal items and income tax
80,485
Interest payments
69,920
Operating profit before depreciation, amortisation,
abnormal items and income tax
10,565
BACL ...evolution
8
117,124
Depreciation and amortisation
3
Operating loss before abnormal items and income tax
Abnormal items
(13,872)
5
Operating loss before income tax
Income tax attributable to operating loss
Retained profits at the beginning of the period
Accumulated losses at the end of the period
24,437
2,039
(11,833)
6
0
(11,833)
0
(11,833)
The profit and loss account is to be read in conjunction with the notes to the financial statements
set out on pages 11 to 26.
Balance
Current Assets
Cash
Receivables
Inventories
Other
Note
$’000
8
9
10
37,940
6,364
453
70
Total Current Assets
44,827
11
12
13
14
938,240
53,729
394,426
29,210
Total Non-Current Assets
1,415,605
Total Assets
1,460,432
15
18
19
Non-Current Liabilities
Bank loans
Shareholder loans
Convertible notes
Provisions
Other
16,413
16
16
16
18
19
928,200
255,000
10,000
142
6,611
Total Non-Current Liabilities
1,199,953
Total Liabilities
1,216,366
Net Assets
Shareholders’ Equity
Share capital
Reserves
Accumulated losses
Total Shareholders’ Equity
244,066
20
21
2,550
253,349
(11,833)
244,066
The balance sheet is to be read in conjunction with the notes to the financial statements set out
on pages 11 to 26.
Total Current Liabilities
8,690
1,537
6,186
9
Current Liabilities
Accounts payable
Provisions
Other
as at to 30 June 1998
BACL ...evolution
Non-Current Assets
Lease premium
Leasehold land
Property, plant and equipment
Other
Sheet
Statement
of
Cash
Flows
1997 to 30 June 1998
Note
Cash flows from operating activities
Cash receipts in the course of operations
Cash payments in the course of operations
Interest received
Interest paid
Net cash provided by operating activities
132,522
(43,208)
2,553
(66,290)
26
BACL ...evolution
10
Cash flows from investing activities
Payment for Brisbane Airport
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
25,577
(1,396,846)
(9,355)
333
Net cash used in investing activities
(1,405,868)
Cash flows from financing activities
Proceeds from issue of shares
Preliminary expenses paid
Proceeds from:
Convertible notes
Shareholder loans
Bank loans
Gain on placement of mezzanine bond received
from financier
Borrowing costs paid
256,414
(515)
10,000
255,000
928,200
2,134
(33,002)
Net cash provided by financing activities
1,418,231
Net increase in cash held
37,940
Cash at the beginning of the financial period
Cash at the end of the financial period
$’000
0
26
37,940
The statement of cash flows is to be read in conjunction with the notes to the financial statements
set out on pages 11 to 26.
Notes
to the
Note
Contents
Statement of Significant Accounting Policies
2
Operating Revenue
3
Operating Loss
4
Auditors’ Remuneration
5
Abnormal Items
6
Taxation
7
Earnings Per Share
8
Receivables
9
Inventories
11
Lease Premium
12
Leasehold Land
13
Property, Plant and Equipment
14
Other Non-Current Assets
15
Accounts Payable
16
Bank Loans, Shareholder Loans and Convertible Notes
17
Financing Arrangements
18
Provisions
19
Other Liabilities
20
Share Capital
21
Reserves
22
Additional Financial Instruments Disclosure
23
Employee Entitlements
24
Commitments
25
Contingent Liabilities
26
Notes to the Statement of Cash Flows
27
Directors’ Remuneration
28
Related Parties
29
Economic Dependency
30
Events Subsequent to Balance Date
31
Segment Information
Other Current Assets
11
10
1997 to 30 June 1998
BACL ...evolution
1
Financial
Statements
Notes
to the
Financial
Statements
1997 to 30 June 1998
1 Statement of Significant Accounting Policies
The significant policies which have been adopted in the preparation of this financial report are:
A Basis of Preparation
The financial report is a general purpose financial report which has been prepared in
accordance with Accounting Standards, Urgent Issues Group Consensus Views and the
Corporations Law.
It has been prepared on the basis of historical costs and except where stated, does not take into
account changing money values or current valuations of non-current assets.
BACL ...evolution
12
This is the first period of operation for the Company. The Company was incorporated on
9 January 1997 and commenced operations on 2 July 1997. Accordingly there are no
comparatives.
B Revenue Recognition
Revenue is recognised on an accruals basis.
Aeronautical Revenue
Aeronautical Revenue comprises Landing Fees and International Terminal charges, based on the
maximum take-off weight (MTOW) of aircraft, and a security charge for the recovery of charges
imposed by Australian Protective Services.
Commercial Trading
Commercial Trading Revenue comprises concessionaire rent and other charges received
including income from public car parks.
Property Revenue
Property Revenue comprises rental income from Company owned terminals, buildings and other
leased areas.
Asset Sales
The profit or loss on disposal of assets is brought to account on the date the transaction occurs.
C Taxation
Income Tax
The Company adopts the liability method of tax effect accounting.
Income tax expense is calculated on net profit adjusted for permanent differences between
taxable and accounting income. The tax effect of timing differences, which arise from items
being brought to account in different periods for income tax and accounting purposes, is
carried forward in the balance sheet as a future income tax benefit or a provision for deferred
income tax.
Future income tax benefits are not brought to account unless realisation of the asset is assured
beyond reasonable doubt. Future income tax benefits related to tax losses are not brought to
account unless realisation is virtually certain. The tax effect of capital losses is not recorded
unless realisation is virtually certain.
D Borrowing Costs
Borrowing costs comprise costs incurred in establishing and renegotiating borrowing facilities,
and are amortised on a straight-line basis over the term of the applicable borrowings.
E Non-Current Assets
The carrying amounts of non-current assets are reviewed to determine whether they are in
excess of their recoverable amount at balance date. If the carrying amount of a non-current
asset exceeds the recoverable amount, the asset is written down to the lower amount.
In assessing recoverable amounts of non-current assets the relevant cash flows have not been
discounted to their present value.
Leasehold land and buildings are independently valued every three years.
Notes
to the
Financial
Statements
F Acquisition of Right to Operate Brisbane Airport
During the period, the Company acquired the right to operate Brisbane Airport for a
period of 50 years with a 49 year option. The Lease Premium paid is the cost of this
right and is carried at cost. As the Directors intend to renew the lease after the initial
50 year period, the Lease Premium is amortised over 99 years. The Lease Premium is
amortised on an inverse sum of the digits basis to reflect increasing benefits expected
over an initial period of 20 years, and thereafter on a straight-line basis.
1997 to 30 June 1998
The acquisition price has been allocated as follows:
$ ‘000
954
940,474
54,300
403,730
(2,612)
1,396,846
G Receivables
Debtors
Trade debtors are generally settled within 30 days and are carried at amounts due. The
collectibility of debts is assessed at balance date and specific provision is made for any doubtful
debts. A general provision for doubtful accounts is also maintained.
H Inventories
Inventories comprise spares for equipment utilised in the operation of the airport and are carried
at the lower of cost and net realisable value.
I Leasehold Land
Leasehold land is recorded at cost and is amortised on a straight line basis over the expected
term of the lease, being 99 years.
J Property, Plant and Equipment
Acquisition
Property, plant and equipment is recorded at cost and depreciated as outlined below.
The cost of property, plant and equipment constructed by the Company includes the cost of
labour, materials, consultants and all other directly associated expenditure. Construction work in
progress at balance date is recorded as it is incurred.
Leasehold land has been recorded net of anticipated costs to remediate identified contaminated
sites. The costs of such remediation will be capitalised when incurred.
13
The allocation of the acquisition price between assets and liabilities was undertaken on the
basis of the Directors’ assessment of fair values and independent valuations of property, plant
and equipment carried out as at 2 July 1997 by A Sharpe AVLE (Val) and P Palella B.Sc QS of
Edward Rushton Australia Pty Limited, on the basis of the open market value of the assets
concerned in their existing use.
BACL ...evolution
Current Assets (Prepayments, Inventories etc)
Lease Premium
Leasehold land
Property, Plant and Equipment
Liabilities
Notes
to the
Financial
Statements
BACL ...evolution
14
1997 to 30 June 1998
Depreciation
Items of property, plant and equipment, including buildings are depreciated using the straight
line method over their estimated useful lives.
The depreciation rates used for each class of asset are as follows:
Runways, Taxiways and Aprons
Roads and Car Parks
Buildings
Movable Plant and Equipment
Lighting and Visual Aids
Mains Services
Fences and Gates
Furniture and Fittings
Fixed Plant and Equipment
Motor vehicles
Office Equipment
Computers and related Hardware
2.5%
2.5%
2.5%
5%
5%
5%
10%
10%
10%
15%
20%
33%
Assets are depreciated from the date of acquisition or, in respect of assets constructed by the
Company, when completed and ready for use.
K Accounts Payable
Liabilities are recognised for amounts to be paid in the future for goods or services received at
balance date, whether or not billed to the Company. Trade accounts payable are normally
settled within 30 days from the end of the month in which the invoice is received, unless prior
contractual arrangements have been entered into.
L Borrowings
Borrowings are carried at their principal amount. Interest expense is accrued at the contracted
rate and included in “Sundry Creditors and Accruals”.
M Derivatives
The Company is potentially exposed to changes in interest rates from its activities although it
uses interest rate swaps to hedge these risks. Derivative financial instruments are not held for
speculative purposes.
Interest payments and receipts under interest rate swap contracts are recognised on an accruals
basis and included in interest expense during the period.
N Employee Entitlements
Annual Leave
Provisions for employee entitlements to annual leave represent the amount which the Company
has a present obligation to pay resulting from employees’ services provided up to the balance
date. The provisions have been calculated at undiscounted amounts based on current wage and
salary rates and include related on-costs.
Long Service Leave
The liability for employees’ entitlements to long service leave represents the present value of the
estimated future cash outflows by the employer resulting from employees’ services provided up
to the balance date.
Liabilities for employee entitlements which are not expected to be settled within twelve months
are discounted using the rates attaching to national government securities at balance date,
which most closely match the terms of maturity of the related liabilities.
In determining the liability for employee entitlements, consideration has been given to future
increases in wage and salary rates, and the Company’s experience with staff departures.
Related on-costs have also been included in the liability.
Notes
to the
Financial
Statements
Superannuation Fund
The Company contributes to a combined defined benefit/defined contribution
superannuation plan. Contributions are charged as an expense in the period in which
they are incurred. Further information is set out in Note 23.
1997 to 30 June 1998
O Unearned Revenue
Revenue received in advance is recorded as a liability in the balance sheet and brought to
account as income in the profit and loss over the period in which the benefit will be derived.
2 Operating Revenue
$’000
36,830
44,672
25,661
7,075
333
2,553
117,124
15
3 Operating Loss
Depreciation of:
• Runways, taxiways and aprons
• Roads and car parks
• Buildings
• Movable plant and equipment
• Lighting and visual aids
• Mains services
• Fences and gates
• Furniture and fittings
• Fixed plant and equipment
• Motor vehicles
• Office equipment
• Computers and related equipment
69,920
3,485
363
8,964
181
709
794
100
443
2,428
160
24
189
17,840
Amortisation of:
• Lease premium
• Leasehold land
• Borrowing costs
2,234
571
3,792
6,597
Amounts set aside to provide for:
• Doubtful debts
• Employee entitlements
Net loss on sale of property, plant and equipment
418
(93)
35
Operating loss before abnormal items and income tax has
been arrived at after charging/(crediting) the following items:
Interest paid:
• Other parties
BACL ...evolution
Aeronautical revenue
Commercial trading revenue
Property revenue
Other revenue
Gross proceeds from sale of property, plant and equipment
Interest received – other parties
Notes
to the
Financial
Statements
1997 to 30 June 1998
4 Auditors’ Remuneration
$’000
Audit Services:
Auditors of the Company – KPMG
65
Other auditors
10
Other Services:
Auditors of the Company – KPMG
41
BACL ...evolution
16
5 Abnormal Items
Gain on placement of mezzanine bond received from financier
Millennium issue rectification costs
2,134
(95)
Aggregate abnormal items before income tax
2,039
The above abnormal items are included in the operating loss before income tax.
6 Taxation
A Income Tax Benefit
Prima facie income tax benefit calculated at 36% on the operating
loss after abnormal items
4,260
Decrease in income tax benefit due to:
Amortisation of lease premium, leasehold land
Sundry items
(919)
(11)
Tax losses and timing differences not brought to account as a
future income tax benefit
(3,330)
0
B Future Income Tax Benefit Not Taken to Account
The potential future income tax benefit arising from tax losses and timing differences has not
been recognised as an asset because recovery is not virtually certain:
Tax losses
5,514
Timing differences
(2,184)
3,330
Timing differences – acquired as a result of the
acquisition of the right to operate Brisbane Airport
1,430
4,760
The potential future income tax benefit will only be obtained if:
i
the Company derives future assessable income of a nature and an amount sufficient to
enable the benefit to be realised;
ii
the Company continues to comply with the conditions for deductibility imposed by the law;
and
iii no changes in tax legislation adversely affect the Company in realising the benefit.
7 Earnings Per Share
Basic earnings per share
6.83 cents (loss)
The weighted average number of ordinary shares used in the calculation of basic earnings per
share is 1,733,296 shares
Diluted earnings per share has not been disclosed as it is not materially different from basic
earnings per share.
Notes
to the
8 Receivables
$’000
Trade debtors
Provision for doubtful debts
5,857
(418)
5,439
Sundry debtors
Financial
Statements
1997 to 30 June 1998
925
6,364
9 Inventories
Maintenance spares – at cost
453
Prepayments
70
11 Lease Premium
Lease premium – at cost
Accumulated amortisation
940,474
(2,234)
BACL ...evolution
10 Other Current Assets
938,240
17
12 Leasehold Land
54,300
(571)
53,729
Leasehold land – at cost
Notes
to the
Financial
Statements
1997 to 30 June 1998
13 Property, Plant and Equipment
$’000
Runways, taxiways and aprons
At cost
Accumulated depreciation
BACL ...evolution
18
Roads and car parks
At cost
139,829
(3,485)
14,604
(363)
Buildings
At cost
190,827
(8,965)
Movable plant and equipment
At cost
1,243
(179)
Lighting and visual aids
At cost
14,264
(709)
Mains services
At cost
14,423
(794)
Fences and gates
At cost
1,000
(100)
Furniture and fittings
At cost
4,503
(443)
Fixed plant and equipment
At cost
23,223
(2,428)
Motor vehicles
At cost
1,166
(132)
Office equipment
At cost
125
(24)
Computers and related hardware
At cost
Capital works in progress
At cost
645
(189)
6,385
Total property, plant and equipment
Net book value
394,426
14 Other Non-Current Assets
Borrowing costs
33,002
(3,792)
29,210
15 Accounts Payable
Trade creditors
Sundry creditors and accruals
8,165
525
8,690
Notes
to the
16 Bank Loans, Shareholder Loans and Convertible Notes
$’000
Bank loans – secured
928,200
Shareholder loans – unsecured
255,000
100,000 convertible notes of $100 each – unsecured
Financial
Statements
1997 to 30 June 1998
10,000
Bank Loans
The bank loans comprise Senior Debt and Mezzanine Debt which are secured by first and
second ranking mortgages respectively over the airport lease and a fixed and floating first
charge over the Company’s assets and undertakings.
Pursuant to the Shareholder Agreement, each shareholder has loaned the company an amount
in proportion to the number of shares for which the shareholder has been issued. Interest
accrues at the rate of 15% per annum but is paid only to the extent that the Company has free
cash available. Interest is non-cumulative and was not paid during the period.
The loans are unsecured and are repayable after 50 years.
19
Convertible Notes
The Noteholder has the option to convert to equity at the prevailing market price, exercisable
by the Noteholder if the Company fails to pay interest for two consecutive interest payment
dates or within a period of twenty business days up to or including the tenth anniversary of
the issue date.
If the notes are not converted on the tenth anniversary of the issue date, they must be repaid at
face value plus any unpaid interest.
17 Financing Arrangements
The Company has access to the following lines of credit:
820,000
108,200
10,000
255,000
20,000
1,213,200
Facilities utilised at balance date:
Senior debt
Mezzanine debt
Convertible notes
Shareholder loans
Working capital facility – bank guarantee
820,000
108,200
10,000
255,000
3,400
1,196,600
Facilities not utilised at balance date:
Working capital facility
16,600
16,600
On 1 July 1997, the Company issued 100,000 convertible notes at a principal value of $100
each. Interest is payable every twelve months at an interest coupon rate equivalent to the 10 year
Commonwealth Bond Rate determined on 1 July each year. Interest is paid annually in arrears.
Total facilities available:
Senior debt
Mezzanine debt
Convertible notes
Shareholder loans
Working capital facility
BACL ...evolution
Shareholder Loans
Notes
to the
Financial
Statements
1997 to 30 June 1998
Working Capital Facility
The facility is available for overdraft, loan, letters of credit, bank guarantees, transactional
banking or a combination thereof, to a maximum of $20 million.
A line fee on the facility is charged at 0.25% p.a. and is secured pari passu with the Senior
Debt Facility.
18 Provisions
$’000
Current
1,537
Employee entitlements
20 Annual Report 1997/98
Non-Current
142
Employee entitlements
19 Other Liabilities
Current
Unearned revenue
Retentions, deposits and other amounts held on behalf of third parties
5,667
519
6,186
Non-current
6,611
BACL ...evolution
Unearned revenue
20 Share Capital
Issued and Paid-Up Capital
2,550,000 ordinary shares of $1.00 each, fully paid
200 performance shares of $1.00 each, fully paid
2,550
0
2,550
On 9 January 1997, the Company made the initial issue of shares, issuing 10 ordinary shares
of $1.00 par value. These were converted to performance shares on 25 March 1997. A further
allotment of 190 performance shares was made on 2 July 1997. Subsequently, the Company
has issued 2,550,000 ordinary shares of $1.00 par value to shareholders. Of these shares,
2,303,570 were issued at a premium of $99.00, 7 were issued at a premium of $102.00,
174,993 were issued at a premium of $103.00 and 71,430 were issued at a premium
of $109.00.
Performance Shares
Performance shareholders have the same rights as ordinary shareholders of the capital in the
Company to receive notices, reports, audited accounts and balance sheets, and attend general
meetings, and to vote at a general meeting in respect of any resolution directly affecting any of
the special rights or privileges attached to the performance shares but otherwise no right to vote
at a general meeting.
Dividends are non-cumulative and only payable if the Company’s financial result exceeds
agreed levels and if sufficient cash flow exists to pay dividends.
21 Reserves
Share premium
Balance at beginning of period
Add: Premium on ordinary shares
issued during the period
Less: Preliminary legal expenses
Balance at end of period
0
253,864
(515)
253,349
Notes
to the
Financial
Statements
22 Additional Financial Instruments Disclosure
A Interest rate risk
Interest Rate Swaps
The Company has entered into a $920 million interest rate swap which swaps the Company’s
floating rate borrowings into fixed rates. The maturity of the swap will coincide with the maturity
of debt facilities.
1997 to 30 June 1998
The contract involves quarterly payment or receipt of the net amount of interest. The fixed rate
at 30 June 1998 was 6.9% and the floating rates were at prevailing market rates plus a
credit margin.
Interest rate risk exposures
1998
Fixed interest maturing in:
Floating
1 year
Over 1
More
Non-
Interest
or less
to
than 5
Interest
5 years
years
bearing
$’000
$’000
$’000
rate
$’000
$’000
Total
Weighted
average
interest
$’000
rate
21
Financial assets
37,940
37,940
Receivables
6,364
4.74
6,364
Financial liabilities
Bank loans
• Senior debt
• Mezzanine debt
820,000
108,200
820,000
108,200
Accounts payable
8,690
Shareholder loans
8,690
255,000 255,000
Other liabilities
7,130
Convertible notes
Interest rate swaps
(notional principal
amount)
6.07
9.36
10,000
(920,000)
7,130
10,000
920,000
7.16
6.90
B Credit risk exposures
Credit risk represents the loss that would be recognised if counterparties failed to perform as
contracted.
The credit risk on financial assets of the Company which have been recognised on the balance
sheet, is the carrying amount, net of any provision for doubtful debts.
The Company minimises concentrations of credit risk by undertaking transactions with a large
number of customers and counterparties from various countries.
The Company is not materially exposed to any individual, country, area or individual customer.
Interest rate swaps are subject to credit risk in relation to the relevant counterparties, which are
principally large banks. The credit risk on swap contracts is limited to the next amount to be
received from counterparties on contracts that are favourable to the Company. No amount is
due to the Company at the end of the period.
Cash
BACL ...evolution
The Company’s exposure to interest rate risk and the effective weighted average interest
rate for classes of financial assets and financial liabilities is set out below:
Notes
to the
Financial
Statements
1997 to 30 June 1998
C Net fair values of financial assets and liabilities
The carrying amounts of financial instruments approximate their fair values.
The valuation of off-balance sheet financial instruments (interest rate swap agreements) is
$105 million and reflects the estimated amount which the Company would expect to pay to
terminate the swaps (net of transaction costs) or replace the swaps at their current market rates
at the end of the period.
23 Employee Entitlements
BACL ...evolution
1998
$’000
Aggregate employee entitlements including on-costs
• Current
• Non-current
1,537
142
1,679
Superannuation funds
The Company has a legally enforceable obligation to contribute to one superannuation fund,
the Federal Airports Corporation Superannuation Fund which is a combination of a defined
benefit and an accumulation fund.
Defined Benefit Component
Employer contributions are based on the advice of the fund’s actuary. Contributions in excess of
those specified in SIS legislation are not legally enforceable. Employee contributions are based
on various percentages of their gross salaries. After serving a qualifying period, all employees
are entitled to benefits on retirement, disability or death.
The fund provides defined benefits based on benefit percentage, years of service and final
average salary. In accordance with the Trust Deed, the Company is under no legal obligation to
make up any shortfall in the fund’s assets to meet payments due to employees.
An actuarial assessment of the funds as at 1 July 1994 was carried out by John Burnett, BA,
FIAA on 6 March 1995. The actuary concluded that the fund was in a satisfactory financial
position.
Set out below in the table are the total net assets, accrued benefits and vested benefits of the
fund. Accrued benefits represent the present value of expected future payments which arise from
members’ service up to the valuation date.
Vested benefits are benefits which are not conditional upon the continued membership of the
fund or any factor, other than resignation from the fund.
Details of contributions to the fund during the period are as follows:
Employer contributions paid to the fund
849
Employer contributions payable to the fund
9
858
1997
$’000
Fund Assets
Market Value (i)
Federal Airports
Corporation
Superannuation
Fund
66,333
1997
$’000
Total Accrued
Benefits (ii)
47,557
1997
$’000
1997
$’000
Excess
Total Vested Benefits
(i)
18,776
60,457
i
Fund assets at net market value and vested benefits have been calculated at 30 June 1997,
being the date of the most recent financial statements of the fund.
ii
Accrued benefits have been obtained from the most recent financial statements of the fund
being 30 June 1997, and are based on an actuarial review performed as at 1 July 1994.
Notes
to the
24 Commitments
Capital Expenditure Commitments
1998
$’000
Contracted but not provided for and payable:
Not longer than one year
3,400
26 Notes to the Statement of Cash Flows
A Reconciliation of cash
37,940
B
Reconciliation of operating loss after income tax to net cash provided by operating activities
(11,833)
Add/(less) items classified as investing/financing activities:
(Profit)/loss on sale of non-current assets
Gain on placement of mezzanine bond received from financier
34
(2,134)
Unearned revenue
(4,722)
Add/(less) non-cash items:
Amortisation/depreciation
Amounts set aside to provisions
Net cash provided by operating activities before change in assets and liabilities
24,437
325
6,107
Change in assets and liabilities
(Increase) in inventories
(17)
Decrease in prepayments
(Increase) in trade/ term debtors
349
(6,701)
Increase in accounts payable
25,839
Net cash provided by operating activities
25,577
27 Directors’ Remuneration
Directors’ Income
The number of directors of the Company whose income from the Company or any related party
falls within the following bands:
$0
$10,000
$20,000
$30,000
$40,000
–
–
–
–
–
$ 9,999
$19,999
$29,999
$39,999
$49,999
Total income paid to all directors of the Company
Number
6
2
3
2
1
217
For the purposes of the Statement of Cash Flows, cash includes cash on hand and at bank and
short term deposits at call. Cash as at the end of the financial period as shown in the Statement
of Cash Flows is reconciled to the related items in the balance sheet as follows:
BACL ...evolution
25 Contingent Liabilities
Cash
1997 to 30 June 1998
8,911
In accordance with the terms and conditions of the agreement to purchase the right to operate
Brisbane Airport, the Company is required to spend a determined amount on capital items in
the first five years of operation, and an additional amount in the following five years of
operation. The determined amount is revised yearly based on passenger growth forecasts and
the operational requirements of the airport. The determined amount is currently estimated at
approximately $331 million for the 10 year period.
Bank Guarantees – secured (refer Note 17)
Financial
Statements
Notes
to the
Financial
Statements
1997 to 30 June 1998
The Managing Director and CEO is appointed by Schiphol International B.V, in accordance
with the Technical Services Agreement between the Company and Schiphol International B.V.
The management fee paid under this arrangement incorporates the salary of the Managing
Director and CEO and does not include a discrete salary component.
Directors’ income does not include insurance premiums paid by the Company in respect of
Directors’ and Officers‘ Liabilities insurance contracts, as the insurance contracts do not specify
premiums paid in respect of individual directors. Details of the insurance premiums paid are set
out in the Directors’ Report.
28 Related Parties
Directors
The names of each person holding the position of Director of the Company during the period:
C Greiner, S Standen, M Astill, I Lee (Alternate: D Corsie), E Nosworthy, J Massey,
K Rooijmans, C Ryan, H Smits (Alternate: H Bakker), J Soorley (Alternate: R Carter), B. Thornton
P Verboom (Alternate: H Bakker) and J. Ward. Mr P Verboom replaced Mr H Smits as a director
during the period.
Details of directors’ remuneration are set out in Note 27.
Apart from the details disclosed in this note, no director has entered into a material contract
with the Company since the beginning of the financial period and there were no material
contracts involving directors’ interests subsisting at year end.
BACL ...evolution
The following directors were appointed on and resigned on:
•
•
•
•
•
•
C Greiner
S Standen
P Graham
M Astill
H Smits
I Lee
Appointed
9.1.97
9.1.97
24.6.97
9.1.97
23.5.97
29.1.97
Resigned
23.5.97
29.1.97
27.6.97
29.1.97
30.1.98
28.8.98
Other Transactions with the Company
The terms and conditions for transactions entered into with shareholder entities were no more
favourable than those available or which might reasonably be expected to be available, on
similar transactions to non-shareholder entities on an arm’s length basis.
Notes
to the
The values of transactions during the period with shareholder-related entities were as follows:
Director
H. Bakker
I. Lee
H. Smits,
P. Verboom
J. Soorley
Commonwealth Bank of
Australia Limited and
related entities
Port of Brisbane Corporation
Schiphol Australia Pty Ltd
Amsterdam Airport Schiphol
City of Brisbane Airport
Corporation Pty Ltd
(Convertible Noteholder and
related entities)
1998
Value of
transactions
$’000
Management services,
reimbursement of bid and
other associated costs –
acquisition of right to operate
Brisbane Airport
1,743
Share issue, borrowings,
shareholder loans,
acquisition of right to
operate Brisbane Airport
667,680
Share issue, shareholder loans,
191,178
Reimbursement of bid and
Share issue, shareholder loans,
acquisition of right to operate
Brisbane Airport
100
87,222
Convertible note issue,
rates and utility charges.
14,377
Amounts payable to and receivable from shareholder-related entities at
balance date arising from these transactions were as follows:
1998
$’000
Current Receivable
Current Payable
Non-current Receivable
Non-current Payable
1997 to 30 June 1998
0
3,939
0
364,731
Technical Services Agreement
The Company has entered into a Technical Services Agreement with Schiphol International
BV in which Schiphol International BV provides the Company with the following services:
• advisory services, including staffing, planning, operations, marketing and third party
liaison; and
• Schiphol International BV will make available qualified personnel to fulfil various positions
within the Company’s organisational structure subject to the Company’s Board approval.
K. Rooijmans
Schiphol International BV
Transactions entered
into with shareholderrelated entity during
the period
BACL ...evolution
E. Nosworthy
Shareholder-related entity
Financial
Statements
Notes
to the
Financial
Statements
1997 to 30 June 1998
29 Economic Dependency
It is not considered that a material dependency exists with any one customer, country or region.
30 Events Subsequent to Balance Date
There have been no events which occurred subsequent to balance date which have had a
material effect on the Company.
31 Segment Information
BACL ...evolution
The Company operates in the aeronautical industry in Australia.
Statement
by
1. In the opinion of the directors of Brisbane Airport Corporation Limited:
Directors
(a) the financial statements of the Company as set out on pages 8 to 26 are drawn up
so as to give a true and fair view of the results for the financial period ended 30 June
1998 and the state of affairs of the Company at 30 June 1998; and
(b) at the date of this statement there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they fall due.
2
The financial statements have been prepared in accordance with applicable Accounting
Standards and Urgent Issues Group Consensus Views.
Signed in accordance with a resolution of directors.
Koen Rooijmans
Director
Brisbane, 25 September 1998
BACL ...evolution
Barry Thornton
Director
Independent
Auditors’
Report
BACL ...evolution
to the Members of
Brisbane Airport
Corporation Limited
Scope
We have audited the financial statements of the Company for the period 9 January 1997 to
30 June 1998 consisting of the profit and loss account, balance sheet, statement of cash flows,
accompanying notes and the statement by directors set out on pages 8 to 27. The Company’s
directors are responsible for the financial statements. We have conducted an independent
audit of these financial statements in order to express an opinion on them to the members of
the Company.
Our audit has been conducted in accordance with Australian Auditing Standards to provide
reasonable assurance whether the financial statements are free of material misstatement. Our
procedures included examination, on a test basis, of evidence supporting the amounts and other
disclosures in the financial statements, and the evaluation of accounting policies and significant
accounting estimates. These procedures have been undertaken to form an opinion whether, in
all material respects, the financial statements are presented fairly in accordance with
Accounting Standards and other mandatory professional reporting requirements and statutory
requirements so as to present a view which is consistent with our understanding of the
Company’s financial position, the results of its operations and its cash flows.
The audit opinion expressed in this report has been formed on the above basis.
Audit Opinion
In our opinion the financial statements of the Company are properly drawn up:
(a) so as to give a true and fair view of:
(i) the state of affairs of the Company at 30 June 1998 and the results and cash flows of
the Company for the period 9 January 1997 to 30 June 1998; and
(ii) the other matters required by Divisions 4, 4A and 4B of Part 3.6 of the Corporations
Law to be dealt with in the financial statements;
(b) in accordance with the provisions of the Corporations Law; and
(c) in accordance with applicable Accounting Standards and other mandatory professional
reporting requirements.
KPMG
Chartered Accountants
Ian Fraser
Partner

BACL Financials_Areport mono - Brisbane Airport Corporation

Transcription

Similar documents

HOTEL ETOILE PEREIRE

Lodging copy_revised dates

Aeroportos do Brasil_eng

7851 Horan Wall Perspex Posters3.indd

summer meeting

Travel information Costa Almeria - Clima and

AIRMAN`S INFORMATiON MANUAL

Lynden Pindling International Airport

Road Closure - Oregon International Air Show

Airport Open House