Post on 22-Mar-2018
ik TelcoNsW AuthorityGOVERNMENT
Contents
Chairpersonrsquos report 3
Acting Managing Directorrsquos report 4
About the NSW Telco Authority 5
Our operating principles 5
Our 201314 objectives5
Our Act 5
Our stakeholders 6
Governance 6
The Board 6
Board meetings8
Our senior management team8
Organisation chart 9
Internal audit and risk management10
Digital information security policy 12
Year in review 13
Core activities13
Projects 18
Participation and responses to inquiries19
Financial statements 20
Independent auditorrsquos report 21
Statement by the Acting Managing Director 23
Statement of comprehensive income 24
Budget outline for 20141544
Statutory reporting obligations 44
Human resources 44
Senior Executives 45
Credit card certification45
Payment of accounts 46
Investment performance 47
Risk management and insurance 47
Disclosure of controlled entities 47
Consultants 47
Work Health and Safety 47
Government Information (Public Access) Act 2009 48
Public interest disclosures 48
Exemptions 48
Annual report production 48
2
Chairpersonrsquos report
I am pleased to present the
201314 Annual Report for
the NSW Telco Authority
which marks our second
year as a statutory
authority within the Finance
and Services cluster It also
marks the second full year
the Board has been in
place
Over the past 12 months the Authority and its
Board has continued to actively work towards its
strategic goals and provide leadership and
guidance to the government operational
telecommunications sector It has been a
privilege to be in the role of Chairperson of the
Board for the past two years and I am looking
forward to continuing to build the capability of
the Board
In the last financial year we have undertaken an
independent review of the Boardrsquos operations
and arrangements in line with the new Premierrsquos
guidelines on Boards and Committees This review
found that there was a high level of respect
among board members and between the Board
and NSW Telco Authority management The
review also identified that there were
opportunities for the Board to increase its
capabilities in key areas and its diversity To this
end I am pleased to report that three new
members were appointed to the Board in May
and June 2014 These new members Ms Liz Ward
Ms Kylie De Courteney and Ms Kaaren Koomen
provide the Board with a greater depth of
experience and expertise and I look forward to
working with them and the other members in the
coming financial year
Over the course of the last year key governance
arrangements have been put in place to assist
the NSW Telco Authority and the Board in
delivering the current and future requirements of
agencies as well as developing best practice for
the sector
The Business and Strategy Group (BSG) was
established as a representative committee of
NSW Government radio communications
stakeholders acting in the capacity of a sector-
wide leadership group In its support of the NSW
Telco Authority the BSG provides advice on
appropriate approaches and strategies for how
to best meet those needs including to identify
and realise opportunities for multi-agency
cooperation and collaboration and to develop
best practice for the way the sector operates
The Technology (Planning and Review) Group
(TPRG) was also established to provide technical
advice to the Authority and the BSG It provides
advice on appropriate technology architecture
and solutions to meet current and future
operational telecommunications and business
requirements The TPRG assists the Authority in its
sector-wide coordination role taking a whole of
government view in order to improve integration
collaboration and consolidation as well as service
improvements for users
I am also pleased to report that over the past
year the Authority has been working in
partnership with industry and agencies to simplify
access for NSW Government buyers and industry
suppliers As a result of this work the Authority has
achieved over $3 million in savings for the NSW
Government through the implementation of the
ITS 2573 procurement scheme This procurement
reform is part of a suite of measures the Authority
aims to implement over the coming years to help
drive a more competitive marketplace for the
sector
I am looking forward to the upcoming 12 months
which will see the Authority and the Board using
the new governance arrangements to lead the
sector Over the next year we will develop a 10
year whole of government strategy for
operational telecommunications services to set
the direction for infrastructure and service
provision across agencies It will identify the most
appropriate mix of delivery models to effectively
and efficiently provide critical services addressing
the needs of frontline staff for whom quality and
availability of service remain paramount
Rod Gilmour
Chairperson
3
Acting Managing Directorrsquos
report
In the last year the NSW
Telco Authority has
continued to provide
essential radio
communication services to
NSW Government
agencies including our
emergency services and
lead sector wide reform
The Authority has managed the Government
Radio Network (GRN) ensuring our 30000 users
have access to a reliable and efficient radio
network On 1 August 2013 Airwave Solutions
Australia assumed management responsibilities for
the GRN Airwave was chosen following an
extensive tender process that included a Client
Reference Group and evaluation teams
comprised of representatives from public safety
organisations utilities and other NSW Government
agencies The contract with Airwave includes a
number of provisions aimed at improving service
delivery for agencies including higher service level
requirements such as improved response and
restoration times as well as increased
governance and accountability
A separate maintenance agreement was
negotiated with the original equipment
manufacturer Motorola Solutions who continue
to support the core and critical components of
the network The transition between network
managers was handled professionally and
seamlessly between the parties and I would like to
acknowledge both Airwave and Motorola for
their contributions during this time
The Authority worked with Motorola and Airwave
to upgrade the GRN core which was completed
in December 2013 This was a highly complex
project delivered with minimal impact to the
network It was delivered in two stages to mitigate
risks associated with major system version
changes I would like to acknowledge the
cooperation that was given by all agencies
involved allowing us to overhaul our network
efficiently and effectively
The Authorityrsquos telecommunications emergency
management team provided support to our
colleagues at the Rural Fire Service during the
October 2013 bushfires The team coordinated
the effort to maintain vital links between the
community and our emergency services
The Authority also established a Spectrum
Management Office (SMO) to oversee the
efficient allocation assignment and ongoing
administration of spectrum for NSW Government
entities This includes all Government licences in
the 400 MHz Harmonised Government Spectrum
bands as well as other spectrum allocations as
required
Over the past year the NSW Telco Authority has
worked with the Board to develop the Enterprise
Risk Management Framework The framework
comprises a policy procedure and tools to assist
in identifying and managing risks All Board
members were independently interviewed during
the year to assess their thoughts and ideas in
relation to risk management and this was
reflected in the final draft Enterprise Risk
Management Framework Further work will be
undertaken over the next twelve months to
embed risk management within the Authorityrsquos
business processes
My appointment as Acting Managing Director
occurred after the end of the reporting period
and I would like to acknowledge the work of my
predecessors Mr Laurie Glanfield and Mr John
Hubby
Shaun Smith
Acting Managing Director
4
About us
Our purpose is to lead and drive the
reform of government operational
telecommunications services and deliver
solutions to better enable our
stakeholders to respond to the needs of
the NSW community
Our operating principles
We will
ensure services continue to meet business
needs and provide an equal or improved
level of service
provide strategic direction and value to the
whole-of-government
use technology as an enabler rather than a
driver of services
engage our stakeholders as partners in
aligning strategies consolidating assets and
reforming services
acknowledge and provide for the unique
operating requirements of emergency service
organisations
ensure the capabilities and skills of the sector
continue to develop
Our 201314 objectives
1 Integrate and enhance service delivery to
better meet the needs of business partners
2 Manage the efficient allocation and use of
spectrum
3 Manage a consolidated portfolio of assets
which are fit for purpose
4 Improve governance and risk management
5 Strengthen sector-wide capabilities and
engagement with partners
Our Act
The NSW Telco Authority is a statutory authority
created under the NSW Government
Telecommunications Act 1991
The Authority was established in 2011 as a result of
the recommendations of the Strategic Review of
NSW Government Mobile Radio Services
undertaken by the NSW Department of Premier
and Cabinet and associated direction provided
by Premierrsquos Memorandum M2010-16
Government Mobile Radio Services
This memorandum was replaced on 1 September
2014 by the new OFS-2014-02-NSW Government
Radio Communications Strategy circular which
provides guidance to agencies on ensuring that
their radio and related communications
investment planning and spectrum licensing
decisions are in line with the future direction of the
sector
The roles undertaken by the Authority include
reform the statersquos infrastructure and services to
make the portfolio more efficient improve
services and streamline processes
undertake the planning deployment and
management of government owned radio
and data networks
identify develop deliver and procure
communications technologies which meet the
needs of customers
manage voice and data spectrum allocations
on behalf of all NSW agencies
coordinate responses to telecommunications
outages during major emergencies and
natural disasters including acting as a conduit
between telecommunications carriers and
emergency management organisations
provide strategy policy and advocacy for the
sector including liaising with national bodies
and stakeholders on sector reforms and
enhancing the capabilities of the sector
The Authority operates as a statutory authority
within the Finance and Services cluster For routine
matters we report to the Minister for Finance and
Service and on specific matters the Cabinet Sub-
Committee on Counter Terrorism and Emergency
Management
5
Our stakeholders
The Authority has a wide range of business
partners including emergency services
organisations providers of essential services and
other NSW Government agencies
In addition to developing partnerships with
industry the Authority also works closely with the
Australian Communications and Media Authority
(ACMA) and relevant agencies in other states
and territories
Governance
The NSW Telco Authority is overseen by a Board of
part-time independent and government
members who with the Managing Director and
executive management are accountable for the
operations of the Authority
The Authority recognises the importance of
agency collaboration and the different skills and
experience that contribute to the development of
policy and strategy As a result a tiered
framework has been adopted to facilitate and
support engagement This model is informed by
the governance framework development
experiences in the NSW Governmentrsquos approach
to Procurement and Information and
Communications Technology
The following advisory groups have been
established as collaborative forums for
engagement with our business partners
Business and Strategy Group (BSG)
Technology (Planning and Review) Group
(TPRG)
Network client forum
The Board
The Telco Authority Board is established under the
NSW Government Telecommunications Act 1991
The Board has adopted a Charter and a Code of
Conduct to guide its operations The Board
provides policy and strategic direction for the
NSW Telco Authority The Minister administers the
Act and nominates the members after
consultation with various sectors of the NSW
Government
Review of the Board
The Board of the Telco Authority engaged an
independent consultant to undertake a review of
the effectiveness of the Board its activities and its
internal governance arrangements during 2013
The review was undertaken as the Board had
been operating for more than 12 months
The Boardrsquos inaugural membership considered the
review outcomes in December 2013 The Board
including new members appointed in May 2014
has endorsed the recommended improvements
to the Boardrsquos Charter and Code of Conduct
Issues concerning the Boardrsquos gender balance
asset management finance and risk
management skills were addressed with the
appointment of several new members
Current members (as 30 June 2014)
In accordance with the Act and to ensure a
broad range of skills and experience the Board is
comprised of members nominated as follows
Chairperson Rod Gilmour (FAIM MAICD) was
General Manager Corporate Affairs Planning
and Human Resources of the Sydney Airport
Corporation Limited until 2011 He is an
experienced leader and change manager with
achievements in transport business development
regulatory frameworks and planning and
environment Mr Gilmour has held many board
and authority appointments including as a
Director of the National Rail Corporation
Nominated by the Minister for Finance and
Services
Deputy Chairperson Peter Barrie is an Assistant
Commissioner of the NSW Police Force
operational Communications and Information
Command He has a wealth of operational
policing experience and is recognised as a leader
in Australian radio and public safety
communications He sits on a number of state and
national boards and committees He is responsible
for the management of the NSW Police Force
radio network and a major capital program of
works to refresh their assets to prepare for future
growth and opportunities Nominated by the
Minister for Finance and Services in concert with
the Minister for Police and Emergency Services
6
Acting Managing Director (until September 2014)
John Hubby (Master of Public Health and
Bachelor of Business Administration) the Deputy
Secretary Corporate Services for Finance and
Services since April 2012 was appointed as Acting
Chief Executive of Finance and Services on 29
April 2014 As well as previously serving as the
Chief Executive of Juvenile Justice NSW Mr Hubby
has also held executive roles in the health sector
in NSW and in the USA
Board member Shane Fitzsimmons (qualifications
in Management and Leadership from the
Australian Institute of Police Management and
NSW TAFE) is Commissioner of the NSW Rural Fire
Service Commissioner Fitzsimmons has a wealth of
strategic and operational fire knowledge and was
awarded the Australian Fire Service Medal in 2001
Nominate by the Minister for Finance and Services
in concert with the Minister for Police and
Emergency Services
Board member Matt Roberts (Master of
Economics and a Bachelor of Economics) is a
Deputy Secretary of the NSW Treasury and is
responsible for policy development and budget
management across several portfolios He was
previously the Director of the National Reform
Branch advising the Council of Australian
Governments Nominate by the Treasurer
Board member Alan Lipman (Bachelor of Business
(Admin)) was the Executive Director of Lomb
Scientific (Australia) Pty Ltd and previously the
General Manager Marketing for Advance
Healthcare Group Limited Mr Lipmanrsquos private
sector expertise is in the management of budgets
implementation of strategy and people
management He has served on the boards of
many non-profit organisations Nominated by the
Minister for Resources and Energy
Board member David Quilty (Graduate Diploma
in Industrial Relations and Bachelor of Arts) is the
Executive Director of the Pharmacy Guild of
Australia Prior to taking up his current role David
directed his own consulting firm providing
strategic advice to businesses and industry
organisations Before that David spent five years
as an executive at Telstra the last three as Group
Managing Director Public Policy and
Communications He has also worked in various
advisory roles in government including six years as
the chief of staff to the Minister for
Communications Information Technology and
the Arts Nominated by the Premier
Board member Kylie De Courteney (Bachelor of
Commerce) has extensive experience as a
Transformation Program Manager and
Management Consultant Kylie has been
responsible for the delivery of large scale
transformational change in some of Australiarsquos
largest and most complex organisations in the
private sector government and professional
services including the University of Sydney Sydney
Trains Chartered Accountants Australia and New
Zealand NSW Roads and Maritime Services
Energy Australia and Telstra Nominated by the
Minister for Resources and Energy
Board member Liz Ward (Master of Business
Administration) is a senior executive with 30 yearsrsquo
experience in driving business growth and
improvement within a diverse range of industries
in Australia New Zealand USA Africa Europe
and the Asia Pacific region Liz has been in Chief
Executive and Director roles across a number of
private and government organisations including
Sydney Trains AUX Investments Telstra CentrePort
Wellington Ltd EDS and Telecom New Zealand
Nominated by the Minister for Transport
Board member Kaaren Koomen (Bachelor of
ArtsLaw Master of Law) is a highly experience
executive with over 25 yearsrsquo experience in
leadership roles in the private and public sector
with a particular focus on communications and
technology She is currently an Executive Director
with IBM Australia and New Zealand and a
member of the Global IBM Government Programs
Leadership Team She has extensive board
experience on over 10 public and private boards
and committees and currently serves on four
including Chair of the Museum of Australian
Democracy at Eureka and Vice President of the
Australian Services Roundtable Nominated by the
Minister for Finance and Services
Other members during the reporting period
Board member (until April 2014) David Abrahams
(Bachelor of Science Cand Mag Honours
equivalent Knowledge Management) has
expertise in the Information Communications
Technology Industry He is principal consultant to
Organise Internet ndash Online Mr Abrahams is a past
7
chair and board member of
YouthConnectionscomau and a past lecturer in
Major Information Technology projects at the
University of Newcastle He is the current
Chairperson of Regional Development Australia
(Central Coast) and is a consultant to state and
local governments Nominated by the Minister for
Resources and Energy
Board member (until December 2013) Gavin
Campbell (MBA Bachelor of Engineering
(Mechanical) is the NSW Director of Asset
Operations for Sydney Trains Mr Campbell leads a
team of approximately 4000 people who work
behind the scenes to maintain Sydney Trainsrsquo
assets He spent much of his earlier career at
Qantas where he headed its Defence Services
delivering improved customer service a new
safety performance program and restructuring
the business to position it for future growth
Nominated by the Minister for Transport
Acting Managing Director (until March 2014)
Laurie Glanfield was the Secretary of the NSW
Department of Finance and Services Prior this Mr
Glanfield was the Director General of the
Department of Attorney General and Justice for
over 20 years Mr Glanfield has also held a
number of state-wide national and international
positions including NSW Chief Information Officer
NSW Coordinator for the National Broadband
Network Founding Member of the International
Consortium for Court Excellence and Deputy
President of the Australasian Institute of Judicial
Administration In 2001 Mr Glanfield was made a
Member of the Order of Australia for services to
the law through the implementation of policies
for legal reform and for making the legal system
more accessible to the community
Acting Managing Director (until August 2013)
Michael Coutts-Trotter (Bachelor of Arts) was
Director General of the NSW Department of
Finance and Services and Managing Director of
the Telco Authority Prior to this role with the Telco
Authority in April 2011 Mr Coutts-Trotter was
Director General of the NSW Department of
Education and Training Before that he was
Director General of the NSW Department of
Finance and Commerce Nominated by the
Minister for Finance and Services
Board meetings
The Board was appointed in 2012 and held its
inaugural meeting in July 2012 There were six
meetings held during the reporting period
Member Period Meetings
Attended Eligible
Rod Gilmour Full year 6 6
Peter Barrie Full year 5 6
Shane
Fitzsimmons
Full year 3 6
Matt
Roberts
Full year 5 6
Alan
Lipman
Full year 4 6
David Quilty Full year 5 6
John Hubby From May
2014
1 1
Kaaren
Koomen
From June
2014
0 1
Kylie De
Courteney
From June
2014
1 1
Liz Ward From May
2014
0 1
Michael
Coutts-
Trotter
From July
2013 to
August 2013
0 0
Gavin
Campbell
Until
December
2013
2 4
Laurie
Glanfield
From
September
2013 to
March 2014
3 4
David
Abrahams
Until April
2014
5 5
Our senior management team
The NSW Telco Authority has a small senior
management team who work with experienced
and qualified staff to deliver the functions and
operations of the organisation
Shaun Smith Bachelor of Engineering (Honours)
Executive Director (aManaging Director after the
reporting period)
Phillip King Bachelor of Engineering
(Telecommunications)
Chief Technology Officer 8
Review of Organisational Structure Organisation chart
In late 201213 the Telco Authority undertook a
Telco Authority Board
Managing Director
Executive
Network and Services
Portfolio Management Office
Policy Governance and Reform
Telecommunications Emergencies
Business Planning and Financial Control
Commercial
review of its organisational structure to determine
the best operating model for the expanding and
changing role for the Authority During 201314
the outcomes of the review were progressively
implemented The new organisational structure
takes into account the work required by the
Authority in meeting its corporate plan
obligations and brings resources to key technical
communications and project management
activities
Recruitment to fill the majority of key positions was
undertaken during 201314 Further recruitment to
fill a number of executive positions will be carried
out once the new Government Sector Executive
employment arrangements are in place
9
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Contents
Chairpersonrsquos report 3
Acting Managing Directorrsquos report 4
About the NSW Telco Authority 5
Our operating principles 5
Our 201314 objectives5
Our Act 5
Our stakeholders 6
Governance 6
The Board 6
Board meetings8
Our senior management team8
Organisation chart 9
Internal audit and risk management10
Digital information security policy 12
Year in review 13
Core activities13
Projects 18
Participation and responses to inquiries19
Financial statements 20
Independent auditorrsquos report 21
Statement by the Acting Managing Director 23
Statement of comprehensive income 24
Budget outline for 20141544
Statutory reporting obligations 44
Human resources 44
Senior Executives 45
Credit card certification45
Payment of accounts 46
Investment performance 47
Risk management and insurance 47
Disclosure of controlled entities 47
Consultants 47
Work Health and Safety 47
Government Information (Public Access) Act 2009 48
Public interest disclosures 48
Exemptions 48
Annual report production 48
2
Chairpersonrsquos report
I am pleased to present the
201314 Annual Report for
the NSW Telco Authority
which marks our second
year as a statutory
authority within the Finance
and Services cluster It also
marks the second full year
the Board has been in
place
Over the past 12 months the Authority and its
Board has continued to actively work towards its
strategic goals and provide leadership and
guidance to the government operational
telecommunications sector It has been a
privilege to be in the role of Chairperson of the
Board for the past two years and I am looking
forward to continuing to build the capability of
the Board
In the last financial year we have undertaken an
independent review of the Boardrsquos operations
and arrangements in line with the new Premierrsquos
guidelines on Boards and Committees This review
found that there was a high level of respect
among board members and between the Board
and NSW Telco Authority management The
review also identified that there were
opportunities for the Board to increase its
capabilities in key areas and its diversity To this
end I am pleased to report that three new
members were appointed to the Board in May
and June 2014 These new members Ms Liz Ward
Ms Kylie De Courteney and Ms Kaaren Koomen
provide the Board with a greater depth of
experience and expertise and I look forward to
working with them and the other members in the
coming financial year
Over the course of the last year key governance
arrangements have been put in place to assist
the NSW Telco Authority and the Board in
delivering the current and future requirements of
agencies as well as developing best practice for
the sector
The Business and Strategy Group (BSG) was
established as a representative committee of
NSW Government radio communications
stakeholders acting in the capacity of a sector-
wide leadership group In its support of the NSW
Telco Authority the BSG provides advice on
appropriate approaches and strategies for how
to best meet those needs including to identify
and realise opportunities for multi-agency
cooperation and collaboration and to develop
best practice for the way the sector operates
The Technology (Planning and Review) Group
(TPRG) was also established to provide technical
advice to the Authority and the BSG It provides
advice on appropriate technology architecture
and solutions to meet current and future
operational telecommunications and business
requirements The TPRG assists the Authority in its
sector-wide coordination role taking a whole of
government view in order to improve integration
collaboration and consolidation as well as service
improvements for users
I am also pleased to report that over the past
year the Authority has been working in
partnership with industry and agencies to simplify
access for NSW Government buyers and industry
suppliers As a result of this work the Authority has
achieved over $3 million in savings for the NSW
Government through the implementation of the
ITS 2573 procurement scheme This procurement
reform is part of a suite of measures the Authority
aims to implement over the coming years to help
drive a more competitive marketplace for the
sector
I am looking forward to the upcoming 12 months
which will see the Authority and the Board using
the new governance arrangements to lead the
sector Over the next year we will develop a 10
year whole of government strategy for
operational telecommunications services to set
the direction for infrastructure and service
provision across agencies It will identify the most
appropriate mix of delivery models to effectively
and efficiently provide critical services addressing
the needs of frontline staff for whom quality and
availability of service remain paramount
Rod Gilmour
Chairperson
3
Acting Managing Directorrsquos
report
In the last year the NSW
Telco Authority has
continued to provide
essential radio
communication services to
NSW Government
agencies including our
emergency services and
lead sector wide reform
The Authority has managed the Government
Radio Network (GRN) ensuring our 30000 users
have access to a reliable and efficient radio
network On 1 August 2013 Airwave Solutions
Australia assumed management responsibilities for
the GRN Airwave was chosen following an
extensive tender process that included a Client
Reference Group and evaluation teams
comprised of representatives from public safety
organisations utilities and other NSW Government
agencies The contract with Airwave includes a
number of provisions aimed at improving service
delivery for agencies including higher service level
requirements such as improved response and
restoration times as well as increased
governance and accountability
A separate maintenance agreement was
negotiated with the original equipment
manufacturer Motorola Solutions who continue
to support the core and critical components of
the network The transition between network
managers was handled professionally and
seamlessly between the parties and I would like to
acknowledge both Airwave and Motorola for
their contributions during this time
The Authority worked with Motorola and Airwave
to upgrade the GRN core which was completed
in December 2013 This was a highly complex
project delivered with minimal impact to the
network It was delivered in two stages to mitigate
risks associated with major system version
changes I would like to acknowledge the
cooperation that was given by all agencies
involved allowing us to overhaul our network
efficiently and effectively
The Authorityrsquos telecommunications emergency
management team provided support to our
colleagues at the Rural Fire Service during the
October 2013 bushfires The team coordinated
the effort to maintain vital links between the
community and our emergency services
The Authority also established a Spectrum
Management Office (SMO) to oversee the
efficient allocation assignment and ongoing
administration of spectrum for NSW Government
entities This includes all Government licences in
the 400 MHz Harmonised Government Spectrum
bands as well as other spectrum allocations as
required
Over the past year the NSW Telco Authority has
worked with the Board to develop the Enterprise
Risk Management Framework The framework
comprises a policy procedure and tools to assist
in identifying and managing risks All Board
members were independently interviewed during
the year to assess their thoughts and ideas in
relation to risk management and this was
reflected in the final draft Enterprise Risk
Management Framework Further work will be
undertaken over the next twelve months to
embed risk management within the Authorityrsquos
business processes
My appointment as Acting Managing Director
occurred after the end of the reporting period
and I would like to acknowledge the work of my
predecessors Mr Laurie Glanfield and Mr John
Hubby
Shaun Smith
Acting Managing Director
4
About us
Our purpose is to lead and drive the
reform of government operational
telecommunications services and deliver
solutions to better enable our
stakeholders to respond to the needs of
the NSW community
Our operating principles
We will
ensure services continue to meet business
needs and provide an equal or improved
level of service
provide strategic direction and value to the
whole-of-government
use technology as an enabler rather than a
driver of services
engage our stakeholders as partners in
aligning strategies consolidating assets and
reforming services
acknowledge and provide for the unique
operating requirements of emergency service
organisations
ensure the capabilities and skills of the sector
continue to develop
Our 201314 objectives
1 Integrate and enhance service delivery to
better meet the needs of business partners
2 Manage the efficient allocation and use of
spectrum
3 Manage a consolidated portfolio of assets
which are fit for purpose
4 Improve governance and risk management
5 Strengthen sector-wide capabilities and
engagement with partners
Our Act
The NSW Telco Authority is a statutory authority
created under the NSW Government
Telecommunications Act 1991
The Authority was established in 2011 as a result of
the recommendations of the Strategic Review of
NSW Government Mobile Radio Services
undertaken by the NSW Department of Premier
and Cabinet and associated direction provided
by Premierrsquos Memorandum M2010-16
Government Mobile Radio Services
This memorandum was replaced on 1 September
2014 by the new OFS-2014-02-NSW Government
Radio Communications Strategy circular which
provides guidance to agencies on ensuring that
their radio and related communications
investment planning and spectrum licensing
decisions are in line with the future direction of the
sector
The roles undertaken by the Authority include
reform the statersquos infrastructure and services to
make the portfolio more efficient improve
services and streamline processes
undertake the planning deployment and
management of government owned radio
and data networks
identify develop deliver and procure
communications technologies which meet the
needs of customers
manage voice and data spectrum allocations
on behalf of all NSW agencies
coordinate responses to telecommunications
outages during major emergencies and
natural disasters including acting as a conduit
between telecommunications carriers and
emergency management organisations
provide strategy policy and advocacy for the
sector including liaising with national bodies
and stakeholders on sector reforms and
enhancing the capabilities of the sector
The Authority operates as a statutory authority
within the Finance and Services cluster For routine
matters we report to the Minister for Finance and
Service and on specific matters the Cabinet Sub-
Committee on Counter Terrorism and Emergency
Management
5
Our stakeholders
The Authority has a wide range of business
partners including emergency services
organisations providers of essential services and
other NSW Government agencies
In addition to developing partnerships with
industry the Authority also works closely with the
Australian Communications and Media Authority
(ACMA) and relevant agencies in other states
and territories
Governance
The NSW Telco Authority is overseen by a Board of
part-time independent and government
members who with the Managing Director and
executive management are accountable for the
operations of the Authority
The Authority recognises the importance of
agency collaboration and the different skills and
experience that contribute to the development of
policy and strategy As a result a tiered
framework has been adopted to facilitate and
support engagement This model is informed by
the governance framework development
experiences in the NSW Governmentrsquos approach
to Procurement and Information and
Communications Technology
The following advisory groups have been
established as collaborative forums for
engagement with our business partners
Business and Strategy Group (BSG)
Technology (Planning and Review) Group
(TPRG)
Network client forum
The Board
The Telco Authority Board is established under the
NSW Government Telecommunications Act 1991
The Board has adopted a Charter and a Code of
Conduct to guide its operations The Board
provides policy and strategic direction for the
NSW Telco Authority The Minister administers the
Act and nominates the members after
consultation with various sectors of the NSW
Government
Review of the Board
The Board of the Telco Authority engaged an
independent consultant to undertake a review of
the effectiveness of the Board its activities and its
internal governance arrangements during 2013
The review was undertaken as the Board had
been operating for more than 12 months
The Boardrsquos inaugural membership considered the
review outcomes in December 2013 The Board
including new members appointed in May 2014
has endorsed the recommended improvements
to the Boardrsquos Charter and Code of Conduct
Issues concerning the Boardrsquos gender balance
asset management finance and risk
management skills were addressed with the
appointment of several new members
Current members (as 30 June 2014)
In accordance with the Act and to ensure a
broad range of skills and experience the Board is
comprised of members nominated as follows
Chairperson Rod Gilmour (FAIM MAICD) was
General Manager Corporate Affairs Planning
and Human Resources of the Sydney Airport
Corporation Limited until 2011 He is an
experienced leader and change manager with
achievements in transport business development
regulatory frameworks and planning and
environment Mr Gilmour has held many board
and authority appointments including as a
Director of the National Rail Corporation
Nominated by the Minister for Finance and
Services
Deputy Chairperson Peter Barrie is an Assistant
Commissioner of the NSW Police Force
operational Communications and Information
Command He has a wealth of operational
policing experience and is recognised as a leader
in Australian radio and public safety
communications He sits on a number of state and
national boards and committees He is responsible
for the management of the NSW Police Force
radio network and a major capital program of
works to refresh their assets to prepare for future
growth and opportunities Nominated by the
Minister for Finance and Services in concert with
the Minister for Police and Emergency Services
6
Acting Managing Director (until September 2014)
John Hubby (Master of Public Health and
Bachelor of Business Administration) the Deputy
Secretary Corporate Services for Finance and
Services since April 2012 was appointed as Acting
Chief Executive of Finance and Services on 29
April 2014 As well as previously serving as the
Chief Executive of Juvenile Justice NSW Mr Hubby
has also held executive roles in the health sector
in NSW and in the USA
Board member Shane Fitzsimmons (qualifications
in Management and Leadership from the
Australian Institute of Police Management and
NSW TAFE) is Commissioner of the NSW Rural Fire
Service Commissioner Fitzsimmons has a wealth of
strategic and operational fire knowledge and was
awarded the Australian Fire Service Medal in 2001
Nominate by the Minister for Finance and Services
in concert with the Minister for Police and
Emergency Services
Board member Matt Roberts (Master of
Economics and a Bachelor of Economics) is a
Deputy Secretary of the NSW Treasury and is
responsible for policy development and budget
management across several portfolios He was
previously the Director of the National Reform
Branch advising the Council of Australian
Governments Nominate by the Treasurer
Board member Alan Lipman (Bachelor of Business
(Admin)) was the Executive Director of Lomb
Scientific (Australia) Pty Ltd and previously the
General Manager Marketing for Advance
Healthcare Group Limited Mr Lipmanrsquos private
sector expertise is in the management of budgets
implementation of strategy and people
management He has served on the boards of
many non-profit organisations Nominated by the
Minister for Resources and Energy
Board member David Quilty (Graduate Diploma
in Industrial Relations and Bachelor of Arts) is the
Executive Director of the Pharmacy Guild of
Australia Prior to taking up his current role David
directed his own consulting firm providing
strategic advice to businesses and industry
organisations Before that David spent five years
as an executive at Telstra the last three as Group
Managing Director Public Policy and
Communications He has also worked in various
advisory roles in government including six years as
the chief of staff to the Minister for
Communications Information Technology and
the Arts Nominated by the Premier
Board member Kylie De Courteney (Bachelor of
Commerce) has extensive experience as a
Transformation Program Manager and
Management Consultant Kylie has been
responsible for the delivery of large scale
transformational change in some of Australiarsquos
largest and most complex organisations in the
private sector government and professional
services including the University of Sydney Sydney
Trains Chartered Accountants Australia and New
Zealand NSW Roads and Maritime Services
Energy Australia and Telstra Nominated by the
Minister for Resources and Energy
Board member Liz Ward (Master of Business
Administration) is a senior executive with 30 yearsrsquo
experience in driving business growth and
improvement within a diverse range of industries
in Australia New Zealand USA Africa Europe
and the Asia Pacific region Liz has been in Chief
Executive and Director roles across a number of
private and government organisations including
Sydney Trains AUX Investments Telstra CentrePort
Wellington Ltd EDS and Telecom New Zealand
Nominated by the Minister for Transport
Board member Kaaren Koomen (Bachelor of
ArtsLaw Master of Law) is a highly experience
executive with over 25 yearsrsquo experience in
leadership roles in the private and public sector
with a particular focus on communications and
technology She is currently an Executive Director
with IBM Australia and New Zealand and a
member of the Global IBM Government Programs
Leadership Team She has extensive board
experience on over 10 public and private boards
and committees and currently serves on four
including Chair of the Museum of Australian
Democracy at Eureka and Vice President of the
Australian Services Roundtable Nominated by the
Minister for Finance and Services
Other members during the reporting period
Board member (until April 2014) David Abrahams
(Bachelor of Science Cand Mag Honours
equivalent Knowledge Management) has
expertise in the Information Communications
Technology Industry He is principal consultant to
Organise Internet ndash Online Mr Abrahams is a past
7
chair and board member of
YouthConnectionscomau and a past lecturer in
Major Information Technology projects at the
University of Newcastle He is the current
Chairperson of Regional Development Australia
(Central Coast) and is a consultant to state and
local governments Nominated by the Minister for
Resources and Energy
Board member (until December 2013) Gavin
Campbell (MBA Bachelor of Engineering
(Mechanical) is the NSW Director of Asset
Operations for Sydney Trains Mr Campbell leads a
team of approximately 4000 people who work
behind the scenes to maintain Sydney Trainsrsquo
assets He spent much of his earlier career at
Qantas where he headed its Defence Services
delivering improved customer service a new
safety performance program and restructuring
the business to position it for future growth
Nominated by the Minister for Transport
Acting Managing Director (until March 2014)
Laurie Glanfield was the Secretary of the NSW
Department of Finance and Services Prior this Mr
Glanfield was the Director General of the
Department of Attorney General and Justice for
over 20 years Mr Glanfield has also held a
number of state-wide national and international
positions including NSW Chief Information Officer
NSW Coordinator for the National Broadband
Network Founding Member of the International
Consortium for Court Excellence and Deputy
President of the Australasian Institute of Judicial
Administration In 2001 Mr Glanfield was made a
Member of the Order of Australia for services to
the law through the implementation of policies
for legal reform and for making the legal system
more accessible to the community
Acting Managing Director (until August 2013)
Michael Coutts-Trotter (Bachelor of Arts) was
Director General of the NSW Department of
Finance and Services and Managing Director of
the Telco Authority Prior to this role with the Telco
Authority in April 2011 Mr Coutts-Trotter was
Director General of the NSW Department of
Education and Training Before that he was
Director General of the NSW Department of
Finance and Commerce Nominated by the
Minister for Finance and Services
Board meetings
The Board was appointed in 2012 and held its
inaugural meeting in July 2012 There were six
meetings held during the reporting period
Member Period Meetings
Attended Eligible
Rod Gilmour Full year 6 6
Peter Barrie Full year 5 6
Shane
Fitzsimmons
Full year 3 6
Matt
Roberts
Full year 5 6
Alan
Lipman
Full year 4 6
David Quilty Full year 5 6
John Hubby From May
2014
1 1
Kaaren
Koomen
From June
2014
0 1
Kylie De
Courteney
From June
2014
1 1
Liz Ward From May
2014
0 1
Michael
Coutts-
Trotter
From July
2013 to
August 2013
0 0
Gavin
Campbell
Until
December
2013
2 4
Laurie
Glanfield
From
September
2013 to
March 2014
3 4
David
Abrahams
Until April
2014
5 5
Our senior management team
The NSW Telco Authority has a small senior
management team who work with experienced
and qualified staff to deliver the functions and
operations of the organisation
Shaun Smith Bachelor of Engineering (Honours)
Executive Director (aManaging Director after the
reporting period)
Phillip King Bachelor of Engineering
(Telecommunications)
Chief Technology Officer 8
Review of Organisational Structure Organisation chart
In late 201213 the Telco Authority undertook a
Telco Authority Board
Managing Director
Executive
Network and Services
Portfolio Management Office
Policy Governance and Reform
Telecommunications Emergencies
Business Planning and Financial Control
Commercial
review of its organisational structure to determine
the best operating model for the expanding and
changing role for the Authority During 201314
the outcomes of the review were progressively
implemented The new organisational structure
takes into account the work required by the
Authority in meeting its corporate plan
obligations and brings resources to key technical
communications and project management
activities
Recruitment to fill the majority of key positions was
undertaken during 201314 Further recruitment to
fill a number of executive positions will be carried
out once the new Government Sector Executive
employment arrangements are in place
9
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Chairpersonrsquos report
I am pleased to present the
201314 Annual Report for
the NSW Telco Authority
which marks our second
year as a statutory
authority within the Finance
and Services cluster It also
marks the second full year
the Board has been in
place
Over the past 12 months the Authority and its
Board has continued to actively work towards its
strategic goals and provide leadership and
guidance to the government operational
telecommunications sector It has been a
privilege to be in the role of Chairperson of the
Board for the past two years and I am looking
forward to continuing to build the capability of
the Board
In the last financial year we have undertaken an
independent review of the Boardrsquos operations
and arrangements in line with the new Premierrsquos
guidelines on Boards and Committees This review
found that there was a high level of respect
among board members and between the Board
and NSW Telco Authority management The
review also identified that there were
opportunities for the Board to increase its
capabilities in key areas and its diversity To this
end I am pleased to report that three new
members were appointed to the Board in May
and June 2014 These new members Ms Liz Ward
Ms Kylie De Courteney and Ms Kaaren Koomen
provide the Board with a greater depth of
experience and expertise and I look forward to
working with them and the other members in the
coming financial year
Over the course of the last year key governance
arrangements have been put in place to assist
the NSW Telco Authority and the Board in
delivering the current and future requirements of
agencies as well as developing best practice for
the sector
The Business and Strategy Group (BSG) was
established as a representative committee of
NSW Government radio communications
stakeholders acting in the capacity of a sector-
wide leadership group In its support of the NSW
Telco Authority the BSG provides advice on
appropriate approaches and strategies for how
to best meet those needs including to identify
and realise opportunities for multi-agency
cooperation and collaboration and to develop
best practice for the way the sector operates
The Technology (Planning and Review) Group
(TPRG) was also established to provide technical
advice to the Authority and the BSG It provides
advice on appropriate technology architecture
and solutions to meet current and future
operational telecommunications and business
requirements The TPRG assists the Authority in its
sector-wide coordination role taking a whole of
government view in order to improve integration
collaboration and consolidation as well as service
improvements for users
I am also pleased to report that over the past
year the Authority has been working in
partnership with industry and agencies to simplify
access for NSW Government buyers and industry
suppliers As a result of this work the Authority has
achieved over $3 million in savings for the NSW
Government through the implementation of the
ITS 2573 procurement scheme This procurement
reform is part of a suite of measures the Authority
aims to implement over the coming years to help
drive a more competitive marketplace for the
sector
I am looking forward to the upcoming 12 months
which will see the Authority and the Board using
the new governance arrangements to lead the
sector Over the next year we will develop a 10
year whole of government strategy for
operational telecommunications services to set
the direction for infrastructure and service
provision across agencies It will identify the most
appropriate mix of delivery models to effectively
and efficiently provide critical services addressing
the needs of frontline staff for whom quality and
availability of service remain paramount
Rod Gilmour
Chairperson
3
Acting Managing Directorrsquos
report
In the last year the NSW
Telco Authority has
continued to provide
essential radio
communication services to
NSW Government
agencies including our
emergency services and
lead sector wide reform
The Authority has managed the Government
Radio Network (GRN) ensuring our 30000 users
have access to a reliable and efficient radio
network On 1 August 2013 Airwave Solutions
Australia assumed management responsibilities for
the GRN Airwave was chosen following an
extensive tender process that included a Client
Reference Group and evaluation teams
comprised of representatives from public safety
organisations utilities and other NSW Government
agencies The contract with Airwave includes a
number of provisions aimed at improving service
delivery for agencies including higher service level
requirements such as improved response and
restoration times as well as increased
governance and accountability
A separate maintenance agreement was
negotiated with the original equipment
manufacturer Motorola Solutions who continue
to support the core and critical components of
the network The transition between network
managers was handled professionally and
seamlessly between the parties and I would like to
acknowledge both Airwave and Motorola for
their contributions during this time
The Authority worked with Motorola and Airwave
to upgrade the GRN core which was completed
in December 2013 This was a highly complex
project delivered with minimal impact to the
network It was delivered in two stages to mitigate
risks associated with major system version
changes I would like to acknowledge the
cooperation that was given by all agencies
involved allowing us to overhaul our network
efficiently and effectively
The Authorityrsquos telecommunications emergency
management team provided support to our
colleagues at the Rural Fire Service during the
October 2013 bushfires The team coordinated
the effort to maintain vital links between the
community and our emergency services
The Authority also established a Spectrum
Management Office (SMO) to oversee the
efficient allocation assignment and ongoing
administration of spectrum for NSW Government
entities This includes all Government licences in
the 400 MHz Harmonised Government Spectrum
bands as well as other spectrum allocations as
required
Over the past year the NSW Telco Authority has
worked with the Board to develop the Enterprise
Risk Management Framework The framework
comprises a policy procedure and tools to assist
in identifying and managing risks All Board
members were independently interviewed during
the year to assess their thoughts and ideas in
relation to risk management and this was
reflected in the final draft Enterprise Risk
Management Framework Further work will be
undertaken over the next twelve months to
embed risk management within the Authorityrsquos
business processes
My appointment as Acting Managing Director
occurred after the end of the reporting period
and I would like to acknowledge the work of my
predecessors Mr Laurie Glanfield and Mr John
Hubby
Shaun Smith
Acting Managing Director
4
About us
Our purpose is to lead and drive the
reform of government operational
telecommunications services and deliver
solutions to better enable our
stakeholders to respond to the needs of
the NSW community
Our operating principles
We will
ensure services continue to meet business
needs and provide an equal or improved
level of service
provide strategic direction and value to the
whole-of-government
use technology as an enabler rather than a
driver of services
engage our stakeholders as partners in
aligning strategies consolidating assets and
reforming services
acknowledge and provide for the unique
operating requirements of emergency service
organisations
ensure the capabilities and skills of the sector
continue to develop
Our 201314 objectives
1 Integrate and enhance service delivery to
better meet the needs of business partners
2 Manage the efficient allocation and use of
spectrum
3 Manage a consolidated portfolio of assets
which are fit for purpose
4 Improve governance and risk management
5 Strengthen sector-wide capabilities and
engagement with partners
Our Act
The NSW Telco Authority is a statutory authority
created under the NSW Government
Telecommunications Act 1991
The Authority was established in 2011 as a result of
the recommendations of the Strategic Review of
NSW Government Mobile Radio Services
undertaken by the NSW Department of Premier
and Cabinet and associated direction provided
by Premierrsquos Memorandum M2010-16
Government Mobile Radio Services
This memorandum was replaced on 1 September
2014 by the new OFS-2014-02-NSW Government
Radio Communications Strategy circular which
provides guidance to agencies on ensuring that
their radio and related communications
investment planning and spectrum licensing
decisions are in line with the future direction of the
sector
The roles undertaken by the Authority include
reform the statersquos infrastructure and services to
make the portfolio more efficient improve
services and streamline processes
undertake the planning deployment and
management of government owned radio
and data networks
identify develop deliver and procure
communications technologies which meet the
needs of customers
manage voice and data spectrum allocations
on behalf of all NSW agencies
coordinate responses to telecommunications
outages during major emergencies and
natural disasters including acting as a conduit
between telecommunications carriers and
emergency management organisations
provide strategy policy and advocacy for the
sector including liaising with national bodies
and stakeholders on sector reforms and
enhancing the capabilities of the sector
The Authority operates as a statutory authority
within the Finance and Services cluster For routine
matters we report to the Minister for Finance and
Service and on specific matters the Cabinet Sub-
Committee on Counter Terrorism and Emergency
Management
5
Our stakeholders
The Authority has a wide range of business
partners including emergency services
organisations providers of essential services and
other NSW Government agencies
In addition to developing partnerships with
industry the Authority also works closely with the
Australian Communications and Media Authority
(ACMA) and relevant agencies in other states
and territories
Governance
The NSW Telco Authority is overseen by a Board of
part-time independent and government
members who with the Managing Director and
executive management are accountable for the
operations of the Authority
The Authority recognises the importance of
agency collaboration and the different skills and
experience that contribute to the development of
policy and strategy As a result a tiered
framework has been adopted to facilitate and
support engagement This model is informed by
the governance framework development
experiences in the NSW Governmentrsquos approach
to Procurement and Information and
Communications Technology
The following advisory groups have been
established as collaborative forums for
engagement with our business partners
Business and Strategy Group (BSG)
Technology (Planning and Review) Group
(TPRG)
Network client forum
The Board
The Telco Authority Board is established under the
NSW Government Telecommunications Act 1991
The Board has adopted a Charter and a Code of
Conduct to guide its operations The Board
provides policy and strategic direction for the
NSW Telco Authority The Minister administers the
Act and nominates the members after
consultation with various sectors of the NSW
Government
Review of the Board
The Board of the Telco Authority engaged an
independent consultant to undertake a review of
the effectiveness of the Board its activities and its
internal governance arrangements during 2013
The review was undertaken as the Board had
been operating for more than 12 months
The Boardrsquos inaugural membership considered the
review outcomes in December 2013 The Board
including new members appointed in May 2014
has endorsed the recommended improvements
to the Boardrsquos Charter and Code of Conduct
Issues concerning the Boardrsquos gender balance
asset management finance and risk
management skills were addressed with the
appointment of several new members
Current members (as 30 June 2014)
In accordance with the Act and to ensure a
broad range of skills and experience the Board is
comprised of members nominated as follows
Chairperson Rod Gilmour (FAIM MAICD) was
General Manager Corporate Affairs Planning
and Human Resources of the Sydney Airport
Corporation Limited until 2011 He is an
experienced leader and change manager with
achievements in transport business development
regulatory frameworks and planning and
environment Mr Gilmour has held many board
and authority appointments including as a
Director of the National Rail Corporation
Nominated by the Minister for Finance and
Services
Deputy Chairperson Peter Barrie is an Assistant
Commissioner of the NSW Police Force
operational Communications and Information
Command He has a wealth of operational
policing experience and is recognised as a leader
in Australian radio and public safety
communications He sits on a number of state and
national boards and committees He is responsible
for the management of the NSW Police Force
radio network and a major capital program of
works to refresh their assets to prepare for future
growth and opportunities Nominated by the
Minister for Finance and Services in concert with
the Minister for Police and Emergency Services
6
Acting Managing Director (until September 2014)
John Hubby (Master of Public Health and
Bachelor of Business Administration) the Deputy
Secretary Corporate Services for Finance and
Services since April 2012 was appointed as Acting
Chief Executive of Finance and Services on 29
April 2014 As well as previously serving as the
Chief Executive of Juvenile Justice NSW Mr Hubby
has also held executive roles in the health sector
in NSW and in the USA
Board member Shane Fitzsimmons (qualifications
in Management and Leadership from the
Australian Institute of Police Management and
NSW TAFE) is Commissioner of the NSW Rural Fire
Service Commissioner Fitzsimmons has a wealth of
strategic and operational fire knowledge and was
awarded the Australian Fire Service Medal in 2001
Nominate by the Minister for Finance and Services
in concert with the Minister for Police and
Emergency Services
Board member Matt Roberts (Master of
Economics and a Bachelor of Economics) is a
Deputy Secretary of the NSW Treasury and is
responsible for policy development and budget
management across several portfolios He was
previously the Director of the National Reform
Branch advising the Council of Australian
Governments Nominate by the Treasurer
Board member Alan Lipman (Bachelor of Business
(Admin)) was the Executive Director of Lomb
Scientific (Australia) Pty Ltd and previously the
General Manager Marketing for Advance
Healthcare Group Limited Mr Lipmanrsquos private
sector expertise is in the management of budgets
implementation of strategy and people
management He has served on the boards of
many non-profit organisations Nominated by the
Minister for Resources and Energy
Board member David Quilty (Graduate Diploma
in Industrial Relations and Bachelor of Arts) is the
Executive Director of the Pharmacy Guild of
Australia Prior to taking up his current role David
directed his own consulting firm providing
strategic advice to businesses and industry
organisations Before that David spent five years
as an executive at Telstra the last three as Group
Managing Director Public Policy and
Communications He has also worked in various
advisory roles in government including six years as
the chief of staff to the Minister for
Communications Information Technology and
the Arts Nominated by the Premier
Board member Kylie De Courteney (Bachelor of
Commerce) has extensive experience as a
Transformation Program Manager and
Management Consultant Kylie has been
responsible for the delivery of large scale
transformational change in some of Australiarsquos
largest and most complex organisations in the
private sector government and professional
services including the University of Sydney Sydney
Trains Chartered Accountants Australia and New
Zealand NSW Roads and Maritime Services
Energy Australia and Telstra Nominated by the
Minister for Resources and Energy
Board member Liz Ward (Master of Business
Administration) is a senior executive with 30 yearsrsquo
experience in driving business growth and
improvement within a diverse range of industries
in Australia New Zealand USA Africa Europe
and the Asia Pacific region Liz has been in Chief
Executive and Director roles across a number of
private and government organisations including
Sydney Trains AUX Investments Telstra CentrePort
Wellington Ltd EDS and Telecom New Zealand
Nominated by the Minister for Transport
Board member Kaaren Koomen (Bachelor of
ArtsLaw Master of Law) is a highly experience
executive with over 25 yearsrsquo experience in
leadership roles in the private and public sector
with a particular focus on communications and
technology She is currently an Executive Director
with IBM Australia and New Zealand and a
member of the Global IBM Government Programs
Leadership Team She has extensive board
experience on over 10 public and private boards
and committees and currently serves on four
including Chair of the Museum of Australian
Democracy at Eureka and Vice President of the
Australian Services Roundtable Nominated by the
Minister for Finance and Services
Other members during the reporting period
Board member (until April 2014) David Abrahams
(Bachelor of Science Cand Mag Honours
equivalent Knowledge Management) has
expertise in the Information Communications
Technology Industry He is principal consultant to
Organise Internet ndash Online Mr Abrahams is a past
7
chair and board member of
YouthConnectionscomau and a past lecturer in
Major Information Technology projects at the
University of Newcastle He is the current
Chairperson of Regional Development Australia
(Central Coast) and is a consultant to state and
local governments Nominated by the Minister for
Resources and Energy
Board member (until December 2013) Gavin
Campbell (MBA Bachelor of Engineering
(Mechanical) is the NSW Director of Asset
Operations for Sydney Trains Mr Campbell leads a
team of approximately 4000 people who work
behind the scenes to maintain Sydney Trainsrsquo
assets He spent much of his earlier career at
Qantas where he headed its Defence Services
delivering improved customer service a new
safety performance program and restructuring
the business to position it for future growth
Nominated by the Minister for Transport
Acting Managing Director (until March 2014)
Laurie Glanfield was the Secretary of the NSW
Department of Finance and Services Prior this Mr
Glanfield was the Director General of the
Department of Attorney General and Justice for
over 20 years Mr Glanfield has also held a
number of state-wide national and international
positions including NSW Chief Information Officer
NSW Coordinator for the National Broadband
Network Founding Member of the International
Consortium for Court Excellence and Deputy
President of the Australasian Institute of Judicial
Administration In 2001 Mr Glanfield was made a
Member of the Order of Australia for services to
the law through the implementation of policies
for legal reform and for making the legal system
more accessible to the community
Acting Managing Director (until August 2013)
Michael Coutts-Trotter (Bachelor of Arts) was
Director General of the NSW Department of
Finance and Services and Managing Director of
the Telco Authority Prior to this role with the Telco
Authority in April 2011 Mr Coutts-Trotter was
Director General of the NSW Department of
Education and Training Before that he was
Director General of the NSW Department of
Finance and Commerce Nominated by the
Minister for Finance and Services
Board meetings
The Board was appointed in 2012 and held its
inaugural meeting in July 2012 There were six
meetings held during the reporting period
Member Period Meetings
Attended Eligible
Rod Gilmour Full year 6 6
Peter Barrie Full year 5 6
Shane
Fitzsimmons
Full year 3 6
Matt
Roberts
Full year 5 6
Alan
Lipman
Full year 4 6
David Quilty Full year 5 6
John Hubby From May
2014
1 1
Kaaren
Koomen
From June
2014
0 1
Kylie De
Courteney
From June
2014
1 1
Liz Ward From May
2014
0 1
Michael
Coutts-
Trotter
From July
2013 to
August 2013
0 0
Gavin
Campbell
Until
December
2013
2 4
Laurie
Glanfield
From
September
2013 to
March 2014
3 4
David
Abrahams
Until April
2014
5 5
Our senior management team
The NSW Telco Authority has a small senior
management team who work with experienced
and qualified staff to deliver the functions and
operations of the organisation
Shaun Smith Bachelor of Engineering (Honours)
Executive Director (aManaging Director after the
reporting period)
Phillip King Bachelor of Engineering
(Telecommunications)
Chief Technology Officer 8
Review of Organisational Structure Organisation chart
In late 201213 the Telco Authority undertook a
Telco Authority Board
Managing Director
Executive
Network and Services
Portfolio Management Office
Policy Governance and Reform
Telecommunications Emergencies
Business Planning and Financial Control
Commercial
review of its organisational structure to determine
the best operating model for the expanding and
changing role for the Authority During 201314
the outcomes of the review were progressively
implemented The new organisational structure
takes into account the work required by the
Authority in meeting its corporate plan
obligations and brings resources to key technical
communications and project management
activities
Recruitment to fill the majority of key positions was
undertaken during 201314 Further recruitment to
fill a number of executive positions will be carried
out once the new Government Sector Executive
employment arrangements are in place
9
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Acting Managing Directorrsquos
report
In the last year the NSW
Telco Authority has
continued to provide
essential radio
communication services to
NSW Government
agencies including our
emergency services and
lead sector wide reform
The Authority has managed the Government
Radio Network (GRN) ensuring our 30000 users
have access to a reliable and efficient radio
network On 1 August 2013 Airwave Solutions
Australia assumed management responsibilities for
the GRN Airwave was chosen following an
extensive tender process that included a Client
Reference Group and evaluation teams
comprised of representatives from public safety
organisations utilities and other NSW Government
agencies The contract with Airwave includes a
number of provisions aimed at improving service
delivery for agencies including higher service level
requirements such as improved response and
restoration times as well as increased
governance and accountability
A separate maintenance agreement was
negotiated with the original equipment
manufacturer Motorola Solutions who continue
to support the core and critical components of
the network The transition between network
managers was handled professionally and
seamlessly between the parties and I would like to
acknowledge both Airwave and Motorola for
their contributions during this time
The Authority worked with Motorola and Airwave
to upgrade the GRN core which was completed
in December 2013 This was a highly complex
project delivered with minimal impact to the
network It was delivered in two stages to mitigate
risks associated with major system version
changes I would like to acknowledge the
cooperation that was given by all agencies
involved allowing us to overhaul our network
efficiently and effectively
The Authorityrsquos telecommunications emergency
management team provided support to our
colleagues at the Rural Fire Service during the
October 2013 bushfires The team coordinated
the effort to maintain vital links between the
community and our emergency services
The Authority also established a Spectrum
Management Office (SMO) to oversee the
efficient allocation assignment and ongoing
administration of spectrum for NSW Government
entities This includes all Government licences in
the 400 MHz Harmonised Government Spectrum
bands as well as other spectrum allocations as
required
Over the past year the NSW Telco Authority has
worked with the Board to develop the Enterprise
Risk Management Framework The framework
comprises a policy procedure and tools to assist
in identifying and managing risks All Board
members were independently interviewed during
the year to assess their thoughts and ideas in
relation to risk management and this was
reflected in the final draft Enterprise Risk
Management Framework Further work will be
undertaken over the next twelve months to
embed risk management within the Authorityrsquos
business processes
My appointment as Acting Managing Director
occurred after the end of the reporting period
and I would like to acknowledge the work of my
predecessors Mr Laurie Glanfield and Mr John
Hubby
Shaun Smith
Acting Managing Director
4
About us
Our purpose is to lead and drive the
reform of government operational
telecommunications services and deliver
solutions to better enable our
stakeholders to respond to the needs of
the NSW community
Our operating principles
We will
ensure services continue to meet business
needs and provide an equal or improved
level of service
provide strategic direction and value to the
whole-of-government
use technology as an enabler rather than a
driver of services
engage our stakeholders as partners in
aligning strategies consolidating assets and
reforming services
acknowledge and provide for the unique
operating requirements of emergency service
organisations
ensure the capabilities and skills of the sector
continue to develop
Our 201314 objectives
1 Integrate and enhance service delivery to
better meet the needs of business partners
2 Manage the efficient allocation and use of
spectrum
3 Manage a consolidated portfolio of assets
which are fit for purpose
4 Improve governance and risk management
5 Strengthen sector-wide capabilities and
engagement with partners
Our Act
The NSW Telco Authority is a statutory authority
created under the NSW Government
Telecommunications Act 1991
The Authority was established in 2011 as a result of
the recommendations of the Strategic Review of
NSW Government Mobile Radio Services
undertaken by the NSW Department of Premier
and Cabinet and associated direction provided
by Premierrsquos Memorandum M2010-16
Government Mobile Radio Services
This memorandum was replaced on 1 September
2014 by the new OFS-2014-02-NSW Government
Radio Communications Strategy circular which
provides guidance to agencies on ensuring that
their radio and related communications
investment planning and spectrum licensing
decisions are in line with the future direction of the
sector
The roles undertaken by the Authority include
reform the statersquos infrastructure and services to
make the portfolio more efficient improve
services and streamline processes
undertake the planning deployment and
management of government owned radio
and data networks
identify develop deliver and procure
communications technologies which meet the
needs of customers
manage voice and data spectrum allocations
on behalf of all NSW agencies
coordinate responses to telecommunications
outages during major emergencies and
natural disasters including acting as a conduit
between telecommunications carriers and
emergency management organisations
provide strategy policy and advocacy for the
sector including liaising with national bodies
and stakeholders on sector reforms and
enhancing the capabilities of the sector
The Authority operates as a statutory authority
within the Finance and Services cluster For routine
matters we report to the Minister for Finance and
Service and on specific matters the Cabinet Sub-
Committee on Counter Terrorism and Emergency
Management
5
Our stakeholders
The Authority has a wide range of business
partners including emergency services
organisations providers of essential services and
other NSW Government agencies
In addition to developing partnerships with
industry the Authority also works closely with the
Australian Communications and Media Authority
(ACMA) and relevant agencies in other states
and territories
Governance
The NSW Telco Authority is overseen by a Board of
part-time independent and government
members who with the Managing Director and
executive management are accountable for the
operations of the Authority
The Authority recognises the importance of
agency collaboration and the different skills and
experience that contribute to the development of
policy and strategy As a result a tiered
framework has been adopted to facilitate and
support engagement This model is informed by
the governance framework development
experiences in the NSW Governmentrsquos approach
to Procurement and Information and
Communications Technology
The following advisory groups have been
established as collaborative forums for
engagement with our business partners
Business and Strategy Group (BSG)
Technology (Planning and Review) Group
(TPRG)
Network client forum
The Board
The Telco Authority Board is established under the
NSW Government Telecommunications Act 1991
The Board has adopted a Charter and a Code of
Conduct to guide its operations The Board
provides policy and strategic direction for the
NSW Telco Authority The Minister administers the
Act and nominates the members after
consultation with various sectors of the NSW
Government
Review of the Board
The Board of the Telco Authority engaged an
independent consultant to undertake a review of
the effectiveness of the Board its activities and its
internal governance arrangements during 2013
The review was undertaken as the Board had
been operating for more than 12 months
The Boardrsquos inaugural membership considered the
review outcomes in December 2013 The Board
including new members appointed in May 2014
has endorsed the recommended improvements
to the Boardrsquos Charter and Code of Conduct
Issues concerning the Boardrsquos gender balance
asset management finance and risk
management skills were addressed with the
appointment of several new members
Current members (as 30 June 2014)
In accordance with the Act and to ensure a
broad range of skills and experience the Board is
comprised of members nominated as follows
Chairperson Rod Gilmour (FAIM MAICD) was
General Manager Corporate Affairs Planning
and Human Resources of the Sydney Airport
Corporation Limited until 2011 He is an
experienced leader and change manager with
achievements in transport business development
regulatory frameworks and planning and
environment Mr Gilmour has held many board
and authority appointments including as a
Director of the National Rail Corporation
Nominated by the Minister for Finance and
Services
Deputy Chairperson Peter Barrie is an Assistant
Commissioner of the NSW Police Force
operational Communications and Information
Command He has a wealth of operational
policing experience and is recognised as a leader
in Australian radio and public safety
communications He sits on a number of state and
national boards and committees He is responsible
for the management of the NSW Police Force
radio network and a major capital program of
works to refresh their assets to prepare for future
growth and opportunities Nominated by the
Minister for Finance and Services in concert with
the Minister for Police and Emergency Services
6
Acting Managing Director (until September 2014)
John Hubby (Master of Public Health and
Bachelor of Business Administration) the Deputy
Secretary Corporate Services for Finance and
Services since April 2012 was appointed as Acting
Chief Executive of Finance and Services on 29
April 2014 As well as previously serving as the
Chief Executive of Juvenile Justice NSW Mr Hubby
has also held executive roles in the health sector
in NSW and in the USA
Board member Shane Fitzsimmons (qualifications
in Management and Leadership from the
Australian Institute of Police Management and
NSW TAFE) is Commissioner of the NSW Rural Fire
Service Commissioner Fitzsimmons has a wealth of
strategic and operational fire knowledge and was
awarded the Australian Fire Service Medal in 2001
Nominate by the Minister for Finance and Services
in concert with the Minister for Police and
Emergency Services
Board member Matt Roberts (Master of
Economics and a Bachelor of Economics) is a
Deputy Secretary of the NSW Treasury and is
responsible for policy development and budget
management across several portfolios He was
previously the Director of the National Reform
Branch advising the Council of Australian
Governments Nominate by the Treasurer
Board member Alan Lipman (Bachelor of Business
(Admin)) was the Executive Director of Lomb
Scientific (Australia) Pty Ltd and previously the
General Manager Marketing for Advance
Healthcare Group Limited Mr Lipmanrsquos private
sector expertise is in the management of budgets
implementation of strategy and people
management He has served on the boards of
many non-profit organisations Nominated by the
Minister for Resources and Energy
Board member David Quilty (Graduate Diploma
in Industrial Relations and Bachelor of Arts) is the
Executive Director of the Pharmacy Guild of
Australia Prior to taking up his current role David
directed his own consulting firm providing
strategic advice to businesses and industry
organisations Before that David spent five years
as an executive at Telstra the last three as Group
Managing Director Public Policy and
Communications He has also worked in various
advisory roles in government including six years as
the chief of staff to the Minister for
Communications Information Technology and
the Arts Nominated by the Premier
Board member Kylie De Courteney (Bachelor of
Commerce) has extensive experience as a
Transformation Program Manager and
Management Consultant Kylie has been
responsible for the delivery of large scale
transformational change in some of Australiarsquos
largest and most complex organisations in the
private sector government and professional
services including the University of Sydney Sydney
Trains Chartered Accountants Australia and New
Zealand NSW Roads and Maritime Services
Energy Australia and Telstra Nominated by the
Minister for Resources and Energy
Board member Liz Ward (Master of Business
Administration) is a senior executive with 30 yearsrsquo
experience in driving business growth and
improvement within a diverse range of industries
in Australia New Zealand USA Africa Europe
and the Asia Pacific region Liz has been in Chief
Executive and Director roles across a number of
private and government organisations including
Sydney Trains AUX Investments Telstra CentrePort
Wellington Ltd EDS and Telecom New Zealand
Nominated by the Minister for Transport
Board member Kaaren Koomen (Bachelor of
ArtsLaw Master of Law) is a highly experience
executive with over 25 yearsrsquo experience in
leadership roles in the private and public sector
with a particular focus on communications and
technology She is currently an Executive Director
with IBM Australia and New Zealand and a
member of the Global IBM Government Programs
Leadership Team She has extensive board
experience on over 10 public and private boards
and committees and currently serves on four
including Chair of the Museum of Australian
Democracy at Eureka and Vice President of the
Australian Services Roundtable Nominated by the
Minister for Finance and Services
Other members during the reporting period
Board member (until April 2014) David Abrahams
(Bachelor of Science Cand Mag Honours
equivalent Knowledge Management) has
expertise in the Information Communications
Technology Industry He is principal consultant to
Organise Internet ndash Online Mr Abrahams is a past
7
chair and board member of
YouthConnectionscomau and a past lecturer in
Major Information Technology projects at the
University of Newcastle He is the current
Chairperson of Regional Development Australia
(Central Coast) and is a consultant to state and
local governments Nominated by the Minister for
Resources and Energy
Board member (until December 2013) Gavin
Campbell (MBA Bachelor of Engineering
(Mechanical) is the NSW Director of Asset
Operations for Sydney Trains Mr Campbell leads a
team of approximately 4000 people who work
behind the scenes to maintain Sydney Trainsrsquo
assets He spent much of his earlier career at
Qantas where he headed its Defence Services
delivering improved customer service a new
safety performance program and restructuring
the business to position it for future growth
Nominated by the Minister for Transport
Acting Managing Director (until March 2014)
Laurie Glanfield was the Secretary of the NSW
Department of Finance and Services Prior this Mr
Glanfield was the Director General of the
Department of Attorney General and Justice for
over 20 years Mr Glanfield has also held a
number of state-wide national and international
positions including NSW Chief Information Officer
NSW Coordinator for the National Broadband
Network Founding Member of the International
Consortium for Court Excellence and Deputy
President of the Australasian Institute of Judicial
Administration In 2001 Mr Glanfield was made a
Member of the Order of Australia for services to
the law through the implementation of policies
for legal reform and for making the legal system
more accessible to the community
Acting Managing Director (until August 2013)
Michael Coutts-Trotter (Bachelor of Arts) was
Director General of the NSW Department of
Finance and Services and Managing Director of
the Telco Authority Prior to this role with the Telco
Authority in April 2011 Mr Coutts-Trotter was
Director General of the NSW Department of
Education and Training Before that he was
Director General of the NSW Department of
Finance and Commerce Nominated by the
Minister for Finance and Services
Board meetings
The Board was appointed in 2012 and held its
inaugural meeting in July 2012 There were six
meetings held during the reporting period
Member Period Meetings
Attended Eligible
Rod Gilmour Full year 6 6
Peter Barrie Full year 5 6
Shane
Fitzsimmons
Full year 3 6
Matt
Roberts
Full year 5 6
Alan
Lipman
Full year 4 6
David Quilty Full year 5 6
John Hubby From May
2014
1 1
Kaaren
Koomen
From June
2014
0 1
Kylie De
Courteney
From June
2014
1 1
Liz Ward From May
2014
0 1
Michael
Coutts-
Trotter
From July
2013 to
August 2013
0 0
Gavin
Campbell
Until
December
2013
2 4
Laurie
Glanfield
From
September
2013 to
March 2014
3 4
David
Abrahams
Until April
2014
5 5
Our senior management team
The NSW Telco Authority has a small senior
management team who work with experienced
and qualified staff to deliver the functions and
operations of the organisation
Shaun Smith Bachelor of Engineering (Honours)
Executive Director (aManaging Director after the
reporting period)
Phillip King Bachelor of Engineering
(Telecommunications)
Chief Technology Officer 8
Review of Organisational Structure Organisation chart
In late 201213 the Telco Authority undertook a
Telco Authority Board
Managing Director
Executive
Network and Services
Portfolio Management Office
Policy Governance and Reform
Telecommunications Emergencies
Business Planning and Financial Control
Commercial
review of its organisational structure to determine
the best operating model for the expanding and
changing role for the Authority During 201314
the outcomes of the review were progressively
implemented The new organisational structure
takes into account the work required by the
Authority in meeting its corporate plan
obligations and brings resources to key technical
communications and project management
activities
Recruitment to fill the majority of key positions was
undertaken during 201314 Further recruitment to
fill a number of executive positions will be carried
out once the new Government Sector Executive
employment arrangements are in place
9
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
About us
Our purpose is to lead and drive the
reform of government operational
telecommunications services and deliver
solutions to better enable our
stakeholders to respond to the needs of
the NSW community
Our operating principles
We will
ensure services continue to meet business
needs and provide an equal or improved
level of service
provide strategic direction and value to the
whole-of-government
use technology as an enabler rather than a
driver of services
engage our stakeholders as partners in
aligning strategies consolidating assets and
reforming services
acknowledge and provide for the unique
operating requirements of emergency service
organisations
ensure the capabilities and skills of the sector
continue to develop
Our 201314 objectives
1 Integrate and enhance service delivery to
better meet the needs of business partners
2 Manage the efficient allocation and use of
spectrum
3 Manage a consolidated portfolio of assets
which are fit for purpose
4 Improve governance and risk management
5 Strengthen sector-wide capabilities and
engagement with partners
Our Act
The NSW Telco Authority is a statutory authority
created under the NSW Government
Telecommunications Act 1991
The Authority was established in 2011 as a result of
the recommendations of the Strategic Review of
NSW Government Mobile Radio Services
undertaken by the NSW Department of Premier
and Cabinet and associated direction provided
by Premierrsquos Memorandum M2010-16
Government Mobile Radio Services
This memorandum was replaced on 1 September
2014 by the new OFS-2014-02-NSW Government
Radio Communications Strategy circular which
provides guidance to agencies on ensuring that
their radio and related communications
investment planning and spectrum licensing
decisions are in line with the future direction of the
sector
The roles undertaken by the Authority include
reform the statersquos infrastructure and services to
make the portfolio more efficient improve
services and streamline processes
undertake the planning deployment and
management of government owned radio
and data networks
identify develop deliver and procure
communications technologies which meet the
needs of customers
manage voice and data spectrum allocations
on behalf of all NSW agencies
coordinate responses to telecommunications
outages during major emergencies and
natural disasters including acting as a conduit
between telecommunications carriers and
emergency management organisations
provide strategy policy and advocacy for the
sector including liaising with national bodies
and stakeholders on sector reforms and
enhancing the capabilities of the sector
The Authority operates as a statutory authority
within the Finance and Services cluster For routine
matters we report to the Minister for Finance and
Service and on specific matters the Cabinet Sub-
Committee on Counter Terrorism and Emergency
Management
5
Our stakeholders
The Authority has a wide range of business
partners including emergency services
organisations providers of essential services and
other NSW Government agencies
In addition to developing partnerships with
industry the Authority also works closely with the
Australian Communications and Media Authority
(ACMA) and relevant agencies in other states
and territories
Governance
The NSW Telco Authority is overseen by a Board of
part-time independent and government
members who with the Managing Director and
executive management are accountable for the
operations of the Authority
The Authority recognises the importance of
agency collaboration and the different skills and
experience that contribute to the development of
policy and strategy As a result a tiered
framework has been adopted to facilitate and
support engagement This model is informed by
the governance framework development
experiences in the NSW Governmentrsquos approach
to Procurement and Information and
Communications Technology
The following advisory groups have been
established as collaborative forums for
engagement with our business partners
Business and Strategy Group (BSG)
Technology (Planning and Review) Group
(TPRG)
Network client forum
The Board
The Telco Authority Board is established under the
NSW Government Telecommunications Act 1991
The Board has adopted a Charter and a Code of
Conduct to guide its operations The Board
provides policy and strategic direction for the
NSW Telco Authority The Minister administers the
Act and nominates the members after
consultation with various sectors of the NSW
Government
Review of the Board
The Board of the Telco Authority engaged an
independent consultant to undertake a review of
the effectiveness of the Board its activities and its
internal governance arrangements during 2013
The review was undertaken as the Board had
been operating for more than 12 months
The Boardrsquos inaugural membership considered the
review outcomes in December 2013 The Board
including new members appointed in May 2014
has endorsed the recommended improvements
to the Boardrsquos Charter and Code of Conduct
Issues concerning the Boardrsquos gender balance
asset management finance and risk
management skills were addressed with the
appointment of several new members
Current members (as 30 June 2014)
In accordance with the Act and to ensure a
broad range of skills and experience the Board is
comprised of members nominated as follows
Chairperson Rod Gilmour (FAIM MAICD) was
General Manager Corporate Affairs Planning
and Human Resources of the Sydney Airport
Corporation Limited until 2011 He is an
experienced leader and change manager with
achievements in transport business development
regulatory frameworks and planning and
environment Mr Gilmour has held many board
and authority appointments including as a
Director of the National Rail Corporation
Nominated by the Minister for Finance and
Services
Deputy Chairperson Peter Barrie is an Assistant
Commissioner of the NSW Police Force
operational Communications and Information
Command He has a wealth of operational
policing experience and is recognised as a leader
in Australian radio and public safety
communications He sits on a number of state and
national boards and committees He is responsible
for the management of the NSW Police Force
radio network and a major capital program of
works to refresh their assets to prepare for future
growth and opportunities Nominated by the
Minister for Finance and Services in concert with
the Minister for Police and Emergency Services
6
Acting Managing Director (until September 2014)
John Hubby (Master of Public Health and
Bachelor of Business Administration) the Deputy
Secretary Corporate Services for Finance and
Services since April 2012 was appointed as Acting
Chief Executive of Finance and Services on 29
April 2014 As well as previously serving as the
Chief Executive of Juvenile Justice NSW Mr Hubby
has also held executive roles in the health sector
in NSW and in the USA
Board member Shane Fitzsimmons (qualifications
in Management and Leadership from the
Australian Institute of Police Management and
NSW TAFE) is Commissioner of the NSW Rural Fire
Service Commissioner Fitzsimmons has a wealth of
strategic and operational fire knowledge and was
awarded the Australian Fire Service Medal in 2001
Nominate by the Minister for Finance and Services
in concert with the Minister for Police and
Emergency Services
Board member Matt Roberts (Master of
Economics and a Bachelor of Economics) is a
Deputy Secretary of the NSW Treasury and is
responsible for policy development and budget
management across several portfolios He was
previously the Director of the National Reform
Branch advising the Council of Australian
Governments Nominate by the Treasurer
Board member Alan Lipman (Bachelor of Business
(Admin)) was the Executive Director of Lomb
Scientific (Australia) Pty Ltd and previously the
General Manager Marketing for Advance
Healthcare Group Limited Mr Lipmanrsquos private
sector expertise is in the management of budgets
implementation of strategy and people
management He has served on the boards of
many non-profit organisations Nominated by the
Minister for Resources and Energy
Board member David Quilty (Graduate Diploma
in Industrial Relations and Bachelor of Arts) is the
Executive Director of the Pharmacy Guild of
Australia Prior to taking up his current role David
directed his own consulting firm providing
strategic advice to businesses and industry
organisations Before that David spent five years
as an executive at Telstra the last three as Group
Managing Director Public Policy and
Communications He has also worked in various
advisory roles in government including six years as
the chief of staff to the Minister for
Communications Information Technology and
the Arts Nominated by the Premier
Board member Kylie De Courteney (Bachelor of
Commerce) has extensive experience as a
Transformation Program Manager and
Management Consultant Kylie has been
responsible for the delivery of large scale
transformational change in some of Australiarsquos
largest and most complex organisations in the
private sector government and professional
services including the University of Sydney Sydney
Trains Chartered Accountants Australia and New
Zealand NSW Roads and Maritime Services
Energy Australia and Telstra Nominated by the
Minister for Resources and Energy
Board member Liz Ward (Master of Business
Administration) is a senior executive with 30 yearsrsquo
experience in driving business growth and
improvement within a diverse range of industries
in Australia New Zealand USA Africa Europe
and the Asia Pacific region Liz has been in Chief
Executive and Director roles across a number of
private and government organisations including
Sydney Trains AUX Investments Telstra CentrePort
Wellington Ltd EDS and Telecom New Zealand
Nominated by the Minister for Transport
Board member Kaaren Koomen (Bachelor of
ArtsLaw Master of Law) is a highly experience
executive with over 25 yearsrsquo experience in
leadership roles in the private and public sector
with a particular focus on communications and
technology She is currently an Executive Director
with IBM Australia and New Zealand and a
member of the Global IBM Government Programs
Leadership Team She has extensive board
experience on over 10 public and private boards
and committees and currently serves on four
including Chair of the Museum of Australian
Democracy at Eureka and Vice President of the
Australian Services Roundtable Nominated by the
Minister for Finance and Services
Other members during the reporting period
Board member (until April 2014) David Abrahams
(Bachelor of Science Cand Mag Honours
equivalent Knowledge Management) has
expertise in the Information Communications
Technology Industry He is principal consultant to
Organise Internet ndash Online Mr Abrahams is a past
7
chair and board member of
YouthConnectionscomau and a past lecturer in
Major Information Technology projects at the
University of Newcastle He is the current
Chairperson of Regional Development Australia
(Central Coast) and is a consultant to state and
local governments Nominated by the Minister for
Resources and Energy
Board member (until December 2013) Gavin
Campbell (MBA Bachelor of Engineering
(Mechanical) is the NSW Director of Asset
Operations for Sydney Trains Mr Campbell leads a
team of approximately 4000 people who work
behind the scenes to maintain Sydney Trainsrsquo
assets He spent much of his earlier career at
Qantas where he headed its Defence Services
delivering improved customer service a new
safety performance program and restructuring
the business to position it for future growth
Nominated by the Minister for Transport
Acting Managing Director (until March 2014)
Laurie Glanfield was the Secretary of the NSW
Department of Finance and Services Prior this Mr
Glanfield was the Director General of the
Department of Attorney General and Justice for
over 20 years Mr Glanfield has also held a
number of state-wide national and international
positions including NSW Chief Information Officer
NSW Coordinator for the National Broadband
Network Founding Member of the International
Consortium for Court Excellence and Deputy
President of the Australasian Institute of Judicial
Administration In 2001 Mr Glanfield was made a
Member of the Order of Australia for services to
the law through the implementation of policies
for legal reform and for making the legal system
more accessible to the community
Acting Managing Director (until August 2013)
Michael Coutts-Trotter (Bachelor of Arts) was
Director General of the NSW Department of
Finance and Services and Managing Director of
the Telco Authority Prior to this role with the Telco
Authority in April 2011 Mr Coutts-Trotter was
Director General of the NSW Department of
Education and Training Before that he was
Director General of the NSW Department of
Finance and Commerce Nominated by the
Minister for Finance and Services
Board meetings
The Board was appointed in 2012 and held its
inaugural meeting in July 2012 There were six
meetings held during the reporting period
Member Period Meetings
Attended Eligible
Rod Gilmour Full year 6 6
Peter Barrie Full year 5 6
Shane
Fitzsimmons
Full year 3 6
Matt
Roberts
Full year 5 6
Alan
Lipman
Full year 4 6
David Quilty Full year 5 6
John Hubby From May
2014
1 1
Kaaren
Koomen
From June
2014
0 1
Kylie De
Courteney
From June
2014
1 1
Liz Ward From May
2014
0 1
Michael
Coutts-
Trotter
From July
2013 to
August 2013
0 0
Gavin
Campbell
Until
December
2013
2 4
Laurie
Glanfield
From
September
2013 to
March 2014
3 4
David
Abrahams
Until April
2014
5 5
Our senior management team
The NSW Telco Authority has a small senior
management team who work with experienced
and qualified staff to deliver the functions and
operations of the organisation
Shaun Smith Bachelor of Engineering (Honours)
Executive Director (aManaging Director after the
reporting period)
Phillip King Bachelor of Engineering
(Telecommunications)
Chief Technology Officer 8
Review of Organisational Structure Organisation chart
In late 201213 the Telco Authority undertook a
Telco Authority Board
Managing Director
Executive
Network and Services
Portfolio Management Office
Policy Governance and Reform
Telecommunications Emergencies
Business Planning and Financial Control
Commercial
review of its organisational structure to determine
the best operating model for the expanding and
changing role for the Authority During 201314
the outcomes of the review were progressively
implemented The new organisational structure
takes into account the work required by the
Authority in meeting its corporate plan
obligations and brings resources to key technical
communications and project management
activities
Recruitment to fill the majority of key positions was
undertaken during 201314 Further recruitment to
fill a number of executive positions will be carried
out once the new Government Sector Executive
employment arrangements are in place
9
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Our stakeholders
The Authority has a wide range of business
partners including emergency services
organisations providers of essential services and
other NSW Government agencies
In addition to developing partnerships with
industry the Authority also works closely with the
Australian Communications and Media Authority
(ACMA) and relevant agencies in other states
and territories
Governance
The NSW Telco Authority is overseen by a Board of
part-time independent and government
members who with the Managing Director and
executive management are accountable for the
operations of the Authority
The Authority recognises the importance of
agency collaboration and the different skills and
experience that contribute to the development of
policy and strategy As a result a tiered
framework has been adopted to facilitate and
support engagement This model is informed by
the governance framework development
experiences in the NSW Governmentrsquos approach
to Procurement and Information and
Communications Technology
The following advisory groups have been
established as collaborative forums for
engagement with our business partners
Business and Strategy Group (BSG)
Technology (Planning and Review) Group
(TPRG)
Network client forum
The Board
The Telco Authority Board is established under the
NSW Government Telecommunications Act 1991
The Board has adopted a Charter and a Code of
Conduct to guide its operations The Board
provides policy and strategic direction for the
NSW Telco Authority The Minister administers the
Act and nominates the members after
consultation with various sectors of the NSW
Government
Review of the Board
The Board of the Telco Authority engaged an
independent consultant to undertake a review of
the effectiveness of the Board its activities and its
internal governance arrangements during 2013
The review was undertaken as the Board had
been operating for more than 12 months
The Boardrsquos inaugural membership considered the
review outcomes in December 2013 The Board
including new members appointed in May 2014
has endorsed the recommended improvements
to the Boardrsquos Charter and Code of Conduct
Issues concerning the Boardrsquos gender balance
asset management finance and risk
management skills were addressed with the
appointment of several new members
Current members (as 30 June 2014)
In accordance with the Act and to ensure a
broad range of skills and experience the Board is
comprised of members nominated as follows
Chairperson Rod Gilmour (FAIM MAICD) was
General Manager Corporate Affairs Planning
and Human Resources of the Sydney Airport
Corporation Limited until 2011 He is an
experienced leader and change manager with
achievements in transport business development
regulatory frameworks and planning and
environment Mr Gilmour has held many board
and authority appointments including as a
Director of the National Rail Corporation
Nominated by the Minister for Finance and
Services
Deputy Chairperson Peter Barrie is an Assistant
Commissioner of the NSW Police Force
operational Communications and Information
Command He has a wealth of operational
policing experience and is recognised as a leader
in Australian radio and public safety
communications He sits on a number of state and
national boards and committees He is responsible
for the management of the NSW Police Force
radio network and a major capital program of
works to refresh their assets to prepare for future
growth and opportunities Nominated by the
Minister for Finance and Services in concert with
the Minister for Police and Emergency Services
6
Acting Managing Director (until September 2014)
John Hubby (Master of Public Health and
Bachelor of Business Administration) the Deputy
Secretary Corporate Services for Finance and
Services since April 2012 was appointed as Acting
Chief Executive of Finance and Services on 29
April 2014 As well as previously serving as the
Chief Executive of Juvenile Justice NSW Mr Hubby
has also held executive roles in the health sector
in NSW and in the USA
Board member Shane Fitzsimmons (qualifications
in Management and Leadership from the
Australian Institute of Police Management and
NSW TAFE) is Commissioner of the NSW Rural Fire
Service Commissioner Fitzsimmons has a wealth of
strategic and operational fire knowledge and was
awarded the Australian Fire Service Medal in 2001
Nominate by the Minister for Finance and Services
in concert with the Minister for Police and
Emergency Services
Board member Matt Roberts (Master of
Economics and a Bachelor of Economics) is a
Deputy Secretary of the NSW Treasury and is
responsible for policy development and budget
management across several portfolios He was
previously the Director of the National Reform
Branch advising the Council of Australian
Governments Nominate by the Treasurer
Board member Alan Lipman (Bachelor of Business
(Admin)) was the Executive Director of Lomb
Scientific (Australia) Pty Ltd and previously the
General Manager Marketing for Advance
Healthcare Group Limited Mr Lipmanrsquos private
sector expertise is in the management of budgets
implementation of strategy and people
management He has served on the boards of
many non-profit organisations Nominated by the
Minister for Resources and Energy
Board member David Quilty (Graduate Diploma
in Industrial Relations and Bachelor of Arts) is the
Executive Director of the Pharmacy Guild of
Australia Prior to taking up his current role David
directed his own consulting firm providing
strategic advice to businesses and industry
organisations Before that David spent five years
as an executive at Telstra the last three as Group
Managing Director Public Policy and
Communications He has also worked in various
advisory roles in government including six years as
the chief of staff to the Minister for
Communications Information Technology and
the Arts Nominated by the Premier
Board member Kylie De Courteney (Bachelor of
Commerce) has extensive experience as a
Transformation Program Manager and
Management Consultant Kylie has been
responsible for the delivery of large scale
transformational change in some of Australiarsquos
largest and most complex organisations in the
private sector government and professional
services including the University of Sydney Sydney
Trains Chartered Accountants Australia and New
Zealand NSW Roads and Maritime Services
Energy Australia and Telstra Nominated by the
Minister for Resources and Energy
Board member Liz Ward (Master of Business
Administration) is a senior executive with 30 yearsrsquo
experience in driving business growth and
improvement within a diverse range of industries
in Australia New Zealand USA Africa Europe
and the Asia Pacific region Liz has been in Chief
Executive and Director roles across a number of
private and government organisations including
Sydney Trains AUX Investments Telstra CentrePort
Wellington Ltd EDS and Telecom New Zealand
Nominated by the Minister for Transport
Board member Kaaren Koomen (Bachelor of
ArtsLaw Master of Law) is a highly experience
executive with over 25 yearsrsquo experience in
leadership roles in the private and public sector
with a particular focus on communications and
technology She is currently an Executive Director
with IBM Australia and New Zealand and a
member of the Global IBM Government Programs
Leadership Team She has extensive board
experience on over 10 public and private boards
and committees and currently serves on four
including Chair of the Museum of Australian
Democracy at Eureka and Vice President of the
Australian Services Roundtable Nominated by the
Minister for Finance and Services
Other members during the reporting period
Board member (until April 2014) David Abrahams
(Bachelor of Science Cand Mag Honours
equivalent Knowledge Management) has
expertise in the Information Communications
Technology Industry He is principal consultant to
Organise Internet ndash Online Mr Abrahams is a past
7
chair and board member of
YouthConnectionscomau and a past lecturer in
Major Information Technology projects at the
University of Newcastle He is the current
Chairperson of Regional Development Australia
(Central Coast) and is a consultant to state and
local governments Nominated by the Minister for
Resources and Energy
Board member (until December 2013) Gavin
Campbell (MBA Bachelor of Engineering
(Mechanical) is the NSW Director of Asset
Operations for Sydney Trains Mr Campbell leads a
team of approximately 4000 people who work
behind the scenes to maintain Sydney Trainsrsquo
assets He spent much of his earlier career at
Qantas where he headed its Defence Services
delivering improved customer service a new
safety performance program and restructuring
the business to position it for future growth
Nominated by the Minister for Transport
Acting Managing Director (until March 2014)
Laurie Glanfield was the Secretary of the NSW
Department of Finance and Services Prior this Mr
Glanfield was the Director General of the
Department of Attorney General and Justice for
over 20 years Mr Glanfield has also held a
number of state-wide national and international
positions including NSW Chief Information Officer
NSW Coordinator for the National Broadband
Network Founding Member of the International
Consortium for Court Excellence and Deputy
President of the Australasian Institute of Judicial
Administration In 2001 Mr Glanfield was made a
Member of the Order of Australia for services to
the law through the implementation of policies
for legal reform and for making the legal system
more accessible to the community
Acting Managing Director (until August 2013)
Michael Coutts-Trotter (Bachelor of Arts) was
Director General of the NSW Department of
Finance and Services and Managing Director of
the Telco Authority Prior to this role with the Telco
Authority in April 2011 Mr Coutts-Trotter was
Director General of the NSW Department of
Education and Training Before that he was
Director General of the NSW Department of
Finance and Commerce Nominated by the
Minister for Finance and Services
Board meetings
The Board was appointed in 2012 and held its
inaugural meeting in July 2012 There were six
meetings held during the reporting period
Member Period Meetings
Attended Eligible
Rod Gilmour Full year 6 6
Peter Barrie Full year 5 6
Shane
Fitzsimmons
Full year 3 6
Matt
Roberts
Full year 5 6
Alan
Lipman
Full year 4 6
David Quilty Full year 5 6
John Hubby From May
2014
1 1
Kaaren
Koomen
From June
2014
0 1
Kylie De
Courteney
From June
2014
1 1
Liz Ward From May
2014
0 1
Michael
Coutts-
Trotter
From July
2013 to
August 2013
0 0
Gavin
Campbell
Until
December
2013
2 4
Laurie
Glanfield
From
September
2013 to
March 2014
3 4
David
Abrahams
Until April
2014
5 5
Our senior management team
The NSW Telco Authority has a small senior
management team who work with experienced
and qualified staff to deliver the functions and
operations of the organisation
Shaun Smith Bachelor of Engineering (Honours)
Executive Director (aManaging Director after the
reporting period)
Phillip King Bachelor of Engineering
(Telecommunications)
Chief Technology Officer 8
Review of Organisational Structure Organisation chart
In late 201213 the Telco Authority undertook a
Telco Authority Board
Managing Director
Executive
Network and Services
Portfolio Management Office
Policy Governance and Reform
Telecommunications Emergencies
Business Planning and Financial Control
Commercial
review of its organisational structure to determine
the best operating model for the expanding and
changing role for the Authority During 201314
the outcomes of the review were progressively
implemented The new organisational structure
takes into account the work required by the
Authority in meeting its corporate plan
obligations and brings resources to key technical
communications and project management
activities
Recruitment to fill the majority of key positions was
undertaken during 201314 Further recruitment to
fill a number of executive positions will be carried
out once the new Government Sector Executive
employment arrangements are in place
9
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Acting Managing Director (until September 2014)
John Hubby (Master of Public Health and
Bachelor of Business Administration) the Deputy
Secretary Corporate Services for Finance and
Services since April 2012 was appointed as Acting
Chief Executive of Finance and Services on 29
April 2014 As well as previously serving as the
Chief Executive of Juvenile Justice NSW Mr Hubby
has also held executive roles in the health sector
in NSW and in the USA
Board member Shane Fitzsimmons (qualifications
in Management and Leadership from the
Australian Institute of Police Management and
NSW TAFE) is Commissioner of the NSW Rural Fire
Service Commissioner Fitzsimmons has a wealth of
strategic and operational fire knowledge and was
awarded the Australian Fire Service Medal in 2001
Nominate by the Minister for Finance and Services
in concert with the Minister for Police and
Emergency Services
Board member Matt Roberts (Master of
Economics and a Bachelor of Economics) is a
Deputy Secretary of the NSW Treasury and is
responsible for policy development and budget
management across several portfolios He was
previously the Director of the National Reform
Branch advising the Council of Australian
Governments Nominate by the Treasurer
Board member Alan Lipman (Bachelor of Business
(Admin)) was the Executive Director of Lomb
Scientific (Australia) Pty Ltd and previously the
General Manager Marketing for Advance
Healthcare Group Limited Mr Lipmanrsquos private
sector expertise is in the management of budgets
implementation of strategy and people
management He has served on the boards of
many non-profit organisations Nominated by the
Minister for Resources and Energy
Board member David Quilty (Graduate Diploma
in Industrial Relations and Bachelor of Arts) is the
Executive Director of the Pharmacy Guild of
Australia Prior to taking up his current role David
directed his own consulting firm providing
strategic advice to businesses and industry
organisations Before that David spent five years
as an executive at Telstra the last three as Group
Managing Director Public Policy and
Communications He has also worked in various
advisory roles in government including six years as
the chief of staff to the Minister for
Communications Information Technology and
the Arts Nominated by the Premier
Board member Kylie De Courteney (Bachelor of
Commerce) has extensive experience as a
Transformation Program Manager and
Management Consultant Kylie has been
responsible for the delivery of large scale
transformational change in some of Australiarsquos
largest and most complex organisations in the
private sector government and professional
services including the University of Sydney Sydney
Trains Chartered Accountants Australia and New
Zealand NSW Roads and Maritime Services
Energy Australia and Telstra Nominated by the
Minister for Resources and Energy
Board member Liz Ward (Master of Business
Administration) is a senior executive with 30 yearsrsquo
experience in driving business growth and
improvement within a diverse range of industries
in Australia New Zealand USA Africa Europe
and the Asia Pacific region Liz has been in Chief
Executive and Director roles across a number of
private and government organisations including
Sydney Trains AUX Investments Telstra CentrePort
Wellington Ltd EDS and Telecom New Zealand
Nominated by the Minister for Transport
Board member Kaaren Koomen (Bachelor of
ArtsLaw Master of Law) is a highly experience
executive with over 25 yearsrsquo experience in
leadership roles in the private and public sector
with a particular focus on communications and
technology She is currently an Executive Director
with IBM Australia and New Zealand and a
member of the Global IBM Government Programs
Leadership Team She has extensive board
experience on over 10 public and private boards
and committees and currently serves on four
including Chair of the Museum of Australian
Democracy at Eureka and Vice President of the
Australian Services Roundtable Nominated by the
Minister for Finance and Services
Other members during the reporting period
Board member (until April 2014) David Abrahams
(Bachelor of Science Cand Mag Honours
equivalent Knowledge Management) has
expertise in the Information Communications
Technology Industry He is principal consultant to
Organise Internet ndash Online Mr Abrahams is a past
7
chair and board member of
YouthConnectionscomau and a past lecturer in
Major Information Technology projects at the
University of Newcastle He is the current
Chairperson of Regional Development Australia
(Central Coast) and is a consultant to state and
local governments Nominated by the Minister for
Resources and Energy
Board member (until December 2013) Gavin
Campbell (MBA Bachelor of Engineering
(Mechanical) is the NSW Director of Asset
Operations for Sydney Trains Mr Campbell leads a
team of approximately 4000 people who work
behind the scenes to maintain Sydney Trainsrsquo
assets He spent much of his earlier career at
Qantas where he headed its Defence Services
delivering improved customer service a new
safety performance program and restructuring
the business to position it for future growth
Nominated by the Minister for Transport
Acting Managing Director (until March 2014)
Laurie Glanfield was the Secretary of the NSW
Department of Finance and Services Prior this Mr
Glanfield was the Director General of the
Department of Attorney General and Justice for
over 20 years Mr Glanfield has also held a
number of state-wide national and international
positions including NSW Chief Information Officer
NSW Coordinator for the National Broadband
Network Founding Member of the International
Consortium for Court Excellence and Deputy
President of the Australasian Institute of Judicial
Administration In 2001 Mr Glanfield was made a
Member of the Order of Australia for services to
the law through the implementation of policies
for legal reform and for making the legal system
more accessible to the community
Acting Managing Director (until August 2013)
Michael Coutts-Trotter (Bachelor of Arts) was
Director General of the NSW Department of
Finance and Services and Managing Director of
the Telco Authority Prior to this role with the Telco
Authority in April 2011 Mr Coutts-Trotter was
Director General of the NSW Department of
Education and Training Before that he was
Director General of the NSW Department of
Finance and Commerce Nominated by the
Minister for Finance and Services
Board meetings
The Board was appointed in 2012 and held its
inaugural meeting in July 2012 There were six
meetings held during the reporting period
Member Period Meetings
Attended Eligible
Rod Gilmour Full year 6 6
Peter Barrie Full year 5 6
Shane
Fitzsimmons
Full year 3 6
Matt
Roberts
Full year 5 6
Alan
Lipman
Full year 4 6
David Quilty Full year 5 6
John Hubby From May
2014
1 1
Kaaren
Koomen
From June
2014
0 1
Kylie De
Courteney
From June
2014
1 1
Liz Ward From May
2014
0 1
Michael
Coutts-
Trotter
From July
2013 to
August 2013
0 0
Gavin
Campbell
Until
December
2013
2 4
Laurie
Glanfield
From
September
2013 to
March 2014
3 4
David
Abrahams
Until April
2014
5 5
Our senior management team
The NSW Telco Authority has a small senior
management team who work with experienced
and qualified staff to deliver the functions and
operations of the organisation
Shaun Smith Bachelor of Engineering (Honours)
Executive Director (aManaging Director after the
reporting period)
Phillip King Bachelor of Engineering
(Telecommunications)
Chief Technology Officer 8
Review of Organisational Structure Organisation chart
In late 201213 the Telco Authority undertook a
Telco Authority Board
Managing Director
Executive
Network and Services
Portfolio Management Office
Policy Governance and Reform
Telecommunications Emergencies
Business Planning and Financial Control
Commercial
review of its organisational structure to determine
the best operating model for the expanding and
changing role for the Authority During 201314
the outcomes of the review were progressively
implemented The new organisational structure
takes into account the work required by the
Authority in meeting its corporate plan
obligations and brings resources to key technical
communications and project management
activities
Recruitment to fill the majority of key positions was
undertaken during 201314 Further recruitment to
fill a number of executive positions will be carried
out once the new Government Sector Executive
employment arrangements are in place
9
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
chair and board member of
YouthConnectionscomau and a past lecturer in
Major Information Technology projects at the
University of Newcastle He is the current
Chairperson of Regional Development Australia
(Central Coast) and is a consultant to state and
local governments Nominated by the Minister for
Resources and Energy
Board member (until December 2013) Gavin
Campbell (MBA Bachelor of Engineering
(Mechanical) is the NSW Director of Asset
Operations for Sydney Trains Mr Campbell leads a
team of approximately 4000 people who work
behind the scenes to maintain Sydney Trainsrsquo
assets He spent much of his earlier career at
Qantas where he headed its Defence Services
delivering improved customer service a new
safety performance program and restructuring
the business to position it for future growth
Nominated by the Minister for Transport
Acting Managing Director (until March 2014)
Laurie Glanfield was the Secretary of the NSW
Department of Finance and Services Prior this Mr
Glanfield was the Director General of the
Department of Attorney General and Justice for
over 20 years Mr Glanfield has also held a
number of state-wide national and international
positions including NSW Chief Information Officer
NSW Coordinator for the National Broadband
Network Founding Member of the International
Consortium for Court Excellence and Deputy
President of the Australasian Institute of Judicial
Administration In 2001 Mr Glanfield was made a
Member of the Order of Australia for services to
the law through the implementation of policies
for legal reform and for making the legal system
more accessible to the community
Acting Managing Director (until August 2013)
Michael Coutts-Trotter (Bachelor of Arts) was
Director General of the NSW Department of
Finance and Services and Managing Director of
the Telco Authority Prior to this role with the Telco
Authority in April 2011 Mr Coutts-Trotter was
Director General of the NSW Department of
Education and Training Before that he was
Director General of the NSW Department of
Finance and Commerce Nominated by the
Minister for Finance and Services
Board meetings
The Board was appointed in 2012 and held its
inaugural meeting in July 2012 There were six
meetings held during the reporting period
Member Period Meetings
Attended Eligible
Rod Gilmour Full year 6 6
Peter Barrie Full year 5 6
Shane
Fitzsimmons
Full year 3 6
Matt
Roberts
Full year 5 6
Alan
Lipman
Full year 4 6
David Quilty Full year 5 6
John Hubby From May
2014
1 1
Kaaren
Koomen
From June
2014
0 1
Kylie De
Courteney
From June
2014
1 1
Liz Ward From May
2014
0 1
Michael
Coutts-
Trotter
From July
2013 to
August 2013
0 0
Gavin
Campbell
Until
December
2013
2 4
Laurie
Glanfield
From
September
2013 to
March 2014
3 4
David
Abrahams
Until April
2014
5 5
Our senior management team
The NSW Telco Authority has a small senior
management team who work with experienced
and qualified staff to deliver the functions and
operations of the organisation
Shaun Smith Bachelor of Engineering (Honours)
Executive Director (aManaging Director after the
reporting period)
Phillip King Bachelor of Engineering
(Telecommunications)
Chief Technology Officer 8
Review of Organisational Structure Organisation chart
In late 201213 the Telco Authority undertook a
Telco Authority Board
Managing Director
Executive
Network and Services
Portfolio Management Office
Policy Governance and Reform
Telecommunications Emergencies
Business Planning and Financial Control
Commercial
review of its organisational structure to determine
the best operating model for the expanding and
changing role for the Authority During 201314
the outcomes of the review were progressively
implemented The new organisational structure
takes into account the work required by the
Authority in meeting its corporate plan
obligations and brings resources to key technical
communications and project management
activities
Recruitment to fill the majority of key positions was
undertaken during 201314 Further recruitment to
fill a number of executive positions will be carried
out once the new Government Sector Executive
employment arrangements are in place
9
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Review of Organisational Structure Organisation chart
In late 201213 the Telco Authority undertook a
Telco Authority Board
Managing Director
Executive
Network and Services
Portfolio Management Office
Policy Governance and Reform
Telecommunications Emergencies
Business Planning and Financial Control
Commercial
review of its organisational structure to determine
the best operating model for the expanding and
changing role for the Authority During 201314
the outcomes of the review were progressively
implemented The new organisational structure
takes into account the work required by the
Authority in meeting its corporate plan
obligations and brings resources to key technical
communications and project management
activities
Recruitment to fill the majority of key positions was
undertaken during 201314 Further recruitment to
fill a number of executive positions will be carried
out once the new Government Sector Executive
employment arrangements are in place
9
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
bulltbull~middot ~shyNSW GOVERtllMENT
Mclltell Ekiding
2middot24 Rswson Place
Sydney NSW 2000
Tel 02 9372 7088Fabull 02 93n 7954 bull
Tel co Authority
TIY 1300 301181 ABN 85 430 594 829
WWWkonampwgovau
Internal Audit and Risk Management Statement for the 2013-2014 Financial Year for the New South Wales Government Telecommunications A uthority
I John Hubby Acting Managing Director of the New South Wales Government Telecommunications Authority (Talco) am of the opinion that the Telco has internal audij and risk management processes in operation that are exclud ing the exceptions described below compliant with the core requirements set out in Treasury Circular NSW TC 0908 Internal Audit and Risk Management Policy
I John Hubby am of the opinion that the internal audij and risk management processes for the Talco depart from the following core requirements set out in Treasury Circular NSW TC 0908 and that (a) the circumstances giving rise to these departures have been detennined by the Minister for Finance amp Services and (b) the Telco has implemented the following practicable alternative measures that will achieve a level of assurance equivalent to the requirement
Ministerially Determined Deoarture
bull Core Requirement 2 An Audit amp Risk Committee has been established
Reason for Departure and Description of Practicable Alternative Measures lmolemented
bull TPP 12middot04 Guidance on Shared Arrangements and Subcommittees for Audit and Risk Committees states in section 1 Guidance on Shared Arrangements sub section 11 Detenninlng
eligibility to participate in a Shared Arrangement on page 6 that Subcommittees should only be established within a legal entity Subcommittees should not be established to create capacity for an
ARC to provide oversight over other legal entities within a cluster This precludes the NSW Government Telecommunications Authority and the State Records Authority from forming a
subcommittee as they are both separate legal entities Both Telco Authority and SRA agreed to fonn a subcommittee as full compliance to TPP 09middot 05 would impose an unreasonable administrative and cost burden
bull A review of the fonner Department of Finance amp Services cluster arrangements for Audit amp Risk Committees was conducted to ensure that smaller related entities were relieved of the cost burdens of supporting their own Audit amp Risk Committees and to provide an equivalent coverage of their obligations under TPP 09-05 through sharing of the Oeoartmenf s resources
The determination by the Minister for Finance amp Services in respect of these departures dated 15 July 2013 is appended to this attestation statement
Internal audit and risk management
10
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
I John Hubby am of the opinion that the Audit and Risk Committee for the Department of Finance amp Services is constituted and operates in accordance with the independence and governance requirements of Treasury Circular NSW TC 0908 The Chair and Members of the Audit and Risk Committee are
bull Carolyn Burlew Independent Chair (period of appointment from 14 October 2011 to 14 October 2015)
bull Ralph Kelly Independent Member (period of appointment from 1 September 2011 to 1 September 2014)
bull Jim Mitchell Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Elizabeth Crouch Independent Member (period of appointment from 13 October 2011 to 13 October 2014)
bull Christine Feldmanis Independent Member (period of appointment from 18 November 2013 to 18 November 2016)
This Audit and Risk Committee has been established under a Minister approved shared arrangement with the State Records Authority in accordance with a resolution of the Board of the New South Wales Government Telecommunications Authority
These processes including the practicable alternative measures implemented provide a level of assurance that enables the senior management of the Telco to understand manage and satisfactorily control risk exposures
As required by the policy I have submitted an Attestation Statement outlining compliance with exceptions with the policy to the Treasury on behalf of the Treasurer
11
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Digital Information Security Annual Attestation Statement for the 2013-2014 Financial Year for the
New South Wales Government Telecommunications Authority
I Shaun Smith AManaging Director of the New South Wales Government Telecommunications
Telco) Authority am of the opinion that the Telco Authority has implemented actions towards an
Information Security Management System during the financial year being reported on consistent
with the Core Requirements set out in the Digital Information Security Policy for the NSW Public
Sector and the approach in place with the Office of Finance and Services and its Shared Service
Provider
I am of the opinion that the security controls in place to mitigate identified risks to the digital
information and digital information systems of the Telco Authority are being made adequate for the
foreseeable future Risk assessments performed during the year identified areas requiring
improvement Plans to address these areas including completing the transition to an information
classification and labelling scheme are developed and being implemented
I am of the opinion that all business units under the control of the Telco Authority with a risk profile
sufficient to warrant an independent Information Security Management System have developed an
Information Security Management System in accordance with the Core Requirements of the Digital
Information Security Policy for the NSW Public Sector
I am of the opinion that where necessary in accordance with the Digital Information Security Policy
for the NSW Public Sector the Telco Authority is transitioning towards adopting relevant practices
aligned with ASNZS ISO IEC 27001 Information technology -Security techniques - Information
security management systems - Requirements
Shaun Smith
Acting Managing Director
Date ~(t~tj
Digital information security policy
12
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Year in review
The 2013 to 2014 financial year was the Authorityrsquos
second full year of operation as a statutory
authority within the Office of Finance and
Services
In the past 12 months the Authority has been
committed to achieving priority activities
developing and maintaining key projects and
putting into place important governance and risk
management arrangements
Core activities
Strategic planning
As part of its long term strategic planning
approach the Board of the Telco Authority held a
planning day in November 2013 and discussed
with the Minister for Finance and Services how
best to plan for the future direction of the NSW
Government operational telecommunications
sector Following these discussions the NSW
Government endorsed the Telco Authorityrsquos
approach to develop a long-term operational
telecommunications strategy The focus of the
strategy will be planning for the most efficient and
cost-effective way of delivering operational
telecommunications services to frontline staff
Consultation with frontline agencies on long term
plans for the sector will continue throughout 2014
The strategy will look at the most cost effective
and efficient service delivery models while
maintaining or improving existing services for
officers in the field The strategy will build on the
existing work of the Telco Authority to rationalise
existing infrastructure and reduce duplication of
effort while addressing sector capability issues
and the deployment of new technology and
services such as a mobile broadband capability
The long term strategy together with the sector
wide reform activities already being undertaken
helped define the Telco Authorityrsquos 201415
Corporate Plan The Corporate Plan was
considered and approved by the Board in June
2014 The combination of the strategy and the
Authorityrsquos own corporate planning work will
ensure that a cohesive and coordinated
approach to sector reform will be achieved
NSW Government Radio Network
The Telco Authority manages the NSW
Government Radio Network (GRN) The GRN is
used by public safety entities and other NSW
government agencies for essential
communications The GRN is an important
strategic asset supporting the Authorityrsquos focus to
provide better services whilst delivering
meaningful sector reform in line with Government
policy
Following a comprehensive competitive tender
process and managed transition period on 1
August 2013 Airwave Solutions (Australia)
13
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
commenced the management and operation of
the GRN With oversight and assurance provided
by the Telco Authority Airwave provides day-to-
day management monitoring maintenance and
service restoration for the network
A separate maintenance agreement is in place
with Motorola Solutions who continue to support
the core and critical components of the network
The GRN geographically covers a third of NSW
and provides mission critical grade
telecommunication services to frontline agencies
over an area covering approximately 80 per cent
of the NSW population as well as the Australian
Capital Territory
Users with a GRN-enabled terminal are able to
communicate with other users within the
coverage area The contractual target is to
achieve 99950 per cent availability During
201314 availability of 99927 per cent was
achieved
Mobile Data Radio Network
The Telco Authority continued to provide the
Government Mobile Data Radio Network in
partnership with Sigtec Pty Ltd as the network
manager responsible for day to day operations
and maintenance This network provides a shared
capacity for low speed data communications use
for computer-aided dispatching of data
The network is utilised by approximately 400
vehicles in the NSW Ambulance fleet to send
information via data as opposed to voice and is
essential to achieving a rapid patient response
The mobile data radio network was available
99999 per cent of the year
Telecommunications Services Functional Area
The Telco Authorityrsquos Telecommunications Services
Functional Area (TELCOFAC) is operational 24
hours a day seven days a week
TELCOFAC plays a critical role in managing
operational activities with telecommunications
carriers public safety agencies and other partner
agencies during emergencies These activities
ensure that critical telecommunication links are
maintained so that members of the public are
able to call triple zero and receive emergency
alert messages during emergencies
TELCOFAC coordinates a comprehensive
approach for handling emergencies and
incidents through the following phases
Prevention ndash designed to minimise emergency
consequences
Preparation ndash addresses the preparation
planning and skills training for the TELCOFAC
to mobilise their structures and resources to
support response to and recovery from an
emergency
Response ndash responding to emergencies to
minimise impacts to individuals the
community and property
Recovery ndash restores critical and significant
telecommunications services to normal
operations
October 2013 bushfires
In October 2013 the TELCOFAC was involved in
the most intensive operations since its inception ndash
the State of Emergency declared in response to
the bushfires in the Blue Mountains the Greater
Hunter Central Coast and Southern Highlands
The TELCOFAC coordinated the effort by
telecommunication carriers and public safety
agencies to protect critical telecommunications
infrastructure restore telecommunication services
affected by the severe bushfires and where
necessary coordinate the augmentation of
telecommunication services to support
responders in the field TELCOFAC also
coordinated the deployment of emergency
communications for the Springwood Recovery
Centre
The focus of the TELCOFAC in 2014 is building
capability With a full complement of staff the
focus is on the tactical and operational training
improving our capability to operate out of hours
improving capabilities for mobile deployment and
sustaining high intensity protracted liaison
operations
14
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
15
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
201314 Corporate Plan
The Corporate Plan presents the Telco Authorityrsquos purpose objectives and goals as well as the values and
operating principles that the Authority operates under The plan was developed in collaboration with key
stakeholders client groups staff and the Board
The Plan aligns with the goals set out in NSW 2021 A Plan to Make NSW Number One the Governmentrsquos
commitment to improve opportunities and quality of life for people in regional and metropolitan NSW It is a
short term plan and is the first step towards delivering on a long term vision for the Telco Authorityrsquos
management in NSW
As the Authority will be leading a period of significant sector wide change the plan is a living document
which will actively drive organisation achievement for the next financial year and beyond
Objective 1 - Integrate and enhance service delivery to better meet the needs of
business partners
Key strategies
11 Understand and plan for the diverse needs of business partners
12 Progressively integrate NSW Police into the Government Radio Network
13 Maintain and improve the quality reliability and efficiency of services
14 Build emergency telecommunications capability across the four phases of emergency management
201314 achievements
Documenting the service requirements of agencies
Development of an asset management framework
Ongoing use of the GRN by NSW Police Force special operations officers
Establishment of governance arrangements for trialling general purpose police officers on the GRN
Development of a strategy to address risks and improve reliability of backhaul links
Establishment of the telecommunications services functional area subcommittee (TELCOFAC)
Objective 2 - Manage the efficient allocation and use of spectrum
Key strategies
21 Participate in strategic partnerships with other jurisdictions to achieve interoperability and improve
services
22 Ensure a coordinated and strategic approach to the allocation of radio spectrum to meet the needs
of NSW Government
23 Develop a dedicated data capability to meet the needs of NSW Government
201314 achievements
Establishment of a Spectrum Management Office within the Authority to plan manage and
implement the allocation of spectrum across NSW Government
Development of a framework for spectrum management
Contributed to the development of a national implementation plan for Public Safety Mobile
Broadband
16
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Objective 3 - Manage a consolidated portfolio of assets which are fit for purpose
Key strategies
31 Work with partners to improve the efficiency and reduce duplication of telecommunications assets
across NSW
32 Coordinate capital planning processes for telecommunications assets across government
33 Improve and align access to telecommunications assets across NSW
34 Maintain a centralised understanding of all government telecommunications assets across NSW
35 Coordinate the procurement of operational telecommunications assets across government
201314 achievements
Initiating pilot programs to consolidate telecommunications assets on a small number targeted sites
Undertaking a cooperative telecommunications capital planning process with key business partners
Designing of a legal framework for future access to telecommunications sites
Implementation of the ITS 2573 prequalification scheme for the procurement of operational
communications
Objective 4 - Improve governance and risk management
Key strategies
41 Enable the Board and related governance arrangements to provide strategic direction to the sector
42 Reduce the likelihood and consequence of risk to the Authority and NSW Government
43 Embed an enhanced shared and rigorous approach to project management
44 Develop and maintain appropriate standards and guidelines
45 Measure and report on performance
201314 achievements
Implementation of stakeholder governance arrangements
Development of an Enterprise Risk Management (ERM) Framework
Enhancement of the Program Management Office to oversee project control and reporting
Undertaking regular communication with business partners
Publication of the Authorityrsquos first annual report for 201213
Objective 5 - Strengthen sector wide capabilities and engagement with partners
Key strategies
51 Lead improvements to the capacity of the sector
52 Undertake positive proactive engagement with business partners
53 Improve the capacity of the organisation to drive reform
54 Build an inclusive culture of performance and innovation
201314 achievements
Completion of a sector wide capability audit
Implementation of a new Authority organisational structure
Key positions with the Authority recruited
Implementation of performance plans aligned to the Corporate Plan for all staff
17
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Projects ITS 2573 Improved Government
Telecommunications Prequalification Scheme
The Telco Authorityrsquos ITS 2573 scheme has saved
over $3 million since its introduction in May 2013
The scheme streamlines purchasing arrangements
for operational telecommunications equipment
infrastructure and services including handsets
network assets and design services
More than 70 NSW Government agencies
including emergency services agencies own
andor operate radio telecommunications
networks to support their operations The scheme
has simplified access for NSW Government buyers
and industry suppliers meaning agencies can
better match the right supplier to the right job This
allows agencies to focus on their core business As
a result the scheme saves time and money while
driving a more competitive marketplace that is
fairer for both large and small suppliers
Under the arrangements vendors can be added
to the scheme periodically and are lsquoprequalifiedrsquo
to do work over $150000 or lsquoregisteredrsquo for work
under $150000 The Authority will continue to work
with stakeholders to use the scheme to drive
greater efficiencies through its combined
purchasing power A recent example is the
terminal equipment subpanel
GRN Core Upgrade
During October 2013 the Telco Authority
completed an upgrade of the Government Radio
Network (GRN) core The core upgrade was a
highly complex project that was delivered in two
stages to reduce risks and have a minimal impact
on the network The project which ensures that
the GRN core is operating on up to date software
also allows several emergency services agencies
to connect their dispatch consoles to the GRN
Spectrum Management Office establishment
The Telco Authority established a Spectrum
Management Office (SMO) to sit within the
Authority This office oversees the efficient
allocation assignment and ongoing
administration of all Government licences in the
400 MHz HGS bands as well as any other
spectrum allocations as required
Some of the ongoing benefits of this approach
are expected to include
a reduction in the allocation of spectrum
required to operate business as usual and
emergency response operations
a reduction in licensing costs to the NSW
Government by surrendering redundant
licences through the removal of duplicated
services
improved spectrum allocation through more
efficient processes and effective tools
an increased opportunity for better planning
in the 400 MHz HGS band by increasing the
allocation and usability of spectrum in that
band
a more efficient use of available spectrum
due to enabling a spectrum assignment that
is fit for purpose
assurance that agencies will be allocated
spectrum they need within the new HGS
bands
Infrastructure Rationalisation Project
In 201314 the Telco Authority commenced a
project to develop a series of rationalisation plans
The project is developing a framework to identify
opportunities for cost avoidance or cost reduction
through asset rationalisation of network
infrastructure The objectives of the project are to
identify what an optimised portfolio of NSW
Government assets consists of
develop a framework to identify opportunities
for cost avoidance or cost reduction through
NSW Government operational
telecommunications asset rationalisation
which will result in an equal or improved level
of service to stakeholder agencies
apply the framework to determine the
quantifiable benefit to the NSW Government
achieved through rationalisation
Plans will be developed for infrastructure
backhaul services and radio networks The project
will provide a basis for development of a forward
technology strategy architecture and roadmap
The Infrastructure Rationalisation Project will
conclude during the 201415 financial year
18
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Sector Capability Review
The Telco Authority carried out a Sector Capability
Review to understand how agencies and state-
owned corporations (SOCs) plan deploy and
manage operational telecommunications (OT)
The objective of the review was to document and
measure 16 key capabilities for each agency The
findings were used to identify recommendations
to achieve more effective and efficient
management of operational telecommunications
and improve services to the public
Participation and responses to
inquiries
The Telco Authority is the lead organisation
focused on government operational
telecommunications in NSW and a key driver of
sector reform To meet this role the Authority
provides input to significant inquiries and
consultation reviews throughout the year During
201314 the Telco Authority contributed to a
number of national forums on radio and
communications issues The main ones are
highlighted below
Objects of the Radiocommunications Act
1992 (Commonwealth)
The former Commonwealth Department of
Broadband Communications and the Digital
Economy (DBCDE) commenced a process to
examine the regulatory framework for the
management of spectrum in Australia An initial
focus point of this work was the objects of the
Radiocommunications Act 1992 The objects set
out the priorities for the regulator of spectrum the
Australian Communications and Media Authority
(ACMA)
The Telco Authority provided a submission
highlighting the importance of maintaining the
requirement for the ACMA to allocate spectrum
for public safety law enforcement and
emergency services purposes NSW public safety
agencies rely on radio services to ensure that
frontline staff are able to communicate when
dealing with an incident so it is essential that they
have access to sufficient and appropriate
spectrum for this purpose
Australian Parliament Inquiry ndash Allocation of
Spectrum for PSMB
In July 2013 the Parliamentary Joint Committee on
Law Enforcement issued a report following its
inquiry into the allocation of spectrum for public
safety mobile broadband (PSMB) purposes The
inquiry was established to consider the quantum
and type of spectrum required in order to ensure
public safety agencies are able to access a PSMB
capability
The Telco Authority along with the Department of
Premier and Cabinet contributed to a multi-
jurisdictional submission to the Inquiry that spelt
out the need for 2 x10MHz of spectrum for
PSMB This amount is required to ensure that
agencies are able to respond to large scale
incidents which occur with increasing frequency
The submission also addressed overflow
arrangements to commercial services during
periods of significant demand
19
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
e
20
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Financial statements
Independent auditorrsquos report
21
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
PAy opinion does not provide aSsurance
about the future viability of the AuthOltity that It has carried out its activities effectively efficiently and eoonomicallI
bull about the effectiveness of its internal oonlrol
about the security and controls over the electronc publication of the audited financial statements on any web~e where they may be ptesented about other Information v1hich may have been hypertinked tofrom the finulCial statements
Independence
In conducting my audit I have oomplied with the independence requirements of the Australian Auditing Standards and other relevant ethical pronouncements The PFampA Act further promotes independence by
PfOviding that only Parliament and not the executive govemmint can remove an Auditor-General
mandating the Auditor-General as auditor of public sector agencies but precluding the provision of non-audit services thus ensuring the Audit0lt-Goneral and the Audt Office of Nevi South WaJes are not compromised in their roles by the possibility of losing cllens or inoome
David Nolan Director Financial Audit Servicas
22 September 2014 SYDNEY
22
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Statement by the Acting Managing
Director
23
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Statement of comprehensive
income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Expenses excluding losses
Personnel Services
Other Operating Expenses
Depreciation
Total Expenses excluding losses
Revenue
Sale of Goods and Services
Grants and Contributions
Other Revenue
Total Revenue
Loss on disposal
NET RESULT
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
2(a)
2(b)
2(c)
3(a)
3(b)
3(c)
4
2688
27818
5865
2716
25404
5821
36371 33941
37609
3543
1231
37616
-
403
42383 38019
(33) (1136)
5979 2942
- -
5979 2942
The accompanying notes form part of these financial statements
24
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Statement of financial position
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventory
Other
Total Current Assets
Non-Current Assets
Plant and Equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Payables
Provision
Other
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Accumulated funds
Total Equity
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
5
6
7
8
9
10
11
12
45590
3524
415
401
34495
2774
-
-
49930 37269
25974 28455
25974 28455
75904 65724
8450
388
-
3286
-
1351
8838 4637
8838 4637
67066 61087
67066 61087
67066 61087
The accompanying notes form part of these financial statements
25
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Balance at 1 July 2013
Net Result for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Increase in net assets from equity transfers
Balance at 30 June 2014
Balance at 1 July 2012
Net Result for the year
Other comprehensive income
Total comprehensive income for the year
Transfers with owners in their capacity as owners
Increase in net assets from equity transfer
Balance at 30 June 2013
Notes Accumulate
d
Funds
$rsquo000
14
61087
5979
-
5979
-
67066
-
2942
-
2942
58145
61087
The accompanying notes form part of these financial statements
26
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Statement of cash flows
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Payments
Payment to suppliers and employees
Total Payments
Receipts
Receipts from customers and rentals
Interest received
Total Receipts
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Plant and Equipment
Other - Reimbursement of advance for capital project
NET CASH FLOWS FROM INVESTING ACTIVITIES
NET INCREASE IN CASH
Opening cash and cash equivalents
Cash transferred as a result of Administration Restructure
from the Office of Finance and Services
CLOSING CASH AND CASH EQUIVALENTS
Notes Actual
2014
$rsquo000
Actual
2013
$rsquo000
13b
13a
5
(31925) (19265)
(31925) (19265)
45365
1231
32030
402
46596 32432
14671 13167
(3945)
369
(401)
-
(3576) (401)
11095
34495
-
12766
-
21729
45590 34495
The accompanying notes form part of these financial statements
27
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Notes to the financial statements
1 Summary of significant accounting policies
(a) Reporting entity
The NSW Government Telecommunications Authority is a NSW Government entity The NSW
Government Telecommunications Authority (the Authority) is a not-for-profit entity (as profit
is not its principal objective) and it has no cash generating units The reporting entity is
consolidated as part of the NSW Total State Sector Accounts
These financial statements for the year ended 30 June 2014 have been authorised for issue
by the Acting Managing Director on 19 September 2014
The Authority as a reporting entity comprises of the following major activities
i Government Radio Network
The NSW Government Radio Network (GRN) provides a common platform for
government agencies and authorities who use mobile radio communications
including as a mission-critical tool for public safety and emergency services
organisations The GRN is owned by the NSW Government and managed on its
behalf by a private sector network manager with oversight and assurance provided
by the Authority User charges are based on the Government approved full cost
recovery IPART funding methodology
ii Mobile Data Radio Network
The Mobile Data Radio Network (MDRN) provides a shared capacity for low speed
data communications use for computer aided dispatching of data The Network is
used by the NSW Ambulance Service The delivery of dispatch information via data
is essential to achieving a rapid patient response
iii Emergency Management
The Telecommunications Services Functional Area forms part of the NSW
Governmentrsquos emergency management arrangements and acts as a link between
telecommunications carriers and emergency services agencies
(b) Basis of preparation
The Authorityrsquos financial statements are general purpose financial statements which have
been prepared on an accrual basis and in accordance with
applicable Australian Accounting Standards (which include Australian Accounting
Interpretations) and
the requirements of the Public Finance and Audit Act 1983 and Public Finance and the
Audit Regulation 2010 and
Treasurerrsquos Directions
Plant and equipment assets (or disposal groups) held for sale and financial assets at fair
value through profit or loss and available for sale are measured at fair value Other
financial statement items are prepared in accordance with the historical cost convention
Judgements key assumptions and estimations management has made are disclosed in the
relevant notes to the financial statements
28
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
All amounts are rounded to the nearest one thousand dollars and are expressed in
Australian currency
(c) Statement of compliance
The financial statements and notes comply with Australian Accounting Standards which
include Australian Accounting Interpretations
(d) Insurance
The Authorityrsquos insurance activities are conducted through the NSW Treasury Managed
Fund Scheme of self-insurance for Government entities The expense (premium) is
determined by the Fund Manager based on past claim experience
(e) Accounting for the Goods and Services Tax (GST)
Revenue expenses and assets are recognised net of the amount of GST except that
the amount of GST incurred by the Authority as a purchaser that is not recoverable from
the Australian Taxation Office is recognised as part of the cost of acquisition of an asset
or as part of an item of expense and
receivables and payables are stated with the amount of GST included
Cash flows are included in the Statement of Cash Flows on a gross basis However the GST
components of cash flows arising from investing and financing activities which are
receivable from or payable to the Australian Taxation Office are classified as operating
cash flows
(f) Revenue recognition
Revenue is measured at the fair value of the consideration or contribution received or
receivable Additional comments regarding the accounting policies for the recognition of
income are discussed below
(i) Sale of Goods and Services
Sale of Goods and Services is recognised when the service is provided
(ii) Interest Revenue
Interest revenue is recognised using the effective interest method as set out in AASB
139 Financial Instruments Recognition and Measurement
(g) Assets
(i) Acquisitions of assets
Assets acquired are initially recognised at cost Cost is the amount of cash or cash
equivalents paid or the fair value of the other consideration given to acquire the
asset at the time of its acquisition or construction or where applicable the amount
attributed to that asset when initially recognised in accordance with the
requirements of other Australian Accounting Standards
29
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Assets acquired at no cost or for nominal consideration are initially recognised at
their fair value at the date of acquisition (see also assets transferred as a result of a
restructure - Note 1(l))
Fair value is the price that would be received to sell an asset in an orderly
transaction between market participants at measurement date
Where payment for an item is deferred beyond normal credit terms its cost is the
cash price equivalent ie the deferred payment amount is effectively discounted at
an asset-specific rate
The Authorityrsquos plant and equipment are measured at depreciated historical cost
as a surrogate for fair value
(ii) Capitalisation thresholds
As in previous years plant and equipment assets costing $5000 and above
individually (or forming part of a network costing more than $5000) are capitalised
(iii) Revaluation of plant and equipment
Physical non-current assets are valued in accordance with the NSW Treasuryrsquos
ldquoValuation of Physical Non-Current Assets at Fair Valuerdquo Policy and Guidelines Paper
(TPP 14-01) This policy adopts fair value in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property Plant and Equipment
Non-specialised assets with short useful lives like plant and equipment are measured
at depreciated historical cost as a surrogate for fair value
(iv) Impairment of plant and equipment
As a not-for-profit entity with no cash generating units impairment under AASB 136
Impairment of Assets is unlikely to arise
Specifically impairment is unlikely for not-for-profit entities given that AASB 136
modifies the recoverable amount test for non-cash generating assets of not-for-
profit entities to the higher of fair value less costs of disposal and depreciated
replacement cost where depreciated replacement cost is also fair value
(v) Depreciation of plant and equipment
Depreciation is provided for on a straight line basis for all depreciable assets so as to
write off the depreciable amount of each asset as it is consumed over its useful life
to the Authority
All material separately identifiable component assets are recognised and
depreciated over their useful lives
The depreciation rates used for 201314 for each class of assets remain unchanged
from previous years are
Plant and equipment
Huts and Tower 25 to 50
Network Equipment
Hardware 100
Software 250
30
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
(vi) Maintenance
Day-to-day servicing costs or maintenance are charged as expenses as incurred
except where they relate to the replacement of a part or component of an asset in
which case the costs are capitalised and depreciated
(vii) Receivables
Short-term receivables with no stated interest rate are measured at the original
invoice amount where the effect of discounting is immaterial
(viii) Inventories
Inventories (other than those held for distribution) are stated at the lower of cost and
net realisable value Cost is calculated using the weighted average cost or first in
first out method
(ix) Impairment of financial assets
All financial assets except those measured at fair value through profit and loss are
subject to an annual review for impairment An allowance for impairment is
established when there is objective evidence that the entity will not be able to
collect all amounts due
For financial assets carried at amortised cost the amount of the allowance is the
difference between the assetrsquos carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate The amount of the
impairment loss is recognised in the net result for the year
Any reversals of impairment losses are reversed through the net result for the year
where there is objective evidence Reversals of impairment losses of financial assets
carried at amortised cost cannot result in a carrying amount that exceeds what the
carrying amount would have been had there not been an impairment loss
(x) Other assets
Other assets are recognised on a cost basis
(h) Liabilities
(i) Payables
These amounts represent liabilities for goods and services provided to the Authority
and other amounts Payables are recognised initially at fair value usually based on
the transaction cost or face value Subsequent measurement is at amortised cost
using the effective interest method
Short-term payables with no stated interest rate are measured at the original invoice
amount where the effect of discounting is immaterial
(ii) Personnel services benefits and other payables
The Authority receives personnel services from the Office of Finance and Services
The Office of Finance and Services is not a Special Purpose Service Entity and does
not control the Authority under this arrangement (Note 1(a))
In accordance with NSW Treasury Circular 1119 Financial and Annual Reporting
Requirements Arising from Personnel Service Arrangements a liability representing
the total amount payable to the Office of Finance and Services is recognised in the
Statement of Financial Position
31
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
As the Authority is not an employer the disclosure requirements of AASB 119
Employee Benefits in respect of employee benefits do not apply
(i) Other provisions
Other provisions exist when the Authority has a present legal or constructive obligation as a
result of a past event it is probable that an outflow of resources will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation
Any provisions for restructuring are recognised only when an agency has a detailed formal
plan and the agency has raised a valid expectation in those affected by the restructuring
that it will carry out the restructuring by starting to implement the plan or announcing its
main features to those affected
(j) Fair value hierarchy
A number of the entityrsquos accounting policies and disclosures require the measurement of
fair values for both financial and non-financial assets and liabilities When measuring fair
value the valuation technique used maximises the use of relevant observable inputs and
minimises the use of unobservable inputs Under AASB 13 the entity categorises for
disclosure purposes the valuation techniques based on the inputs used in the valuation
techniques as follows
(i) Level 1 - quoted prices in active markets for identical assets liabilities that the
entity can access at the measurement date
(ii) Level 2 - inputs other than quoted prices included within Level 1 that are
observable either directly or indirectly
(iii) Level 3 - inputs that are not based on observable market data (unobservable
inputs)
The entity recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred
Refer Note 18 for further disclosures regarding fair value measurements of financial assets
(k) Equity
(i) Accumulated funds
The category lsquoAccumulated Fundsrsquo includes all current and prior period retained
funds
(l) Equity transfers
The transfer of net assets between agencies as a result of an administrative restructure
transfers of programs functions and parts thereof between NSW public sector agencies
and lsquoequity appropriationsrsquo (refer Note 1(g)(i)) are designated or required by Accounting
Standards to be treated as contributions by owners and recognised as an adjustment to
ldquoAccumulated Fundsrdquo This treatment is consistent with AASB 1004 Contributions and
Australian Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public
Sector Entities
32
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
The transfer of net assets from the Office of Finance and Services to the Authority were
transferred at book value After being examined by the management of both entities
along with related NSW Treasury policy and the Australian Accounting Standards it was
determined that the book value represented fair value
(m) Comparative information
Except when an Australian Accounting Standard permits or requires otherwise
comparative information is disclosed in respect of the previous reporting period 30 June
2013 for all amounts reported in the financial statements
The current period represents the period ended 30 June 2014
(n) Changes in accounting policy including new or revised Australian Accounting Standards
(i) Effective for the First Time in 201314
The accounting policies applied in 201314 are consistent with those of the previous
financial year except as a result of the following new or revised Australian
Accounting Standards that have been applied for the first time in 201314
bull AASB 13 Fair Value Measurement
AASB 13 Fair Value Measurement aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single source of
fair value measurement and disclosure requirements for use across Australian
Accounting Standards
The Authorityrsquos adoption of AASB 13 Fair Value Measurement has only affected
the disclosures in the notes to the financial statements (refer Note 18)
(ii) Issued but not effective
NSW public sector entities are not permitted to early adopt new Australian
Accounting Standards unless NSW Treasury determines otherwise
The following new Accounting Standards have not been applied and are not yet effective
Accounting Standard Interpretation
AASB 9 AASB 2010-7 and AASB 2012-6 regarding financial instruments
AASB 127 (NFP) Separate Financial Statements
AASB 1031 Materiality
AASB 1055 and AASB 2013-1 regarding budgetary reporting
AASB 2012-3 regarding offsetting financial assets and financial liabilities
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-6 regarding Reduced Disclosure Requirements
AASB 2013-8 Australian Implementation Guidance for Not-for-Profit Entities
AASB 2013-9 regarding the Conceptual Framework Materiality and Financial Instruments
(parts B and C)
It is considered that the implementation of these Standards will not have any material
impact on the Authorityrsquos financial statements
33
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
2 Expenses excluding losses
(a) Personnel services expense
2014 2013
$rsquo000 $rsquo000
Salaries and wages (including recreation leave) 2368 2279
Superannuation 227 219
Long service leave() 70 (93)
Workers compensation insurance 24 13
Payroll tax and fringe benefits tax 155 142
Voluntary redundancy() (156) 156
2688 2716
() The credit balance for Long Service Leave is due to the actuarial adjustment applied to the
provision as at 30 June 2013
() During the year the Authority was reimbursed for the redundancy payment made in 201213
The Authority received personnel services from the Office of Finance and Services as it is unable to
employ staff Refer note 1(h)(ii)
(b) Other operating expenses
2014 2013
$rsquo000 $rsquo000
Auditorrsquos remuneration
- audit of the financial statements 48 51
Network operating expenses 16683 18892
Rent 2827 2325
Maintenance 610 234
Legal Fees 132 308
Consultants 2268 1722
Contractors 3041 504
Power 451 394
Decommissioning expenses 388 -
Other 1370 974
27818 25404
2014 2013
$rsquo000 $rsquo000
Reconciliation - Total Maintenance
Maintenance expense as above 610 234
Personnel Services Employee related maintenance
expenses included in Note 2(a) - -
Total maintenance expenses included in Notes 2(a) and
2(b) 610 234
Maintenance related services are generally provided by external service providers and therefore
employee related maintenance expenses are nil
34
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
(c) Depreciation expense
2014 2013
$rsquo000 $rsquo000
Depreciation
- Plant and equipment 5865 5821
5865 5821
3 Revenue
(a) Sale of goods and services
2014 2013
$rsquo000 $rsquo000
Radio Network Services 37609 37616
37609 37616
(b) Grants and contributions
2014 2013
$rsquo000 $rsquo000
Grants received from the Office of Finance and Services 1762 -
Capital contributions received from other agencies 1781 -
3543 -
(c) Other revenue
2014 2013
$rsquo000 $rsquo000
Interest Revenue 1231 403
1231 403
4 Gain(loss) on disposal
2014 2013
$rsquo000 $rsquo000
Gain(loss) on disposal of plant amp equipment
Written down value of assets disposed (33) (1136)
Net gain(loss) on disposal of plant amp equipment (33) (1136)
5 Current assets - cash and cash equivalents
2014 2013
$rsquo000 $rsquo000
Cash at bank and on hand 45590 34495
45590 34495
The deposits are bearing floating interest rate average of 341 for the period ended 30 June 2014
(2013 - 302) These funds are at call
For the purposes of the Statement of Cash Flows includes Cash at bank
35
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Cash assets recognised in the Statement of Financial Position are reconciled to cash at the end of
the financial year as shown in the Statement of Cash Flows as follows
2014 2013
$rsquo000 $rsquo000
Cash and cash equivalents (per Statement of Financial
Position) 45590 34495
Closing cash and cash equivalents (per Statement of
Cash Flows) 45590 34495
Refer Note 18 for details regarding credit risk liquidity risk and market risk arising from financial
instruments
6 Current assets ndash receivables
Trade Debtors
Prepayments
2014 2013
$rsquo000 $rsquo000
2530 1955
994 819
3524 2774
Details regarding credit risk liquidity risk and market risk including financial assets that are either
due or impaired are disclosed in Note 18
7 Current assets - inventories
2014 2013
$rsquo000 $rsquo000
Inventory - Spare parts 415 -
415 -
8 Current assets - other
2014 2013
$rsquo000 $rsquo000
Input Tax Credits 401 -
401 -
36
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
9 Non-current assets - plant and equipment
At 1 July 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
At 30 June 2014 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 71212 14371 1144 86727
Accumulated depreciation (47317) (13436) - (60753)
Net carrying amount 23895 935 1144 25974
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Plant and Plant and
Period Ended 30 June 2014 Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year 26592 1863 28455
Additions 3309 - 3309
Disposals (33) - (33)
Depreciation expense (4937) (928) (5865)
Assets under construction 108 - 108
Carrying amount at end of year 25039 935 25974
At 30 June 2013 ndash Fair Value Plant and Plant and Assets under
Equipment Equipment Construction
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000 $rsquo000
Gross carrying amount 68021 14371 1036 83428
Accumulated depreciation (42465) (12508) - (54973)
Net carrying amount 25556 1863 1036 28455
37
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Reconciliation
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning
and end of the current reporting period is set out below
Year Ended 30 June 2013 Plant and Plant and
Equipment Equipment
(GRN) (MDRN) Total
$rsquo000 $rsquo000 $rsquo000
Carrying amount at start of year - - -
Assets transferred from DFS 31238 2844 34082
Additions 294 - 294
Disposals (1136) - (1136)
Depreciation expense (4840) (981) (5821)
Assets under construction 1036 - 1036
Carrying amount at end of year 26592 1863 28455
Note The assets were transferred during the year 201213 The written down value included GRN ndash
Network Equipment $293 million Huts and Towers $19 million MDRN ndash Network equipment $24
million Huts and Towers $04 million
10 Current liabilities - payables
2014 2013
$rsquo000 $rsquo000
Trade Creditors 7885 3162
Accrued Personnel Services 565 124
8450 3286
Details regarding credit risk liquidity risk and market risk including a maturity analysis of the above
payables are disclosed in Note 18
11 Current liabilities - provisions
2014 2013
$rsquo000 $rsquo000
Other Provisions
Decommissioning Costs 388 -
388 -
The provision represents the cost of decommissioning existing operational assets arising from a
forced site exit and decommissioning microwave equipment as a result of relocating one of the
Network Control Centres
Movement in Provisions (other than employee benefits)
Movements in each class of provision during the financial year other than employee benefits are
set out below
2014 Other Total
$rsquo000 $rsquo000
Carrying amount at the beginning of financial year - -
Additional provisions recognised 388 388
Carrying amount at end of financial year 388 388
38
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
12 Current liabilities - other
2014 2013
$rsquo000 $rsquo000
GST Output Tax Liability - 1351
- 1351
13 Reconciliation of cash flows from operating activities to net results
a) Reconciliation of cash flows from operating activities
2014 2013
$rsquo000 $rsquo000
Net Cash from Operating Activities 14671 13167
Depreciation and amortisation (5865) (5821)
Changes in Operating Assets and Liabilities
Increase(Decrease) in trade and other receivables 749 (9683)
Increase in inventory 415 -
Increase in other assets 401 1437
(Increase)Decrease in revenue in advance - 5224
(Increase)Decrease in trade creditors and provisions (5743) 125
(Decrease)Increase in other liabilities 1351 (1507)
Net Result 5979 2942
b) Cash Flow Comparatives
The cash flow comparatives for year ending 30 June 2013 represent eight months of
operational activities The first four months were included as part of the cash transferred arising
from the Administrative Restructure from the Office of Finance and Services
14 Increasedecrease in net assets from equity transfers
Assets and liabilities transferred to the Authority from the Office of Finance and Services on 1 July
2012 with respect to the Authority are summarised as assets $605 million and liabilities $24 million
The transfer had a $581 million impact on net assets
The Assets and Liabilities transferred were Fixed Assets $341 million Receivables and Prepayments
$99 million Cash $217 million Accrued Income ($52 million) and Payables ($24 million)
15 Commitments for expenditure
(a) Capital commitments
2014 2013
$rsquo000 $rsquo000
Aggregate capital expenditure for the acquisition of
information technology equipment and other equipment
contracted for at balance date and not provided for
Not later than one year - 6051
Later than one year and not later than five years - -
Later than five years - -
Total (including GST) - 6051
39
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
(b) Operating lease commitments
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating lease rentals not
provided for and payable
Not later than one year 1667 2010
Later than one year and not later than five years 4478 5005
Later than five years 655 1736
Total (including GST) 6800 8751
The Authority has entered into operating lease agreements with government agencies and private
companies for provision of accommodation for the Authorityrsquos use
Site rental leases are entered into with other NSW Government agencies and private sector
companies The term of accommodation leases range from one to ten years with the option for
renewal for further terms The lease agreement allows the lessor to review rents on specified dates
There is no option for the purchase of buildings at the expiry of the lease term Recurrent outgoings
including cleaning electricity rates management fee and public liability insurance is the
responsibility of the Authority and all repairs and maintenance
(c) Operating contractual obligations
2014 2013
$rsquo000 $rsquo000
Future non-cancellable operating contractual
obligations not provided for and payable
Not later than one year 12167 13729
Later than one year and not later than five years 6608 12458
Later than five years - -
Total (including GST) 18775 26187
16 Lease revenue commitments
2014 2013
$rsquo000 $rsquo000
Not later than one year 61 61
Later than one year and not later than five years 72 124
Later than five years - -
Total (including GST) 133 185
17 Contingent liabilities and contingent assets
The Authority is in dispute with a key supplier and is seeking reimbursement of potential overcharges
arising from the interpretation of the timing and treatment of the contractual pricing
schedule Legal counsel has been engaged and negotiations with the supplier continue however
due to counter claims and ongoing discussions the outcome is not virtually certain and it is
premature to determine the amount that will be reimbursed to the Authority
The Authority is not aware of any contingent liabilities at the date of these financial statements
40
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
18 Financial instruments
The Authorityrsquos principal financial instruments are outlined below These financial instruments arise
directly from the Authorityrsquos operations or are required to finance its operations The Authority does
not enter into or trade financial instruments including derivative financial instruments for
speculative purposes
The Authorityrsquos main risks arising from financial instruments are outlined below together with the
Authorityrsquos objectives policies and processes for measuring and managing risk Further
quantitative and qualitative disclosures are included throughout these financial statements
The Managing Director has overall responsibility for the establishment and oversight of risk
management and reviews and agrees on policies for managing each of these risks Risk
management policies are established to identify and analyse the risks faced by the Authority to set
limits and controls and to monitor risks Compliance with policies is reviewed by the Authority on a
regular basis
The Authorityrsquos financial instruments include cash receivables and payables
(a) Financial Instrument Categories
Financial Assets Note Category
2014
$rsquo000
Carrying
Amount
2013
$rsquo000
Carrying
Amount
Class
Cash and cash
equivalents
Receivables
5
6
Not applicable
Loans and receivable (at
amortised cost)
45590
2300
34495
1777
Financial Liabilities
Class
Payables 10 Financial liabilities
measured at amortised
cost
7733 2987
Excludes statutory receivables and prepayments (ie not within scope of AASB 7)
Excludes statutory payables and unearned revenue (ie not within scope of AASB 7)
(b) Credit risk
Credit risk arises when there is the possibility that the counter party will default on their
contractual obligations resulting in a financial loss to the entity The maximum exposure to
credit risk is generally represented by the carrying amount of the financial assets (net of any
allowance for impairment)
Credit risk arises from the financial assets of the entity including cash receivables and
authority deposits No collateral is held by the Authority The Authority has not granted any
financial guarantees
Credit risk associated with the Authorityrsquos financial assets other than receivables is
managed through the selection of counterparties and establishment of minimum credit
rating standards
41
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Cash
Cash comprises cash on hand and bank balances held with the preferred supplier for NSW
Government Cash and Banking Services Interest is earned on the daily bank balance at
monthly commercially comparable interest rates
Receivables - Trade Debtors
All trade debtors are recognised as amounts receivable at balance date Collectability of
trade debtors is reviewed on an ongoing basis Procedures as established in the Treasurerrsquos
Directions are followed to recover outstanding amounts including letters of demand
Debts which are known to be uncollectible are written off An allowance for impairment is
raised when there is objective evidence that the entity will not be able to collect all
amounts due This evidence includes past experience and current and expected changes
in economic conditions and debtor credit ratings No interest is earned on trade debtors
Invoicing terms are 30 days At 30 June 2014 the Authority does not have debtors that are
past due and impaired
(c) Liquidity risk
Liquidity risk is the risk that the Authority will be unable to meet its payment obligations when
they fall due The Authority continuously manages risk through monitoring future cash flows
and maturities planning to ensure adequate holding of high quality liquid assets
During the current and prior years there were no defaults on any loans payable No assets
have been pledged as collateral The Authorityrsquos exposure to liquidity risk is deemed
insignificant based on prior periodsrsquo data and current assessment or risk
The liabilities are recognised for amounts due to be paid in the future for goods or services
received whether or not invoiced Amounts owing to suppliers (which are unsecured) are
settled in accordance with the policy set out in NSW TC 1112
For small business suppliers where terms are not specified payment is made not later than
30 days from date of receipt of a correctly rendered invoice For other suppliers if trade
terms are not specified payment is made no later than the end of the month following the
month in which an invoice or a statement is received For small business suppliers where
payment is not made within the specified time period simple interest must be paid
automatically unless an existing contract specifies otherwise For payments to other
suppliers the Head of an authority (or a person appointed by the Head of an authority)
may automatically pay the supplier simple interest There was no interest applied to
payables during the year
(d) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices The Authority has no exposure to foreign
currency risk and does not enter into commodity contracts
The effect on profit and equity due to a reasonably possible change in risk variable is
outlined in the information below for interest rate risk and other price risk A reasonably
possible change in risk variable has been determined after taking into account the
economic environment in which the entity operates and the time frame for the assessment
(ie until the end of the next annual reporting period) The sensitivity analysis is based on risk
exposures in existence at the statement of financial position date The analysis is performed
on the same basis as for 2013 The analysis assumes that all other variables remain constant
42
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Interest Rate Risk - Cash Facility
Exposure to interest rate risk arises primarily through the investments in cash facilities The
Authority has no direct equity investments The Authority holds units in the following facilities
$rsquo000
2014
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 45590 (456) (456) 456 456
$rsquo000
2013
Financial assets
Carrying
Amount
Net Result
-1
Equity
-1
Net Result
+1
Equity
+1
Cash and cash
equivalents 34495 (345) (345) 345 345
(e) Fair Value Compared to Carrying Amount
Financial instruments are generally recognised at cost The amortised cost of financial
instruments recognised in the Statement of Financial Position approximates the fair value
because of the short-term nature of many of the financial instruments
19 After balance date events
The Authority has no after balance date events
END OF AUDITED FINANCIAL STATEMENTS
43
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Budget outline for 201415 Budget
FY 2015
$000
Expenses excluding losses
Personnel servicesemployee related 5856
Other operating expenses 28852
Depreciation and amortisation 7497
Finance cost -
Total expenses excluding losses 42205
Revenue
Sale of goods and services 38104
Other revenue 4989
Total revenue 43093
Total comprehensive income for the year 888
Statutory reporting obligations
Human resources
The Telco Authority does not directly employ full time equivalents All staff are employed by the Office of
Finance and Services with the Office charging the Telco Authority for personnel services The Authority
actively seeks secondments from business partners to increase sector wide experience as well as the
Authorityrsquos capacity Personnel policies are based on those used by the Office of Finance and Services
As employees of the Office of Finance and Services the full details of the Authorityrsquos human resources
activities for the 201314 financial year are reported on in the Office of Finance and Servicesrsquo Annual
Report The workplace profile 201314 is set out below
Category No of staff 201213 No of staff 201314
Senior Executive Service 2 1
Senior Officer Classification 8 3
Executive Office 2 3
Business Management 2 2
Emergency Management 1 4
Network Operations 3 3
Policy Governance and Reform 2 4
Strategy and Architecture 1 4
Commercial NA 2
TOTAL 19 26
44
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Senior Executives
2014
Female Male Total
Senior Executive Band12
Representation
by Women
Band 4 (Secretary) - - - -
Band 3 (Deputy Secretary) - - - -
Band 2 (Executive Director) - - - -
Band 1 (Director) - 4 4 0
Total - 4 4 0
Senior Executive Band12
2014
Range
$
Average
Remuneration
$
Band 4 (Secretary) 422501 - 488100 -
Band 3 (Deputy Secretary) 299751 - 422500 -
Band 2 (Executive Director) 238301 - 299750 -
Band 1 (Director) 167100 - 238300 167917
385 of the agencys employee related expenditure in 2014 was related to senior executives
Note 1 Senior Executive statistics exclude casuals contractoragency staff statutory appointments staff
on secondment to other agencies and staff on long term leave without pay)
Note 2 Statistics are based on Workforce Profile census data as at 19 June 2014
Credit card certification
In accordance with the Treasurerrsquos Directions 20501- 20508 the Telco Authority certifies that corporate
credit card use by officers of the Authority is in accordance with the established government
requirements Premierrsquos Memorandum and Treasurerrsquos Directions
The Telco Authority has three credit cards on issue with a total limit of $20000
45
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Payment of accounts
The table below summarises the account payment performance during 201314
Quarters
Current
within due
date
lt30 days
overdue
30 - 60 days
overdue
61 - 90 days
overdue
90+ days
overdue
All Suppliers
September 81248474 33551343 - - 3443000
December 41971464 7017701 77840 9471580 36087040
March 13724394 119467746 (6423600) (343617) (216160)
June 16489402 - (8883) - (157342)
Small Business Suppliers
September 2155672 54505
- - -
December 3573830 2989800
- - -
March - 38725048 - - -
June 5956867
- -(157342)
Zero interest was paid during the financial year as a result of late payments
46
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Investment performance
The Authorityrsquos investment performance for the
reporting period is outlined below The Authority
used the Treasury Corporatelsquos Hourglass
investment vehicle for a 1 month period The
Westpac investment was the primary source of
interest revenue for the reporting period
Category Weighted Revenue Annual
portfolio rate of
composition return
TCorp
Hourglass
5 $63457 293
Bank
Interest
95 $1167564 340
Risk management and insurance
The Authority complies with all relevant insurance
requirements including workersrsquo compensation
motor vehicles public liability property and
miscellaneous items During the 201314 financial
year the Authority paid $136860 (excluding
goods and services tax) in insurance premiums
Disclosure of controlled entities
The Authority receives personnel services from the
Office of Finance and Services The Office of
Finance and Services is not a Special Purpose
Service Entity and does not control the Authority
under this arrangement
Consultants
The Authority engages external consultants to
support specific projects and workload peaks as
required This allows the Authority to draw on
specialist expertise from the private sector
Engagements above $50000
Consultant Description Amount
Management Services
Protiviti PL Enterprise Risk
Management
$52940
IBM Australia Asset
management
framework
$76945
UXC
Consulting PL
Greater Metro
Area
rationalisation
planning
$87430
RF Industries
Pty Ltd
Radio frequency
coverage
assessment
$88920
Portland
Group PL
Scheme
Management
Services
$111186
Gravelroad
Consulting
Government
radio
rationalisation
planning
$180745
KPMG Strategic options
and market
analysis
$403166
Jacobs Group
(Australia) Pty
Ltd
Infrastructure
rationalisation
planning
$984333
Total $1985665
Engagements under $50000
Category Engagements Amount
Management
services
20 $ 274968
Organisational
review
1 $ 7200
Total $ 282168
Work Health and Safety
The Authority manages its obligations under the
Work Health and Safety Act 2011 by ensuring all
work health and safety (WHS) issues from staff
and management are raised with the Office of
Finance and Services This is carried out through a
committee structure formed between NSW
Procurement the Information Communications
Technology Strategy Group and the Telco
Authority
47
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
Established under the Act this Committee is a
consultative forum made up of management
and employee representatives Investigating and
discussing issues raised by Telco Authority staff
and contractors the Committee provides
recommendations and actions on WHS issues for
the benefit of all Authority employees The
Committee also facilitates the consultation
process for resolving all WHS issues between
employees and management of the Telco
Authority the Office of Finance and Services and
Building Controllers
The Telco Authority management team
recognises the broader WHS environment that is
operated within The Authority will continue to
monitor the WHS Management Committee
structure to ensure the most appropriate structure
is used to handle WHS issues The Authority is
committed to keeping staff informed on any new
arrangements that should be considered
The WHS Committee comprises
Robert Trieste Chairperson
Warren Grant Management
representative
David Thomson Management
representative
Tim Pearse Telco Authority
employee
representative
Government Information (Public
Access) Act 2009
The intention of the Government Information
(Public Access) Act 2009 is to make government
information more open and available to the
general public As part of the Office of Finance
and Services within the Treasury and Finance
Cluster the Telco Authority complies with this Act
by proactively releasing information on its
website and responding to formal applications
made to the Right to Information Officer of the
Office of Finance and Services
Statistical information about access applications
is received in relation to the Authority is reported
in the Office of Finance and Services Annual
Report
Public interest disclosures
For the period July 2013 to June 2014 no Telco
Authority officials made public interest
disclosures
As staff are employees of the Office of Finance
and Services the Telco Authority has adopted
and adheres to the Finance and Services Fraud
and Corruption Internal Reporting Policy All staff
are advised of this policy by means of the Code
of Conduct and intranet access Changes within
the Treasury and Finance Cluster in 2014 require
amendments to be made to the Finance and
Services public interest disclosure processes and
policies Revised information and education and
training of staff senior management and
nominated disclosure officers is planned to be
undertaken during the July 2014 to June 2015
financial year
Exemptions
As a small statutory body Telco Authority plans to
meet its obligation to report on the following
areas triennially
Disability plans
Workforce diversity
Multicultural policies and services
program
Work health and safety
Waste reduction
Progress is these areas will be reported in the 2014
to 2015 annual report and will include the
preceding two years
Annual report production
The Telco Authority annual report was prepared
internally and no external costs were incurred
A PDF version of the report is available at
wwwtelconswgovau
48
wwwtelconswgovau
October 2014
Tel co Authority
49
wwwtelconswgovau
October 2014
Tel co Authority
49