2007-08 Annual Report - V/Line

V/LINE pASSENGER ptY LtD
ABN 29 087 425 269
(Subject to Deed of Company Arrangement)
GPO Box 5343
Melbourne VIC 3001
V/LINE ANNuAL REpoRt 2007–08 Growing with regional Victoria
2007-08
Growing with regional Victoria
HEAD oFFICE/ADMINIStRAtIoN
Level 23, 570 Bourke Street
Melbourne VIC 3000
Telephone (03) 9619 5900
Facsimile (03) 9619 5000
vline.com.au
CuStoMER INFoRMAtIoN,
RESERVAtIoNS AND SALES
Telephone 136 196
CuStoMER FEEDBACK
Freecall 1800 800 120
Annual Report
All information correct at time of printing October 2008

01
Each week V/Line runs more than 1400 train services
and 600 coach services across regional Victoria.
While we are Victoria’s largest regional public transport
operator, we do much more than get people where they
need to go.
We also look after the network that allows freight
operators to move their cargo between regional
centres and the docks. We provide access to the
tracks for passenger and freight services and
maintain the regional rail infrastructure.
We’re a major employer, with our 1300 staff living
and working in every part of the state, including more
than 650 in country Victoria.
As a key part of regional Victoria, we’re a strong
supporter of the towns and cities in which we live
and work. That’s why we work with hundreds of other
Victorian businesses and contractors to supply goods
and services to keep our coaches and trains on track.
We’re also working hard to grow V/Line, because
we believe our growth will further support country
communities. Not since the 1940s have so many people
travelled around the state by coach and train. There are
more services than ever before and unprecedented
resources are being invested into regional infrastructure.
And in the coming years we plan to play an even
bigger role in the regional economy as we encourage
more people out of Melbourne to visit the country.
It’s an exciting time for V/Line because we’re growing
with regional Victoria.
OUR VISION
Connecting Victorian communities and industry.
OUR MISSION
To deliver safe, reliable, accessible and sustainable
passenger and freight transport services.
By doing this, we provide value for our customers,
community and the V/Line team.
OUR VALUES
• Put our customers first
• Be honest
• Take responsibility
• Strive for excellence and
• Treat people and the environment with respect
With safety being paramount in all we do.
ABOUT THIS ANNUAL REPORT
V/Line is fully owned by the State of Victoria,
responsible to the Minister for Public Transport
and funded on a not-for-profit basis.
This report provides a summary of V/Line’s key
activities and financial performance for the period
1 July 2007 to 30 June 2008.
Cover: Geelong fans on their ‘pilgrimage’ to the 2007 AFL Grand Final.
Right: Kangaroo Flat Station reopened during the year following a major renovation.
Letter to the Minister
Contents 02
Chairman’s report
CEO’s report
04
08
Overview
Safety and security
Our customers
12
18
22
Sustainability, environment
and community
Our operations
Our regional network
28
32
38
Our people
42
46
Financial statements
55
80
Finance
Energy Efficiency Opportunities
Program – Public Report
Corporate governance
50
Disclosure index
84

02
V/LINE ANNUAL REPORT 2007–08
LeTTer To The MiniSTer
03
30 October 2008
The Hon. Lynne Kosky
Minister for Public Transport
Level 16, 121 exhibition Street
Melbourne VIC 3000
Dear Minister
It is with great pleasure that I present the annual report for V/Line Passenger Corporation and V/Line Passenger Pty Ltd (V/Line), in a year
when Victorians have embraced regional train and coach services in unprecedented numbers.
The period covered by this report – the financial year 1 July 2007 to 30 June 2008 – marks a major turning point in V/Line’s history when
we moved from just providing public transport services to cementing the business as a major contributor to the regional Victorian economy.
The role of V/Line extends beyond providing the means for Victorians to make almost 12 million trips across the state this year, with the organisation
a major regional employer, investor in local goods and services, and supporter of country communities through a range of partnerships. For the
first time, this report also details patronage of Department of Transport privately-marketed coaches, which are V/Line ticketed.
As an essential service, V/Line is subsidised to offer an affordable transport option for regional Victorians. Considering the major impact
of rising diesel prices on the fleet, and the drought on reducing freight access fees, V/Line’s financial performance in 2007–08 was in line
with expectations.
V/Line’s board and management continue to embrace the challenge of meeting the needs and expectations of a rapidly growing customer
base, and I look forward to the ongoing support and investment from the government in delivering quality public transport.
Yours faithfully
Victorian Premier John Brumby and Public Transport Minister Lynne Kosky
at the launch of our first three-carriage VLocity.
Frank Tait, Chairman
Victorians have embraced regional train and coach services in unprecedented numbers.
Letter to the Minister

04
V/LINE ANNUAL REPORT 2007–08
ChairMan’S rePorT
05
Communities around Australia and indeed globally are
focusing their attention on transport in all its forms like
never before. Soaring fuel prices, rapidly expanding urban
areas, traffic congestion and increasing concern about
climate change are just some of the issues pushing
governments and individuals to re-think their approach to
the way they travel. Victoria is no different.
Early in this decade there was little if any growth in
patronage of our rail services. This changed dramatically
following the major infrastructure upgrades of 2005 and
2006, the subsequent roll-out of 40 new VLocity trains
(5,600 extra seats), an average 20 per cent fare reduction
in 2007, and the introduction of thousands of extra
services from 2006.
While drought dominated the landscape, the Ballarat
line saw one day of ‘European’ conditions in June 2008.
Photo courtesy of Ballarat Courier
V/Line, a key player in the delivery of passenger rail and
freight services across Victoria, is confronting many of the
challenges faced by public transport providers worldwide.
Fortunately, the Regional Fast Rail project, the ongoing
introduction of new trains, improved corporate business
systems and an overall streamlining of operations with the
successful roll-out of more services, meant that V/Line was
better placed than many other operators during the year to
meet the challenges of rapidly growing demand.
THE PATRONAGE CHALLENGE
One of the key issues now facing V/Line is the explosion in
passenger numbers as people recognise the advantages of
quality public transport and seek an affordable alternative
to rising petrol prices.
While external influences such as rising fuel prices have
clearly been a factor, there is no doubt that government
investment in infrastructure upgrades and rolling stock
have also been major catalysts for patronage increases
of 29 per cent in 2006–07 and 23 per cent in 2007–08.
In effect, based on our future projections, we have
experienced more than three years’ growth in the past
two years. Significantly, while the continuing growth
of regional communities has obviously expanded the
potential V/Line market, our research has shown that we
have also been able to increase our share of the available
commuter market from six to 11 per cent since 2005.
This ‘overnight’ growth has presented major challenges for
V/Line as we work to accommodate new travellers and we
know we still have improvements to make in some areas.
On the other hand, the speed of the change has provided
an exciting opportunity for V/Line to further develop its
role as a major contributor to the growth of the Victorian
regional economy.
The Gippsland town of Yarragon.
The V/Line growth story of the past three years is impressive…
Chairman's report

06
V/LINE ANNUAL REPORT 2007–08
ChairMan’S rePorT
07
OUR FUTURE
The V/Line growth story of the past three years is
impressive. Maintaining service levels while also
managing growth is a difficult task, though the
Department of Transport’s surveys show we have
an overall customer satisfaction rating of 77.3.
It’s clear we’re already offering a very good service
that is appealing to more and more Victorians each
day. Our challenge is to keep pace with demand.
At the same time, we know that there is still much work to be
done. The capacity of the Victorian rail network – particularly
in the metropolitan area – to continue to carry more trains,
and to carry them on time, is a major challenge currently
being addressed by the government.
There is also a need to address broader transport issues,
as identified this year in major Victorian government
transport planning reports, the Regional Rail Freight Review
and the Eddington East-West Link Needs Assessment
Report. These reports will provide key inputs to the
development of transport solutions that will be
important to all Victorians in the years ahead.
Effective implementation of the freight review, including
significant funding for maintenance of the network, will be
crucial to ensure we are prepared to respond to demands
for freight transport when the drought breaks and grain
harvests improve throughout regional Victoria.
V/Line is committed to working closely with the
government and other stakeholders to ensure the
best possible outcomes for our customers and
regional communities on key transport issues.
THE V/LINE TEAM
This has truly been an outstanding year by all measures,
thanks to the hard work of V/Line’s staff and management
team. Without their dedication and foresight to overcome
the hurdles of past years, the business would not be in
the strong position it enjoys today.
I would also like to thank my fellow board members
for their commitment and contribution to the success
of the business during the past year. The new financial
year will see some new faces on the V/Line board
following the resignation of Meredith Doig and
retirement of Alice Williams.
The 2008–09 year presents many opportunities as
we work to manage the rapid growth in our customer
numbers, and I have every confidence that the V/Line
team will continue to improve the business and the
invaluable service we offer to regional Victoria.
Frank Tait, Chairman
THE YEAR AHEAd
North-East Rail Revitalisation project
This is a $501.3 million upgrade of the Albury/
Wodonga line to a standard-gauge track. The project
will remove the rail line from the centre of Wodonga
and convert 200 kilometres of broad-gauge track
to standard gauge, delivering a passenger and
rail freight link between Australia’s economic hubs,
Melbourne and Sydney, and improved passenger rail
services between Melbourne and Albury/Wodonga.
The works will require the replacement of V/Line
trains with road coaches between Seymour and
Albury from November 2008.
Wendouree Station
The Department of Transport is building a new station
to the west of Ballarat to meet increased customer
demand and ease parking in the vicinity of Ballarat
Station. Concurrently, additional car parking is being
developed at the existing Ballarat Station. The new
Wendouree Station is expected to open in 2009.
New Ticketing Solution (myki)
V/Line will support trials of the new myki ticketing
system scheduled to take place in 2008–09. Civil works
to install myki equipment are under way at V/Line
stations. V/Line staff will undertake training in
preparation for the introduction of myki, which
will include a new V/Line reservation system.
Chairman Frank Tait
Wodonga Station will be moved out of the city centre
as part of the North-East Rail Revitalisation project.

08
V/LINE ANNUAL REPORT 2007–08
Ceo’S rePorT
09
Ticket sales were up 30 per cent to 4.3 million in the year.
The unprecedented growth in patronage of V/Line services
continued unabated in 2007–08.
While the 29 per cent increase in passenger numbers in
the previous financial year may have been seen by some
as an anomaly associated with the introduction of cheaper
fares, a further 23 per cent increase this year is confirmation
that we are indeed experiencing a new era in rail travel.
Nearly 12 million passenger trips were made with V/Line in
the past year, almost doubling our patronage of just three
years ago. With the likelihood of continuing high fuel prices
and increasing congestion on metropolitan roads, we expect
patronage to grow to more than 13 million passengers in
2008–09.
Growth of this magnitude has affected all areas of the
V/Line business. We now operate more than 73,000
rail services annually. Our fleet has grown from 197 to
240 locomotives and carriages, Sprinters and VLocities,
with more on the way. In 2004–05, we had 727 full-time
equivalent staff. At year’s end our workforce had grown
to 1,292 since the acquisition of the RNA business, with
all employees deserving great credit for the way in which
they have responded to meeting customer needs in these
years of significant change.
PERFORMING TO MEET GROWTH
During this period of enormous growth, V/Line has
maintained its reputation as one of the most reliable
public transport operators in Australia, easily meeting our
reliability target of 96 per cent.
We again consistently met punctuality targets in regional
areas on most lines, only to lose time in metropolitan
sections where record numbers of services competed
for track space. High patronage has also translated into
increased boarding times at V/Line stations, resulting
in delays to some services. Our trains were 94.5 per
cent on time overall in the regional areas (excluding the
metropolitan area), an improvement on the 93.5 per cent
achieved last year. However, our target of 92 per cent on
time for the full journey was not met on most lines.
FOCUS ON SAFETY
Despite the increased pressure on V/Line staff as a result
of record numbers of passengers, it is pleasing to report
that we recorded improvements in most areas of our safety
performance. However, V/Line’s Lost Time Injury Frequency
Rate (LTIFR) increased slightly during the year and will
continue to be a focus into 2008–09.
A significant safety milestone this year for V/Line was
achievement of full Rail Safety Act 2006 accreditation
prior to the August 2008 deadline. Re-accreditation was
achieved and granted from 1 July 2008.
V/Line also played a significant role in the ongoing
upgrade of level crossings throughout the state, working
closely with the government and other rail organisations
to improve safety for both our customers and motorists.
As well as advocating improvements to level crossing safety
through a range of administrative and engineering solutions,
we have also strongly supported education and enforcement
programs to ensure motorists obey warning signals.
Sleeper replacement works on the Geelong line.
Our new three-carriage VLocities under construction.
CEO’s report
V/Line has maintained its reputation as one of the most reliable public transport operators in Australia.

10
V/LINE ANNUAL REPORT 2007–08
Ceo’S rePorT
11
SYSTEMS FOR THE FUTURE
V/Line’s regional stakeholders – including municipal,
business, farming and other organisations – are keen to
see us play a greater role in their towns and economies
and to continue to grow to meet their needs.
To meet this challenge, the V/Line management team
has worked hard to develop a business culture focused
on customer service. In practical terms, this has meant
building a pool of ‘consumer intelligence’ so that we
can better plan for demographic and population shifts
in regional Victoria. We are developing a program to
identify and respond to customer priorities, as well as
modernising business systems and planning for future
rolling stock and infrastructure requirements.
One of our most exciting initiatives is a digital railway
study, which has the potential to revolutionise the
Victorian rail industry. In the near future, we will work
with the Department of Transport to scope this project,
which would see the replacement of V/Line’s regional
train radio system with a digital upgrade. Depending
upon this project’s final scope, a digital system has the
potential to serve as a platform for other services, such
as improved communication with customers regarding
disruptions and performance reporting, and customer
on-train internet access.
SUCCESSFULLY MEETING CHALLENGES
While planning and preparation for ongoing modernising
of V/Line operations has been a focus in 2007–08, we
have recorded many significant achievements this year.
The ongoing integration of former Pacific National staff
into our Regional Network and Access (RNA) operations
continued successfully throughout the year. The RNA team
delivered a record annual major periodic maintenance
(MPM) works program, implementing many efficiencies
so that a larger proportion of the passenger and freight
network could be maintained within the original budget.
We made a significant step forward in our customer
communication following the development of a new
SMS and email capability to alert customers to issues
on the network in real time. The new system, called
‘V/Line Inform’, has been trialled with customers and
is expected to be rolled-out during 2008–09.
Our fleet continued to grow, with the planning, construction,
testing and accreditation of our first three-carriage VLocity.
These units are expanded by permanently adding an additional
carriage to the middle of an existing two-carriage VLocity.
Twenty-two ‘middle’ carriages were on order by year’s
end and early in the new financial year the government
announced the purchase of a further 28 VLocity carriages
(nine full three-carriage trains and one middle carriage).
Fifty extra carriages will be delivered over the next four
years, adding vital seating capacity to our busy network.
CONTINUING TO dEVELOP OUR STAFF
Like all progressive businesses, V/Line is committed to
developing staff and providing career growth opportunities
to help retain valuable corporate knowledge.
Our people development programs have continued to
be a focus, while the breadth of training programs has
expanded significantly as the range of roles – particularly
in the RNA business – has increased. A highlight in our
training was the graduation of 11 staff from V/Line’s
Management Development program, which qualified
them to receive a Diploma of Business from Swinburne
University of Technology.
In our role as a major regional employer, we have
established a number of apprenticeships and training
programs in country Victoria, catering particularly for
young people seeking opportunities in trades that require
specialist skills, such as signal technicians and others
in the electrical trades.
V/Line’s good standing in regional communities has
resulted in significant competition for most advertised
job vacancies.
FINANCIAL PERFORMANCE
In 2007–08, V/Line sold 4.3 million tickets (one million
more than last year) and generated $59.6 million in farebox
revenue – a 13 per cent increase on the previous year.
Approximately 72 per cent of this revenue came from
full fares and 28 per cent came from concession fares.
There was a five per cent increase in full fare revenue
compared to the previous financial year which in part is
a reflection of the massive growth in regional commuters
using V/Line trains to travel to work in Melbourne.
Revenue from freight access fees was well below expectations
(down $2 million on the previous financial year to
$2.5 million) due to the drought severely impacting
harvest outcomes. Despite the low return, increased
maintenance requirements of the freight rail infrastructure
inherited by V/Line last year continue to place major
financial pressures on the business.
Total expenditure for the year increased 23 per cent to
$420.9 million, in line with rising costs for staff, fuel and
network maintenance. While total subsidies (which include
the freight network) rose to $226.7 million, V/Line, as a
not-for-profit, government-owned business reported a
deficit of $9 million for 2007–08. The most significant
factor in this deficit was a $7.2 million increase in fuel
costs to $25 million for the year.
Efficiencies and increased patronage have seen a
significant decrease in the subsidy per passenger.
The overall passenger subsidy in 2006-07 was
$200.1 million or $22.74 per passenger. For 2007–08
the subsidy was $218.7 million, with subsidy per
passenger falling to $19.88, reflecting an improved
return on taxpayer investment.
CONTINUING TO GROW
Not since the gold-rush era of the 1850s has the role
of rail been so important to the economy and lifestyles
enjoyed in Victorian towns and cities. The V/Line team is
proud of the part we are playing in building our regional
communities and we stand ready to deliver steadily
increasing levels of service in the years ahead.
In 2008-09, we plan to help build the economic health of
the regions even further by encouraging more Melburnians
to use our trains and coaches to travel throughout the state
and spend their tourist dollars in the areas that have so
strongly supported V/Line in the past.
This is indeed a period of rail renaissance in Victoria.
It is an exciting time for our customers, for the
communities we serve and certainly for everyone
at V/Line. As we prepare to take the next step in the
development of our rail and regional transport business,
on behalf of the management group, I thank all members
of the V/Line team for their contribution in what has
been a year of outstanding achievement.
Rob Barnett, Chief Executive Officer
Our first diploma of Business graduates.
CEO Rob Barnett.

12
V/LINE ANNUAL REPORT 2007–08
OVERVIEW
13
UP 23%
11.96 million
customer trips
PATRONAGE
11,008,000
rail passenger trips
952,000
coach passenger trips*
* Includes Department of Transport privately-marketed coaches.
UP 30%
4.3 million
tickets sold
REVENUE
72 per cent
full fares
UP 13%
$59.6 million
farebox revenue
28 per cent
concession fares
UP 7%
UP 15%
60,510
short distance rail
services
12,568
long distance rail
services
RAIL FLEET ANd STATIONS
40
VLocity trains
138
carriages
41
locomotives
82
stations
21
sprinters
Above and right: Our fleet consists of Sprinters, VLocities and locomotives.
UP 5%
1,320
employees (total)
EMPLOYEES
1292
Full-time equivalent staff
Overview
r
Facts and Figures

14
V/LINE ANNUAL REPORT 2007–08
OVERVIEW
15
CUSTOMERS
Passenger trips (rail and coach) #
SAFETY
Lost-time injury (LTI) rate per million hours worked
– within V/Line’s control †
EMPLOYEES
Full-time equivalent staff
OPERATIONS
Reliability overall (short and long distance services,
average monthly performance – target 96%)
Regional punctuality – outside metro network (short
and long distance services on time to 5 and 10 minutes
respectively, average monthly performance – target 92%)
FINANCE
Revenue from operational activities
2007–08
11.96 million
2007–08
12.0
2007–08 1292
2007–08 98.73% 2007–08
94.50% 2007–08
$328.3 million
2006–07
9.72 million
2006–07 11.6
2006–07 1240
2006–07 98.85% 2006–07
93.55% 2006–07
$294.4 million
Customer Satisfaction Index (DOT target 68)
TRAINS
2007–08
76.7
COACHES
2007–08
80.3
LTI frequency rate per million hours worked
– with stress/trauma †
2007–08
22.4
Employees (total) Reliability – short distance Overall punctuality – short distance on time to 5 minutes*
Total income
2007–08
1320
2007–08 98.54% 2007–08
86.09% 2007–08
$411.9 million
2006–07
76
2006–07
78
2006–07
26.2
2006–07
1255
2006–07 98.71% 2006–07
86.62% 2006–07
$318.9 million
The level of satisfaction is in line with last year and remains
above the Department of Transport target of 68.
No. customer information enquiries
2007–08
2006–07
803,016
816,066
Customer incidents within VLine’s control per million km
– requiring medical assistance*
2007–08
2006–07
0.64
0.90
Training attendance numbers
2007–08
2006–07
4372
2953
Reliability – long distance
Overall punctuality – long distance on time to 10 minutes*
Total expenses
2007–08 99.67% 2007–08
86.47% 2007–08
$420.9 million
2006–07 99.56% 2006–07
83.47% 2006–07
$342.3 million
No. of services run – short distance
* Includes performance in both regional and metropolitan areas.
Loss before income tax expense
No. customer feedback cases
2007–08
2006–07
12,225
12,529
Signals passed at danger
(SPaDs per million km) – human factor
2007–08
2006–07
0.14
0.80
Training sessions
2007–08
2006–07
565
493
2007–08
2006–07
No. of services run – long distance
60,510
56,636
2007–08
2006–07
$9.0 million
$23.4 million
No. of on-train consultation sessions with customers
2007–08
2006–07
Compensation paid to customers for V/Line not
meeting on-time targets (complimentary ticket value)
2007–08
12
12
$67,140
Customer incidents per million km
– requiring medical assistance*
2007–08
2006–07
# Includes Department of Transport privately-marketed coaches.
† Figure includes RNA staff who transferred to V/Line in May 2007.
* Excludes customers affected by the accident at Kerang in June 2007.
1.78
2.10
2007–08
2006–07
12,568
10,964
2006–07
$47,074
Key Results

16
V/LINE ANNUAL REPORT 2007–08
OVERVIEW
17
ENGINEERING – FLEET
Rolling stock
Rolling stock availability (3-month mean km between faults):
Sprinters
Rolling stock availability (% fleet available):
2007–08 22,992 2007–08
93.6%
2006–07 23,113 2006–07
93.1%
Carriages
2007–08
2006–07
Locomotives
2007–08
2006–07
VLocity
2007–08
2006–07
128,359
179,205
21,866
20,745
75,692
79,378
Sprinters and carriages
Locomotives
2007–08
2006–07
VLocity
2007–08
2006–07
81.7%
82.2%
91.1%
94.5%
RAIL PATRONAGE BY LINE
Geelong Ballarat Bendigo
05–06 2.03 million
06–07 2.57 million
07–08 3.08 million
05–06 1.37 million
06–07 1.88 million
07–08 2.39 million
Seymour Gippsland
1.05 million
1.15 million
1.21 million
0.82 million
1.05 million
1.54 million
05–06 1.47 million
06–07 2.20 million
07–08 2.78 million
Pinnaroo
To Adelaide
To Adelaide
To Adelaide
Mt Gambier
Nhill
Ouyen
Dimboola
Horsham
Mildura
Hopetoun
Warracknabeal
Robinvale
Manangatang
Murtoa
Sea Lake
Birchip
Donald
Rupanyup
Piangil
Wedderburn
Swan Hill
Kerang
St Arnaud
Cohuna
Dunolly
Barham
Pyramid
Rochester
Elmore
Moama
Echuca
Bendigo
Deniliquin
Tocumwal
Stanhope
Barmah
Nathalia
Kyabram
Griffith
Numurkah
Murchison
East
Shepparton
Finley
Mulwala
Cobram
Yarrawonga
Corowa
Rutherglen
Benalla
Wangaratta
Springhurst
Heathcote
Mansfield
Maryborough
Stawell
Castlemaine
Seymour
Avoca
Mt Buller
Wallan
Halls Gap
Kyneton
Yea
Ararat
Daylesford
Lancefield
Woodend
Whittlesea
Glenthompson
Creswick
Sunbury
Skipton
Ballarat
Melton
Hamilton
Bacchus
Ringwood
Maffra
Casterton
Marsh
Werribee
Derrinallum
Warragul
Mortlake
Lara
Melbourne Dandenong
Heywood
(see inset)
Geelong
Camperdown
Lang Lang
Sale
Traralgon
Koroit
Terang
Colac
Korumburra
Portland
Anglesea
Leongatha
Warrnambool
Cowes
Anderson
Port Fairy
Lorne
Yarram
Wonthaggi
Bright
Albury
To Sydney
Wodonga
Beechworth
To Canberra
Mt Beauty
Bairnsdale
Cann River
Orbost
Lakes Entrance
TO BALLARAT
TO GEELONG
Melton
TO BENDIGO
To Canberra
Sunbury
Watergardens
To Narooma &
Batemans Bay
TO SEYMOUR
Craigieburn
Broadmeadows
Rockbank
Essendon
MELBOURNE
Sunshine
North Melbourne METRO
Footscray
Flinders Street
Newport
Richmond
Southern
Werribee
Cross Station Caulfield
(Spencer Street)
Clayton
Dandenong
Berwick
Pakenham
TO GIPPSLAND
05–06
06–07
07–08
05–06
06–07
07–08
Port
Campbell
Apollo Bay
Cape Inverloch
Paterson
Key Results

18
V/LINE ANNUAL REPORT 2007–08
SafeTy anD SeCuriTy
19
Our partnership with police saw increased enforcement activity
aimed at encouraging motorists to obey level crossing warnings.
Photo courtesy of the Geelong Advertiser
2007–08 yielded tangible results in our relentless pursuit
of zero incidents in V/Line’s rail operations, to improve
safety for staff, customers, industry and the community.
These results were due to ongoing system improvements,
better transparency of the real causes of incidents and a
growing understanding of the role of ‘human factors’ in
our day-to-day operations.
V/LINE ACCREdITATION
V/Line was among the first of Victoria’s rail operators
to receive accreditation under the new Rail Safety Act
2006, covering both our passenger operations (‘above
rail’) and regional network (‘below rail’). This accreditation,
certified by Public Transport Safety Victoria (PTSV)
on 25 June 2008, was given without condition on the
assessment’s 26 elements. Successful accreditation
is the direct result of two year’s hard work to implement
our risk Management System across the business.
This is a significant achievement considering that the
regional network was only integrated into V/Line in
May 2007, following the government buyback of the
track and infrastructure from Pacific National. Identifying
risks, and mitigating them through systems, processes
and procedures, is recognised as the most effective path
to improving safety performance and is the cornerstone
of the new rail Safety act.
HUMAN FACTORS ANd SYSTEM dEVELOPMENT
Human factors, coupled with system development,
are fundamental planks of V/Line’s safety management
program.
In 2007–08 we extended our human factors program,
training all operational managers and supervisors in
how human behaviour can either contribute to incidents
or assist in creating a safer rail environment.
A key part of this work was improving internal
investigation processes into incidents, ensuring
outcomes are communicated back to the workforce
to encourage learning, new safety improvements
and future reporting. To further support learning from
incidents, V/Line introduced a ‘Just Culture’ policy
in the year, which supports employees in fully and
honestly reporting and investigating incidents
without fear of recrimination.
These developments build on our iSo 9001 certification,
achieved last year, and will help us achieve occupational
health and safety accreditation iSo 4801 in 2008–09.
LOST-TIME INJURY (LTI)
Rate per million hours worked
(within V/Line’s control) +
2007–08
2006–07
SIGNALS PASSEd
AT dANGER
(SPADS per million km)
– human factor
2007–08
2006–07
2007–08
12.0
11.6
0.14
0.80
CUSTOMER INCIdENTS
WITHIN V/LINE’S CONTROL
PER MILLION KM
– requiring medical assistance
worked (within V/Line’s control)
2006–07
0.64
0.90
LTI FREqUENCY
Rate per million hours worked
– with stress and trauma +
2007–08
2006–07
CUSTOMER INCIdENTS
PER MILLION KM
– requiring medical assistance
2007–08
2006–07
+ Figures include RNA staff who transferred to V/Line in May 2007.
22.4
26.2
1.78
2.10
V/Line was among the f irst rail operators accredited under the new Rail Safety Act in 2008.
Safety and security

20
V/LINE ANNUAL REPORT 2007–08
SafeTy anD SeCuriTy
21
There were six serious level crossing incidents on the
Victorian regional network during 2007–08:
diggers Rest – 21 June 2008
Collision between a V/Line train and a car at
Holden Road. No injuries.
Terang – 26 March 2008
Collision between a Pacific National freight train and a
car at Springs road/Dalvui Lane. no serious injuries.
Modewarre – 24 March 2008
Collision between a V/Line train and a car at Considines
Road. Two fatalities and three injured.
Mitiamo – 25 February 2008
Collision between an El Zorro freight train and a car at
Echuca/Mitiamo Road. One fatality.
Redcliffs – 16 January 2008
Collision between a Pacific National freight train and
a B-double semi-trailer at Millewa Road. No injuries.
drouin – 12 September 2007
Collision between a V/Line train and a car at
Lardner’s Track. No injuries.
Other significant incidents in 2007–08 included:
Ballarat – 20 March 2008
A minor collision occurred between a ballast train and
a stationary, unattended ballast regulator. The vehicles
were operated by John Holland and El Zorro. No injuries.
Southern Cross Station yard – 16 November 2007
a V/Line h-Set carriage collided with a V/Locity train in
a shunting incident and derailed. Both vehicles were
damaged as a result. No injuries.
Bacchus Marsh – 10 September 2007
A V/Line locomotive sustained damage during a shunting
incident with another train in the Bacchus Marsh yards.
No injuries.
SAFETY PERFORMANCE
In 2007–08, V/Line’s company-wide lost time injury
frequency rate (LTIFR) was 12, a 0.4 per cent increase on
the previous year. While this small increase is disappointing,
V/Line’s improved reporting regime identified that manual
handling, coupled with an ageing workforce, were the
main contributors to the increase. This is an issue in
many transport and service organisations, and one that
we will focus on during 2008–09.
Our LTIFR rate, including stress and trauma, fell from
26.2 to 22.4 this year. This figure is heavily dependent
on uncontrollable trespasser incidents and level
crossings incidents which occur across the network.
In 2007–08 we saw a significant improvement in the
important operational safety indicator Signals Passed
at Danger (SPaD). The rate, which is measured for every
incident per million kilometres travelled, dropped from
the already low result of 0.8 last year to 0.14.
Another key achievement was the near completion of
the n-Set power assisted door program. This prevents
customers from opening carriage doors while the train
is moving. All other trains in V/Line’s fleet have this
important safety feature. This safety improvement
has contributed to a reduction in the number of
medically treated slip, trip and fall incidents
previously reported.
V/Line also worked to improve the visibility of our
trains, at level crossings in particular. as Sprinters
and locomotives are progressively refurbished, and
as VLocities enter their major maintenance cycles,
yellow reflective strips will continue to be added to
the fronts of vehicles.
LEVEL CROSSINGS
The ongoing state government level crossing upgrade
program continued to provide vital safety improvements
for our customers and motorists alike throughout the year.
With the integration of the regional network into our
business, V/Line’s Chief Executive Officer was invited to
sit on the state government’s Victorian railway Steering
Committee on Level Crossings. This committee advises
the Minister for Public Transport on how to improve safety
at crossings and provides advice on the upgrade at
crossings, which are fully funded by the state.
To support this change, V/Line introduced its own
level crossing committee in May 2008. It will coordinate
activities associated with level crossings in our network,
such as operational and technical performance for which
we are responsible. The committee ensures that internal
resources are utilised to continuously improve safety for
staff, passengers and the public.
V/Line is also represented on the Level Crossing Behavioural
Sub-Committee (to the state government’s steering
committee), which is studying the effectiveness of existing
and proposed safety measures on road-user behaviour.
During the year, V/Line welcomed the government’s
lowering of speed limits on the approach to 72 level
crossings across Victoria to give motorists greater
reaction time.
The Department of Transport’s ‘Don’t Risk It’ advertising
campaign also played a major role in promoting safety at
level crossings and encouraged the need for motorists
to be accountable for their own safety and behaviour.
IMPROVING CUSTOMER SAFETY
In May 2008, V/Line initiated a trial of authorised officers,
to enforce our position of zero tolerance of anti-social
behaviour in station areas and onboard trains.
While issues on our network are statistically low, and
conductors offer an improved level of safety onboard
every V/Line train, feedback from staff indicated that
more could be done to tackle unacceptable social
behaviour in some locations. With just six officers as
part of the trial, a targeted strategy was adopted to ensure
areas and services with repeated incidents were the focus.
While the trial was in the early stages at year’s end, initial
feedback has been positive from customers and staff alike.
The year also saw the roll-out of further security measures,
including the development of CCTV, lighting control, fencing
standards and patrols of stabling areas to help reduce the
number of vandalism attacks on trains as well as cleaning
costs and associated train delays as vehicles are removed
from service.
Level crossing safety was a key focus in 2007–08.
A trial of authorised officers started in May 2008.
Safe working practices in the field are critical,
particularly during night works.

22
V/LINE ANNUAL REPORT 2007–08
our CuSToMerS
23
Above and right: Ballarat’s Sovereign Hill was
promoted as a key destination for families.
Every month during 2007–08, about 100 people
became new, regular customers of V/Line’s train
and coach services as patronage soared to record
levels for the third consecutive year.
Customer satisfaction ratings of our train services also
increased by 0.7 to 76.7, despite many busy services,
and satisfaction with V/Line coaches increased 2.3 to
80.3 (77.3 coach and train combined). V/Line services
continued to generate the highest level of satisfaction,
as measured in quarterly passenger surveys by the
Department of Transport, of any public transport
operation in Victoria.
The affordability of V/Line services is seen as a major
contributor to increasing levels of patronage and customer
satisfaction. The average 20 per cent fare cut in March
2007, coupled with a 40 per cent increase in petrol prices
in the first half of 2008 alone, has improved the cost
competitiveness of taking a V/Line train in preference
to driving a car, especially during peak periods.
The growth in our commuter market saw an increase
in full-fare revenue to 72 per cent, compared with 67
per cent in 2006–07.
RECORd PATRONAGE
Not since the last major era of rail growth in the 1940s,
when few people owned cars, have so many customers
travelled on regional Victorian trains.
The 29 per cent jump in patronage in 2006–07 set new
records. This year’s further 23 per cent increase confirms
a massive swing in Victorian travel patterns, with V/Line
patronage increasing 65 per cent in just four years.
In 2004–05 our rail and coach services recorded 7.25
million passenger trips; this year there were a combined
11.96 million passenger trips.
Coach passenger trips grew nine per cent, from 874,000
last year to 952,000 in 2007–08, and are forecast to
exceed one million trips for the first time in 2008–09.
TOTAL CUSTOMER TRIPS*
2007–08 11,960,167
2006–07 9,719,593
2005–06 7,639,413
* Combined train, V/Line coach and DOT privately marketed coaches.
Customer satisfaction with V/Line services also increased…
Our customers

24
V/LINE ANNUAL REPORT 2007–08
our CuSToMerS
25
Our call centre managed over 803,000
telephone enquiries in 2007–08.
Passenger trips by coach grew nine per cent.
PERCENTAGE OF ALL RAIL TRIPS BY LINE
2007–08 2006–07
28% Geelong
25% Bendigo
22% Ballarat
14% Gippsland
11% Seymour
PERCENTAGE OF ALL TRIPS BY COACH*
29% Geelong
25% Bendigo
21% Ballarat
13% Seymour
12% Gippsland
2007–08 2006–07
19% North
17% West
14% North East
12% South West
12% South east
9% Trans Regional
8% East
7% Goulburn
2% North West
19% North
16% West
15% North East
12% South east
11% South West
10% Trans Regional
8% Goulburn
7% East
2% North West
* Includes
Department
of Transport
administered
coaches.
RAIL PATRONAGE BY LINE
Geelong up 19.8%
3,081,829
passenger trips
Ballarat up 27%
2,392,485
passenger trips
Bendigo up 26.5%
2,784,441
passenger trips
Seymour up 5.5%
1,208,744
passenger trips
Gippsland up 47.3%
1,540,730
passenger trips
Train passenger trips grew at more than twice the rate of
coaches – up 24 per cent from 8.85 million to 11 million
passenger trips. The combined coach and train patronage
saw an overall increase of 23 per cent in the year.
While the Gippsland line is the second-least patronised
of our five corridors, it experienced the greatest growth
– up 47 per cent in the past year to 1.54 million passenger
trips. In just one year, almost 500,000 extra trips were
made to and from the Gippsland region by train.
The Geelong line remains our busiest corridor, with
3.08 million passenger trips (up 20 per cent); followed
by the Bendigo line, with 2.78 million trips (up 27
per cent) and the Ballarat line with 2.39 million trips
(up 27 per cent). While the Seymour line’s patronage
rose by just 6 per cent to 1.21 million passenger trips,
the increase was significant considering that the line’s
previous busiest station – Craigieburn – became part
of the Connex network following electrification of the
line in September 2007.
In 2007–08, we issued complimentary tickets valued
at $67,140 (compared with $47,074 the previous year),
as compensation for not achieving performance targets.
This increase is partly attributed to more people travelling
and an increase in periodical ticket holders, as performance
levels did not change significantly compared to the
previous year.
PUBLIC TRANSPORT OMBUdSMAN
If customers with public transport related complaints
are not satisfied with the response they receive from the
relevant operator, they have the opportunity to ask the
Public Transport Ombudsman for an independent review.
This year, the Public Transport Ombudsman reviewed
64 V/Line customer cases compared with 79 in 2006–07.
All cases were satisfactorily resolved.
IMPROVING OUR CUSTOMER COMMUNICATION
Our customers made a significant shift in the past year in
the way they access information about V/Line and our services.
Traffic to our website increased by 34 per cent, lifting the
total number of visitors to 2.56 million for the year.
Despite the massive growth in passenger numbers,
customer enquiries made by telephone decreased
by two per cent to 803,016. Similarly, feedback cases
declined two per cent to 12,225.
Recognising this increase in popularity of online services,
we are expanding our capacity in this area with the
development of ‘V/Line Inform’ – a system for providing
near real time information via SMS, email and the V/Line
website. V/Line Inform, which will be more widely
promoted throughout 2008–09, enables customers to plan
their travel more effectively in the event of disruptions.
Web improvements in 2007–08 included work to develop
systems that will enable customers to calculate fares as
well as order and buy tickets online. The Viclink Journey
Planner will also be further developed to enable
coordination with non-V/Line services.
Train patronage increased by 24 per cent
to 11 million passenger trips.

26
V/LINE ANNUAL REPORT 2007–08
our CuSToMerS
27
Twelve consultations were conducted by senior
management on board peak trains during the year.
CUSTOMER CONSULTATION
We continued our successful monthly on board
customer consultation program in 2007–08, with
senior V/Line management meeting directly with
commuters to answer their questions and discuss
ways to keep improving our service.
Twelve consultations were held in 2007–08, with priority
items raised by customers including the following.
Service delivery
Services to run on time. Clear announcements and
good connections with other services are required and
timely information on disruptions must be given.
Information
Good information needs to be available when
switching from V/Line to metropolitan services.
Comfort
More seats need to be available on trains and
buses. Car parking availability at growing stations
is also a priority.
Access
Stations and vehicles must cater for passengers
with special needs.
Cleanliness
Trains and buses, including food and toilet areas,
should remain clean.
Safety
Train, station, platform and car park safety is a priority.
SELLING THE BENEFITS OF RAIL
In 2007–08, V/Line’s direct marketing program to
people moving house in our catchment areas exceeded
expectations, with 18 per cent of those contacted taking
up the offer of a trial ticket. About 40 per cent of these
have indicated they would use V/Line more regularly
as a result of the promotion.
While the regular commuter market still accounts for the
majority of our patronage growth, with most peak services
operating at capacity, some off-peak and counter peak
services have spare capacity that could be better utilised
– particularly on weekends.
This year we trialled a new Family Traveller ticket to attract
day-trippers to Melbourne or country Victoria. The trial was
successful and demonstrated the potential for growing
the family tourism market. The number of trips made in
January 2008 was 20,000 higher than in the previous
January (using the family Saver tickets). This new ticket
was developed with the specific aim of being competitive
with car travel for two adults and four children, and was
scheduled for introduction in August 2008.
Our special services to AFL football continued to be
very popular and played a major role in introducing new
customers to our service. The strong on-field performance
of Victorian teams – especially the state’s only regional
team, Geelong – made for busy trains most weekends
during the 2007 and 2008 seasons.
TAKING MELBOURNE TO THE COUNTRY
The high visibility of V/Line in regional Victoria and the
direct practical benefits of cheaper and more frequent
services have seen a massive take-up of train travel by
people living in our regional catchment areas. However,
awareness of these benefits has been low among the
Melbourne market, explaining why most of our record
patronage is ‘one-way’ traffic.
A campaign is being developed to encourage more
Melburnians to travel to the country, with the dual
benefit of using spare capacity on weekends while
helping regional tourism.
Our market research has identified the market segments
interested in a regional train ‘adventure’ and quantified
the potential patronage that could be achieved, with the
top destinations being Bendigo, Ballarat, Echuca, Geelong
and Paynesville.
Promoting trips to regional Victoria has the potential to
deliver substantial revenue benefits both to V/Line and
to regional destinations. Analysis suggests that a strong
promotional campaign in Melbourne could generate
additional farebox revenue, as well as expenditure
on local attractions and businesses.
Encouragingly more Melburnians to travel to the country
by train will be a focus in the coming year.
A campaign is being developed to encourage more Melburnians to travel to the country…

28
V/LINE ANNUAL REPORT 2007–08
SuSTainaBiLiTy, enVironMenT
AND COMMUNITY
29
V/Line works with farmers and local councils
to keep livestock off train lines.
The 2007–08 year saw V/Line continue to build
its role in country Victoria as a major contributor
to regional economies.
Not only do we provide crucial transport connections
that enable people to travel between cities and towns
for work, tourism and other leisure activities but we are
also a significant employer of more than 650 regional
Victorians, a major consumer of local goods and services,
and access provider to the state’s freight network.
A MORE SUSTAINABLE V/LINE
Increasingly consumers are judging products and services
they purchase on ‘green’ credentials and on how businesses
support communities in which they operate. V/Line is
creating partnerships with suppliers and the community
to continually adopt more sustainable approaches to the
way we operate our business.
Our developing sustainability framework aims to sustain
our business into the future and also support community
and economic development in regional Victoria and
minimise our environmental impact.
We are also developing and implementing an
environmental Management System (eMS) which
is compliant with iSo 14001. The eMS is one of the
cornerstones of the broader management system which
will fuse Quality Management iSo 9001, the Rail Safety
Act 2006, and occupational health and Safety iSo 4801
and will be incorporated into the V/Line Integrated
Management System.
REdUCING CARBON EMISSIONS
In 2007–08 we continued to develop an action plan as
part of our membership of the Commonwealth Greenhouse
Challenge Plus program to reduce our carbon emissions.
It includes:
• fitting of more fuel-efficient generators in n-Class
locomotives
• purchase of new gel-based batteries in 12 n-Class
locomotives to improve the start-up ability of locomotives
and reduce the need to leave locomotives running in
down times to avoid failure to start
• reviewing the feasibility of using a blend of up to five
per cent bio-diesel and reviewing locomotive engine
tuning to reduce emissions
• station and office initiatives, including recycling at
Geelong Station and participation at both our Bourke
Street offices in a ‘one bin’ system run by building
management which has seen recycling rates increase
significantly.
While V/Line offers a green alternative to car travel,
we are nevertheless a significant emitter of greenhouse
gases and user of energy through the operation of our
diesel powered trains.
ENERGY EFFICIENCY
V/Line is registered for the Commonwealth Energy
efficiency opportunities program and Sustainability
Victoria’s resource Smart initiative. We have recently
identified a number of environmental improvement
opportunities which will further demonstrate V/Line’s
commitment to sustainability, including:
• lighting improvements at stabling yards, stations and
office locations to ensure V/Line is meeting standards,
including DDA compliance, in an energy efficient
manner; and
• solar hot water – investigation of the conversion
of Geelong Station to solar hot water.
V/Line’s first public report to the Department of Energy,
Resources and Tourism is detailed from page 80.
We are also working to reduce our carbon emissions through more ef f icient locomotive generators…
Sustainability, environment and community

30
V/LINE ANNUAL REPORT 2007–08
SuSTainaBiLiTy, enVironMenT
AND COMMUNITY
31
Kangaroos footballer Nathan Thompson was the star
attraction at V/Line’s Life Training clinics.
Ballarat (in the red and white) defeated Geelong
to win the 2008 V/Line Cup.
AN IMPORTANT PART OF COUNTRY COMMUNITIES
Partnership and Sponsorship Programs
Our sponsorship of the Victorian Country Football
League (VCFL) entered its fifth year and achieved a
record participation rate, with carnivals and Life Training
programs reaching 3500 young people across the state
in 2007–08. These important sessions provide education
on diet, obesity, alcohol, drugs, isolation, depression
and suicide. V/Line ambassador and North Melbourne
AFL player Nathan Thompson continued to play a lead
role in the sessions, which were also supported by other
current and former AFL footballers. Victoria Police’s Purana
Taskforce also presented a special drug education program.
V/Line’s VCFL sponsorship continued the tradition of
supporting the elite Under 15 championships in Melbourne
– the V/Line Cup – which for the first time featured an
indigenous team from the Victorian Aboriginal Youth
Sport and recreation Co-operative. in another first,
we also supported an East versus West competition
to complement the TAC Cup.
With our football program now well established, plans
have advanced to extend our sponsorship to netball
so as to better balance and diversify our support of
regional sport. The first stage of a netball sponsorship
is expected to start in 2008–09.
In addition to our daily train and coach service plan,
sponsorships, and plans to encourage more Melburnians
to regional Victoria, V/Line is also a supporter of major
events in the country. This year we continued our sponsorship
of Warrnambool’s fun 4 Kids festival, the Shepparton
KidsFest and several other major events in the regions.
In-Kind and Awareness Support
V/Line provided a wide variety of community organisations
with in-kind support and also helped raise awareness of
these organisations through V/Line stations and our website.
Organisations we supported in 2007–08 included
Crimestoppers, Bethany House (Geelong), Legacy,
Jeans for Gene Day, the Leukaemia Foundation,
Cancer Society, and run for Life.
Supporting Regional Economies
As part of our plans to encourage more Melburnians to
travel to regional Victoria, an outbound marketing campaign
was developed this year for launch in late 2008. While we
anticipate significant financial benefits to V/Line by filling
spare capacity on off-peak trains, the benefits to country
communities are expected to be greater.
Significant work with regional tourism operators,
councils, bus companies, and the Department of
Transport was undertaken this year. This is to better
coordinate our promotional efforts in the metropolitan
market and to make sure Melburnians are offered the
right connections and tourism opportunities when they
arrive in the country.
dISABILITY dISCRIMINATION ACT (ddA)
Transport operators are required to progressively comply
with Disability Discrimination Act (DDA) standards over
a period of time, mostly 20 years. For the majority of
standards, 50 per cent compliance is required by
December 2012.
New VLocity carriages currently taking to the tracks
already meet these standards and, with the refurbishment
program of Sprinters, n-Set and h-Set carriages now well
advanced, V/Line is on track to meet the 2012 deadline.
However, there are some standards including lighting,
hearing augmentation, waiting areas, surfaces, handrails/
grab rails, symbols, signage, furniture, gateways and
access for payment of fares and information for which
100 per cent compliance is required earlier. As a result,
we are currently reviewing and updating our station
audit to ensure compliance requirements are fully
identified and met.

32
V/LINE ANNUAL REPORT 2007–08
our oPeraTionS
33
Works started during the year on the new
Wendouree Station in Ballarat.
V/Line operated a record 73,078 train services across
Victoria in 2007–08 to meet the demands of rapidly
growing patronage.
While the most significant boost to our services occurred
in September 2006, modest increases also resulted from
two timetable revisions this financial year. The past year
saw the operation of an extra 5,478 train services, almost
equivalent to an additional month of services – or an
eight per cent increase on 2006–07.
OUR PERFORMANCE
V/Line continues to be rated as one of the most reliable public
transport operators in Australia, with a very low service
cancellation rate. During the year, of 74,015 timetabled
trains just 937 services were cancelled. With an overall
reliability rate of 98.7 per cent, we consistently met our
96 per cent monthly reliability target.
Overall punctuality of our long-distance trains averaged
86.5 per cent on time to 10 minutes in 2007–08 (a three
per cent improvement on the previous year) while our
short-distance trains averaged 86.1 per cent on time
to five minutes (a 0.5 per cent decline).
Trains on most lines are consistently meeting our
punctuality targets in regional areas, only to lose time
in the metropolitan section. In the regional network,
93.8 per cent of our long-distance trains were on time
and 94.7 per cent of our short-distance trains were on
time. This measurement gives a more accurate indication
of the punctuality of trains in the area under V/Line’s
control. The metropolitan rail operator, Connex, is
responsible for managing the flow of services when
they arrive in the suburban network. As more services
are added by both V/Line and Connex, rail traffic
congestion and increased boarding times as a result
of high passenger numbers will continue to affect the
punctuality of both operators.
The V/Line management team remains committed to
improving performance in those areas within its control,
so projects are under way to continue improvements to
yard movements, docking times, staff training, and
infrastructure and fleet management.
BIGGER TRAINS TO MEET dEMANd
Currently the network is operating almost at full capacity
at peak times. Coupled with a major increase in Connex’s
services in recent years, few ‘pathways’ through the
Melbourne network now exist to increase the number
of services during peak periods. As a result, V/Line
is continuing to expand the size of existing trains to
address the need for more seats as record numbers
of people choose to travel with us.
RELIABILITY – short distance
2007–08 98.54%
2006–07 98.71%
2005–06 98.92%
RELIABILITY – long distance
2007–08 99.67%
2006–07 99.56%
2005–06 99.79%
PUNCTUALITY – short distance (on time to 5 mins)*
2007–08 86.09%
2006–07 86.62%
2005–06 85.67%
PUNCTUALITY – long distance (on time to 10 mins)*
2007–08 86.47%
2006–07 83.47%
2005–06 85.03%
* Punctuality overall on regional and metropolitan network.
Trains on most lines are consistently meeting our punctuality targets in regional areas…
Our operations

34
V/LINE ANNUAL REPORT 2007–08
our oPeraTionS
35
Train wash facilities in Melbourne.
Locomotive and Sprinter rolling stock are fully deployed
across the network, with the new VLocity fleet offering the
best opportunity to boost seating capacity. The Victorian
Government has committed to the purchase of 22 new
‘middle’ carriages for our VLocity trains (a further 28 carriages
were added to the order after this reporting period).
This will see over half of our two-carriage VLocities
permanently converted to three-carriage trains.
On average, customers will see an extra VLocity carriage
added to the fleet each month from August 2008 until
2012. These carriages will provide a total of 3,692 more
seats on V/Line services.
Larger trains will be deployed progressively across the
network. With peak Geelong line trains already operating
at the maximum six-carriage length, plans are in place to
extend platforms at some Geelong stations to accommodate
larger VLocity sets.
OPERATIONAL ACHIEVEMENTS
During the year V/Line was an alliance partner in the
Department of Transport’s upgrade of signalling systems
in the busiest part of our network: between North
Melbourne and Southern Cross stations. These major
works – to replace out-dated, manually operated signalling
with a computerised system – culminated in a shutdown
of part of the Geelong, Ballarat and Bendigo lines over the
Queen’s Birthday long weekend in June 2008. Despite the
magnitude of the closure, the upgrade was completed with
minimal disruption to customers, thanks to a proactive
communications campaign and on-the-ground management.
Rolling stock reliability (3 month mean km between faults):
SPRINTER RELIABILITY
2007–08 22,992
2006–07 23,113
CARRIAGE RELIABILITY
2007–08 128,359
2006–07 179,205
LOCOMOTIVE RELIABILITY
2007–08 21,866
2006–07 20,745
VLOCITY RELIABILITY
2007–08 75,692
2006–07 79,378
Since 2006, we have aimed to update our timetables
twice annually to meet the changing needs of our
customers and to integrate with metropolitan trains.
This year we successfully implemented new timetables
across the state in September 2007 and april 2008.
The changes saw more than 13,000 seats per week
added to our services.
V/Line made significant progress towards implementing
the Train Services improvement Program in the year.
This program puts in place a new operational structure
to provide extra supervisory and managerial support that
drives standards, procedures, as well as improved service
outcomes and better career pathways. In 2007–08,
an operational Standards Manager (Training and
Compliance), a Conductor Manager and eight Conductor
Service Managers were recruited ino the operations
Group. This program will continue in 2008–09 with
a view of focusing on driving operations.
MANAGING THE V/LINE FLEET
The introduction of our first three-carriage VLocity trains,
which are classified by rail safety authorities as new
vehicles, was a major achievement for the V/Line engineering
team following successful modification, type approval,
testing and driver training programs.
Changes to maintenance and stabling requirements for
the expanded fleet and longer vehicles began this year
and will be a key activity into 2008–09. Improved fuelling
capability on each corridor has also been a priority,
with expanded fuelling points completed at Geelong
and Bendigo, and work underway at Ballarat.
The $13 million progressive refurbishment of h-Set and
Sprinter trains continued during the year. The first of each
train type to be updated entered passenger service in
September 2007. Work is also nearing completion on the
automation of doors on our n-Set fleet to ensure that they
cannot be manually opened by passengers while trains
are in motion.
Rapidly increasing patronage has demanded that every
available carriage is on the tracks for as long as possible.
However, our strict maintenance regime has been
maintained, with vehicles removed from service for
as short a time as possible to enable refurbishment.
While there was a slight drop in the performance of our
VLocity trains as they enter their first major maintenance
cycles, this new fleet has remained highly reliable, travelling
on average more than 75,000 kilometres before experiencing
a fault. This is an excellent result compared with all other
forms of transport.
our ageing Sprinters and locomotive-hauled trains
continue to provide vital capacity for our customers
but perform only one third as well as the new VLocities
– travelling an average of 21,000 to 23,000 kilometres
between faults, which is in line with expectations for a
fleet of this age. V/Line is continuing to work with the
Department of Transport to achieve a long-term rolling
stock refurbishment and acquisition program which will
both meet growth requirements and enable V/Line’s
dated locomotive-hauled fleets of N and H-sets to be
replaced with modern vehicles.
V/Line’s train control centre.

36
V/LINE ANNUAL REPORT 2007–08
our oPeraTionS
37
IMPROVEMENTS TO OUR STATIONS
The 2007–08 year saw the re-opening of Kangaroo Flat
Station, with the majority of Bendigo line services now
stopping at this fully refurbished station. Our coach
operations at Mildura also received a boost, with three
new V/Line staff employed to serve customers from
September 2007.
V/Line managed the $800,000 refurbishment of Swan hill
Station, which reopened in late 2007. a similar major overhaul
of Lara Station on the Geelong line began in early 2008.
This year we extended the opening hours of Echuca
Station following the success of services on this recently
reopened line.
Station improvements were also delivered on the
Gippsland line. at Longwarry Station the platform
was extended and improvements were made to car
parking, lighting and access. There was a major upgrade
to the Garfield Station car park and new shelters were
installed at Nar Nar Goon, Garfield, Bunyip and
Longwarry stations.
The Department of Transport completed new Parkway
facilities at Lara, Ballan, Garfield, Drouin, Bacchus Marsh,
Gisborne and Wallan stations to significantly improve the
number of car spaces. Work is also underway to create
more parking at Ballarat Station, in addition to the parking
facilities to be provided at Ballarat’s second station at
Wendouree (due to open in 2009).
ON TIME PERFORMANCE OF TRAINS ON THE REGIONAL NETWORK UP TO THE METROPOLITAN BOUNdARIES*
Short distance
Long distance
GEELONG
(Marshall Station)
85.1
BALLARAT
87.6
94.0
95.4
WERRIBEE
SUNSHINE
BENDIGO
86.5
94.0
WATERGARDENS
SOUTHERN CROSS
STATION
88.7
97.1
BROADMEADOWS
PAKENHAM
SEYMOUR
92.7
82.3
TRARALGON
Regional area punctuality
Total journey punctuality
* Regional area punctuality
for Melbourne-bound
trains is calculated
before the train enters
the metropolitan system.
Out-bound train punctuality
in the regional area is
assessed by deducting
its actual variance at the
metropolitan boundary
from its actual variance at
its regional destination.
88.1
WARRNAMBOOL
94.6
ARARAT
92.5
95.6
WERRIBEE
SUNSHINE
SWAN HILL
82.5
93.0
95.6
ECHUCA
93.0
WATERGARDENS
SOUTHERN CROSS
STATION
SHEPPARTON
89.7
97.4 82.6
88.5
BROADMEADOWS
PAKENHAM
ALBURY/
WODONGA
92.9
79.5
BAIRNSDALE
VLocity trains continued to be highly reliable,
travelling over 75,000 kms between faults.
Our business partners.
“V/Line has been excellent to work with, and it is to their credit that they recognise that there are
local contractors who have the capacity to complete larger projects. We look forward to working with
V/Line on future upgrade works.” aaron hair, Geelong Branch Manager, Bay Building Services

38
V/LINE ANNUAL REPORT 2007–08
OUR REGIONAL NETWORK
39
A record level of maintenance was carried out on our
passenger and freight rail networks in the first full year
of V/Line’s management of the regional network.
Our new Regional Network and Access department
managed a major acceleration of maintenance and
upgrade activity following the transfer of the network
to V/Line in May 2007. In 2007–08, over $60 million
was invested in the major periodic maintenance program.
With a strong government commitment to the network
and the future of access and maintenance arrangements
secured under V/Line, the business was able to
confidently advance improvements to the network.
SIGNIFICANT MILESTONES
Significant productivity gains through more efficient
work practices, as well as cost savings from bulk material
purchases, saw the maintenance program delivered
ahead of schedule and under budget.
Achievements in 2007–08 included the following.
• Complete renewal of track and road surfaces at 112
level crossings to provide smoother crossings for trains
and road vehicles alike. Signalling and warning light
upgrades were also undertaken at 38 level crossings.
• renewal of four kilometres of track formations on
the passenger system, and upgrades to points and
crossings at 18 other locations.
• replacement, welding or grinding of 214 kilometres
of rail to ensure smoother train running.
• renewal of 12 station pit areas through platforms
with concrete sleepers.
• Bridge works at 41 locations across the state and the
renewal of 183 minor structures such as light poles.
The budget efficiencies gained throughout 2007–08
enabled additional works to be undertaken, including:
• the successful removal of asbestos from West Tower
in the Spencer Street yards
• works to develop a continuous welded rail over 88
kilometres between Bendigo and Echuca for smoother
train rides, which also included the re-railing of 36
kilometres of track
• the partial re-sleepering of the freight line between
Shepparton and Tocumwal.
• replacement of more than 40,000 sleepers on
the passenger network, and a further 130,000
on the freight system to improve track structures
and remove temporary speed restrictions.
Above and right: More than 27,000 concrete sleepers were laid on the Geelong line in April 2008.
Budget efficiencies gained throughout 2007-08 enabled additional works to be undertaken…
Our regional network

40
V/LINE ANNUAL REPORT 2007–08
OUR REGIONAL NETWORK
41
HEAT SPEEd RESTRICTIONS PILOT PROJECT
Managing passenger and freight services during periods
of warm weather has been a significant issue, with trains
required to slow down due to the risk of tracks buckling
in high temperatures.
The existing heat speed restriction procedure (also known as
WOLOs) involves a blanket approach based on the morning’s
weather forecast, rather than actual rail temperature.
A project began this year to review the procedure using data
from 22 newly installed rail stress gauges and weather
stations on the Geelong, Ballarat, Bendigo, Swan hill and
Echuca lines. This review will provide a more analytical
approach and, depending on the outcome of a pilot over
the 2008–09 summer, may reduce the frequency of
heat-imposed speed restrictions.
MAJOR PROJECTS
V/Line also supported several major state governmentmanaged
projects in 2007–08, including the $73 million
Mildura Rail Freight Upgrade project, which is on target for
completion in 2009. This project will result in the upgrade
of 525 kilometres of track between Geelong and Mildura.
In May 2008, the Federal and Victorian governments jointly
announced a $501.3 million program to revitalise Victoria’s
north-east rail corridor. The North-East Rail Revitalisation
project will remove the rail line from the centre of Wodonga
and convert 200 kilometres of broad-gauge track to
standard gauge between Seymour and albury.
This upgrade will require a closure of our Albury/Wodonga
line from late 2008. With the start of works, control of the
new standard-gauge track will be permanently transferred
to the Australian Rail Track Corporation. Three V/Line trains
will be converted to a standard-gauge configuration and will
operate to Albury in the future under an access agreement
with the ARTC, with completion expected in 2010.
our Shepparton and Seymour services will continue to
operate on broad-gauge tracks, meaning the Albury/Wodonga
line will be our only standard-gauge passenger service.
THE FREIGHT NETWORK
The regional freight network has been the subject of a
major review by the state government, which has increased
funding for routine and major periodic maintenance of
the network over the last couple of years.
However, the impact of the drought on farming production
has caused a major decline in expected rail freight access
fees at a time of increasing maintenance demands.
Revenue from access fees dropped $2 million in the year
to $2.5 million, with most revenue coming from V/Line’s
own passenger services. This has required, and will
continue to require, an ongoing boost to subsidies to
ensure the vast freight network is fit to carry more trains
when the drought breaks.
Adelaide
VICTORIA’S NETWORK OF PASSENGER ANd FREIGHT LINES
Panitya
Serviceton
Diapur
Linga
Yelta
Mildura
Red Cliffs
Yaapeet
Heywood
Portland
Jeparit
Branxholme
Dimboola
Hattah
Ouyen
Hopetoun
Horsham
Hamilton
Robinvale
Kulvin
Glenthompson
Warracknabeal
Dennington
Murtoa
Woomelang
Manangatang
Sea Lake
Glenorchy
Maroona Yard
Warrnambool
Stawell
Ararat
Birchip
St Arnaud
Tatyoon
Terang
Westmere
Piangil
Ultima
Nyah West
Wycheproof
Korong Vale
Swan Hill
Maryborough
Beaufort
Camperdown
Berrybank
South Kerang
Ballarat
Colac
Moulamein
Dunolly
Kerang
Inglewood
Newstead
Clunes
Marong
Gheringhap
Inverleigh
Pyramid
Eaglehawk
Ballan
Dingee
Bendigo
Castlemaine
Bacchus Marsh
North
Geelong
Winchelsea
Little River
Wakool
Huntly
Echuca
Malmsbury
Kyneton
Woodend
Sunbury
Diggers Rest
Melton
Werribee
Lara
Geelong
Rochester
Murchison East
Nagambie
Seymour
Deniliquin
Strathmerton
Kyabram
Broadford
Wallan
Craigieburn
Somerton
Mangalore
Tallarook
MELBOURNE
METROPOLITAN
AREA
(See inset)
Shepparton
Toolamba
Tocumwal Yard
Dookie
Euroa
Benalla
Nar Nar Goon
Longwarry
Pakenham Warragul
Drouin
Oaklands
Trafalgar
Wahgunyah
Glenrowan
Moe
Wangaratta
Morwell
Wodonga
Bandiana
Springhurst
Traralgon
Rosedale
Albury
Sale
Bairnsdale
Ballarat
Geelong
Bendigo
Sydenham
Deer Park
St Albans
Ardeer
Albion
Brooklyn
Spotswood
Tottenham
Yard Flemington
Racecourse
Sunshine
Newmarket
Newport
Seaholme
Broadmeadows
Port
Melbourne
Craigieburn
Oak Park
Strathmore
Jacana
Glenroy
North Dynon
South Dynon
Southern Cross
Williamstown Pier
Jewell
Seymour
Upfield
Flinders Street
Fawkner
Merri
North
Melbourne
Elsternwick
Brighton Beach
Sandringham
Clifton Hill
Victoria Park
Richmond
S. Yarra
Mornington
Reservoir
Caulfield
Epping
Glenferrie
Kooyong
Darling
Bentleigh
Rosanna
Camberwell
Alamein
Cheltenham
Huntingdale
Mordialloc
Blackburn
Mount Waverley
Stony Point
Westall Yard
Hurstbridge
Glen Waverley
Ringwood
Dandenong
Lyndhurst
Passenger and freight services (V/Line broad gauge)
Freight only (V/Line broad gauge)
Freight only (V/Line standard gauge)
ARTC (V/Line standard gauge) including dual gauge
North Geelong – Gheringhap and Geelong grain loop
Connex Melbourne (broad gauge)
Bayswater
Boronia
Cranbourne
Victorian Rail Track Corporation (VicTrack)
Lilydale
Belgrave
Traralgon
Track works were undertaken on 214 kms of rail across the state.
* The broad-gauge line between Seymour
and Albury will be standardised in 2009.

42
V/LINE ANNUAL REPORT 2007–08
OUR PEOPLE
43
V/Line is committed to developing and maintaining a
skilled and dedicated workforce to meet the increasing
demands of its growing business. We see the provision
of a comprehensive range of training and development
programs as a key element in attracting and retaining the
people we need to operate our business now and into
the future.
Investment in staff skills was boosted again in 2007–08,
with the number of employees undertaking job-related
training programs increasing by 48 per cent. The total
number of training sessions conducted across the
organisation also grew by 15 per cent.
This sharp focus on employee training and development
has been a significant factor in V/Line being able to attract
quality applicants for a variety of positions advertised in
the past year.
In a year when V/Line experienced patronage growth
of 23 per cent, staff numbers increased by a modest
four per cent, from 1,240 in 2006–07 to 1,292 full-time
equivalent staff this year.
During the past year 10 new signal maintenance
apprentices were recruited across regional Victoria,
along with 45 new Regional Network and Access staff
to fill long-standing vacancies.
This year we have also worked with operations to
strengthen the mid-management support of our
conductors and drivers through the Train Services
Improvement Program. Management of V/Line branded
coaches owned by private operators will also be
boosted in 2008–09 following the appointment
of a new coaches manager.
GENdER RATIO
AT 30 JUNE 2008
All V/Line staff
dIVERSE SKILLS TRAINING
The breadth and diversity of skills required throughout
V/Line increased significantly when the business assumed
responsibility for the operation and maintenance of the
regional rail network. We now need to introduce and train
staff in areas responsible for signalling, electrical trades,
track maintenance and many other non-customer facing
activities. A diverse range of training courses – from
snake-bite prevention to four-wheel drive management
– is provided to develop skills and ensure the safety of
employees working on and around country rail lines.
V/LINE SKILL GROUP
AT 30 JUNE 2008
Above rail staff
Below rail staff
Our people
Staff numbers grew by a modest four per cent during the year.
1,151 Male
169 Female
Investment in staff skills was boosted again in 2007-08.
7 Executive
49 Non-executive/professional
33 Administration
64 Operations
232 Station staff
208 Conductors
318 Train drivers
28 Senior management
4 Authorised officers*
2 Executive
13 Senior management
20 Administration
153 Infrastructure maintenance
54 Signals & comms
18 Professional
7 Professional technical
69 Operations
41 Train controllers
* An additional two authorised officers (total of six) were seconded from Connex.

44
V/LINE ANNUAL REPORT 2007–08
OUR PEOPLE
45
The F-Gate team in Melbourne.
Training – training attendance (all staff)
2007–08
2006–07
Training programs (all staff)
2007–08
2006–07
4,372
2,953
565
493
Programs designed to provide our management team
with the skills they need to manage a growing and diverse
workforce continued this year, with 11 staff members
completing V/Line’s Management Development program
to qualify for a Diploma of Business from Swinburne
University of Technology. These programs have a strong
practical component, with participants being required to
demonstrate application of the training within the workplace.
PLANNING OUR FUTURE RESOURCES
As V/Line continues to grow, future workforce planning is
crucial. Our challenge is to match customer-support staff
levels with patronage forecasts and infrastructure
maintenance staff with the demands of a rail freight
network that will require major upgrades in coming years.
With an ageing driver workforce and a steady stream of
retirements anticipated over the next few years, V/Line
has continued to work on driver workforce planning
with Connex, the Department of Transport and the
Rail, Tram and Bus Union (RTBU) Locomotive Division.
An internal career path program will be introduced in
the coming year to provide the opportunity for our staff
to participate in a trainee driver program. This program
has the potential to diversify our driver base and ensure
greater staff retention.
As a retention strategy, V/Line is also working with the
RTBU to implement more flexible working arrangements,
such as part-time and job share opportunities for drivers.
Recognising the reality of our ageing workforce, V/Line is
continuing to develop the skills of our younger employees,
giving them opportunities to progress through the business
by taking on new and more challenging roles. We are also
working more closely with regional secondary and trade
schools by participating in career expos to promote V/Line
as a modern career option for young people. We plan to
build on an initial positive response from prospective
employees by further developing our careers promotion
program over the next few years.
UNION COLLECTIVE AGREEMENT
The ongoing integration and induction of Regional Network
and Access staff – who transferred to V/Line from Pacific
National in May 2007 – has been a major achievement.
V/Line also successfully negotiated the Regional Network
and Access (Infrastructure and Operations) Union Collective
Agreements (UCAs), which were formally registered with
the Workplace Authority in December 2007.
SERVICE MILESTONES
Two service award ceremonies were conducted during the
year to acknowledge the long service and dedication of
95 V/Line team members who reached service milestones
of 10, 15, 20, 25, 30, 40 or 50 years.
Our council partners.
We are also working more closely with regional secondary and trade schools…
“We see V/Line as a key partner in planning for Ballarat and the region’s growth,
meeting the community’s future transport needs.” anthony Schinck, Ceo, City of Ballarat

46
V/LINE ANNUAL REPORT 2007–08
FINANCE
47
Record rail patronage on our network during the year saw a
$6.7 million increase in farebox revenue to $59.6 million.
However, the level of franchise support for the passenger
business increased by $18.6 million, reflecting the record as
well as the need to increase staff numbers to accommodate
the growth in patronage.
Importantly, though, a key efficiency measure – franchise
subsidy per passenger – decreased by 12.6 per cent,
from $22.74 in 2006–07 to $19.88 in 2007–08.
The state subsidy for the Regional Network and Access
business increased to $8 million (up from $3 million in
2006–07). This reflected continued low levels of access
revenue from freight operators and the inclusion of the
financial results of Regional Network and Access for a
full year (just eight weeks reported in 2006–07).
The business reported a consolidated loss before tax
for the year of $9 million ($23.4 million loss in 2006–07).
V/Line’s major obligation is the delivery of subsidised
passenger transport services to regional Victoria and
hence the business qualifies as a not-for-profit entity.
Neither V/Line’s Franchise Agreement with the Director
of Public Transport nor V/Line’s Corporate Business Plan
contemplates the corporation making a profit.
Every three to four years V/Line’s rolling stock fleet is
independently revalued. We commissioned a revaluation
of our rolling stock as at 31 March 2008. This resulted
in a large ($20.9 million) decrease in the value of our
Sprinters and locomotive-hauled trains. The revaluation
decrement was offset against the revaluation reserve,
which was created when the fleet was previously revalued
in 2003–04, and so did not affect the loss before tax.
The VLocity fleet does not appear on our balance sheet
as it is owned by rolling Stock holdings Pty Ltd, which is
owned by Victrack.
While this improvement reflected increased operating
efficiencies, the cost of fuel had a significant impact on the
budget, rising $7.2 million during the year to $25 million.
A major deal was agreed between V/Line and BP
to limit our exposure to rising global fuel prices.
A key efficiency measure - franchise subsidy per passenger - decreased by 12.6 per cent…
Finance

48
V/LINE ANNUAL REPORT 2007–08
FINANCE
49
TAx ARRANGEMENTS
By direction of the Treasurer of Victoria, under the
State Owned Enterprises Act 1992, V/Line Passenger
Corporation and its subsidiary V/Line Passenger Pty
Limited entered into the National Tax Equivalent Regime
on 1 October 2003.
The revaluation decrement of $20.9 million referred to
above resulted in an income tax expense of $6.3 million.
The deferred tax asset arising from the revaluation
decrement was written off as an expense because it
was not probable that it would be realised. This reflects
the fact that the company is a not-for-profit entity and
has significant accumulated tax losses.
BUSINESS MANAGEMENT SYSTEM
The implementation of the Business Management System
(BMS) for the passenger business was successfully completed
during the year. Regional Network and Access was also
migrated to the BMS at year’s end.
ENGAGEMENT OF CONSULTANTS PAId OVER $100,000
Supplier/Vendor Description $’000
Alphawest Information technology services 3,843
Fujitsu Australia BMS implementation 1,309
Critical Risk Risk management/ security 1,248
Corrs Chambers
Legal advice,
814
Westgarth
including RNA transition costs
Worley Parsons Engineering services 740
Dimension Data Australia Information technology services 682
Pty Ltd
Willis Australia
Workcover advice, case
525
management and insurance
brokerage
Battiston Consulting Business management system 348
consulting
Barrington Centre
Critical incident management
315
and employee assistance program
Ernst & Young Taxation & internal audit services 222
Oakton Services Pty Ltd RNA business management
198
system implementation
Twenty 20 Communications Marketing services 194
Group
Mercer Consulting Human resources services –
150
work value remuneration advice
EMA Consulting Industrial relations consultancy 144
Condico Consulting
Business improvement
137
program consulting
Compass Consulting Change program consulting 122
Four M's Pty Ltd Engineering consulting –
119
RNA integration
Initiate Action Pty Ltd Materials management project 110
Cura Risk Management Risk management 103
Under $100,000 = 7 consultancies with a total value of $388,000
FINANCIAL SUMMARY:
Revenue
Operational
Non-operational
$M
2007–08
328.3
83.6
$M
2006–07
294.4
24.5
Expenditure 420.9 342.3
Operating deficit 15.3 23.4
Net cash inflow from operating activities 20.9 16.6
Total assets 173.0 183.0
Total liabilities 105.3 85.3
Net assets 67.7 97.7
Our retail partners
“Being a V/Line ticket agent has been great for business - I nearly sell a book for every ticket I sell.
V/Line has certainly extended the pro f ile of the shop.” Michael Kelly, V/Line ticket agent, Kelly’s Books & Toys. yarrawonga

50
V/LINE ANNUAL REPORT 2007–08
CORPORATE GOVERNANCE
51
Ms Catherine Scott
dr Meredith doig
Ms Alice Williams
Mr Frank Tait
V/LINE PASSENGER CORPORATION, V/LINE PASSENGER
PTY LTd ANd RELATEd ENTITIES
V/Line Passenger Corporation (VLPC) was established
on 15 July 2003 as a statutory Rail Corporation under the
Rail Corporations Act 1996. VLPC is the sole shareholder
of the main operating entity, V/Line Passenger Pty Limited
(V/Line).
V/Line has a Franchise Agreement with the Director of
Public Transport (the Director), representing the State
Government of Victoria, to operate regional rail and rail
replacement coach services throughout Victoria to 31
December 2009.
In July 2004 the Director directed V/Line to facilitate the
operation of heritage rail (i.e. steam) services on behalf
of identified rail heritage groups. V/Line established a
wholly owned subsidiary company, Victorian Rail Heritage
Operations Pty Limited (VRHO), to facilitate the operation
of these heritage rail services. On 4 February 2008 VRHO
was deregistered.
In April 2007 the Director directed V/Line to execute
documents and operate the regional below-rail business
following the state’s buyback of the infrastructure from
Pacific National, to facilitate track access for the operation
of both passenger and freight rail services.
BOARd OF dIRECTORS
As at 30 June 2008, the boards of VLPC and V/Line
consisted of the same four non-executive directors,
with the board of the parent entity, VLPC, reporting
to the Minister for Public Transport.
The sole director of VRHO from 20 December 2006
until 4 February 2008 was Mr Rob Barnett.
Each board has established protocols and procedures
to ensure that corporate governance is maintained at the
highest levels and that the strategic direction and overall
performance of the respective business entities can be
developed and monitored diligently.
BOARd COMPOSITION
Mr Frank Tait
Mr Tait is the chair of the boards of both VLPC and V/Line.
His career spans government as well as the rail transport
and defence industries. Along with his role on the V/Line
boards, Mr Tait is executive director of the Infrastructure
Projects Division within the Department of Transport. He
also has a consulting business, advising boards, executive
management and entrepreneurs on business strategy,
organisational development and recruitment strategies.
dr Meredith doig
Dr Doig was the deputy chair of VLPC and V/Line until her
resignation on 13 June 2008. Dr Doig is a director of the
Port of Melbourne Corporation, Bakers Delight Holdings
and the University of Melbourne, where she chairs one
of the university’s subsidiaries. She was previously a
director of the Victorian Channels Authority, the Driver
education Centre of australia and fintona Girls’ School,
as well as a member of the Federal Government’s Higher
Education Council. Dr Doig also has a consulting business
which specialises in advising boards and directors on
governance, board evaluations, executive remuneration,
potential assessment and succession planning. For the
past seven years, she has been a moderator with the
Cranlana Programme on ‘ethics and the Good Society’.
Before becoming a professional company director,
she held senior executive positions with ANZ, CRA,
Comalco and Ford.
Ms Catherine Scott
Ms Scott is an experienced board member and has held
senior executive positions in the investment banking
and airline industries. In addition to finance expertise she
brings to V/Line a thorough understanding of infrastructure
projects and regional development. Ms Scott is the deputy
chairperson of Goulburn Valley Water and also serves
on the boards of Goulburn Murray Water and VicForests.
She chairs the audit and risk management committee
of VicForests.
Mr Michael Tilley
Corporate governance

52
V/LINE ANNUAL REPORT 2007–08
CORPORATE GOVERNANCE
53
Mr Michael Tilley
Mr Tilley is the managing director and a founding director
of Terrain Capital. He has worked in the accounting and
finance industries for more than 25 years and has broad
senior advisory and project management experience in all
facets of corporate finance. Mr Tilley is also chairman of
Lower Murray Water authority and Vision Super Pty Ltd.
Ms Alice Williams
Ms Williams is an independent consultant and a company
director. She holds a number of government and public board
positions, including Director of Equity Trustees Limited,
Telstra Sale Company Limited, airservices australia, Victorian
funds Management Corporation and Guild insurance &
financial Services Limited. She is a Commissioner on the
Victorian Competition and efficiency Commission. She has
served on the boards of australian accounting Standards,
State Trustees and Western health. additionally, Ms Williams
acts as a consultant to a range of clients, including domestic
and international corporations and the Australian Federal
Government, on corporate and financial strategy and
regulatory matters. She is an active council member
of the Cancer Council of Victoria.
Ms Williams did not seek reappointment to VLPC when
her term expired, and she retired from V/Line, effective
1 July 2008.
BOARd MEETINGS ATTENdANCE
The boards of VLPC and V/Line generally hold bi-monthly
meetings and additional meetings as required.
V/Line Passenger Corporation
Director No. eligible to attend No. attended
Mr Frank Tait (Chair) 7 7
Dr Meredith Doig 6 6
Ms Catherine Scott 7 5
Mr Michael Tilley 7 5
Ms Alice Williams 7 6
V/Line Passenger Pty Ltd
Director No. eligible to attend No. attended
Mr Frank tait (Chair) 7 7
Dr Meredith Doig 6 6
Ms Catherine Scott 7 5
Mr Michael Tilley 7 5
Ms Alice Williams 7 7
ACCESS TO INFORMATION
Directors of VLPC and V/Line are allowed full access
to information required in order to discharge their
responsibilities. Directors of both entities may obtain
independent professional advice on matters arising in
the course of board duties. Directors also have access
to senior managers and/or officers of the entity on
whose board they serve and, on request, to documents
held by the entity.
INdEMNIFICATION OF OFFICERS
VLPC and V/Line have entered separately into deeds
of indemnity and access with each director and the
Corporation/Company Secretary. Mr anthony Day resigned
as Corporation/Company Secretary on 14 September
2007. Ms Rebecca Northeast was appointed Corporation
Secretary on 21 april 2008 and Company Secretary on
10 April 2008. VRHO entered into a deed of indemnity
and access with its sole director, Mr Rob Barnett, up to
4 February 2008. These deeds of VLPC, V/Line and VRHO
provide for indemnification against liabilities arising
from the conduct of the business or from the discharge
of directors’ duties (other than any liability relating to a
wilful breach of duty or trust) and the maintenance of
directors’ and officers’ insurance.
BOARd COMMITTEES
The board of V/Line has established three board committees.
These relate to people and remuneration; finance, audit
and risk; and, safety, security and environment. All three
committees met regularly throughout the year. The People
and Remuneration Committee was chaired until 13 June 2008
by Dr Meredith Doig; the Finance, Audit and Risk Committee
was chaired throughout the year by Ms Catherine Scott;
and the Safety, Security and environment Committee was
chaired throughout the year by Ms Alice Williams.
CORPORATE PLAN
In accordance with the Rail Corporations Act, VLPC
prepared its Corporate Plan, including its statement
of corporate intent. The Corporate Plan is prepared
annually and covers a three-year period starting from
the current financial year.
MINISTERIAL dIRECTIONS
VLPC received one Ministerial direction for the period
ending 30 June 2008. The direction, received on 28 May
2008, was for the board of VLPC to procure that V/Line
execute documents and negotiate and conclude other
documents in relation to the North East Rail Gauge
Standardisation and Wodonga rail Bypass transaction.
FREEdOM OF INFORMATION
VLPC is subject to the provisions of the Freedom of
Information Act 1982. For the year ended 30 June 2008,
VLPC received one request for access to information.
BUILdING ACT 1993
It is V/Line’s policy to ensure that new buildings and
works to existing buildings carried out for and on its
behalf comply with the Building Act 1993.
NATIONAL COMPETITION POLICY
VLPC continues to comply with the requirements
of the National Competition Policy.
WHISTLEBLOWERS PROTECTION ACT
VLPC and V/Line are subject to the provisions of the
Whistleblowers Protection Act 2001. In the past year,
no disclosures have been received or investigations
made, nor have any disclosures been referred to the
Ombudsman, nor has the Ombudsman referred any
disclosures or made any recommendations to any
of the three entities.
IMPLEMENTATION OF THE VICTORIAN INdUSTRY
PARTICIPATION POLICY
V/Line entered into one contract for the year ended
30 June 2008 to which VIPP thresholds applied and
VIPP compliance was undertaken. VLPC’s and V/Line’s
standard tendering procedures include compliance
with VIPP as and when required.
RISK MANAGEMENT
A process is in place for V/Line and VLPC to meet their
obligations under the Victorian Managed Insurance
Authority Act 1996. The board of V/Line, as the significant
operating entity, considers risk management issues
regularly as part of its monthly board meetings, through
the activities of both the Safety, Security and environment
Committee and the Finance, Audit and Risk Committee,
as well as through a robust internal audit process known
as the enterprise Wide risk Management System.
VICTORIAN GOVERNMENT RISK MANAGEMENT
FRAMEWORK ATTESTATION
I, Frank Tait certify that V/Line Passenger Corporation
through its wholly owned subsidiary and operating
company, V/Line Passenger Pty Ltd, has risk
management processes in place consistent with the
australian / new Zealand risk Management Standard
aS/nZS 4360 and an internal control system is in place
that enables the executive to understand, manage and
satisfactorily control risk exposures. The board verifies
that this assurance and the risk profiles of V/Line
Passenger Corporation and V/Line Passenger Pty Ltd
have been critically reviewed within the last 12 months.
Frank Tait
Chairman
27 August 2008

54
V/LINE ANNUAL REPORT 2007–08
Financial Statements
Executive team
TOP (left to right)
Rob Barnett
Chief Executive Officer
Geoff Arthur
General Manager,
Operations
Wayne Walsh
Manager Network
Services, rna
Graham Perry
General Manager,
Engineering
MIddLE (left to right)
John Lee
Executive General Manager
Corporate and Finance
Mike Sutcliffe
Infrastructure Manager,
RNA
BOTTOM (left to right)
Jenny Kelman
General Manager,
Human Resources
Laurie Foley
General Manager, Safety,
Security & environment
Ursula McGinnes
General Manager,
Stakeholder relations
Rebecca Northeast
Company (Corporation)
Secretary
Statutory Statement
56
Balance Sheet
57
operating Statement
56
Cash flow Statement
58
Statement of
58
Notes to the
59
Changes in Equity financial Statements
Independent
Auditor’s Report
Disclosure index
79
84

56
V/LINE ANNUAL REPORT 2007–08
FINANCIAL STATEMENTS
57
Statutory Statement
oPeratInG Statement For tHe year enDeD 30 June 2008
BaLanCe SHeet aS at 30 June 2008
We certify that the attached financial statements for V/Line Passenger Corporation
and subsidiaries have been prepared in accordance with Standing Direction 4.2 of
the Financial Management Act 1994, applicable financial reporting directions, Australian
Accounting Standards and other mandatory professional reporting requirements.
We further state that, in our opinion, the information set out in the Operating
Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement
and Notes to the Financial Statements presents fairly the financial transactions
during the year ended 30 June 2008 and the financial position of the consolidated
entity at this date.
We are not aware of any circumstance which would render any particulars included
in the financial statements to be misleading or inaccurate.
The Accountable Officer and the Chief Financial Accounting Officer have, within the
last 12 months, made formal statements to the board that:
• the Corporation’s financial reports present fairly, in all material respects, the
Corporation’s financial condition and operational results in accordance with the
requirements of the Financial Management Act 1994 including the Directions
• the financial report is founded on a sound system of risk management and internal
compliance and control which implements the policies adopted by the board and
• the Corporation’s risk management and internal compliance and control system
is operating efficiently and effectively in all material respects.
Frank Tait, Chairman
Rob Barnett, Chief Executive Officer
Catherine
L. Scott, Director
John D. Lee, Executive General Manager
– Corporate & Finance
noteS 2008 2007
$’000 $’000
InCome
Revenue 2 328,326 294,435
Other income 2 83,573 24,506
Total income 411,899 318,941
eXPenSeS
Operational expenses 3 (a) 218,729 224,091
Depreciation 3 (b) 20,391 22,737
Administrative expenses 49,969 30,914
Selling expenses 2,258 1,104
Marketing and communication 3,905 4,173
Customer service expenses 2,652 2,641
Project expenses 15,957 17,875
Infrastructure maintenance 77,818 123
Impairment of assets 10 – 500
Trains provided free of charge 1 (f) 29,225 28,863
Assumption of RNA net liabilities 14 – 9,293
Total expenses 420,904 342,314
Loss before income tax expense (9,005) (23,373)
Income tax expense 4 6,290 –
Net loss for the period 13 (15,295) (23,373)
The above Operating Statement should be read in conjunction with the accompanying notes.
noteS 2008 2007
$’000 $’000
aSSetS
Current assets
Cash and cash equivalents 5 2,664 859
Receivables 6 21,378 12,504
Inventories 7 5,296 4,484
Other current assets 8 330 377
Total current assets 29,668 18,224
non-current assets
Investments 1(l), 9 – –
Property, plant and equipment 10 143,302 164,753
Total non-current assets 143,302 164,753
total assets 172,970 182,977
LIaBILItIeS
Current liabilities
Payables 1(o),11 58,544 36,681
Provisions 1(x),12 44,503 46,971
Total current liabilities 103,047 83,652
non-current liabilities
Provisions 1(x),12 2,210 1,642
Total non-current liabilities 2,210 1,642
total liabilities 105,257 85,294
net assets 67,713 97,683
noteS 2008 2007
$’000 $’000
eQuIty
Asset Revaluation Reserve 13 104,913 119,588
Accumulated surplus/(losses) 13 (37,200) (21,905)
total equity 67,713 97,683
Commitments for expenditure 24
Contingent assets and liabilities 23
The above Balance Sheet should be read in conjunction with the accompanying notes.
Melbourne, 14 August 2008

58
V/LINE ANNUAL REPORT 2007–08
Financial Statements
59
Statement of Changes in Equity for the year ended 30 June 2008
NOTES 2008 2007
$’000 $’000
Total equity at the beginning of the
97,683 121,056
financial year
Net loss for the period (15,295) (23,373)
Revaluation decrement to rolling stock (14,675) –
Total equity at the end of the financial year 67,713 97,683
The above Statement of Changes in Equity should be read in conjunction with the
accompanying notes.
Cash Flow Statement for the year ended 30 June 2008
NOTES 2008 2007
$’000 $’000
Cash flows from operating activities
Receipts from government (GST inclusive) 340,691 249,709
Receipts from other entities (GST inclusive) 77,313 65,604
Payments to suppliers and employees
(389,742) (296,552)
(GST inclusive)
GST payments to the Australian Taxation Office (7,933) (2,793)
Interest received 557 594
Net cash flows from operating activities 27 20,886 16,562
Cash flows from investing activities
Payment for plant and equipment (19,081) (18,656)
Net cash flows used in investing activities (19,081) (18,656)
Net increase/(decrease) in cash
and cash equivalents
Cash and cash equivalents at the
beginning of the financial year
Cash and cash equivalents at the end
of the financial year
1,805 (2,094)
859 2,953
5 2,664 859
The above Cash Flow Statement should be read in conjunction with the accompanying notes.
NOTES TO THE FINANCIAL StatementS
Table of contents
Note 1 Summary of significant accounting policies
Note 2 Income
Note 3 Operational expenses/Depreciation of non-current assets
Note 4 Income tax expense
Note 5 Cash and cash equivalents
Note 6 Receivables
Note 7 Inventories
Note 8 Other current assets
Note 9 Investments
Note 10 Property, plant and equipment
Note 11 Payables
Note 12 Provisions
Note 13 Equity
Note 14 Assumption of net liabilities – Regional Network and Access
Note 15 Financial instruments
Note 16 Controlled entities
Note 17 Ministers and accountable officers
Note 18 Remuneration of executives
Note 19 Remuneration of directors and accountable officer
Note 20 Remuneration of auditors
Note 21 Directors disclosures
Note 22 Related party disclosures
Note 23 Contingent assets and liabilities
Note 1 Summary of significant accounting policies
(a) Basis of accounting
This is a general purpose financial report, which has been prepared in accordance with the
requirements of the Financial Management Act 1994 and Accounting Standards, including
Australian accounting interpretations and authoritative pronouncements of the Australian
Accounting Standards Board.
The corporation is in compliance with the requirements of the Australian equivalents to
International Financial Reporting Standards (AIFRS). V/Line has applied the AIFRS to all
Financial Reports and appropriate notes contained in these statements.
V/Line Passenger Corporation is a Victorian statutory corporation established in Australia
under the Rail Corporations Act 1996.
The financial report has been prepared on an accruals basis and is based on historical
cost, except for the revaluation of certain non-current assets and financial instruments.
Cost is based on the fair values of the consideration given in exchange for assets.
Accounting policies applied are consistent between current and prior year.
The financial statements were authorised for issue by the board on 14 August 2008.
(b) Principles of consolidation of controlled entities
The financial report comprises the consolidated financial statements of V/Line Passenger
Corporation and its subsidiaries. The effects of all transactions between entities in the
consolidated entity are eliminated in full.
Where control of an entity is obtained during a financial year, its results are included
in the consolidated operating statement from the date on which control commences.
Where control of an entity ceases during a financial year its results are included for that
part of the year during which control exists.
V/Line Passenger Corporation is represented by:
Note 24
Note 25
Note 26
Note 27
Note 28
Note 29
Operating leases and expenditure commitments
Employee benefits and superannuation commitments
Subsequent events
Cash flow statement
Economic dependency
Dividends
Investment in subsidiary $1
Contributed equity $1
The corporation has no other assets or liabilities.
Given the immaterial nature of the investment by the parent entity it has not been
reported separately.

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V/LINE ANNUAL REPORT 2007–08
Financial Statements
61
The controlled entities consolidated within the V/Line Passenger Corporation group are
NAME
Country of
incorporation
Equity
interest
2008
$’000
2007
$’000
V/Line Passenger Pty Ltd Australia 100% – –
Victorian Rail Heritage Operations Pty Ltd
(deregistered during the year and
investment of $1 written off)
Australia – – –
On 1 October 2003, the Corporation purchased one ordinary share in V/Line Passenger Pty
Ltd (subject to Deed of Company Arrangement) for $1. This represents 100% of the
company’s issued capital. V/Line Passenger Pty Ltd forms part of the consolidated entity.
On 7 July 2004, by direction of the Director of Public Transport pursuant to section 4.3 of
the Franchise Agreement, Victorian Rail Heritage Operations Pty Limited (VRHO) was
registered. V/Line Passenger Pty Ltd had 100% ownership of VRHO. The principal activities
of VRHO were the provision of labour requirements to operate a passenger train network
in accordance with the requirements of Division 3, Part VI of the Transport Act. VRHO
provided the labour requirements to three heritage train operator incorporated bodies.
The board of V/Line Corporation approved the voluntary deregistration of VRHO during
the year. VRHO did not conduct any business activities during the year, these activities
were transferred to V/Line Passenger Pty Ltd. VRHO was officially deregistered on
4 February 2008.
Correction of prior year errors
In the prior year, the parent entity was disclosed separately. The investment by the parent
entity in V/Line Passenger Pty Ltd should have been reported at cost of $1 in accordance
with AASB 127 and not fair value of net assets acquired.
The asset revaluation reserve relating to the recognition of rolling stock assets in
V/Line Passenger Pty Ltd at fair value for the period ended 30 June 2004 should have
been treated as a post acquisition reserve and therefore recognised on consolidation
of the group.
Comparatives for 2007 have been restated as if these errors had not occurred.
The table shown below displays a summary of the adjustments made.
Consolidated entity
2007 as
reported
Adjustment
increase/
(decrease)
2007
restatement
$’000 $’000 $’000
Equity
Asset revaluation reserve – 119,588 119,588
Retained earnings 97,683 (119,588) (21,905)
Parent entity
2007 as
reported
Adjustment
increase/
(decrease)
2007
restatement
$’000 $’000 $’000
Operating Statement
Impairment loss 23,373 (23,373) –
Investments 97,683 (97,683) –
Balance Sheet
Retained earnings 97,683 (97,683) –
(c) Not for profit
The board is of the view that the consolidated entity qualifies as a not-for-profit entity
since the primary obligation of the corporation is the delivery of subsidised public
transportation services to regional Victoria. The entity has signed a Franchise Agreement
with the Director of Public Transport which determines the services that the corporation
provides and the payments received for those services. The entity’s funding is based
on achieving a small loss before interest, depreciation and tax and neither the mission
nor corporate strategy of the corporation reflect achieving profit. As such, the entity has
been deemed to have a not-for-profit status and accordingly complies with accounting
standards set for not for profit entities including AIFRS requirements.
The entity is a not-for-profit entity for Federal Income Tax purposes and is therefore
exempt from income tax.
(d) Going concern
Notwithstanding the deficiency in net current assets of $73.3 million (2007: $65.4 million)
this financial report has been prepared on a going concern basis. The consolidated entity
is subsidised by its ultimate parent entity, the State Government of Victoria, pursuant to
a Franchise Agreement with the Director of Public Transport.
The funding requirements for the year ended 30 June 2009 have been agreed by the
Director of Public Transport under an approved budget allocation pursuant to the Franchise
Agreement. The Franchise Agreement contains provisions for the funding requirements
to be met by the State Government of Victoria throughout the franchise period.
On 13 April 2007, the Director of Public Transport directed the consolidated entity to assume,
in the public interest, responsibility for the operation and management of the state’s regional
rail network. On 27 May 2008, the Director of Public Transport directed the consolidated
entity to execute certain documents and undertake certain actions in relation to the North
East Rail Gauge Standardisation and Wodonga Rail Bypass transaction. The Director of
Public Transport acknowledges and agrees that if the consolidated entity suffers material
financial detriment as a result of complying with these directions, the consolidated entity
will be reimbursed by the Director an amount agreed by the consolidated entity and the
Director or, failing agreement, as determined by the Director of Public Transport.
The Director of Public Transport has also agreed that, while the consolidated entity
is under state ownership, the Department of Transport will meet all of the consolidated
entity’s employee entitlements as and when those amounts fall due in the event the
consolidated entity is not able to meet these financial obligations.
The financial report does not include any adjustments relating to the recoverability
and classification of recorded asset amounts, nor to the amounts and classification
of liabilities that might be necessary should the consolidated entity not continue as a
going concern.
Refer to Note 28 for further details of the consolidated entity’s economic dependency
on the State Government of Victoria.
(e) Comparatives
When the presentation or classification of items in the financial report is amended,
comparative amounts have been reclassified unless the reclassification is impractical.
(f) Revenue
Revenue is recognised and measured at the fair value of the consideration received
or receivable to the extent it is probable that the economic benefits will flow to the
corporation and the revenue can be reliably measured.
VALUE IN KIND
Use of VLocity, Diesel Multiple Unit Trains are leased by Rolling Stock Holdings Pty Ltd
and received free of charge (‘Value in Kind’;‘VIK’). The VIK measurement is based on the
value of the lease payments.
CONTRIBUTIONS
Government provides subsidies that are recognised as revenue when they are controlled
by the corporation, which is generally upon receipt of the subsidy.
TICKET SALES
Fare box revenue (ticket sales) are recognised on an accrual basis. Sales of tickets that
relate to passenger trips to be taken after the reporting date are not recognised as income
but as a liability.
The Director of Public Transport acknowledges and agrees that, for the benefit of the
directors of the consolidated entity and without limiting the level of financial support, the
Director of Public Transport has agreed to provide the consolidated entity funding to a level
sufficient for it to comply with the solvency requirements under the Corporations Act 2001.

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V/LINE ANNUAL REPORT 2007–08
Financial Statements
63
(g) Cash
Cash and cash equivalents comprise cash on hand and cash at bank, deposits at call
and highly liquid investments with an original maturity of three months or less, which
are readily convertible to known amounts of cash and are subject to insignificant risk
of changes in value.
(h) Trade and other receivables
Trade receivables representing passenger and inter-operator revenues receivable and are
carried at nominal amounts due less any allowance for uncollectible amounts. A provision
for impairment is recognised when collection of the full amount is no longer probable.
For trade receivables, normal terms are 30 days and 7 days for agency accounts.
(i) Related party receivables
Receivables from related parties are recognised and carried at fair value. There is no
interest charged on related party receivables.
(j) Inventories
V/Line has a supplier arrangement with EDI Rail Pty Ltd for the supply of spare parts.
These spares are available on a ‘just in time’ basis. This practice is considered by
industry to be best practice as it has the lowest storage costs. V/Line has a contract
for these spares to be available upon request. These items are valued at cost on a first
in first out basis.
(k) Revaluations of non-current assets
Rolling stock is measured at fair value and all other non-current assets are measured
at cost.
Revaluations are made with sufficient regularity to ensure that the carrying amount
of each asset does not differ materially from its fair value at the reporting date.
Revaluations are assessed annually and supplemented by independent assessments
every three or four years. Revaluations are conducted in accordance with the Victorian
Government Policy – FRD 6A Application of Victorian Government Policy ‘Revaluation
of Non-Current Physical Assets’.
(l) Investment in Subsidiaries
Investments in subsidiaries are carried at cost.
(m) Cost and valuation of property, plant and equipment
i. Valuation of rolling stock and rotables
V/Line Passenger Pty Ltd undertook an independent revaluation of its rolling stock as
at 31 March 2008. The 2008 valuation was performed by rolling stock specialists and
reviewed by a qualified valuer. Although valuation of assets is typically based on the net
recoverable amount, the corporation has used depreciable replacement cost as a valuation
basis. This valuation is in keeping with FRD 6A, which states the net recoverable test does
not apply to a not-for-profit entity since there is no dependence on its assets abilities to
generate cash inflows.
Any revaluation increment or decrement is brought to account in the asset revaluation
reserve, except to the extent that it reverses a revaluation decrease of the same asset
previously recognised in profit or loss, in which case the increase is recognised in profit
or loss.
Any revaluation decrease is recognised in profit or loss, except to the extent that it offsets
a previous revaluation increase for the same asset, in which case the decrease is debited
directly to the asset revaluation reserve to the extent the credit balance existing in the
revaluation reserve for that asset.
Revaluation increases and revaluation decreases relating to individual assets within
an asset class are offset against one another within that asset class but are not offset
in respect of assets in different classes.
ii. Depreciation of property, plant and equipment
Depreciation is provided on a straight-line basis on all plant and equipment, including
rolling stock and buildings.
Rolling stock comprises locomotives, carriages, diesel multiple units (known as Sprinters)
and vans. Any refurbishments or conversions are depreciated over the remaining useful
life of the refurbishment.
iii. Estimated useful lives of property, plant and equipment are set out below:
Leasehold improvements 3 to 10 years
Plant and equipment 3 to 10 years
Rolling stock
4 to 17 years
The assets’ residual values, useful lives and amortisation methods are reviewed,
and adjusted if appropriate, at each financial year end.
iv. Leasehold improvements
The cost of improvements to leasehold properties is amortised over the unexpired
period of the lease or the estimated useful life of the improvement, whichever is the
shorter. Leasehold improvements held at the reporting date are being amortised over
3 to 10 years (2007 – 3 to 10 years).
v. Leased non-current assets
Leases of property, plant and equipment are classified as finance leases whenever
the terms of the lease transfer substantially all the risks and rewards of ownership
to the lessee. All other leases are classified as operating leases.
(n) Leases
i. Finance leases
Leases of property, plant and equipment are classified as finance leases whenever
the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee. All other leases are classified as operating leases. The entity does not have
any finance leases.
ii. Operating leases
Operating lease payments, including any contingent rentals, are recognised as an
expense in the operating statement on a straight-line basis over the lease term,
except where another systematic basis is more representative of the time pattern
of the benefits derived from the use of the leased asset.
iii. Lease incentives
Incentives received on entering into operating leases are recognised as liabilities.
The incentive of the lease is amortised over the remaining life of the lease.
(o) Trade and other payables
i. Payables consist predominantly of creditors and other sundry liabilities.
Payables are carried at amortised cost and represent liabilities for goods and services
provided prior to the end of the financial year which remain unpaid. These amounts
are brought to account when the obligation to make future payments in respect of the
purchase of the goods and services arises.
ii. Related party payables
Payables to related parties are carried at amortised cost. No interest is charged by the lender.
(p) Repairs and maintenance
Repairs and maintenance work on rolling stock are scheduled in accordance with
V/Line’s rolling stock management plan and the rail safety management standards.
Scheduled maintenance examinations on rolling stock are determined at set intervals
depending on the type of rolling stock.
The refurbishment program included in the rolling stock management plan includes
major examinations and overhauls of rolling stock. The consolidated entity treats these
examinations as significant upgrades, which extend the useful life of the rolling stock.
Included in the refurbishment program is the replacement of major units such as traction
and locomotive motors, generators, wheel sets and bogies. These items are capitalised
and amortised over their useful life.
All other maintenance examinations and minor work are treated as repairs and
maintenance and expensed when incurred.
(q) Goods and Services Tax
Revenues, expenses, assets and liabilities are recognised net of the amount of associated
GST unless the GST incurred is not recoverable from the taxation authority, in which case
it is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable.
The net amount of GST recoverable from, or payable to, the taxation authority is included
with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from
investing or financing activities which are recoverable from, or payable to the taxation
authority are presented as operating cash flows.

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V/LINE ANNUAL REPORT 2007–08
Financial Statements
65
(r) National Tax Equivalent Regime (NTER)
By direction of the Treasurer of Victoria, under the State Owned Enterprise Act 1992,
the consolidated entity entered into the NTER on 1 October 2003. Any NTER expense
payable is calculated on operating profit or loss adjusted for permanent and timing
differences between NTER income and accounting income.
Deferred tax is accounted for using the balance sheet liability method in respect of
temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding a business combination,
where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the
asset is realised or liability is settled. Deferred tax is credited in the operating statement
except where it relates to items that may be credited directly to equity, in which case the
deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax
profits will be available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based
on the assumption that no adverse change will occur in income taxation legislation and
the anticipation that the economic entity will derive sufficient future assessable income
to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law.
V/Line and its wholly owned Australian subsidiaries have formed an income tax
consolidated group under the Tax Consolidation Regime. Each entity in the group
recognises its own current and deferred tax liabilities, except for any deferred tax
liabilities resulting from unused tax losses and tax credits which are immediately
assumed by the parent entity. The current tax liability of each group is then subsequently
assumed by the parent entity. The group notified the ATO that it had formed an income
tax consolidated group to apply from 1 October 2003. The tax consolidated group has
entered a tax sharing agreement whereby each corporation in the group contributes
to the income tax payable in proportion to their contribution to profit before tax.
(s) Employee benefits
Provision is made for employee benefits accumulated as a result of employees
rendering services up to the reporting date. These benefits include annual leave
and long service leave.
Liabilities arising in respect of wages and salaries, annual leave, sick leave and any
other employee benefits expected to be settled within 12 months of the reporting date
are measured at their nominal amounts based on remuneration rates which are expected
to be paid when the liability is settled, including related on-costs.
All other employee benefit liabilities are measured at the present value of the estimated
future cash outflows to be made in respect of services provided by employees up to the
reporting date.
In determining the present value of future cash outflows, the interest rates relating to
government guaranteed securities are used, which have terms to maturity approximating
the terms of the related liability.
The determination of the current portion of employee benefits is based upon benefits
which are expected to be settled within 12 months of the reporting date and are measured
at their nominal values.
Employee benefit expenses arising in respect of salaries and wages, annual leave,
long service leave, sick leave, other leave benefits and other employee benefits are
charged against the Operating Statement.
The contributions made to superannuation funds by the consolidated entity are charged
against the Operating Statement when due.
(t) Rounding of amounts
The corporation is of a kind referred to in Class Order 98/0100, issued by the Australian
Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the
financial report. Amounts in the financial report have been rounded off in accordance with
that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
(u) Functional and presentation currency
The functional currency of the consolidated entity is the Australian dollar, which has
been identified as the presentation currency for the consolidated entity.
(v) Financial instruments
V/Line has no financial assets other than cash and trade receivables.
Financial instruments are initially measured at fair value on trade date, which includes
transaction costs, when the related contractual rights or obligations exist.
At each reporting date, the group assesses whether there is objective evidence that
a financial instrument has been impaired. In the case of available-for-sale financial
instruments, a prolonged decline in the value of the instrument is considered to
determine whether impairment has arisen. Impairment losses are recognised in the
Operating Statement.
(w) Impairment of assets
At each reporting date, the group reviews the carrying values of its assets to determine
whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value
less costs to sell and depreciated replacement cost, is compared to the asset’s carrying
value. Any excess of the asset’s carrying value over its recoverable amount is expensed
to the Operating Statement, except to the extent the write-down is to be brought to account
in the asset revaluation reserve.
(x) Provisions
Provisions are recognised when there is a present obligation, the future sacrifice of
economic benefits is probable, and the amount of the provision can be reliably measured.
The amount recognised as a provision is the best estimate of the consideration required
to settle the present obligation at reporting date, taking into account the risks and
uncertainties surrounding the obligation. Where a provision is measured using the cash
flows estimated to settle the present obligation, its carrying amount is the present value of
those cash flows using market yields at the reporting date on national government bonds
with terms to maturity that match, as close as possible, the estimated future cash flows.
(y) Significant accounting estimates and judgements
Management evaluates estimates and judgements incorporated into the financial report
based on historical knowledge and best available current information. Estimates assume
a reasonable expectation of future events and are based on current trends and economic
data, obtained both externally and within the group.
i. Key estimates — Impairment
The group assesses impairment at each reporting date by evaluating conditions specific to
the group that may lead to impairment of assets. Where an impairment trigger exists, the
recoverable amount of the asset is determined. Depreciated replacement cost calculations
performed in assessing recoverable amounts incorporate a number of key estimates.
ii. Key judgements — Allowance for impairment loss on trade receivables
There has been a $109,000 decrease to the provision in 2008 based on a detailed analysis
of the recoverability of individual accounts.
iii. Key judgements — Timing of employment provisions
All employment provisions are classified according to whether the entity has an
unconditional right to defer settlement beyond 12 months.
iv. Key judgements — Useful lives of property, plant & equipment
Property, plant & equipment useful lives are reviewed on an annual basis to ensure
their contribution is realistically based on their useful economic life.

66
V/LINE ANNUAL REPORT 2007–08
Financial Statements
67
NOTES 2008 2007
NOTES 2008 2007
NOTES 2008 2007
NOTES 2008 2007
$’000 $’000
$’000 $’000
$’000 $’000
$’000 $’000
Note 2 Income
(a) Revenue
Fare box revenue 59,641 52,889
Inter-operator income 787 1,058
Franchise subsidy 218,703 200,094
State subsidy 8,000 3,000
Access charges 2,520 4,509
Other income 9,450 4,022
Trains received free of charge 29,225 28,863
Note 3 (a) Operational expenses
Franchise performance penalty 4,922 4,326
Other direct costs 10,927 5,591
Fleet maintenance 47,820 47,670
Fuel costs 25,024 17,786
Road coach services 4,539 3,372
Access charges 15,845 62,701
Repairs & maintenance 2,470 9,660
111,547 151,106
Note 3 (b) Depreciation of non-current assets
Depreciation of non-current assets
Plant and equipment 1,677 2,855
Leasehold improvements 287 322
Rolling stock 12,384 12,414
Rolling stock – capitalised improvements 6,043 7,146
20,391 22,737
Note 5 Cash and cash equivalents
Cash at bank 2,560 771
Cash on hand 104 88
2,664 859
Note 6 Receivables
Trade receivables 20,037 10,108
Less: provision for impairment (153) (262)
19,884 9,846
328,326 294,435
(b) Other income
Interest – other persons / corporation 557 591
Govenment project reimbursement revenue 75,768 17,875
Capital transfer reallocation 7,248 6,040
83,573 24,506
Total income 411,899 318,941
Direct labour costs
Salaries and wages 87,191 58,931
Superannuation 8,402 6,115
Annual leave/long service leave expense 3,670 1,672
Other on-costs (fringe benefits tax,
payroll tax and work cover levy)
7,919 6,267
107,182 72,985
Total operational expenses 218,729 224,091
Note 4 Income tax expense
The components of tax expense comprise:
Current tax – –
The prima facie tax on profit from ordinary
activities before income tax is as follows:
Prima facie tax payable on ordinary
(2,702) (7,012)
activities before income tax at 30%
(2007: 30%) economic entity
Tax effect of permanent differences and
2,702 7,012
tax losses not brought to account
Write off deferred tax asset arising from
the revaluation decrement to rolling stock
6,290 –
6,290 –
The deferred tax asset arising from the revaluation decrement has been written off as an
expense because it is not probable that it will be realised.
Fuel rebate receivables 818 1,991
Other receivables 676 667
21,378 12,504
Related party receivables
Trade receivables include the following
receivables from related parties:
Department of Transport 17,174 6,839
Other related parties 502 1,055
17,676 7,894
Terms and conditions relating to the above financial instruments:
Credit sales are on 30 day terms. Details of the terms and conditions of related parties
receivables are set out in Note 22.
Note 7 Inventories
The company has substantial prior year tax losses which began and continue to
accumulate since, the year ended 30 June 2004. Management has decided that there
is no likelihood of profits to be offset against prior year tax losses. As a result, the income
tax effect of these losses have not been brought to account in the financial statements.
Spares and materials at cost 5,296 4,484
Note 8 Other current assets
Prepayments 330 377
The amount of accumulated tax losses as at 30 June 2008 is approximately $88,000,000,
representing future income tax benefits of approximately $26,400,000 not recognised.

68
V/LINE ANNUAL REPORT 2007–08
Financial Statements
69
NOTES 2008 2007
NOTES 2008 2007
NOTES 2008 2007
NOTES 2008 2007
$’000 $’000
$’000 $’000
$’000 $’000
$’000 $’000
Note 9 Investments
V/Line Passenger Corporation does not own any investments, with the exception
of controlled ownership of V/Line Passenger Pty Ltd as detailed in Note 1(b)
Note 10 Property, plant and equipment
Plant and equipment
At cost 27,529 26,408
Accumulated depreciation (20,349) (18,552)
7,180 7,856
Rolling stock
At independent valuation – 1 March 2008 114,116 164,875
Accumulated depreciation (3,146) (45,451)
Impairment – (500)
110,970 118,924
Leasehold improvements
At cost 3,851 3,589
Accumulated amortisation (1,101) (814)
2,750 2,775
Rolling stock – capitalised improvements
Cost 3,527 36,509
Rotables 928 794
Accumulated depreciation (153) (15,462)
4,302 21,841
Capital works in progress 18,100 13,357
Total property, plant and equipment 143,302 164,753
Valuation of rolling stock
An independent valuation of all rolling stock was conducted by rolling stock specialists
with an effective date of 31 March 2008.
As the market for the rolling stock lacks sufficient depth due to the specialised nature
of the assets and the small population and volume traded, other indirect methods have
been used.
The depreciated replacement cost method has been used as the primary method of
valuation and has provided a fair value for the V/Line Passenger Pty Ltd rolling stock fleet
as at 31 March 2008 of $114.1 million.
Movement in carrying amounts:
The movement in the carrying amounts for each class of property, plant and equipment
between the beginning and the end of the year is as follows.
Plant and equipment
Carrying amount at beginning of year 7,856 6,156
Additions 1,001 4,556
Disposals – –
Depreciation expense (1,677) (2,856)
Carrying amount at end of year 7,180 7,856
Rolling stock at valuation
Carrying amount at beginning of year 118,924 131,652
Additions – 186
Impairment – (500)
Disposals – –
Depreciation expense (12,384) (12,414)
Revaluation transfer from rolling stock at
25,395 –
cost – capitalised improvements
Revaluation decrement (20,965) –
Carrying amount at end of year 110,970 118,924
Leasehold improvements
Carrying amount at beginning of year 2,775 2,685
Additions 262 412
Depreciation expense (287) (322)
Carrying amount at end of year 2,750 2,775
Rolling stock at cost – capitalised
improvements
Carrying amount at beginning of year 21,841 21,647
Additions 13,899 7,340
Disposals – –
Depreciation expense (6,043) (7,146)
Revaluation transfer to rolling stock at
(25,395) –
valuation
Carrying amount at end of year 4,302 21,841
Capital works in progress
Carrying amount at beginning of year 13,357 7,946
Additions 10,976 15,731
Transfers to fixed assets (6,233) (2,961)
Reversals from fixed assets (project
expenses capitalised by VicTrack)
– (7,359)
Carrying amount at end of year 18,100 13,357
Total property, plant and equipment
Carrying amount at beginning of year 164,753 170,086
Additions 26,138 28,224
Disposals – –
Depreciation expense (20,391) (22,737)
Transfers to fixed assets (6,233) (2,961)
Reversal from fixed assets (project expenses
– (7,359)
capitalised by VicTrack)
Impairment – (500)
Rolling Stock revaluation net decrement (20,965) –
Carrying amount at end of year 143,302 164,753
All primary franchise assets are subject to a fixed charge and all other assets to a floating
charge in favour of the Director of Public Transport. The maximum prospective liability
secured by the Deed of Charge is one billion dollars.
Note 11 Payables
Trade payables 25,275 11,340
Accruals 26,036 19,664
Deferred income 638 603
Other payables 6,595 5,074
Total payables 58,544 36,681
Amounts payable to related parties are as
follows:
Department of Transport – –
Other related parties 3,040 7,614
3,040 7,614

70
V/LINE ANNUAL REPORT 2007–08
Financial Statements
71
NOTES 2008 2007
$’000 $’000
Note 12 Provisions
Current provisions
Employee benefits 43,136 45,577
Other provisions (employee related) 1,367 1,394
44,503 46,971
Movement in other provisions:
Opening balance 1,394 1,179
Additional provisions raised during the year – 215
Amounts used (27) –
Closing balance 1,367 1,394
Non-current provisions
Employee benefits 2,210 1,642
Note 13 Equity
Asset revaluation reserve 119,588 119,588
Revaluation decrement
(net of tax effect of $6,290)
(14,675) –
104,913 119,588
Retained earnings
Balance at the beginning of the year (21,905) 1,468
Net profit / (loss) (15,295) (23,373)
Balance at the end of the year (37,200) (21,905)
NOTES 2008 2007
$’000 $’000
Note 14 Assumption of net liabilities – Regional Network and Access
The amounts recognised at the date of
acquisition were:
Inventory – 2,791
Plant & equipment – 1,615
Employee entitlements – (13,189)
Other provisions – (510)
Net liabilities assumed – (9,293)
The operating results in relation to the RNA
business were:
Income
Operating revenue 118,659 13,148
State subsidy 8,000 3,000
Other income 4,613 592
Total income 131,272 16,740
Expenses
Operational expenses 36,915 12,264
Administrative expenses 19,881 3,347
Communication expenses 59 –
Infrastructure maintenance 77,818 124
Total expenses 134,673 15,735
Profit/(loss) for the period (3,401) 1,005
Note 15 Financial instruments
(a) Financial risk management
The corporation’s financial instruments consist mainly of deposits with banks, local
money market instruments, short-term investments, accounts receivable and payable,
loans to and from subsidiaries, bills and leases. The main purpose of non-derivative
financial instruments is to raise finance for group operations.
The group does not have any derivative instruments at 30 June 2008.
i. Treasury risk management
A finance committee consisting of senior executives of the group meet on a regular basis
to consider currency and interest rate exposure and to evaluate treasury management
strategies in the context of the most recent economic conditions and forecasts.
ii. Financial risks
The main risks the corporation is exposed to through its financial instruments are interest
rate risk, liquidity risk and credit risk.
INTEREST RATE RISK
At 30 June 2008 the corporation had no debt.
Foreign currency risk
The corporation is not exposed to fluctuations in foreign currencies.
LIQUIDITY RISK
The corporation manages liquidity risk by monitoring forecast cash flows and ensuring
that adequate funding is maintained.
CREDIT RISK
The maximum exposure to credit risk, excluding the value of any collateral or other
security, at balance date to recognised financial assets, is the carrying amount, net of any
provisions for impairment of those assets, as disclosed in the balance sheet and notes to
the financial statements.
The economic entity does not have any material credit risk exposure to any single
receivable or group of receivables under financial instruments entered into by the
economic entity with the exception of the Department of Transport for $16.9 million.
PRICE RISK
The corporation is not exposed to any material commodity price risk.

72
V/LINE ANNUAL REPORT 2007–08
Financial Statements
73
(b) Interest rate risk
The consolidated entity’s exposure to interest rate risk which is the risk that a financial instrument’s value will fluctuate as a result of changes in the effective
interest rates of financial assets and financial liabilities.
Financial instruments
2008 Fixed interest rate maturing in:
Floating
interest rate
1 year or less Between 1
and 5 years
Over 5 years
Non-interest
bearing
Weighted average
effective interest rate
(c) Net fair values
The carrying amounts of financial assets and liabilities approximate their fair values.
The aggregate net fair values of financial assets and liabilities are equal to their
carrying amount.
2008 2007
$’000 $’000
Note 16 Controlled entities
V/Line Corporation did not purchase any other entities during the year. In 2004,
V/Line Corporation purchased 100% of the shares of V/Line Passenger Pty Ltd for $1.
The following entities are 100% controlled by V/Line Passenger Corporation as at
30 June 2008:
V/Line Passenger Pty Limited.
Financial assets
Cash and cash equivalents 2,664 – – – – 6.50%
Trade and other receivables – – – – 21,378 –
Financial liabilities
Trade and other payables – – – – 58,544 –
Financial instruments
Financial assets
2007 Fixed interest rate maturing in:
Floating
interest rate
1 year or less Between 1
and 5 years
Over 5 years
Non-interest
bearing
Weighted average
effective interest rate
Cash and cash equivalents 859 – – – – 6.12%
Trade and other receivables – – – – 12,504 –
Financial liabilities
Trade and other payables – – – – 36,681 –
All other financial assets and liabilities are non-interest bearing.
Financial assets
Cash and cash equivalents 2,664 859
Trade and other receivables 21,378 12,504
24,042 13,363
Financial Liabilities
Trade and other payables (58,544) (36,681)
Net financial assets (34,502) (23,318)
(d) Credit risk exposures
The corporation’s maximum exposures to credit risk at balance date in relation to each
class of recognised financial asset is the carrying amount of those assets as indicated in
the balance sheet.
The main exposure to credit risk arises as it operates in the public transport field and relies
on the credit worthiness of the State Government of Victoria.
Other credit risk in trade receivables is managed in the following way:
– enforcing disclosed payment terms
– debt collection policies and procedures.
The maximum credit risk exposure does not take into account the value of any collateral
or other security held in the event other entities or parties fail to perform their obligations
under the financial instruments in question.
(e) Market risk
The corporation’s exposure to market risk sensitivities at balance date is not considered
to be material.
Victorian Railway Heritage Operations Pty Ltd (voluntary deregistration on 4 February 2008).
Note 17 Ministers and Accountable Officers
In accordance with the Ministerial Directions issued by the Minister for Finance under the
Financial Management Act 1994, the following disclosures are made regarding responsible
persons for the reporting period.
The names of persons who were responsible persons at any time during the financial year
were:
Responsible Minister:
The Honourable Lynne Kosky MP, Minister for Public Transport
Directors of the board:
Mr Frank A. Tait
Dr Meredith A. Doig
(Resigned 13 June 2008)
Ms Catherine L. Scott
Mr Michael D. Tilley
Ms Alice J. M. Williams
(Resigned 30 June 2008)
Remuneration 2008 2007
Accountable Officer $330,000 – 339,999 $330,000 – 339,999

74
V/LINE ANNUAL REPORT 2007–08
Financial Statements
75
Note 18 Remuneration of executives
Executive Officers, (other than the Accountable Officer’s) remuneration during the
reporting period is shown in the table below. Base remuneration is exclusive of bonus
payments, long-service leave payments, redundancy payments, retirement benefits and
fringe benefits tax.
TOTAL REMUNERATION Base remuneration
2008 2007 2008 2007
$150,000 – $159,999 – – 1 –
$160,000 – $169,999 – – – –
$170,000 – $179,999 – – 2 1
$180,000 – $189,999 – – 3 2
$190,000 – $199,999 1 1 – –
$200,000 – $209,999 – 1 – 1
$210,000 – $219,999 2 1 2 –
$220,000 – $229,999 3 1 – –
$230,000 – $239,999 - – – 1
$240,000 – $249,999 1 – – –
$250,000 – $259,999 1 1 – 1
$280,000 – $289,999 – 1 – –
Total numbers 8 6 8 6
2008 2007
$’000 $’000
Note 19 Remuneration of Directors and Accountable Officer
Income paid or payable, or otherwise made
512 492
available, in respect of the financial year
to all directors and the Accountable Officer,
directly or indirectly, from the entity or any
related party.
The number of directors and the
Accountable Officer whose income
(including superannuation contribution)
falls within the following bands:
$20,000 – $29,999 4 4
$50,000 – $59,999 1 –
$60,000 – $69,999 – 1
$330,000 – $339,999 1 1
Note 20 Remuneration of auditors
Amounts received or due and receivable
by the auditors:
6 6
Note 21 Directors’ disclosures
The directors of the parent entity during the year ending 30 June 2008 were:
Frank A. Tait Appointed 1 October 2003
Meredith A. Doig Appointed 1 October 2003; Resigned 13 June 2008
Catherine L. Scott Appointed 1 October 2003
Michael D. Tilley Appointed 1 July 2006
Alice J. M. Williams Appointed 1 July 2006; Resigned 30 June 2008
All directors are directors of V/Line Passenger Pty Ltd, which forms part of the
consolidated entity.
Note 22 Related party disclosures
Related
party
Payments to related parties
Metlink
Victoria
Pty Ltd
VicTrack
Access
Southern
Cross Station
Authority
Department
of Transport
Nature of transaction Terms and conditions 2008
($)
Provision of services
for V/Line customers
to access suburban
network
Provision of
communication
services
Rental payments
Miscellaneous
payments made
under the Franchise
Agreement
Receipts from related parties
The entity was
charged services
on a cost basis only
Normal commercial
terms and conditions
Normal commercial
terms and conditions
In accordance
with the Franchise
Agreement
2007
($)
2,196,000 2,422,230
8,852,152 3,038,962
874,887 946,533
4,922,211 4,325,858
Total amount 1,809,880 1,375,980 1,505,649 1,249,594
– audit of the financial statements 78 62
– other services – –
78 62
Southern
Cross Station
Authority
Department
of Transport
Reimbursement
of site allowances
and other charges
Provides funding
to the corporation
Normal commercial
terms and conditions
In accordance
with the Franchise
Agreement
– 105,658
226,703,236 203,094,430
VicTrack
Access
Management fee
for rent collection
In accordance
with agreement
62,949 59,225
The parent company did not have any related party transactions within the
wholly owned group.

76
V/LINE ANNUAL REPORT 2007–08
Financial Statements
77
Note 23 Contingent assets and liabilities
Prior to 30 June 2008 there had been a number of incidents involving rolling stock and
either motor vehicles or trucks at level crossings throughout Victoria. As a result of these
incidents, damage has been sustained to rolling stock that has or will necessitate repairs
as well as other operational costs incurred from the incidents in question. V/Line is
pursuing the owners and/or operators of the vehicles in question from these incidents
(either in person or through their insurers) for the costs of the repairs and other expenses
incurred. The amount of contingent assets in relation to these incidents is uncertain.
In addition, there may be contingent liabilities in relation to these incidents.
Note 24 Operating leases and expenditure commitments
Operating lease commitments
Operating lease commitments primarily relate to commercial lease agreements in relation
to tenancy at 570 Bourke Street and 628 Bourke Street, Melbourne. The leases expire in
2014 and 2015 respectively which include fixed rate increases of between 3% and 3.5%
or market rent reviews at dates specified in the agreements.
Commitments for minimum contractual payments in relation to non-cancellable operating
leases are payable as follows.
2008 2007
$’000 $’000
Within one year 2,967 3,034
Later than one year but not later than 5 years 9,151 7,494
Later than 5 years 2,774 2,988
14,892 13,516
Expenditure commitments
Expenditure commitments primarily relate to station access charges payable up until
31 December 2009, the Franchise Agreement expiry date.
Commitments in relation to operating expenditure are shown below.
2008 2007
$’000 $’000
Within one year 10,312 20,413
Later than one year but not later than 5 years 1,252 11,432
Later than 5 years – –
Note 25 Employee benefits and superannuation commitments
(a) Employee benefits
The aggregate employee benefit liability is comprised of:
11,564 31,845
2008 2007
$’000 $’000
Accrued wages, salaries and on-costs 4,460 3,560
Short term provisions (current) 44,503 46,971
Long term provisions (non-current) 2,210 1,642
51,173 52,173
(b) Superannuation
Prior to the original Franchise Agreement, the majority of the consolidated entity’s staff
were members of government superannuation funds.
The state-organised funds include the Revised Scheme, New Scheme and the Transport
Superannuation Fund, which are all defined benefits schemes. These schemes are
‘master funds’ comprising a large number of participating members therefore are
not controlled by the consolidated entity.
With effect from 29 August 1999, employees were given the opportunity to remain
in the government superannuation funds or to change to a private superannuation fund.
The private funds joined by employees of the consolidated entity since 29 August 1999 are
VicSuper or Superannuation Trust of Australia. These funds are both accumulation funds.
The consolidated entity has not recognised any unfunded superannuation liabilities as the
State Government has guaranteed to undertake this liability from the commencement of
the original franchise in 1999. Any unfunded liabilities that may arise subsequent to the
new franchise are calculated annually by the Government Superannuation Office and paid
by V/Line at the end of the financial year.
(c) Superannuation schemes contributions and liabilities
Total superannuation
contributions
Contribution
for the year
2008 $’000
Contribution
for the year
2007 $’000
Contribution
outstanding
at year end
2008 $’000
Contribution
outstanding
at year end
2007 $’000
9,311 6,942 – –
Note 26 Subsequent events
There are no events subsequent to balance date.
Note 27 Cash flow statement
2008 2007
$’000 $’000
(a) Reconciliation of operating
profit/(loss) after tax to net cash
flows from operations
Operating profit/(loss) after tax (15,295) (23,373)
Non-cash flows in profit/(loss)
Depreciation 20,391 22,737
Tax expense 6,290 –
Asset impairment – 500
Assumption of Regional and Network
Access net liabilities
– 9,293
Change in operating assets and liabilities
(Increase)/decrease in trade and other
(8,874) (2,675)
receivables
(Increase)/decrease in inventories (811) 207
(Increase)/decrease in prepayments 47 –
(Decrease)/increase in trade and other
21,037 9,056
payables
(Decrease)/increase in other provisions (1,899) 817
Net cash from/ (used in) operating activities 20,886 16,562
(b) Reconciliation of cash
Cash balance comprises:
– Cash at bank 2,560 771
– Cash on hand 104 88
2,664 859

78
V/LINE ANNUAL REPORT 2007–08
Independent auditor’s report
79
Note 28 Economic dependency
The consolidated entity provides public transport services to rural and regional
Victoria and is also responsible for the management and maintenance of the rail
network. The provision of these services is subsidised by the State Government of
Victoria. Without the provision of that subsidy the consolidated entity could not continue
as a going concern. The subsidy requirements for the year ending 30 June 2009 have been
approved by the state. The consolidated entity’s three-year business plan has also been
approved by the Director of Public Transport pursuant to the Franchise Agreement.
Note 29 Dividends
No dividends were paid, declared or recommended during the year, or subsequent
to the year end.

80
V/LINE ANNUAL REPORT 2007–08
Energy efficiency
opportunities REPORT
81
Energy efficiency opportunities program – public report
Controlling Corporation
FIRST PUBLIC REPORT
V/Line Passenger Pty Ltd (Subject to Deed of Company Arrangement)
Period to which this report relates
(See sub-section 22(2) of the Act and Regulation 7.1 of the Energy Efficiency Opportunities Regulations (the Regulations) 2006)
Part 2 - Outcomes of and business response to opportunities that have been identified and evaluated for
each group member, business unit, key activity or site assessed
(See paragraphs 3-6 of Schedule 4 and Schedule 6 of the Regulations)
Group member/business unit/key activity/site >0.5 PJ name: V/Line Passenger (Above Rail)
2
Start 1 July 2006 End 30 June 2008
Part 1 - Summary of assessments conducted thus far
Table 1.1 - Description of the way in which the corporation has carried out its assessments and over what period was each assessment
taken. A statement saying that the intent and key requirements of the Energy Efficiency Opportunities legislation have been met must be
made.
V/Line has collected emissions and energy use data for the past four years. This data formed the basis of the assessment which was undertaken for
the ‘above rail’ division of the business under the Energy Efficiency Opportunities legislation. A cross-functional business improvement project team
was formed to analyse the data and identify opportunities to improve V/Line’s energy efficiency. This assessment looked at data for 2005-06 and
2006-07, with energy use increasing across those two years because of an increase in the number of services being run. The assessment itself took
place between March and June 2008. A number of potential opportunities were identified and evaluated (some are still going through the evaluation
process). The outcome of the assessment was documented in an information paper which was reviewed and noted by the board. The intent and key
requirements of the Energy Efficiency Opportunities legislation have been met.
Table 1.3
Outcomes of
assessment
***Business
Response
Status of Opportunities
Number of
Opportunities
Estimated energy savings per
annum by payback period (GJ)
0 – < 2 years 2 – 4 years
Total estimated
energy savings
per annum (GJ)
*Accuracy
range (%)
Identified (accuracy ±30%) 2 0.3 1770 1770.3 ± 25%
Identified (accuracy > ±30%)
**Total Identified 2
Under Investigation 1 1770 1770 ± 25%
To be Implemented 1 0.3 0.3 ± 25%
Implementation Commenced
Implemented
Not to be Implemented
Table 1.2 - Group member/business
unit/key activity/site that have been
assessed
Energy use per
annum in the year
the assessment is
completed *
V/Line Passenger (Above Rail) 962 TJ (2006-07)
1052 TJ (2007-08
est)
Energy data accuracy
(if not within ±5%) **
Total 962 TJ (2006-07)
Total as a percentage of total energy 100%
use of the group covered by this
report
* Energy Bandwidth may only be used if approved in the Assessment and Reporting Schedule
** Data accuracy not within ± 5% can only be included if approved in the Assessment and Reporting Schedule
Reasons for not achieving data accuracy to within
±5% **
± 5% (see paragraph 5(b) of Schedule 4 of the Regulations)
*The accuracy range for projected or actual costs, benefits and energy savings.
**You must ensure that this row is the sum of the two rows above it.
*** The data contained in each row of the business response area must total to the data contained in the 'Total Identified' row.
Note: An opportunity is any potential change to a system, activity or piece of equipment that:
• is identified during an EEO assessment;
• is consistent with legal requirements such as OHS, and
• may result in energy savings projects with payback periods of 4 years or less.

82
V/LINE ANNUAL REPORT 2007–08
ENERGy EFFICIENCy
OPPORTUNITIES REPORT
83
Details of at least three significant opportunities found through EEO assessments
(See paragraph 7 of Schedule 4 of the Regulations)
Details must include a brief description of the opportunity and may optionally include details of the costs of implementation, energy/dollar savings and any
other benefits (such as greenhouse reductions).
Table 1.4
3
Opportunity 1
A review was undertaken of lighting at the West Melbourne Maintenance Depot. The review found that energy could be
saved in two ways. The first improvement identified was through the refurbishment of light fittings. This involved (among
other things) the replacement of fluorescent tubes with more efficient types and the installation of high performance
reflectors. The second improvement identified was through the installation of voltage reduction units for fluorescent lights.
These units would reduce the voltage to the lights when full power is not required (i.e. after a warm-up period). The annual
savings generated through these improvements, inclusive of energy savings and maintenance savings, was calculated to be
approximately $60,000 p.a. The investment required to implement these improvements is approximately $208,000. This
represents a payback period of 3.4 years. These improvements would also generate a greenhouse gas emission reduction
of approximately 650 tonnes per annum.
Opportunity 2 *
A review was undertaken of the pool of V/Line road vehicles. The light motor vehicle fleet consists of several different types
of sedans and station wagons as well as Toyota Hilux 2WD and 4WD utility vehicles. Research was undertaken to
determine the greenhouse gas emissions of vehicles in our current fleet and those of alternative vehicles which would also
meet the requirements of the business. The research determined that the Toyota Hilux 2WD and 4WD had the lowest
emissions when compared with other vehicles in their respective classes. The research also determined that the Toyota
Aurion had greenhouse gas emissions that were on average 10 per cent lower than other sedans in the fleet and 12 per cent
lower than station wagons in the fleet. A reduction in greenhouse gas emissions would therefore be achieved if the company
standardized on the Toyota Aurion when replacing existing sedans or acquiring new sedans. There will be a corresponding
reduction in energy use estimated to be 5 per cent of total road vehicle energy use. A revised Motor Vehicle Policy
incorporating these changes was recently approved by the board.
Opportunity 3 **
*If there are less than three significant opportunities, provide details of those identified.
**If no significant opportunities have been identified in the assessment, a statement to this effect.
Part 3 - Voluntary Contextual Information
Reporting corporations may supply additional information that provides more context to the public report. Such information may include:
4
V/Line has also identified a number of potential opportunities which have either not been fully evaluated or have a payback period of greater than four
years. These opportunities include the following:
• Lighting improvements at stabling yards – lighting at stabling yards is currently the subject of a research project by a final year engineering
student under a program sponsored by Greenhouse Challenge Plus. This could lead to the development of new standards for the provision
of lighting at yards which could be implemented at locations throughout Victoria.
• Lighting improvements at stations – a major review of lighting at stations is currently being undertaken to ensure V/Line is meeting
standards, including DDA compliance, in an efficient manner.
• Lighting improvements at head office – various alternative lighting technologies are currently being reviewed with a view to implementing a
trial.
• Solar powered stations – an investigation into converting Geelong Station to solar power was undertaken. An investment in the order of
$900,000 would be required to generate the 140,000 p.a. kWh of electricity (approx $24,000 at current rates) used on average at the station.
• Solar hot water – the conversion of Geelong Station to solar hot water was investigated as an opportunity. An investment in the order of
$5,000 would be required with an estimated saving of $1,000.
While the implementation of the above initiatives would be of benefit, the improvement would be marginal given that approximately 96 per cent of
V/Line’s energy is used through the burning of diesel to power trains. Regarding V/Line’s fleet of trains, the following programs have been
implemented, are about to be implemented or have been investigated:
• N locomotive generator upgrade – N-Class locomotives have been fitted with more efficient Head End Power generators over the past four
years. These generators provide power to the carriages attached to the locomotives. Due to the small amount of fuel used in the generator
compared to the motor, a fuel efficiency improvement cannot be demonstrated.
• N locomotive battery replacement – a new gel-based battery is to be installed in some of the N-Class locomotives. The new battery type
should give a longer life and more reliable cold starting which will reduce the need to leave locomotives idling for long periods.
• Sprinter oil additive trial – an oil additive, which was supposed to reduce engine friction and hence reduce fuel consumption, was trialled in
one Sprinter (another type of rail vehicle in the fleet). V/Line found that fuel use increased during the trial period so the initiative was not
progressed further.
It should be noted that V/Line operates an ageing fleet of rolling stock. The average age of the V/Line fleet is about 25 years, although excluding the
newest vehicles from that analysis pushes the average up to about 35 years. The capacity to make significant improvements in fuel efficiency is
therefore limited. V/Line will soon be receiving additional new motorised carriages however these will be used to provide additional capacity rather
than allowing older vehicles to be retired.
Although V/Line’s gross energy use has increased over the past two years, this has been due to an increase in the number of services provided. The
increase in service provision, among other factors, has encouraged a large increase in patronage meaning that V/Line’s energy indicators have
moved in a positive direction.
Towards the end of the 2006-07 financial year, V/Line became responsible for the operation and maintenance of the Victorian regional track network.
This is known as the ‘Below Rail’ division of the business. Data is currently being collected for these activities but it will cause a step change in
V/Line’s total energy use. The below rail division will be included in V/Line’s next assessment which should commence later this year.
5
Part 4 - Declaration
(See paragraph 8 of Schedule 4 of the Regulations and paragraph 22(4)(c) of the Act)
The information included in this report has been reviewed and noted by the
board of directors and is to the best of my knowledge, correct and in
accordance with the Energy Efficiency Opportunities Act 2006 and Energy
Efficiency Opportunities Regulations 2006.
Chief Executive Officer

84
V/LINE ANNUAL REPORT 2007–08
DISCLoSure InDeX
The Annual Report of the V/Line Passenger Corporation is prepared in accordance with all
relevant Victorian legislation.
This index has been prepared to identify compliance with statutory disclosure requirements.
mInISterIaL DIreCtIonS
mInISterIaL DIreCtIonS
report of operations
Financial Statements
Charter and purpose
Financial statements required under Part 7 of the Fma
FRD 22A Manner of establishment and the relevant Ministers 3, 51, 73
SD 4.2(f) Financial report 56
FRD 22A Objectives, functions, powers and duties Inside Cover, 13-15, 51
SD 4.2(b) Operating statement 56
FRD 22A Nature and range of services provided 5-15
SD 4.2(b) Balance sheet 57
management and structure
FRD 22A Organisational structure 54
SD 4.2(a) Statement of changes in equity 57
SD 4.2(b) Cash flow statement 58
SD 4.2(c) Accountable officer’s declaration 56
Financial and other information
FRD 22A Statement of workforce data and merit and equity 43
FRD 22A Occupational health and safety 14, 19
FRD 15A Executive officer disclosures 74
SD 4.2(c) Compliance with Australian accounting standards
59
and other authoritative pronouncements
SD 4.2(c) Compliance with Ministerial directions 53
SD 4.2(d) Rounding of amounts 64
FRD 22A Summary of the financial results for the year 47
FRD 22A Significant changes in financial position during the year 47
LeGISLatIon
FRD 22A Major changes or factors affecting performance 4-10
Freedom of Information Act 1982 53
FRD 22A Subsequent events 77
Whistleblowers Protection Act 2001 53
FRD 22A Application and operation of Freedom of Information Act 1982 53
Victorian Industry Participation Policy Act 2003 53
FRD 22A
Compliance with building and maintenance provisions
of Building Act 1993
53
Building Act 1983 53
Financial Management Act 1994 56, 79
FRD 25 Victorian Industry Participation Policy disclosures 53
Audit Act 1994 79
FRD 22A Statement on National Competition Policy 38 53
FRD 22A Application and operation of the Whistleblowers Protection Act 2001 53
FRD 22A Details of consultancies over $100,000 48
FRD 22A Details of consultancies under $100,000 48
FRD 12A Disclosure of major contracts n/a
FRD 24A Reporting of office-based environmental impacts 29, 80
FRD 22A Statement of availability of other information Back Cover
FRD 10 Disclosure index 84
DeSIGn
ThatWorks
PrInt
Immij Pty Ltd
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