newcastle port corporation · 2019-02-12 · annual report 2001 ~ 2002 page 4 the port of newcastle...
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N E W C A S T L E P O R T
C O R P O R A T I O N
A N N U A L R E P O R T
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C O N T E N T S
Chairman’s Message 2
CEO’s Message 3
Purpose 4
Australia’s Premier Commercial Port 4
The Year in Review 5
Summary of Results 5
Business and Trade 6
Community and Environment 8
Shipping 9
People and Safety 9
Equal Employment Opportunity Training 10
Compliance and Risk Management 10
Statutory Information
Letter to the Voting Shareholders 13
Statutory Information 14
Index 30
Financial Statements
Directors’ Statement 32
Independent Audit Report 33
Statement of Financial Performance 34
Statement of Financial Position 35
Statement of Cash Flows 36
Notes to and forming part of the Financial Statements 37
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C H A I R M A N ’ S M E S S A G E
The Board has pursued its twin
objectives of trade expansion
and diversification throughout
the past year with pleasing
results in a challenging and
volatile market.
Coal exports reached a new record of more than
69 million tonnes, while imports of iron and steel grew
by more than 100,000 tonnes. The expansion of the
Kooragang coal loading facility this year led to a record
monthly throughput of 6.645 million tonnes in January
2002 and that record continues to be threatened
monthly.
Significant progress has been made with major projects
to enhance the Port and improve its facilities. A
submission prepared for Government consideration
proposes to test the market for a private consortium to
construct and operate a Multi-Purpose Terminal on the
ex-BHP Steelworks site. A harbour deepening and
improvement project is being developed to allow the
larger ships to carry more coal from the Port.
As well as these projects, the Corporation has been
very active in supporting the development of the
Austeel and Protech steel projects and testing the
potential port requirements. Several initiatives are also
being pursued to improve the Port's grain handling
facilities.
These results and the pursuit of new developments
have been achieved with an appreciation of the needs
of the surrounding port communities and a strong drive
towards improving the economic prosperity of the
region.
During the year there has been a change of Chief
Executives following Glen Oakley's decision not to
extend his contract. I would like to commend Glen for
his tireless efforts and the results he has achieved as
CEO, particularly in raising the profile of the
Corporation and restructuring the workforce.
I look forward to the contribution of the new Chief
Executive, Chris Oxenbould, who joins following a
distinguished career in the Navy and more recently in
the NSW Premier's Department.
The contribution of all Corporation employees has been
integral to this year's success and, on behalf of the
Board, I express appreciation of those efforts.
WILTON AINSWORTHChairman
GAYE HARTDirector
JOHN FITZGERALDDirector
JOHN McNAUGHTONDirector
DOUG HICKLINGStaff Director
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C E O ' S M E S S A G E
I am very pleased to join an
organisation that is running
smoothly and performing well,
with another record year.
Without doubt the past year
has been busy and successful for the Corporation. The
future is also very bright with a number of exciting
projects emerging and at very interesting and
demanding stages of their development.
The major projects present a considerable challenge to
ensure they are managed properly and that the
necessary support and approvals are obtained.
A small strategic projects team has been established to
develop the Multi-Purpose Terminal and harbour
improvement projects. It will also monitor the steel
projects and maintain the Port's commitment to them.
The team's worth is already evident in preparing sound
business cases and submissions for consideration by
shareholders and Government.
With over a year's experience of the new staff
structure, effort has concentrated on strategic business
planning and a clear definition and understanding of
the Corporation's goals and the contribution of each
staff member to them. This is a natural progression of
the earlier staff rationalisation and aimed at
strengthening the Corporation's teamwork and
productivity.
The task before the Corporation is exciting and the
rewards and potential benefits for the Hunter Region
are significant. I look forward to working with the
Newcastle Port Corporation team, to meet the
challenges that lie before us.
CHRIS OXENBOULD AO Chief Executive Officer
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The Port of Newcastle was Australia's first commercial
export port, sending a shipload of coal to Bengal in
1799. It is also one of Australia's largest tonnage ports,
and is the world's largest coal exporting port.
A major focus for the Newcastle Port Corporation in
recent years has been to diversify trade through the
Port, and so alleviate our current reliance on coal. The
Corporation has been working hard to increase the
movement of general cargoes and also other bulk
cargoes through the Port. There has been considerable
success with the addition of cargoes such as vegetable
oils, cottonseed and iron and steel.
The construction of a joint venture agriterminal by P&O
and GrainCorp, has resulted in the export of bulk
cottonseed through Newcastle, with various other more
specialist grains expected.
Record steel imports signify a historic change in the use
of the Port, from that of steel exporter. Use of the
Eastern Basin Distribution Centre and the Basin
warehouse demonstrates good relationships between
port service providers, importers and the Corporation.
The Port has had regular visits by liner service vessels
such as Austral Asia Line, (AAL), New Guinea Pacific
Line (NGPL), Gearbulk, Western Bulk Carriers (WBC)
and Clipper Elite Carriers (CEC).
Attendance and displays at agricultural shows such as
AgQuip in Gunnedah, and the Moree Cotton Show,
helped the Corporation to better understand the needs
of our customers, and helped to establish links with
agricultural exporters.
A U S T R A L I A ’ S P R E M I E RC O M M E R C I A L P O R T
The purpose of the Corporation is to enhance the
economic development of the Hunter Region and NSW
by providing an efficient, effective and environmentally
sustainable maritime gateway to the region.
P U R P O S E
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T H E Y E A R I N R E V I E W
S U M M A R Y O F R E S U L T S
Trade throughput for the Port of Newcastle for the
Financial Year 2001/2002 was 75.5 million tonnes.
This is a 2% increase on last year, and the second
highest throughput tonnage in the Port's 203 year
history.
Imports of 3.4 million tonnes through the Port were
slightly down on the previous year, mainly due to a
decline in the transhipment of coal carried by the vessel
Wallarah.
Exports of coal were a record 69.3 million tonnes,
aided by the completion of Port Waratah Coal Services'
Kooragang Coal Terminal expansion. Other exports
gave a total export figure for the year of 72.1 million
tonnes, a 2% increase on the 2000/01 year.
While several commodities such as aluminium and
timber had throughput that was below budget for the
year, overall general cargo throughput was 12.7%
above budget. This was particularly aided by increases
in zinc and lead exports. Specialised bulk throughput
was above budget by 12.6%, with wheat throughput
some 450,000 tonnes above budget.
2000/01 2001/02
Operating Surplus ($m after tax) 7.608 5.757
Total assets ($m) 140.59 138.45
Return on assets 6.4% 8.4%
Total trade (million mass tonnes) 73.87 75.498
Total trade (million revenue tonnes) 74.33 75.888
Total vessel GRT (million tonnes) 50.80 53.20
Average vessel size (Dwt) 58,680 64,276
Vessel visits 1,514 1,473
Average port management charge
per tonne of cargo $0.47 $0.47
Average port management charge
per vessel ($000) 22.94 24.30
Revenue per employee ($000) 351 414
Number of employees 103 94
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B U S I N E S S A N D T R A D E
• Central to the Corporation's strategy to diversify
trade through the Port has been the redevelopment
of the former BHP Steelworks site into a Multi-
Purpose Terminal (MPT).
Established deep water frontage land is a rarity
in Australia and indeed the world, and this
makes the 150 hectares, which includes transport
infrastructure, a valuable asset ready for
redevelopment.
The Corporation set up a Strategic Projects Branch
with four staff. They have been working on the
proposed redevelopment, which is currently at
business case and expression of interest stages. The
proposed redevelopment includes:
~ a post panamax vessel sized container facility of over
500,000 teu (average container size) capacity;
~ a general cargo terminal with over half a million
tonnes capacity;
~ rail based infrastructure; and
~ extensive backup land for related development.
The Strategic Projects Branch was also involved in
the detailed assessment of Project Newport, a
proposal to deepen and widen the Port.
• Port Waratah Coal Services completed its $345 million
Stage 3 expansion, which was officially opened in
March 2002. The expansion has increased capacity
at Kooragang Coal Terminal by 12 million tonnes per
annum, giving a combined Kooragang and
Carrington capacity of 90 million tonnes per annum.
The Stage 3 expansion involved a third rail receival
point; an additional stockyard stacking conveyor,
reclaimer and 500,000 tonne storage pad; and a
third ship loader and linking conveyors. The
construction involved six major construction
contractors from the Hunter Valley, and employed
1500 people.
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• The Globex grain loading proposal has been shelved
due to a proposed alliance between GrainCorp
(NSW) and GrainCo (Queensland) for the operation
of bulk grain loading terminals. This will avoid
duplication of capital investment and allows the
sharing of knowledge, skills and intellectual
property. The alliance, in the form of a new joint
venture company named Bulk Terminals Australia
(BTA), is now planning to improve grain delivery to
the existing GrainCorp site at West Basin 3. Other
grain handling enhancements for the Port are being
investigated.
• Australian Defence Industries (ADI) launched the
last of six minehunters in January 2002. The
minehunters were produced for the Royal Australian
Navy, and about 850 local businesses contributed to
the project, which at its peak employed 580 people.
ADI is bidding for a much larger project to build
patrol boats for the Navy using advanced
composites.
• A join venture agriterminal used for the storage and
loading of cottonseed and other seeds and grains,
was completed in June 2002 adjacent to No. 2
Kooragang berth. The joint venture, between P&O
and GrainCorp, involves two silos holding a nominal
20,000 tonnes of cottonseed each and a shared
conveyor system. A loading arm was refurbished to
handle the cottonseed and other commodities.
• The Eastern Basin Distribution Centre (EBDC) has
been experiencing good throughput of trade, with
ongoing liner visits by AAL, NGPL, NBC, CEC and
Gearbulk. Aluminium, steel and timber have formed
the majority of goods handled by the EBDC, with
various other goods making up the balance. In
September 2001, the EBDC established a container
record, with 300 containers loaded onto the NGPL
vessel Chekiang.
• At the end of August 2001, the Corporation again
participated in Australia's largest agricultural field
days and rural exhibition – AgQuip at Gunnedah.
The field days attract over 100,000 visitors from
across the country to see the latest in agricultural
equipment, products and services. Newcastle Port
Corporation exhibits at AgQuip to raise awareness
of its port facilities and the services which benefit
importers and exporters located in the State's west
and north west.
The Corporation was also represented at the Moree
Cotton Show in May 2002. Cotton and cottonseed
are products which are increasingly exported
through the Port. The Corporation is ensuring that
cotton farmers and exporters are aware of our
facilities.
• During the financial year the Corporation's wharf
restoration program (comprising concrete spalling
repairs and the installation of cathodic protection
systems) continued with works undertaken on the
Eastern Basin and Western Basin wharves.
Restoration work on the Western Basin wharf
commenced in 1998 with the repair of concrete
failures.
The subsequent installation of a cathodic protection
system in areas of significant deterioration was the
final element of work to provide the wharf with an
additional lifespan of approximately 30 years.
Cathodic installation work on the Eastern Basin
wharf will be completed by May 2003.
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C O M M U N I T Y A N D E N V I R O N M E N T
• The Corporation was again involved in the
Newcastle Port Corporation National Maritime
Festival as naming rights sponsor. More than
100,000 people attended the festival weekend,
which included visits from ships such as the James
Craig, dragon boat races, a cross-harbour swim,
canoe polo and a range of other activities. The
Maritime Festival is run by the Newcastle Maritime
Museum, and plans are underway for a bigger and
better festival in 2003.
• The Corporation was a major sponsor of
EnergyAustralia Surfest, the major surfing event in
Newcastle attracting international competitors.
• The Corporation sponsored the Emerging Exporter
category of the Hunter Export Awards in August
2001. The category ties in well with the
Corporation's goal of diversifying the Port's
throughput. PCWI Pty Ltd of Cardiff was the winner
of the Emerging Exporter category.
• Various school and community groups took tours of
the Port and presentations were given at the meetings
of service clubs, schools and other community
groups. The tours and presentations help to explain
to the community the purposes and functions of the
Port and the Newcastle Port Corporation.
• The Corporation has taken part in discussions with
the Carrington community in order to ensure a good
relationship between residential and industrial
neighbours.
• On 7 August 2001, Newcastle Port Corporation
conducted a Shoreline Assessment and Cleanup
Course at the Holiday Inn Newcastle.
Representatives of several State Government
agencies attended the course. A similar course was
conducted by Newcastle Port Corporation in Ballina
on the State's north coast. The annual Marine Oil
and Chemical Spill course was held in Newcastle
during May 2002. The Corporation also attended the
Mid North Coast and Northern Rivers District
Emergency Management Committee meetings as
part of its Port Safety Operating Licence
requirements.
• Stage 2 of the port access road was planned and
completed during the latter part of 2001, and
included community consultation and visits to the
site. The major reason for the project was to reduce
truck movements close to the residential area of
Carrington. The Carrington Heavy Vehicle Bypass
was opened on 20 December 2001.
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S H I P P I N G
• The new vessel traffic information centre (VTIC)
improves the efficiency of ship handling
arrangements through the Port, by centralising vessel
traffic arrangements, shipping communications and
the Corporation's operations branch staff, such as
Pilots and Port Officers, in one location.
• Dredging is undertaken five days per week.
Newcastle Port Corporation contracted the use of
a sweep bar to complement the dredging work of
the dredger, “David Allan.” The sweeping campaign
successfully levelled out the bed of the harbour to
design depths.
• The Corporation continued the development of a
project for the deepening and widening of the Port's
main navigation channels. Following endorsement
of the project by the Cabinet Standing Committee
on the Budget in November 2001, an inter-agency
steering committee was established and work
commenced on the preparation of documentation
for a Call for Detailed Proposals. This has required
detailed consideration of engineering, financial and
legal issues, as well as the impacts on the Port's
customers, the environment and the Port's operating
procedures, which consumed the remainder of the
year. Following completion of this work, the
Corporation will report back to Government early in
the new financial year on the best options.
• The Corporation was involved in planning the
relocation of the Hunter Towage Services’ tugs to
Dyke Point. This should take place early in the next
financial year.
• During the year the Port was visited by 1473
commercial and naval vessels. Coal berths loaded
796 vessels, the largest being the Pacific Triangle
which is 300 metres long with a cargo carrying
capacity of 184,000 tonnes.
• There were 3086 shipping movements with 2691
using a pilot. In January 2002, there were 296
pilotage movements which is a record for a single
month. Over 70% of pilotage movements during the
year used a helicopter to deliver Pilots.
P E O P L E A N D S A F E T Y
The Corporation remains committed to sustaining an
equal employment opportunity workplace through the
continued use of flexible work practices supported by a
range of policies that both protect and support staff's rights.
There were no industrial disputes during the
2001/2002 financial year. As well, productivity and
innovation were encouraged through the introduction
of an integrated performance management system.
Project management training has also been given a
high priority, with thirty-one Port Corporation staff
undergoing a one-day project management course.
Follow up discussion groups looked at several pilot
projects.
During the financial year, lost time injuries increased
from three to six, however the number of working days
lost declined from 153 to 54 due to the success of the
injury management plan. As well, the Corporation
celebrated a twelve month period with no lost time
injuries, from November 2000 to October 2001.
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C O M P L I A N C E A N D R I S KM A N A G E M E N T
During the 2001/2002 year the Corporation:
• Began upgrading the certified quality assurance
system to comply with the ISO 9000:2000 series of
quality standards;
• Addressed the requirements of the revised
Occupational Health and Safety legislation and
related Regulations, which have a compliance date
of 1 September 2002;
• Conducted OH&S consultation training and OH&S
risk management training for supervisors/managers;
• Held a full review of insurance risk and amended
policies to incorporate appropriate deductible
amounts and insurance value limits;
• Conducted a full review of the requirements of the
Workers Compensation Premium Discount Scheme;
formulated and implemented action plans;
• Replaced computer hardware, such as server and
desktops, to improve the reliability of delivery of the
Corporation's information technology. This also
made systems more robust and serviceable.
Internal auditors and independent external auditors
reviewed operating and administrative systems with no
material matters of concern.
The Corporation will continue to develop and
implement risk management strategies throughout the
coming year. We will:
• Invite the members of the "Port User Group" to
attend Occupational Health and Safety awareness
sessions outlining roles and responsibilities within
the Port;
• Further progress risk management profiles within
the Corporation;
• Review compliance with the Treasurer’s Directions
and Premier's Department Guidelines; and
• Install a radio link to the Port precinct so that the
information technology network can be accessed
from remote sites.
E Q U A L E M P L O Y M E N TO P P O R T U N I T Y T R A I N I N G
The merit principle was applied to all recruitment,
relieving and development opportunities. Staff
participating on selection panels attended recruitment
and selection committee training and staff who have
not attended a course in the last three years will have
a refresher course. Harassment prevention courses
were conducted for non-supervisory staff.
Recruitment and selection procedures were reviewed
to include anti-discrimination changes reflecting
employers' and carers' responsibilities, and a people
maintenance program is being introduced. Its aim is to
incorporate health and wellbeing strategies into the
Corporation's current flexible working strategies, to
provide a better approach to balancing the work and
family lives of our employees.
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N E W C A S T L E P O R T
C O R P O R A T I O N
STATUTORY INFORMATION AND FINANCIAL STATEMENTS
Newcastle Port Corporation Annual Report for the year ending 30 June 2002
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C O N T E N T S
Letter of Submission 13
Charter 14
Aims 14
Objectives and Outcomes 14
Management and Structure 18
Summary Review of Operations 21
Improvement Plans 21
Funds Granted to Non-Government Community Organisations 21
Legal Change 22
Heritage 22
Economic or Other Factors 22
Research and Development 22
Employee Relations 23
Community Access and Responsibilities 25
Miscellaneous Port Activities 25
Exemptions 26
Consultants 27
Promotions – Publications 27
Customer Response 27
Guarantee of Service 28
Risk Management and Insurance 28
Subordinate Legislation 29
Auditor General Matters 29
Disclosure of Controlled Entities 29
Freedom of Information 29
Annual Report 29
Credit Card Use 29
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Dear Treasurer and Assistant Treasurer,
We present the Annual Report of the Newcastle Port Corporation for the year ending 30 June 2002. The report is in
accordance with the Annual Reports (Statutory Bodies) Act 1984, the applicable provisions of the Public Finance and
Audit Act 1983 and the State Owned Corporations Act 1989. It is submitted for presentation to Parliament.
The Board wishes to record its appreciation of the contribution of the senior managers and all staff to this year's
excellent result.
Wilton Ainsworth Chris Oxenbould AO
Chairman Chief Executive Officer
The Hon M R Egan MLC The Hon John J Della Bosca MP
Treasurer Assistant Treasurer
Governor Macquarie Tower Governor Macquarie Tower
Level 33, 1 Farrer Place Level 33, 1 Farrer Place
SYDNEY NSW 2000 SYDNEY NSW 2000
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1 CHARTER
Following the NSW State Election in March 1995, the Premier, Mr Bob Carr, announced plans to corporatise the
Port of Newcastle as part of the corporatisation of the State's ports.
Legislation was passed in June of that year and the Newcastle Port Corporation was established under the
provisions of the Ports Corporatisation and Waterways Management Act, 1995.
Newcastle Port Corporation is an autonomous Statutory Corporation whose voting shareholders (the Treasurer and
Assistant Treasurer) represent the Government of NSW.
The Annual Report is presented in accordance with the Annual Reports (Statutory Bodies) Act 1984, the Annual
Reports (Statutory Bodies) Regulation 2000, the applicable provisions of the Public Finance and Audit Act 1983,
and the State Owned Corporations Act 1989.
2 AIMS
Newcastle Port Corporation aims to:
~ provide marine safety, navigation and traffic management services;
~ successfully manage wharf facilities;
~ successfully manage port-related property; and
~ be a leading commercially viable port whose port-related business development benefits the Corporation and
broader community.
3 OBJECIVES AND OUTCOMES
The Corporation succeeded in meeting the objectives in all key areas this year.
Key Result Area
Trade Development
Safety
Equity
Finance
Objective
To maximise profitable port throughput.
To provide a safe working environment
for all port users.
To provide a workplace culture which at
all times displays fair practices and
behaviours.
To improve Shareholder Value Add.
Outcome
Total trade increased by 2.2%. There were
record coal exports and iron and steel
imports.
Lost time injuries increased from 3 to 6 but
the number of working days lost declined
from 153 to 54 due to the success of the
Injury Management Plan.
No industrial disputes occurred.
The SVA was above budget, despite
increased spending on maintenance of the
wharves.
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Key Result Area
Finance
Operations
Liaise and Consult
Objective
To reduce risk and exposure to a single
commodity.
To improve overall asset performance.
To provide a high value shareholder
return.
To improve the efficiency of port
operations.
To improve the quality of operations
and service delivery.
To develop and implement a waste
reduction program.
To improve links with customers.
To develop strategic alliances with
partners.
Outcome
There were record steel imports due to
competitiveness of general cargo facilities
at Newcastle. Above budget throughput of
miscellaneous bulks. The Corporation
promoted development of the Multi-
Purpose Terminal on the former BHP site.
Return on assets was 8.81%, which was
above target, and higher than 2000/2001.
The dividend to shareholders for the
financial year was $9 Million.
The introduction of revised traffic management
services and implementation of an
integrated performance management
system has improved productivity and
service to customers.
The revised arrangements at the Vessel
Traffic Information Centre improved service
delivery. Quality audits of port procedures
ensured compliance with port safety
operating licence requirements.
A waste reduction and purchasing policy
was implemented to reduce, reuse and
recycle waste.
Regular liaison with and visits to customers
were undertaken. The Corporation consulted
with ship agents on port projects, such as
Project Newport.
Corporation officers assisted Globex
regarding the proposed grain terminal
project at Dyke wharves and liaised with
P&O regarding the possible construction of
additional bulk berth (K1). There was
ongoing joint promotion of Eastern Basin
Distribution Centre.
3 OBJECIVES AND OUTCOMES (continued)
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Key Result Area
Corporate Governance
Operating Licence
Objective
To provide a risk management strategy
for prudent management of all risks.
To conform to all aspects of the
operating licence.
Outcome
Strategies were implemented to ensure
identification of risks and compliance with
relevant standards and legislation. Audits
and reviews of operating and administrative
systems did not identify any matters for
concern.
The Corporation met all performance
standards in accordance with the port
safety operating licence. Officers liaised
with the Transport Safety Bureau, together
with other Port Corporations, regarding the
potential for improvements in performance
standards.
3 OBJECIVES & OUTCOMES (continued)
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STAFF
UNIONS GOVERNMENTDept of Transport
MinisterTreasurer
Assistant Treasurer
SPECIAL SITESProjectsTenders
CUSTOMERSShippingExportersImporters
GENERAL PUBLIC SERVICE PROVIDERSProvidoresStevedores
Towage CompaniesMooring Services
Transport ProvidersCustoms
MEDIA
SUPPLIERSMajor Suppliers
Outsourced ServiceProviders
OTHER STAKEHOLDERSHEDC
CouncilPlanning NSWPremier’s Dept.
NEWCASTLE PORT CORPORATION'S BROADER COMMUNITY
NewcastlePort
Corporation
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4 MANAGEMENT AND STRUCTURE
BOARD OF DIRECTORS
The current Board of Directors, with the exception of Mr Hickling, was reappointed by the Governor of New South
Wales on 4 December 2001 for a period of three years.
Wilton Ainsworth BS (Hons) Chairman, former Chief Executive of Commonwealth Steel Company.
John Fitzgerald BS Director, former Chief Executive and Director of A Goninan and Co Limited.
John McNaughton AM Director, former Lord Mayor of Newcastle, reappointed December 1998.
Gaye Hart AM, BA, MEd, Director, Director of the Hunter Institute of Technology.
Doug Hickling Survey Technician within the Corporation’s Marine Section, re-elected
Staff Director in July 1999.
DIRECTORS’ MEETINGS
There were thirteen meetings of the Newcastle Port Corporation’s Board during the year. The number of meetings
attended by the Directors were:
W Ainsworth 13
J Fitzgerald 13
J McNaughton 12
G Hart 11
D Hickling 13
SIGNIFICANT SUB–COMMITTEES OF BOARD
Audit Sub–Committee John Fitzgerald (Chair)
Wilton Ainsworth
Gaye Hart
Environment Sub–Committee John McNaughton (Chair)
Doug Hickling
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Compliance and Corporate
Governance
Corporate Reporting
Quality
Audit
Insurance
OH&S
Legal
Corporate Strategic Planning
Secretariat
Finance
Purchasing
Employee Relations
Information Systems
Property
MANAGEMENT STRUCTURE AND EXECUTIVE REMUNERATION
CHIEF EXECUTIVE OFFICERChris Oxenbould AO
ComplianceStatutory powers
Pilotage Port Safety Operating Licence
Pilotage Support Services
Vessel Traffic Management
Wharf Services
Survey
Dredging
Project and Capital Works
Maintenance
Incident Response Management
Environment Management
Business Develpment
External Relations
Logistic/Supply Line Development
Marketing/Promotions
Forecasting
Research
Business Analysis
BOARD
GENERAL MANAGER –OPERATIONS
Gary Webb
EXECUTIVE MANAGER –BUSINESS DEVELOPMENT
Bill Norrie
GENERAL MANAGER –COMMERCIALSteve Edmonds
Input into Corporate plans
HARBOUR MASTERTimothy Turner
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4 MANAGEMENT AND STRUCTURE (continued)
Dr Glen Oakley BMed Sc (Hons), Grad Dip Ed, Chief Executive Officer
(to 18 November 2001) MBA, PhD, FAICD FASCPA, FAIM,
AMP
Chris Oxenbould AO FAICD Chief Executive Officer
(from 19 November 2001)
Gary Webb BSurv (Hons), Grad Dip Ed, General Manager – Operations
Registered Surveyor, MAICD, MDP
Steve Edmonds BEc, MBA Corporate Secretary /
General Manager – Commercial
Timothy Turner Master Mariner, MDP Harbour Master / Senior Pilot
Timothy Ryan Grad Dip Ed, Dip Exp Mgt, Business Relations Manager
(to September 2001) Grad Dip Tran Mgt
Bill Norrie Executive Manager, Business Development
(from January 2002)
As at 30 June 2002 the total remuneration package for the CEO was $225,000 including salary, income tax,
superannuation, motor vehicle costs and fringe benefits tax. In addition the CEO has an "at risk" salary incentive of
$25,000 that is subject to performance against set objectives. Three other executives were paid the equivalent of SES
Level 1 or above.
EXTERNAL COMMITTEES
During 2001/2002 NPC officers participated in the following external committees.
Agribusiness Taskforce Bill Pope
Chartered Institute Of Transport – Hunter Chapter Steve Edmonds, Bill Norrie
Coal Chain Transport Planning Group Gary Webb
Hunter District Emergency Management Committee Gary Webb
Hunter Valley Coal Chain Council Gary Webb
Mid North Coast District Emergency Management Committee Gary Webb
Newcastle and Hunter Business Chamber – Regional Infrastructure Committee Steve Edmonds
Newcastle Port Users Group Gary Webb
Northern Rivers District, Emergency Management Committee Gary Webb
NSW National Plan Technical Working Group Gary Webb
NSW Sea Freight Council Bill Norrie
Technical and Operations Committee AAPMA Tim Turner
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4 MANAGEMENT AND STRUCTURE (continued)
Committees disbanded:
NSW Grains Industry Consultative Committee
NSW State Marine Committee
Port Security Committee
5 SUMMARY REVIEW OF OPERATIONS
See Section 1 of the Annual Report.
6 IMPROVEMENT PLANS
The Corporation's business planning is an interactive process based on reviewing previous performance, revising
strategies and updating targets. Within this planning process there are external reviews of quality, safety and
environmental performance specified to ensure compliance with quality accreditation and the port safety operating
licence. There is also an internal audit process aimed at these areas. This is in addition to the internal and external
financial audit process.
A Business Development Branch, headed by the Executive Manager – Business Development, was created and
functions relating to marketing, public relations, trade forecasting, logistics analysis and business development
were transferred to this branch. This branch is also involved in the business planning and review process.
An Integrated Performance Management System, linked to a performance bonus, was developed and introduced
for staff, to encourage productivity improvement and innovative work practices.
Rationalisation of traffic management services occurred mid-June 2001. The upgraded and enhanced Vessel Traffic
Information System was implemented and provides superior information and management capabilities. This
resulted in improved vessel safety, enhanced data exchange with port customers and facilitated vessel turnaround.
7 FUNDS GRANTED TO NON-GOVERNMENT COMMUNITY ORGANISATIONS
There were no grants to non-government community organisations during the year.
SPONSORSHIP
The Newcastle Port Corporation has a sponsorship and donations program, which aims to:
~ present the Corporation as a responsible corporate citizen;
~ provide support to institutions which directly or indirectly provide market intelligence information;
~ create a positive environment in which port-related and public sectors can operate; and
~ increase awareness of the Corporation's identity across a wide cross-section of the community.
With these objectives in mind, the Corporation, during the 2001/2002 financial year, committed $181,895 in
sponsorship pledges.
None of these items appeared on the Government Budget Papers.
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8 LEGAL CHANGE
The introduction of the new Occupational Health & Safety Regulations 2000 required review of risk assessment
and management procedures. This review commenced during the year and action required is to be progressively
implemented.
9 HERITAGE
The Corporation's main heritage listing is the Hydraulic Pump House originally used for housing pumps which
supplied power to the cranes loading vessels at the Dyke berths. Following repairs to the Pump House the area was
secured to minimise vandalism. Tenders were called for to find a use for the occupation of the building that
conformed to the State Owned Heritage Management principles. Work continued on the compilation of a Heritage
and Conservation Register to conform with the Heritage Act 1977.
10 ECONOMIC OR OTHER FACTORS
Total trade through the Port of Newcastle in 2001/2002 increased by 2.2% to 75.5 million tonnes. Strong growth
in thermal coal demand, especially in the Asian region, resulted in an increase in coal exports by 3.1% to 67.2
million tonnes. Despite strong competition from coal exported from China, the Port was able to achieve a record
in coal shipments for the year.
The $340 million expansion of the Kooragang Coal Terminal, owned by Port Waratah Coal Services, contributed to
the record coal throughput. The Port now has a capacity to load 90 million tonnes of coal per annum.
The rapid expansion in coal exports from China resulted in increased stocks at Hunter Valley mines. These excess
stocks resulted in lower spot prices for coal and the larger mines then cut back production. The domestic price of
coal in Southern China rose and consequently coal was exported to this area from Newcastle. Australian producers
resisted seeking volume at the expense of price.
A favourable season in rural areas of north-west NSW resulted in 1.5 million tonnes of grain exports. The
aluminium smelters at Tomago and Kurri Kurri continued full production despite the bleak world economic climate
and relatively low commodity prices. As a result, 1.1 million tonnes of alumina was imported. Aluminium metal
exports declined due to more frequent shipping and competitive container freight rates out of Sydney Ports. Iron
and steel imports have increased dramatically as Japanese steel makers exported more of their product.
11 RESEARCH AND DEVELOPMENT
Research and development activities centred on several potential port development projects. The simulator at the
Australian Maritime College was used to investigate the handling of container vessels under cross wind conditions
in the Steelworks Channel for the proposed Multi-Purpose Terminal, and the passage of vessels up the Hunter
River's North Arm channel for the proposed Austeel project, including parameters for passing Stockton Bridge.
Modelling the conditions of tides, wind and currents in conjunction with vessel and berth characteristics enables
more objective decision making in relation to port operations and developments.
The Corporation trialed the reduction of the number of tugs used on certain general cargo vessels fitted with bow
thrusters.
The two stroke outboard motors on the pilot tender were replaced with four stroke motors to improve fuel economy
and reduce impact on the environment.
Development work was carried out on a Strategic Vessel Plan to determine the Corporation's future harbour craft
requirements.
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12 EMPLOYEE RELATIONS
All staff have team or individual performance agreements which include mutually agreed performance indicators
and development plans. The Consultative Committee, which has Union and employee representation, meets
regularly to discuss the Corporation's performance, continuous improvement initiatives, organisational change and
policies. Performance management plans for all staff are to be linked to team and individual bonus payments.
The Corporation remains committed to sustaining an Equal Employment Opportunity workplace through the
continued use of flexible work practices supported by a range of policies that both protect and support staff's rights.
To further underpin this commitment the Corporation continues to provide a range of Employee Assistance
Programs supplied by service providers who continue to offer the most effective specialist counselling services.
These services remain complemented with regular weekly field visits from an industrial Chaplain.
The Corporation has joined with the University of Newcastle in two scholarship programs that span over six years.
These programs provide students with experience in the workplace. This enables high quality students to remain
longer with the Corporation than they could previously with the one-year trainee scheme.
The Corporation is in the process of developing a People Maintenance Program aimed at incorporating the current
flexible work strategies with health and wellbeing strategies. The Corporation also continues to subsidise gym
memberships for all staff to promote a healthy lifestyle.
CODE OF CONDUCT
The Corporations Code of Conduct and Ethics describes the standard of behaviour and ethical requirements
expected of all employees in the performance of daily business. There were no changes to the Code of Conduct
during the year.
Newcastle Port Corporation employees' employment actions are governed by the following Acts, Regulations and Policies:
~ Ports Corporatisation and Waterways Management Act 1995;
~ State Owned Corporations Amendment Act 1995;
~ State Owned Corporations Act 1989;
~ Anti-discrimination Act 1977;
~ Crimes Act 1900;
~ Freedom of Information Act 1989;
~ Independent Commission Against Corruption Act 1988;
~ Protected Disclosures Act 1994;
~ Workers Compensation Act 1987;
~ Workplace Injury Management and Workers Compensation Act 1998;
~ Occupational Health & Safety Act 2000;
~ Industrial Relations Act 1996;
~ Ombudsman Act 1974; and
~ Public Finance and Audit Act 1983
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12 EMPLOYEE RELATIONS (continued)
Relevant Newcastle Port Corporation Policies:
~ EEO Policy Statement and Plan;
~ Ethnic Affairs Priority Statement;
~ Grievance Handling and Dispute Resolution Procedures;
~ Harassment Prevention;
~ Protected Disclosures Act 1994 Internal Reporting Policy;
~ Communications/Electronic Equipment Policy;
~ Policy on the Acceptable Use of Internet and Electronic Mail;
~ Procurement Policy;
~ Occupational Health, Safety and Rehabilitation Policy;
~ Alcohol & Other Drugs Policy; and
~ Non smoking Policy.
MAJOR EEO OUTCOMES ACHIEVED DURING THE YEAR
~ The merit principle was applied to all recruitment.
~ Recruitment and Selection Committee training, including EEO principles, was conducted for staff participating
on selection panels.
~ Further EEO refresher training courses will be conducted for staff who have not attended a course in the last
three years.
~ Recruitment and selection procedures were reviewed to include anti-discrimination changes reflecting
employer's and carer's responsibilities.
ACTION PLAN FOR WOMEN 2001/02
The Corporate objectives remain to:
~ Promote safety and prevent violence against women;
~ Promote workplaces that are equitable, safe and responsive to all aspects of women's lives;
~ Promote access to learning and life skills for women, and successful outcomes from this education; and
~ Improve and maintain women's health.
The Corporation's achievements in the past year include:
~ Continued commitment to the elimination of discrimination against women by adherence to EEO policy.
~ Continued flexible working conditions to enable women to better balance work and family life;
~ Participation in "springboard" training programs for women; and
~ Continued participation in the Spokeswomen Program.
~ Harassment Prevention courses were conducted for non-supervisory staff.
OVERSEAS VISITS BY EMPLOYEES
There were no overseas visits by Corporation staff during the financial year.
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13 COMMUNITY ACCESS AND RESPONSIBLITIES
The Corporation continues to maintain community amenities surrounding the Port, including the northern
breakwater, Macquarie Pier and fishing access in Carrington.
Disabled Group employer, Delando Crescent remains our major contractor for gardening and lawn services.
The Corporation is to set up a video library for access by all staff who require assistance in caring for or dealing
with individual disabilities such as diabetes, dementia and Parkinson's disease.
ETHNIC AFFAIRS POLICY
The Corporation abides by the NSW Charter of Principles for a Culturally Diverse Society.
Initiatives include:
~ Signs and notices around the Port and waterways use international symbols to ensure the safety of the general public;
~ Tide Charts and other literature available to local and international customers include languages other than English.
~ Staff in direct contact with the public have training in communicating with people from diverse backgrounds;
~ Ethnic affairs policy awareness principles are included in all position descriptions.
14 MISCELLANEOUS PORT ACTIVITIES
NEWCASTLE PORT CORPORATION LAND DISPOSAL
There were no land disposals by the Newcastle Port Corporation during 2001/02 year.
WASTE REDUCTION AND PURCHASING POLICY (WRAPP)
The use of electronic communication has reduced paper generation and flow between departments.
The Corporation has recycling bins for paper, emptied daily by cleaning contractors and forwarded to recyclers.
Used toner cartridges are recycled.
Summer Hill Waste Management Centre is used for green waste (approx. 2 tonnes p.a.) Mulch is also used for
landscaping (approx. 2 tonnes p.a.).
The Corporation has used broken concrete and soil produced by building activities to reclaim additional land
adjacent to East Basin. This action has increased the available wharf stacking area.
CONTRACTING AND MARKET TESTING
The Corporation continues to outsource cleaning, payroll, maintenance tasks, pilotage delivery tasks; some
security; and information technology functions.
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14 MISCELLANEOUS PORT ACTIVITIES (continued)
CAPITAL WORKS
The major capital works for the year were the second stage of the Vessel Traffic Information System (VTIS), the
Hunter River (South Arm) Dredging Master Plan and the amplification of services on Dyke Point.
Stage Two of the VTIS is the complementary improvement of the system's vessel safety functions through the
introduction of marine pilot's portable information units. After the VTIS was commissioned in June 2001, the
Corporation evaluated the emerging technological developments of pilot "carry-on" information units.
Preparation of the Dredging Master Plan (and Environmental Impact Statement) for the future dredging of the
South Arm of the Hunter River progressed during 2001/02. The Plan will ensure that future strategic port
development requiring statutory approvals for capital dredging activities will be streamlined.
Investigation of future utility service requirements at Dyke Point and Carrington continued during the financial year.
Preliminary designs have been formulated to cater for the future expansion of facilities in the Port area.
15 EXEMPTIONS
The Treasurer has granted Newcastle Port Corporation exemptions from some areas of the Annual Reports
(Statutory Bodies) Act on the basis of Commercial in Confidence matters.
The following matters are exempt but require report in this summarised form.
S41B(c) Financial Statements
~ Preparation of Manufacturing and Trading Statements.
~ Material items of income and expenditure on a program or activity basis.
~ Summary Review of operations.
~ Management activities – Schedule 1 ARSBR.
~ Consultants – Schedule 1 ARSBR.
~ Consumer response – Schedule 1 ARSBR.
~ Risk Management – Schedule 1 ARSBR.
The following matters are exempt as they are no longer required for performance assessment and accountability.
Schedule 1 Part 1
~ Amounts set aside for renewal or replacement of fixed assets.
~ Amounts set aside to any provision for known commitments.
~ Amount appropriated for repayment of loans.
Schedule 1 Part 3
~ Schedule of outstanding public borrowings or other repayable advances.
~ Non-current asset value exceeds replacement costs.
~ Performance in Payment of Accounts – Schedule 1 ARSBR.
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15 EXEMPTIONS (continued)
The following items are exempt on a Commercial in Confidence basis.
~ Budgets – outline and detail – S.7(1)(a)(iii)ARSBA/Schedule 1 ARSBR.
~ Significant Judicial Decisions – S.9(1)(f) ARSBA/Schedule 1 ARSBR.
~ Research and Development – Schedule 1 ARSBR.
~ Human Resources – Schedule 1 ARSBR.
~ Land Disposal – Schedule 1 ARSBR.
~ Investment Management Performance – Cl.12 ARSBR/TCG 1991/5.
~ Liability Management Performance – Cl.12 ARSBR/TCG 1991/5.
16 CONSULTANTS
Major items for which Consultants were employed included:
~ Financial and technical advice relating to the proposed widening and deepening project (Project Newport) and
the proposed Multi-Purpose Terminal;
~ Legal advice regarding the maintenance contracting proposal.
A total of $167,909 was spent on Consultants.
17 PROMOTION – PUBLICATIONS
The following publications were made free of charge to customers and the general public during the year:
~ Annual Report 2000/01
~ Eastern Basin Distribution Centre Brochure
~ Guarantee of Service Statement
~ Port Facilities Brochure
~ Port Information Sheets
~ Tide Chart and Information Handbook
~ Scuttlebutt, the Corporation's Quarterly Newsletter.
18 CUSTOMER RESPONSE
Complaints were received regarding faults or inadequacies relating to the Corporation's website. These were
investigated and rectified. The website will be redesigned in 2002/2003.
Residents adjacent to a main navigation aid expressed concern regarding the impact on their amenity of planned
maintenance work. Following discussions with the residents, the work was carried out in stages at times suitable
to the residents.
A complaint was received regarding the base of the removable breakwater access barrier on Macquarie Pier. This
was investigated and it was found that a Corporation contractor did not replace the barrier pole after entering the
breakwater. An apology was forwarded to the person concerned.
Minor complaints were received regarding transfer of vessel traffic information, which were investigated and
responded to.
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19 GUARANTEE OF SERVICE
The Newcastle Port Corporation has a Guarantee of Service. The published statement lists the categories of
Corporation's customers; the services and assets provided by the Corporation; and the measurements of service
standards. Operational service and assets are available 24 hours per day, 7 days per week. The Head Office
operates between 8.30am and 5.00pm weekdays.
Pilots, vessel traffic management, emergency response and communications are available 24 hours per day, 7 days
per week.
Contact names and numbers are listed to enable easy access to the Corporation for suggestions and complaints.
20 RISK MANAGEMENT AND INSURANCE ACTIVITIES
COMPLIANCE AND RISK MANAGEMENT
The Board and Management continue to acknowledge the need for a risk management framework within the
Corporation.
A Compliance and Risk Branch was established in November 2000 with the objective of centralising the
administration and management of risk issues. While many day-to-day risks remain under the control of the
associated line managers, the Compliance and Risk section assists them to coordinate the following areas:
~ Occupational Health and Safety;
~ Quality Assurance and associated Port Safety Operating Licence;
~ General Insurance;
~ Statutory financial reporting;
~ Taxation compliance; and
~ Information Technology support and contingencies.
The Corporation continued to implement risk management strategies throughout the 2001/02 year, including:
~ Upgrading the certified Quality Assurance system to comply with the ISO 9000:2000 series of Quality
Standards;
~ Addressing the requirements of the revised Occupational Health and Safety Legislation and related
Regulations, which have a compliance date of 1 September 2002;
~ Amending insurance policies to incorporate appropriate deductible amounts and insurance value limits;
~ Conducting a full review of the requirements of the Worker's Compensation Premium Discount Scheme;
~ Formulating and implementing action plans; and
~ Replacing computer hardware, to improve the reliability of delivery of the Corporation's information
technology.
Independent external and internal auditors reviewed various operating and administrative systems with no material
matters of concern.
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21 SUBORDINATE LEGISLATION
There were no significant departures from the Subordinate Legislation Act.
22 RESPONSE TO MATTERS RAISED BY THE AUDITOR GENERAL
There were no significant issues raised by the Auditor General which require comment.
23 DISCLOSURE OF CONTROLLED ENTITIES
The Corporation has no controlled entities.
24 FREEDOM OF INFORMATION
There were no requests for information received as outlined in the Freedom of Information Act 1989.
Enquiries for access to documents under the Freedom of Information Act may be made to The General Manager –
Commercial, Newcastle Port Corporation.
25 ANNUAL REPORT COST
1,000 copies of the 2001/02 Annual Report have been produced on CD–ROM with a limited number of printed
copies for statutory purposes. A copy of the Annual Report is also available on the Corporation's website at
www.newportcorp.com. Production cost per copy is $25.48.
26 CREDIT CARD USE
Credit card use was in accordance with the Premier's Memoranda and Treasurer's Directions together with the
provisions of the State Owned Corporations Act.
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INDEX
A Aims 14
Annual Report Cost 29
Action Plan for Women 24
B Board of Directors 18
C Capital Works 26
Charter 14
Code of Conduct 23
Committees – Board 18
– External 20
Community Access and Responsibilities 25
Consultants 27
Contracting and Market Testing 25
Controlled Entities 29
Credit Card Use 29
Customer Response 27
D Directors’ Meetings 18
E Economic or Other Factors 22
Employee Relations 23
Equal Employment Opportunity 24
Ethnic Affairs 25
Exemptions 26
Executive Remuneration 20
F Freedom of Information 29
Funds Granted 21
G Guarantee of Service 28
H Heritage 22
I Improvement Plans 21
L Land Disposal 25
Legal Change 22
M Management and Structure 18
Miscellaneous Port Activities 25
O Objectives and Outcomes 14
Organisation Chart 17
Overseas Visits 24
P Promotion – Publications 27
Performance/Results 5
R Research and Development 22
Risk Management and Insurance 28
Response to Auditor General 29
S Sponsorship 21
Subordinate Legislation 29
Summary Review of Operations 21
W Waste Reduction and Purchasing Policy 25
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N E W C A S T L E P O R T C O R P O R A T I O N
Financial Statements for the year ended 30 June 2002
Contents
1. Directors’ Statement 32
2. Independent Audit Report 33
3. Statement of Financial Performance 34
4. Statement of Financial Position 35
5. Statement of Cash Flows 36
6. Notes to and forming part of the Financial Statements 37
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D I R E C T O R S ’ S T A T E M E N T
In accordance with a resolution of the Directors of the Newcastle Port Corporation, Clause 14 of the Public Finance
and Audit Regulation 2000, and pursuant to Section 41C(1B) and 41C(1C) of the Public Finance and Audit Act 1983,
in the opinion of the Directors:
1. the accompanying financial statements exhibit a true and fair view of the financial position of the Corporation
as at 30 June 2002 and transactions for the year then ended;
2. the statements have been prepared in accordance with the provision of the Public Finance and Audit Act 1983,
the Public Finance and Audit Regulation 2000 and relevant Treasurer’s Directions.
Further, we are not aware of any circumstances which would render any particulars included in the financial
statements to be misleading or inaccurate.
Wilton Ainsworth John Fitzgerald
Chairman Director
Dated: 23rd October 2002
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S T A T E M E N T O FF I N A N C I A L P E R F O R M A N C Efor the financial year ended 30 June 2002.
Note 2002 2001
$000 $000
Revenue from Ordinary Activities
Port Management 2 35,788 34,739
Interest on Deposits 628 825
Other 3 2,241 2,014
Total Revenue from Ordinary Activities 38,657 37,578
Expenses from Ordinary Activities
Salaries, Wages and Related Costs 8,154 10,722
Superannuation 5 1,913 3,790
Repairs and Services 6,502 4,249
Utilities and Communications 683 681
Port Fee and Licence 2,846 2,647
Administration 2,378 2,009
Consultants 98 34
Depreciation 11 4,123 4,135
Borrowing Costs 2,332 2,389
Audit Fees – external 75 72
Directors’ Emoluments 4 164 131
Loss on Sale of Non-Current Assets 11 138 47
Total Expenses from Ordinary Activities 29,406 30,906
Profit from Ordinary Activities before Income Tax Expense 9,251 6,672
Income Tax Expense Relating to Ordinary Activities 6 (3,494) 936
Net Profit from Ordinary Activities after Income Tax Expense 5,757 7,608
Increase in Asset Revaluation Reserve Arising on
Revaluation of Non-Current Assets - 2,549
Total Revenues, Expenses and Valuation Adjustments
Recognised Directly in Equity - 2,549
Total Change in Equity Other Than Those Resulting
from Transactions with Owners as Owners 5,757 10,157
The accompanying notes form part of these financial statements
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S T A T E M E N T O FF I N A N C I A L P O S I T I O Nas at 30 June 2002.
Note 2002 2001
$000 $000
Current Assets
Cash Assets 7 17,589 16,190
Receivables 8 3,548 2,822
Inventories 9 47 62
Other 10 641 459
Total Current Assets 21,825 19,533
Non-Current Assets
Property, Plant and Equipment 11 104,180 107,606
Future Income Tax Benefit 1,473 1,435
Other 12 10,972 12,012
Total Non-Current Assets 116,625 121,053
Total Assets 138,450 140,586
Current Liabilities
Payables 13 4,305 4,856
Interest Bearing Liabilities 14 2,900 5,242
Tax Liabilities 15 1,179 247
Other Provisions 16 10,182 10,268
Total Current Liabilities 18,566 20,613
Non-Current Liabilities
Interest Bearing Liabilities 14 27,777 25,298
Deferred Tax Liabilities 15 4,704 4,102
Other Provisions 16 3,255 3,182
Total Non-Current Liabilities 35,736 32,582
Total Liabilities 54,302 53,195
Net Assets 84,148 87,391
Equity
Contributed Equity 17 62,283 62,283
Reserves 18 19,868 19,868
Retained Profits 19 1,997 5,240
Total Equity 84,148 87,391
The accompanying notes form part of these financial statements
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S T A T E M E N T O FC A S H F L O W Sfor the financial year ended 30 June 2002.
Note 2002 2001
$000 $000
Inflows/ Inflows/
(Outflows) (Outflows)
Cash Flows from Operating Activities
Receipts from Customers 41,253 40,603
Payments to Suppliers and Employees (26,370) (23,879)
Interest Received 628 826
Interest Paid (2,255) (2,290)
Income Tax Equivalent Paid (1,999) (4,174)
Net Cash Provided by Operating Activities 24(b) 11,257 11,086
Cash Flows from Investing Activities
Payments for Property, Plant and Equipment (1,072) (2,267)
Proceeds from Sale of Property, Plant and Equipment 198 253
Newcastle Harbour Deepening Account 16 17
Net Cash Used in Investing Activities (858) (1,997)
Cash Flows from Financing Activities
Dividends Paid (9,000) (9,000)
Net Cash Used in Financing Activities (9,000) (9,000)
Net Increase in Cash Held 1,399 89
Cash at the Beginning of the Financial Year 16,190 16,101
Cash at the End of the Financial Year 1(a) 24(a) 17,589 16,190
The accompanying notes form part of these financial statements
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
Background
Newcastle Port Corporation (NPC) is a Statutory State Owned Corporation under the State Owned Corporations Act 1989
(as amended), responsible for the Port of Newcastle.
1. Statement of Significant Accounting Policies
The following summary explains the significant accounting policies that have been adopted in the preparation of the
accounts.
Basis of Accounting
As required by Section 41B(1) of the Public Finance and Audit Act, 1983, the accompanying Financial Statements form a
General Purpose Financial Report and have been prepared in accordance with applicable Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and Urgent Issues Group (UIG)
Consensus Views to exhibit a true and fair view of the financial position and transactions of NPC.The Financial Statements
also incorporate financial reporting requirements specified in the Public Finance and Audit Regulation 2000 and relevant
Treasurer's Directions.
Proper accounts and records for all of NPC's operations have been kept as required under Section 41(1) of the Public
Finance and Audit Act, 1983.
Cost is based on the fair value of the consideration given in exchange for assets. The fair value of cash consideration with
deferred settlement terms is determined by discounting any amounts payable in the future to their present value as at the
date of acquisition. Present values are calculated using rates applicable to similar borrowing arrangements of the
Corporation.
The form of presentation of the Financial Statements has been on the basis of full accrual accounting using historical cost
accounting conventions, except for certain items which, as noted, are at valuation. The accounting policies adopted are
consistent with those of the previous year except where noted.
Statement of Significant Accounting Policies
(a) Cash in the Statement of Cash Flows
For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks (net of any outstanding
bank overdraft) and highly liquid investments with short periods to maturity with insignificant risk of changes in value.
Cash at the end of the financial year, as shown in the Statement of Cash Flows, is reconciled to the item "Cash" in
the Statement of Financial Position at note 24(a).
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
1. Statement of Significant Accounting Policies (continued)
(b) Valuation of Property, Plant and Equipment
The property, plant and equipment of NPC was initially valued at the date of incorporation on 1 July 1995. The
"Deprival" value concept was the basis of valuation used to introduce the assets at "fair value". The value of the
property, plant and equipment was recognised as "Net Assets Acquired on Corporatisation" together with the
remaining net assets introduced upon corporatisation. The Corporation's accounting policy will require it to undertake
a revaluation of property, plant and equipment at least every five years.
In accordance with Australian Accounting Standard AAS10, "Recoverable Amount of Non-Current Assets",
a recoverable amount test was performed as at 30 June 2002 to ensure that the asset's carrying values did not
exceed recoverable amounts. As at the abovementioned date the asset's carrying value did not exceed expected
recoverable amounts. Expected net cash flows included in determining recoverable amounts of non-current assets are
discounted to the present values using an appropriate, risk adjusted discount rate. The potential capital gains tax
effect has not been included in the revalued carrying amount of the assets as such a liability is not expected to
crystalise.
(c) Capitalisation of Property, Plant and Equipment
All capital expenditure on land, reclamations, buildings, workshops, roadways, wharves, jetties and breakwaters, and
plant of $300 or more are capitalised. Only those assets completed and ready for service are taken to Property, Plant
and Equipment accounts. The remaining capital expenditures are carried forward as construction in progress but
included in Property, Plant and Equipment in the Statement of Financial Position. Additions are initially brought to
account at cost.
(d) Depreciation of Property, Plant and Equipment
Depreciation has been calculated on depreciable assets, using rates estimated to write off the assets over their
remaining economic lives for the Corporation on a straight line basis in accordance with Australian Accounting
Standard AAS4, “Depreciation.” Land and reclamation assets have been treated as non-depreciable. Straight line
depreciation rates used for each class of fixed assets are in the following ranges:
Buildings 2-7%
Roads 6-9%
Wharves and jetties 3-8%
Breakwaters 1%
Plant 5-50%
(e) Inventories
Inventories have been recorded at cost price on acquisition and charged on issue at the weighted cost of each stock
line. A perpetual inventory system is adopted and is supported by annual stocktakes. The extent of stock deterioration
and obsolescence is also being reviewed regularly. Stock write-downs as a result of stocktakes and obsolescence are
charged directly to operating expense.
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
1. Statement of Significant Accounting Policies (continued)
(f) Bad and Doubtful Debts
Bad Debts are written off against the Provision for Doubtful Debts after thorough investigation and exhaustion of
recovery processes. A review was carried out during the year to determine the adequacy of the level of the Provision
for Doubtful Debts.
(g) Employee Entitlements
Benefits for long service leave, annual leave and superannuation have been provided on the basis of emerged
entitlements for recognised service for long service leave (five years and over) and quantum due at balance date for
annual leave. During the year ended 30 June 2002, NPC continued to provide fully for all employee entitlements in
accordance with Australian Accounting Standard AAS30, "Accounting for Employee Entitlements." Long service leave
is measured on a nominal basis. It is considered that this measurement technique produces results not materially
different from the estimate determined by using the present value basis of measurement.
The average sick leave taken by employees, based on past experience, is less than the entitlement accruing each
period. It is considered improbable that existing accumulated entitlements will be used and therefore no liability has
been recognised.
(h) Assets
The assets of NPC are unencumbered.
(i) Leases
Operating lease payments are charged as an expense in the period in which they are incurred, as this represents
the pattern of benefits derived from the leased assets.
(j) Rounding Amounts to Nearest $000
In the financial statements, all amounts are rounded to the nearest thousand dollars.
(k) Taxation Equivalent Regime
The Tax Equivalent regime requires NPC to make tax equivalent payments to the NSW Government's Consolidated
Fund and involves income tax and capital gains tax.
Tax effect accounting principles have been adopted whereby income tax expense has been calculated on pre tax
accounting profit after adjustments for permanent diffferences. The tax effect of timing differences, which occur when
items are included or allowed for income tax purposes in a period different to that for accounting, is shown at current
taxation rates in provision for deferred income tax and future income tax benefit, as applicable.
(l) Discount on Borrowings
The difference between the debt’s long-term face value and the non-current value shown in the Statement of
Financial Position is taken up as a Discount on Borrowings. The discount will be amortised over the life of
the loans.
(m) Investments
Deposits are shown at cost. Hourglass funds are at valuation. Interest is taken to income as earned.
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
1. Statement of Significant Accounting Policies (continued)
(n) Receivables and Payables
Trade accounts receivable are generally settled within 15 days and are carried at amounts due. Trade accounts
payable including accruals not yet billed, are recognised when the Corporation becomes obliged to make future
payments as a result of purchase of assets or services. Trade accounts payable are generally settled within
30 days.
(o) Net Fair Values of Financial Assets and Liabilities
Net fair values of financial instruments are determined on the following basis:
Monetary financial assets and liabilities which are not traded in an organised financial market –
cost basis carrying amounts of trade debtors, trade account payable and accruals;
Fixed rate loans, floating rate loans – current risk adjusted market rates;
Investments in term deposits and commercial bills – current market rates.
(p) Revenue Recognition
Revenue is recognised for the major business activities as follows:
Charges on vessels – revenue is recognised at the completion of the vessel movement;
Berth charges – revenue is recognised when the vessel departs the berth;
Rental income – revenue is recognised on a monthly basis in accordance with lease agreements;
Interest income – revenue is recognised as earned on a daily basis and not at maturity of the underlying
investment.
(q) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
1) where the amount of GST incurred is not recoverable from the Taxation Office it is recognised as part of
the cost of the acquisition of an asset or as part of an item of expense;
2) for receivables and payables which are recognised inclusive of GST. GST payable to and recoverable from
the Taxation Office is recognised as a payable and receivable respectively in the Statement of Financial
Position.
(r) Segment Reporting
The Corporation operates predominately in one business segment, that being Port Management, and within one
geographical segment, being Newcastle, NSW, Australia.
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
2002 2001
$000 $000
2. Port Management
Charges on Vessels 28,369 27,010
Berth Services 7,419 7,729
35,788 34,739
3. Other Income
Non Port Related Lease / Rental 1,823 1,713
Other 418 301
2,241 2,014
4. Directors’ Emoluments
Directors’ Emoluments 164 131
Remuneration paid to Directors is in accordance with
rates determined by the Premier’s Office. The Directors
received no loans nor any other benefits.
5. Significant Item – Superannuation
Decrease in the amount of overfunded superannuation due to:
- Increase in fund liability 225
- Negative returns on superannuation funds invested. Funds
are under the control of the SAS Trustee Corporation (STC). 1,427 1,652 -
Contributions and decrease in the amount of overfunded
superannuation due to an increase in member liability base
following a review of actuarial assumptions by the
Government Actuary - 3,574
Accumulation fund contributions 261 216
1,913 3,790
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
2002 2001
$000 $000
6. Income Tax Equivalent
Income Tax Expense
The difference between income tax expense provided in the
financial statements and the prima facie income tax expense
is reconciled as follows:
Profit from Ordinary Activities before Tax Equivalents 9,251 6,672
Prima facie tax thereon at 30% (34% in prior year) 2,775 2,268
Add tax effect of permanent and other differences:
Non-deductible expenses 269 122
Non-deductible depreciation 138 152
Writeback of tax effect of overfunded superannuation 312 (3,490)
Amount underprovided in prior year - 26
Restatement of deferred tax balances due to changes in the tax rate - (14)
Total income tax expense attributable to operating profit 3,494 (936)
Total income tax expense comprises movements in:
Provision for income tax 2,931 2,947
Provision for deferred income tax 602 (4,157)
Future income tax benefit (39) 274
3,494 (936)
7. Cash Assets At Cost At Cost
Cash assets at 30 June 2002 consist of:
Cash on Hand 3 3
Cash at Bank 294 95
T Corp Hourglass Facility trust 16,937 15,750
Fixed Term Deposit 355 342
17,589 16,190
Investments at both 30 June 2002 and 30 June 2001 are very short term, hence market value approximates cost.
(a) Net Fair Value
The Corporation considers the carrying amount of investments approximates their net fair values.
(b) Significant Terms and Conditions
There are no significant terms and conditions relating to investments.
(c) Credit Risk
The Corporation considers it does not have any significant risk exposure for investments. The maximum credit risk is
considered to be the net fair value.
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
2002 2002
$000 $000
8. Receivables
Current
Trade Debtors 2,169 1,681
Accrued Income 357 240
Other Debtors 1,022 934
3,548 2,855
Less: Provision For Doubtful Debts - (33)
3,548 2,822
(a) Provision for Doubtful Debts
Opening Balance 33 32
Less: Bad debts written off (33) 1
Closing Balance - 33
(b) Net Fair Value
The Corporation considers the carrying amount of debtors approximate their net fair value.
(c) Significant Terms and Conditions
Trade debtors are required to be settled within 7 days.
(d) Credit Risk
The Corporation does not have any significant exposure to any individual customers or counterparty. The maximum
credit risk is considered to be the net fair value.
Major concentrations of credit risk that arose from the Corporation’s receivables in relation to the industry
categories and location of the customers by the percentage of the total receivables from customers are:
%
Mining industry 73
Manufacturing industry 13
Agricultural industry 14
%
Asia 84
Australia 4
Other 12
2002 2001
$000 $000
9. Inventories
Consumable Store Items 47 62
Reviews of all store items have been carried out during the year ended
30 June 2002 to determine stock obsolescence and stock on hand adjustments.
Stores are valued at the lower of cost and net realisable value.
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
2002 2001
$000 $000
10. Other Current Assets
Prepayments 641 459
11. Property, Plant and Equipment
Property, Plant and Equipment (at cost or valuation) 116,208 115,660
Accumulated depreciation (12,856) (9,106)
Construction in progress 828 1,052
104,180 107,606
Land and Buildings
At cost 827 821
At valuation 32,699 32,049
33,526 32,870
Accumulated depreciation at cost 57 33
Accumulated depreciation at valuation 1,019 697
1,076 730
Written Down Value 32,450 32,140
Roads
At cost 2,655 2,643
At valuation 2,164 2,165
4,819 4,808
Accumulated depreciation at cost 427 295
Accumulated depreciation at valuation 399 278
826 573
Written Down Value 3,993 4,235
Wharves and Jetties
At cost 344 271
At valuation 45,250 45,250
45,594 45,521
Accumulated depreciation at cost 28 21
Accumulated depreciation at valuation 5,695 3,799
5,723 3,820
Written Down Value 39,871 41,701
Breakwaters
At cost - -
At valuation 13,377 13,377
13,377 13,377
Accumulated depreciation at cost - -
Accumulated depreciation at valuation 167 34
167 34
Written Down Value 13,210 13,343
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
2002 2001
$000 $000
11. Property, Plant and Equipment (continued)
Plant
At cost 1,747 1,366
At valuation 17,145 17,718
18,892 19,084
Accumulated depreciation at cost 263 53
Accumulated depreciation at valuation 4,801 3,896
5,064 3,949
Written Down Value 13,828 15,135
Total Property Plant and Equipment in Operation 103,352 106,554
Construction in Progress
Land and Buildings 525 775
Wharves & Jetties 227 134
Plant 76 143
Total 828 1,052
Disposals
Proceeds from Sale 197 253
Written Down Value (335) (300)
Net Amount included in the Statement of Financial Performance (138) (47)
Reconciliation of the carrying amounts of each class of property plant and equipment at the beginning and end of the
current year are set out below:
30 June 2002 Land and Wharves & Construction in
Buildings Roads Jetties Breakwaters Plant Progress Total
Carrying amount at start of year 32,140 4,235 41,701 13,343 15,135 1,052 107,606
additions - - - - - 1,072 1,072
disposals - - - - (335) (40) (375)
transfer to asset register 656 12 72 - 516 (1,256) -
depreciation expense (346) (254) (1,902) (133) (1,488) - (4,123)
Carrying amount at end of year 32,450 3,993 39,871 13,210 13,828 828 104,180
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
11. Total Property Plant and Equipment in Operation (continued)
Land and Buildings, Roads and Wharves and Jetties were revalued as at 30 June 1999. A revaluation of material
Breakwaters, Navigation Aids and Plant was brought to account as at 1 April 2001. Assets deemed immaterial and not
subject to revaluation are recognised at cost. Assets acquired during the year were not subject to revaluation and are
shown at cost.
The "Deprival Value" concept was the basis of valuation and guidance during the valuation process was obtained using
current valuation methodology.
While the relationship between deprival value and fair value is being examined by the Australian Accounting Standards Board,
the Corporation is permitted, in accordance with the AAS38 (10.7) transitional provision, to apply the revaluation basis used
for the immediately preceding reporting period. This transitional provision is available for any reporting period beginning on
or before 30 June 2002.
2002 2001
$000 $000
12. Other Non-Current Assets
Overfunded Superannuation (a) 10,972 12,012
Movement in Overfunded Superannuation Balance on Charge to Balance
30-Jun-01 Revenue Payments 30-Jun-02
$000 $000 $000 $000
Superannuation 12,012 (1,652) 612 10,972
(a) Overfunded Superannuation
Future Retirement Benefits under the State Superannuation Scheme, the State Authorities Superannuation Scheme
and State Authorities Non-Contributory Superannuation Scheme have been provided as under:
2002 2001
Liability Funding Net Asset Net Asset
$000 $000 $000 $000
State Superannuation Scheme (8,973) 18,033 9,060 10,222
State Authorities Superannuation Scheme (4,090) 5,489 1,399 1,267
State Authorities Non-Contributory
Superannuation Scheme. (1,003) 1,516 513 523
(14,066) 25,038 10,972 12,012
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
12. Other Non-Current Assets (continued)
Mercer Ltd has completed an assessment of the Gross Superannuation liabilities for the defined benefits schemes
administered by the SAS Trustee Corporation for the financial year ending 30 June 2002. These schemes include the
funds listed above.
The 2002 assessment is based on the full requirements of AAS25. This requires that a "market determined risk
adjusted discount rate" be applied as the valuation interest rate in the calculation of the value of accrued benefits. A
review of the interest rate assumptions used in the 2001 valuation has confirmed that the interest rate of 7% per
annum should remain unchanged for the 2002 liability calculations. The assumptions that were applied for the 2001
calculations have been replaced by the rates in the following table
2002/03 2003/04 2004/05
% % %
Rate of investment return 7.0 7.0 7.0
Rate of general salary increase 6.5 4.0 4.0
Rate of increase in CPI 2.5 2.5 2.5
2002 2001
$000 $000
13. Payables
Payables comprise:
Trade Creditors 1,623 2,213
Accrued Financial Expenses 614 537
Port Cargo Access Charge (a) 415 359
Accrued Salaries and Wages 548 326
Harbour Deepening Account (b) 359 343
Other Creditors and Accruals 746 1,078
4,305 4,856
(a) Relates to the port cargo access charge collected, on behalf of the Consolidated Fund from Port users, but not yet
remitted. A management fee is retained by NPC.
(b) Under an agreement with Newcastle Shippers of coal to overseas destinations and importers of ores, the former
MSB was provided from 1 May 1976 to 31 May 1982 with funds by means of a special levy of $1 per tonne on
such goods to finance the cost of deepening the Port’s channel to 15.3 metres. Work on this project was completed
in 1984 / 85 at a total cost of $104.242 million of which $86.242 million was funded by contributions from the
levy.
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
13. Payables (continued)
Upon completion of the project, it was decided by mutual agreement between the Coal Representatives and the
MSB that the balance of funds available in the Levy Account as at 1 July 1985 and any future income earned on
those funds would be applied to a Newcastle Harbour Study Fund to investigate the possibility of large ship
movements within the Port.
Movements in the Levy Account are as shown below:
2002 2001
$000 $000
Opening Balance 343 325
Add – Interest on funds invested 16 20
Less – Expenditure on channel development - (2)
Closing Balance 359 343
(c) Net Fair Values
The Corporation considers the carrying amounts of trade and
other accounts payable approximate their net fair values.
(d) Significant terms and conditions
Trade accounts payable are generally settled in 30 days.
14. Interest Bearing Liabilities
NSW Treasury Corp Borrowings 30,677 30,540
Classification of liability
Current - Face value 2,900 5,242
Non-Current - Face value 28,072
- Discount on purchase (295)
27,777 25,298
30,677 30,540
(a) Net Fair Value
The Corporation considers the market value of the borrowings
approximate their fair net value. 31,670 32,247
(b) Significant Terms and Conditions
Borrowings consist of NSW Treasury Corporation floating and fixed rate loans. NSW Treasury Corporation
loans are based upon instalment payments of interest only and repayment or rollover of principal at
maturity. All borrowings are secured by Government Guarantee.
Total loans are repayable as follows :
Within 1 year 7,078 8,197
Later than 1 year and not later than 5 years 12,562 14,018
Later than 5 years 11,037 8,325
30,677 30,540
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
2002 2001
Note $000 $000
15. Tax Provisions
Current Non-Current Current Non-Current
Income Tax Equivalent (a) 1,179 - 247 -
Deferred Income Tax - 4,704 - 4,102
1,179 4,704 247 4,102
Movement in Tax Provisions Balance on Charge to Less Balance
30-Jun-01 Revenue Payments 30-Jun-02
$000 $000 $000 $000
Income Tax Equivalent 247 2,931 (1,999) 1,179
Deferred Income Tax 4,102 602 - 4,704
4,349 3,533 (1,999) 5,883
(a) Income Tax Equivalent
Provision for Income Tax is calculated by adjusting Income Tax Expense for timing differences using a tax rate
of 30%. (Also refer note 6.)
16. Other Provisions
Current Non-Current Current Non-Current
Dividend (a) 9,000 - 9,000 -
Annual Leave (b) 1,182 - 1,268 -
Long Service Leave (c) - 2,094 1,984
Dredging (d) - 1,161 - 1,198
10,182 3,255 10,268 3,182
Movement in Other Provisions Balance on Charge to Less Balance
30-Jun-01 Revenue Payments 30-Jun-02
$000 $000 $000 $000
Dividend 9,000 9,000 (9,000) 9,000
Annual Leave 1,268 723 (809) 1,182
Long Service Leave 1,984 295 (185) 2,094
Dredging 1,198 - (37) 1,161
13,450 10,018 (10,031) 13,437
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
16. Other Provisions (continued)
(a) Dividend
A dividend of $9million was negotiated between the Corporation’s Board of Directors and the Voting Shareholders.
(b) Annual Leave
NPC’s liability for annual leave, calculated at 30 June 2002 wage rates and entitlement of personnel, has been
assessed as $1.2million and is fully provided.
(c) Long Service Leave
NPC’s liability for long service leave, calculated at 30 June 2002 wage rates and entitlement of personnel, has been
assessed as $2.1million and is fully provided. This figure excludes allowance for personnel still subject to completion
of service conditions.
(d) Dredging
The Port of Newcastle lies at the mouth of the Hunter River and as such is vulnerable to large amounts of silt
deposits during times of heavy rains. The Provision for Dredging is required due to the Corporation’s obligation
under the Port Safety Operating Licence to ensure safe channel depths in the Port. The provision is calculated
by costing the removal of the likely amount of silt to be deposited in an average flood period. Mr B Druery BE Dip
Sc(Geol) M AppSc MIEAust of Patterson Britton & Partners Consulting Engineers was consulted to carry out
this study.
(e) Net Fair Value
The Corporation considers the carrying amount of provisions approximate their net fair value.
2001 2000
$000 $000
17. Contributed Equity
Ordinary Share Capital (a) 62,283 62,283
(a) Share Capital
The State Owned Corporations Act 1989 (as amended) requires the Corporation to have two voting shareholders;
the Treasurer, Mr M Egan, and one other Minister, being the Special Minister of State, Mr J J Della Bosca. Each
shareholder must at all times have an equal share in the equity of the Corporation. As at 30 June 2002 each
shareholder held a $1 share.
There has been no movement in Contributed Equity during the year.
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
2002 2001
$000 $000
18. Reserves
Asset Revaluation Reserve 19,868 19,868
19,868 19,868
Asset Revaluation Reserve
Balance at the Beginning of the Financial Year 19,868 17,319
add Revaluation (refer note 11) - 2,549
Balance at the End of the Financial Year 19,868 19,868
19. Retained Profits
Balance at the Beginning of the Financial Year 5,240 6,632
add Net Profit 5,757 7,608
less Dividend provided for or paid (9,000) (9,000)
Balance at the End of the Financial Year 1,997 5,240
20. Contingent Liabilities
A contingent liability existed as at 30 June 2002. It relates to an insurance claim and the maximum exposure
to the Corporation is $25,000.
(2001 – $15,000 )
21. Commitments
Capital Expenditure
Forward obligations of NPC under major contracts committed as at 30 June 2002 but not otherwise brought
to account have been assessed as follows (GST inclusive):
Not later than one year 586 430
Operating Leases
Minimum future lease payments payable for non-cancellable operating leases are as follows:
Not later than one year 40 -
Later than one and not later than five years 78 -
118 -
22. Events Occurring After Reporting Date
There are no known events occurring after balance date that materially affect the financial statements.
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
23. Leases 2002
$000
Land and Buildings Wharves and Jetties Plant
Gross book value of leased assets 15,936 15,649 1,450
Accumulated depreciation on leased assets 503 1,982 1,199
Depreciation expense on leased assets for the year 158 605 106
2001
$000
Land and Buildings Wharves and Jetties Plant
Gross book value of leased assets 15,553 15,576 1,450
Accumulated depreciation on leased assets 409 1,322 1,083
Depreciation expense on leased assets for the year 204 659 85
2002 2001
$000 $000
Lease commitments receivable as at 30 June 2002 31,851 34,408
(inclusive of GST)
Minimum future lease payments receivable from
non-cancellable operating leases are as follows:
Not later than one year 3,760 3,902
Later than one and not later than five years 12,183 12,942
Later than five years 15,908 17,564
Lease income consists of a combination of base and throughput rents.
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
2002 2001
$000 $000
24. Notes to the Statement of Cash Flows
(a) Reconciliation of Cash
Cash on Hand 3 3
Cash at Bank 294 95
Current Investments 17,292 16,092
17,589 16,190
(b) Reconciliation of Profit from Ordinary Activities after Income
Tax Equivalents to Net Cash Flows from Operating Activities
Profit from Ordinary Activities after Income Tax Equivalent 5,757 7,608
Depreciation 4,123 4,135
Harbour deepening research - 2
Write-off opening Construction in Progress 40 -
(Profit) / loss on sale of non-current assets 138 47
10,058 11,792
Changes in Assets and Liabilities
(Increase) / Decrease in Receivables (631) 329
(Increase) / Decrease in Recoverables (96) (93)
(Increase) / Decrease in Inventories 15 26
(Increase) / Decrease in Superannuation Overfunding 1,040 2,831
(Increase) / Decrease in Other Current Assets (182) 402
(Decrease) / Increase in Creditors (429) 1,741
(Decrease) / Increase in Provisions 1,482 (5,942)
Net Cash from Operating Activities 11,257 11,086
(c) Financing Facilities
The Corporation has approved access to NSW
Treasury Corporation’s “come and go” facility.
Amount used - -
Amount unused 20,000 20,000
20,000 20,000
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
25. Additional Financial Instrument Disclosures
(a) Interest Rate Risk
The Corporation’s exposure to interest rate risk and the effective interest rates on financial instruments on balance
date are:
Weighted
average
effective Floating Fixed interest rate Non-
interest interest less than 1 to 5 Over 5 interest
rate rate 1 year years years bearing Total
$000 $000 $000 $000 $000 $000
30 June 2002
Assets
Cash 4.02% 294 - - - 3 297
Trade receivables - - - - 2,169 2,169
Investments 4.63% 17,292 - - - - 17,292
Interest rate swaps (1,000) - 1,000 - - -
Total financial assets 16,586 - 1,000 - 2,172 19,758
Liabilities
Trade payables - - - - 1,623 1,623
Borrowings 7.13% - 7,078 12,562 11,037 - 30,677
Interest rate swaps (1,000) - 1,000 - - -
Total financial liabilities (1,000) 7,078 13,562 11,037 1,623 32,300
Net financial assets / (liabilities) 17,586 (7,078) (12,562) (11,037) 549 (12,542)
30 June 2001
Assets
Cash 4.50% 95 - - - 3 98
Trade receivables - - - - 1,681 1,681
Investments 5.99% 16,092 - - - - 16,092
Total financial assets 16,187 - - - 1,684 17,871
Liabilities
Trade payables - - - - 2,213 2,213
Borrowings 7.38% - 8,197 14,018 8,325 - 30,540
Total financial liabilities - 8,197 14,018 8,325 2,213 32,753
Net financial assets / (liabilities) 16,187 (8,197) (14,018) (8,325) (529) (14,882)
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
25. Additional Financial Instrument Disclosures (continued)
(b) Credit risk
All financial assets are unsecured.
The carrying amount of financial assets included in the Statement of Financial Position represents the Corporation’s
maximum exposure to credit risk in relation to these assets. Where the Corporation has a right of set-off and intends
to settle on a net basis, this set-off has been reflected in the financial statements in accordance with accounting
standards.
(c) Derivative Financial Instruments
The nature of Newcastle Port Corporation's business gives rise to gaps in maturity of its cashflows and to exposures
arising from possible changes in the repricing of financial positions upon their maturity. The Corporation has identified
the risks that arise from such gaps and exposures and has established policies to prudentially monitor and limit those
risks. In managing such risks, the Corporation may be involved in derivative financial instruments. A derivative financial
instrument is a contract or agreement whose value is derived from the value of the underlying instrument, reference
rate or index. Derivative financial instruments are used to alter and modify the natural risks inherent in the Statement
of Financial Position. The Corporation uses futures contracts and interest rate swaps to hedge financial exposures
arising from its borrowing portfolio thereby limiting the risk that changes in interest rates will adversely affect profit.
Gains or losses on derivative transactions are brought to account when realised
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N O T E S T O A N D F O R M I N G P A R TO F T H E F I N A N C I A L S T A T E M E N T Sfor the financial year ended 30 June 2002.
25. Additional Financial Instrument Disclosures (continued)
Net Exposure
The market value of the Corporation’s derivative financial instruments outstanding at year end are as follows:
i) Interest Rate Swap Contract
Assest and liability swaps in place at 30 June 2002 have fixed interest rates ranging from between 5.5% and 6.3%
and variable rates that range between 4.4% and 4.6%. As at 30 June 2002 the notional principal amounts and
periods of expiry of the interest rate swap asset and libilities are as follows:
2002 2001
$000 $000
2-3 years 600 -
4-5 years 400 -
2-3 years* (600) -
4-5 years* (400) -
* The negative amounts represent asset interest rate swap contracts.
ii) Interest Rate Futures
Derivative Financial Instruments Receivable
Interest Futures 513 494
The futures position at the end of the financial year is as follows:
Total
Delivery Contracts Value
Month Sold $000
3 year bond futures Sept 2002 (14) 1,400
10 year bond futures Sept 2002 2 200
END OF AUDITED FINANCIAL STATEMENTS
Newcastle Port Corporation
Newcomen Street PO Box 663 Newcastle NSW 2300 Australia
Phone: (02) 4985 8222 International Phone: 61 2 4985 8222 Toll Free: 1800 048 205 (NSW)
Telex: AA 28761 Facsimile: (02) 4926 4596 International Fax: 61 2 4926 4596
Internet: http://www.newportcorp.com Email: [email protected]
Business hours: 5 days per week, 9.00 am – 5.00 pm
Service hours: 7 days per week, 24 hours per day Peac
h 01
1393