Rottnest Island Authority Annual Report...Rottnest Island Authority Annual Report 010- 011 Rottnest...

Rottnest IslandCelebrating 100 Years of Tourism 1911-2011

Rottnest Island Authority

Annual Report2010-2011

� Rottnest Island Authority Annual Report �010-�011

Rottnest Island Authority

ANNUAL REPORT

2010-2011

Address PO Box 693

Fremantle WA 6959

E-Shed, Victoria Quay

Fremantle WA 6160

Telephone 08 943� 9300

Facsimile 08 943� 9301

Email [email protected]

Internet www.rottnestisland.com

Rottnest Island – driving sustainability

Image courtesy Experience Perth

Image courtesy Reid family

Image courtesy Battye Library



Rottnest Island – Celebrating 100 Years of Tourism 1911-�011 1

Table of Contents Letter to the Minister ................................................................................................... �

Highlights ................................................................................................................... 3

Chairman’s Overview ................................................................................................... 4

Chief Executive Officer’s Summary ................................................................................ 6

AGENCY OVERVIEW

• Vision ................................................................................................................... 8

• Operational Structure ............................................................................................ 8

• Performance Management Framework .................................................................... 8

• The Rottnest Island Community ............................................................................ 11

AGENCY PERFORMANCE

• Financial Summary .............................................................................................. 1�

• Key Performance Indicators Summary .................................................................. 14

• Rottnest Island Management Plan �009-�014 ....................................................... 15

• Recreational and Holiday Services ........................................................................ 18

• Natural Environment and Cultural Heritage Management ......................................... ��

• Infrastructure, Utilities and Services ...................................................................... �5

SIGNIFICANT ISSUES AND TRENDS

• Financial Security ................................................................................................ �7

• Island Infrastructure ............................................................................................. �7

• Visitor Trends ...................................................................................................... �7

• New Legislation ................................................................................................... �8

• Sustainability....................................................................................................... �8

• Climate Change Impacts ...................................................................................... �8

DISCLOSURES AND LEGAL COMPLIANCE

• Independent Audit Opinion .................................................................................... 30

• Financial Statements ........................................................................................... 3�

• Key Performance Indicators ................................................................................. 6�

• Other Financial Disclosures .................................................................................. 66

• Governance Disclosures ...................................................................................... 67

• Other Legal Requirements .................................................................................... 70

APPENDIX

• Reconciliation Action Plan Progress Report............................................................ 74

� Rottnest Island Authority Annual Report �010-�011

The Hon Dr Kim Hames MLA

Minister for Tourism

In accordance with section 61(1) of the Financial Management Act 2006, and in fulfilment of obligations imposed on the

Authority by the Rottnest Island Authority Act 1987, we hereby submit for your information and presentation to Parliament

the Annual Report of the Rottnest Island Authority for the year ended 30 June �011.

This report has been prepared in accordance with the provisions of the Financial Management Act 2006.

Laurie O’Meara AM John Driscoll

CHAIRMAN DEPUTY CHAIRMAN

�0 September �011 �0 September �011


Highlights

Celebrating 100 years of tourism on Rottnest Island during �011

Silver Award for Major Tourist Attraction – WA Tourism Awards

Over 565,000 people visited Rottnest Island during the year of which 100,000 stayed overnight in Authority accommodation

A 9% increase in visitors who travelled by ferry compared to the previous year

Rottnest Island met or exceeded the expectations of 94% of its visitors

The Rottnest Island Authority continued to achieve positive cash flow at a time of stagnation in the tourism industry

Rottnest Island Management Plan �009-�014 progressed with $3.5 million expended on planned initiatives

Another $1.5 million ‘banked’ for the 10 year accommodation refurbishment programme

Aboriginal Reconciliation Plan implemented to �011 stage including:

• Four Aboriginal staff employed• Community grants awarded to assist access to the Island • Cultural awareness training for Authority staff

More than $�.4 million was spent on capital works including:

• Improvements to accommodation with new barbecues and additional sofas • New gas reticulation system at the Caroline Thomson cabins• 750 new purpose built adult hire bikes

Improved customer satisfaction levels achieved across a range of Island services and facilities

4 bed accommodation packages including ferry fares, bike hire and Bayseeker bus tickets were available from $45 per person per night

Introduction of Telethon Tuesdays $35 return fare

We celebrated 100 years of tourism on Rottnest Island during 2011.

Chairman’s Overview

Laurie O’Meara AM

CHAIRMAN

In 1911 the then Governor Bedford declared

Rottnest to be an A class Reserve so that it

would always be available for holidaymakers and,

of course, tourists. In December the Authority

welcomed the popular retiring Governor Dr Ken

Michael to the Island to officially launch �011 as

the 100th year of tourism. He did this by unveiling

the bright new signage on the main jetty thereby

setting off a number of special events to be held

throughout the year.

A matter of constant concern to the Authority is

the high cost of doing business on Rottnest. As a

result the Island carries the reputation of being an

expensive place for holidays. The situation is not

assisted by negative press articles which use the

traditional draw of a Rottnest headline to ‘sell’ a

story. Such articles never examine the reasons why

operating a holiday resort and support businesses

on an island involves serious cost penalties. It is

disappointing that the opportunity to fully explain

the situation is never given other than by an edited

letter to the editor.

First among these cost penalties is the cost of

staffing. Staff, required by their duties to stay on

the Island, must be provided with accommodation

by their employer. Others come over from the

mainland and back each day at their employers’

expense, with their hours starting and finishing at

the mainland.

The Rottnest Island Authority provides all utilities

such as electricity, gas, water, sewerage and waste

disposal, the last of which is transported by barge

back to the mainland. Because of the small volumes

involved there is very little economy of scale and

the charges to its own accommodation, and to the

businesses on the Island is several times the level

about which we read daily complaints in Perth and

throughout the State. There is no alternative for all

businesses other than to cover these high costs in

their prices.

A constant imposition which the Authority has been

discussing with Government for some years is the

requirement for the cost of maintaining the reserve

to be covered from ‘profits’ produced from the

operation of the Authority’s commercial operations.

It is pleasing to acknowledge that this has now been

addressed with the agreement by the Government

to make an annual grant to the Authority to assist

with this expense. On behalf of the Authority, I wish

to record my appreciation for this assistance.

Even with this cost penalty, holidays at Rottnest

still compare quite favourably with opposition

often referred to, such as Bali or the South West.

Critics are inclined to compare the cost of a

standard hotel room with a Rottnest cabin which

can accommodate up to six or eight persons.

In my review last year, I referred to the downturn

of 16% in visitor numbers which was attributed to

the general malaise of the tourism industry during

�009-10. It is pleasing to note that half of this

4 Rottnest Island Authority Annual Report �010 - �011

Rottnest Island – Celebrating 100 years of Tourism 1911 - �011 5

drop in numbers has been picked up this year, proving that

it was not cost that caused the reduced visitor numbers.

Being mindful of the cost of a holiday on Rottnest the

Authority is constantly looking to ensure that visitors

are well looked after and that all members of the

family are catered for. This also applies to the range of

accommodation available for visitors. At one end of the

scale we continue our efforts to have a new hotel built on

the site at Longreach Bay and plans are well progressed

to upgrade and expand the Island campsite adjacent to the

Caroline Thomson cabins.

All of the annual events on the Island were held without

any problems. The much publicised Leavers days remain

a time of frivolity and rite of passage, and because of the

work put in by volunteers, police and Authority staff, they

fail to attract the negative press of times past. The Rottnest

Channel Swim is now an event of international importance,

and the Authority and the Rottnest Channel Swim

Association have formed a close working relationship to

ensure that it remains so. It is of interest that two members

of the Authority, Deputy Chairman John Driscoll and Sally

Hollis were in the field this year.

The annual Anzac Ceremony became a major event this year

with over 1,000 early morning participants. The number

was swelled by the presence of children with their families

arriving by ferry at 5.30 am, an initiative of the Department

of Sport and Recreation. This initiative entitled ‘Nature Play

Day’ enabled 800 parents and children to spend the day on

the Island carrying out a number of activities to introduce

them to Rottnest. It is hoped that this will become an

annual event.

We continue to enjoy and marvel at the skill of the lads from

the Clontarf Academy who compete for the Wadjemup Cup

in November. A new event this year was the individual time

trial for cyclists which was part of the UCI World Cycling

Tour. Comments received indicate that the participants

rated it as a first class location for such

an event so we expect to see them again.

The Rottnest experience is always enhanced by the great

contribution made by the many voluntary groups who give

their time so willingly year in year out. It always amazes me

that so many people from all walks of life continue to show

their love for our Island in such an unselfish way. On behalf

of the Authority I say a very sincere thank you.

During the year the Tourism portfolio was passed from

Minister Dr Liz Constable to Deputy Premier Dr Kim Hames.

We thank Minister Constable for great interest in the affairs

of the Authority and her regular attendance at Island

events. Minister Hames has quickly demonstrated active

involvement and we welcome him to the role.

Members Sue Murphy, Karen Jacobs and Geoff Totterdell

left the Authority during the year with their terms having

expired. All had made valuable contributions of their varying

talents and I record my thanks to them. Two new members

John Driscoll and Sally Hollis were appointed with John

being made Deputy Chairman. We welcome them and look

forward to their input.

Paolo Amaranti has continued to lead his administration

with a very high level of professionalism in what is at

times a difficult environment where he needs to marry the

competing demands of Authority members, the public

and his staff. The Authority has a diverse group of people

in its employ and I acknowledge the commitment and

professionalism they bring to their endeavours and thank

them for their efforts.

We face the new financial year with the continuing challenge

of financial sustainability and an important part of this is

to ensure that we contain costs, improve the offering and

remain relevant to our regular visitors.

6 Rottnest Island Authority Annual Report �010-�011

For the year 2010-11 we set ourselves the goals of reversing a downturn in visitor numbers, and returning the Rottnest Island Authority to a positive financial position.

CEO’s Summary

Paolo Amaranti

CHIEF EXECUTIVE OFFICER

For the year �010-11 we set ourselves the

goals of reversing a downturn in visitor numbers

and returning the Rottnest Island Authority (the

Authority) to a positive financial position. That we

have succeeded in both of these is due in no small

measure to the cooperative marketing efforts we

have undertaken with the Rottnest Island Business

Community. The 100 Years of Tourism celebrations,

Telethon Tuesdays, and Tom Williams and Love My

Rotto campaigns have all contributed to an overall

9% increase in visitors.

During the �010-11 financial year, the Authority

achieved an accounting profit of $�.1 million

and a positive cash flow position of $3.� million.

However, the main contribution to these results was

a significant abnormal item; an Australian Taxation

Office Fuel Tax Rebate adjustment of $1.7 million

for diesel fuel purchased in previous years. After

discounting this item, a profit of $0.4 million and

positive cash flow of $1.5 million was achieved;

both results were better than expected.

Steady progress has been made during the year

in moving forward the �5 initiatives outlined in

the Rottnest Island Management Plan �009-�014

(RIMP). $3.5 million was spent and although

some initiatives require more time and effort

than anticipated, we are confident they will all be

completed by �014.

We have seen positive increases in our visitor

satisfaction ratings despite implementing careful

budgetary constraints across the business.

We have taken over the management of the Fun

Park and Picture Hall, providing value for money

entertainment with a family focus. In conjunction

with the Department of Sport and Recreation’s

Nature Play family days, we have seen hundreds of

children enjoying the kind of freedom and carefree

fun that should be synonymous with childhood.

The successful introduction of an online booking

system has seen 35% of accommodation bookings

made online. We continue to provide telephone and

face-to-face assistance, leasing a reception and

information pod at the newly refurbished Heritage

Award winning B-Shed facilities at Victoria Quay.

Demand for bookings in peak season remains four

times greater than the accommodation available.

Managing antisocial behaviour was successful;

for example, the Kingstown Barracks is now an

alcohol-free area making the facility very suitable for

school and youth groups to use.

Our new cleaning contractors have received a

marked increase in positive customer comment

in the first few months of operation. They were

appointed on the basis of a commitment to

sustainability principles such as electric vehicles

and environmentally friendly cleaning materials.

Our focus on our visitors includes more than

$�.4 million spent on capital works during the

year, including a new children’s playground

at South Thomson, stainless steel barbeques

installed in �4 units, ceiling fans, furniture and

equipment upgrades. There were 750 new


adult bikes purchased this year, customised to Rottnest

conditions, together with an expanded range of sporting and

recreational equipment for visitors to hire.

Aboriginal reconciliation continues to be a major focus for

the Authority and this year we progressed our Reconciliation

Action Plan most satisfactorily. A review of what we have

achieved to date includes a continuing relationship with

the Clontarf academies which this year held their Annual

Conference at the Country Club. We look forward to a

continuation of this association into the years ahead. We

implemented several interpretation initiatives based on the

advice of our Aboriginal Heritage Officer. The Authority

had four Aboriginal employees engaged during the year in

various functions, including cultural heritage, bike hire and

corporate services.

During the year over 16,000 students participated in our

curriculum-linked education programs which now have an

Aboriginal component, Wadjemup Dreaming, which has

been enthusiastically taken up. The interpretative panels and

Seasons Wheel telling the story of the Six Aboriginal Seasons

provide some fascinating information for the students and

our other visitors. I would like to thank the Wesfarmers

volunteers who helped with the construction. Our revamped

jetty signage provides a welcome to Wadjemup. It tells the

story of the Island from the Dreaming to today, and of our

commitment to walking together with the community to heal

the past and forge a positive future together.

Authority staff and some Rottnest Island Guides had the

opportunity to experience a two-day immersion into Aboriginal

culture, learning about belonging to country, skin groups,

and their significance to the workings of a society that in the

past was truly sustainable over many thousands of years.

Described by participants as ‘life-changing’, the awareness

training brings alive the injustices of the past in a meaningful

way so that present dysfunction can be understood and

insights gained into how the future could be better.

We were delighted to receive a commitment from the State

Government for an additional $6 million over three years

to assist us in meeting our responsibilities for protecting

and conserving our significant heritage and natural

environments.

The strong investment we have made in the past few years

to improving our governance structures, policies and

processes continued this year. A new commercial approach

to business leasing has seen a transfer of the responsibility

of providing staff housing to businesses requiring this

facility. Major renovations including the General Stores in

the Settlement and at Geordie Bay have been subject to our

tough new development planning process which builds in

compliance with our environmental and sustainability goals.

The Authority has again achieved full compliance with the

Economic Regulation Authority’s licences to produce and

supply power, gas, water and waste management services.

I congratulate the staff of the Authority and our facilities

contractor, Programmed Facility Management, for this

achievement.

The wonderful work of our volunteers including the Rottnest

Voluntary Guides Association, Winnits, corporate volunteers

and community organisations such as the Scouts,

continues to make an invaluable contribution to the Rottnest

experience. My sincere thanks and those of the Authority go

to them.

I would like to recognise the efforts of the Island business

community in bringing about a reversal of the downward

trend of visitors in an uncertain financial climate. My sincere

thanks go to my staff, my colleagues on the Board,

the Chairman Mr Laurie O’Meara, and to the Minister for

Tourism Dr Kim Hames for his support during the year.

We look forward to the year ahead, to increasing our

efficiencies and effectiveness as an organisation, to

achieving our reconciliation and sustainability goals – but

most of all to enhancing our visitors’ satisfaction with their

day or stay on Rottnest Island.


Agency Overview

Vision Rottnest Island is a model of ethical tourism based

on financial, environmental and social sustainability.

Objectives

• Rottnest Island provides a wide range

of recreational and holiday services to

Island visitors that create a high degree of

satisfaction;

• The Authority generates revenue from

commercial activities to financially sustain its

operating and asset replacement costs;

• Rottnest Island’s natural environment and

cultural heritage are conserved and enhanced

as models of sustainability within Australia; and

• The Authority acquires and manages its

financial and other resources to become

financially sustainable.

Operational StructureThe Rottnest Island Authority was established

under the terms of the Rottnest Island Authority Act 1987 (the Act) and administers the Rottnest Island Regulations 1988. It is responsible to the

Hon Dr Kim Hames MLA, Minister for Tourism,

and is governed by members appointed by the

Governor on the nomination of the Minister.

The Chief Executive Officer administers the day

to day operations of Rottnest Island, subject to

the control of the Authority and is supported by a

core permanent staff of 117 full-time equivalents.

Temporary staff are engaged as required to meet

seasonal demand.

Performance Management FrameworkThe framework is structured in accordance with

the requirements of the Government’s Outcome

Based Management Framework for public sector

agencies.

The Authority is classified as a Public Non-Financial

Corporation by the State Government. This implies

that the agency is required to be self-funding and

not rely on State Budget funding for its commercial

operating expenses. The Authority is therefore

required to act in a commercial manner to fulfil its

functions. The Act, however, does not stipulate

profit-maximisation or realisation of commercial

rates of return as its objectives.

The Rottnest Island Authority’s performance management framework reflects its functions as outlined in the Rottnest Island Authority Act 1987 and through strategic documents such as the prevailing Rottnest Island Management Plan.



Rottnest Island Authority’s Outcome Based Management Framework

Government Goal: Social and Environmental Responsibility

Ensuring that economic activity is

managed in a socially and environmentally

responsible manner for the long-term

benefit of the State.

Shared Responsibilities with Other Agencies

The Authority does not share any key

service-related responsibilities with other

agencies. It works in partnership with

other Government providers servicing

Rottnest Island, including the Western

Australia Police Service, Western Australia

Department of Health and Department of

Education.

MINISTER FOR TOURISMHon Dr Kim Hames MLA

ROTTNEST ISLAND AUTHORITYMEMBERS

Laurie O’Meara AM (Chairman)

MANAGERINTERNAL AUDIT

Peta Davis

CHIEF EXECUTIVEOFFICER

Paolo Amaranti

GENERAL MANAGER GOVERNANCE,

STRATEGY & SUPPORTGreg Ellson

MANAGER HOLIDAY SERVICESPeter Hill

MANAGERACCOMMODATION

SERVICESJonathan Mason

MANAGER CULTURAL HERITAGE

Hannah Eames

MANAGER WORKS & CONTRACT

SERVICESLeon McIvor

MANAGER MARINE &

TERRESTRIAL RESERVERoland Mau

ROTTNEST ISLAND AUTHORITY’S DESIRED

OUTCOMEKEY PERFORMANCE INDICATORS

SERVICES PROVIDED TO THE

COMMUNITY

Rottnest Island visitors enjoy recreational and holiday experiences in healthy natural and cultural environments.

EFFECTIVENESS • Visitor satisfaction with the Rottnest Island experience. • Health of Rottnest Island’s natural environment. • Health of Rottnest Island’s cultural heritage.

1. Recreational and holiday services.

EFFICIENCY • Average cost of recreational and holiday services provided per visitor. • Average cost of natural environment and cultural heritage management per Reserve hectare.

�. Natural environment and cultural heritage management.

Rottnest Island AuthorityExecutive Organisation Structure


The Rottnest Island Community

Business Community

The Rottnest Island Business Community

(RIBC) is a collective group representing

the interests of business operators

and other organisations that service

the Island. Members include all private

business operators on the Island, the ferry

and freight services and the Authority’s

commercial operators.

The role of the RIBC is to promote the

Island’s businesses and services, and

encourage cooperation amongst its

members. The RIBC also works closely with

the Authority to promote the Island, and

provides leadership regarding ‘destination’

marketing and promotional strategies.

Volunteer Groups

Rottnest Island is fortunate to have a

number of volunteer groups working for the

benefit of the Island and its visitors. These

include the Rottnest Voluntary Guides

Association, Winnit Club, the Rottnest

Conservation Foundation, Scouts Australia,

Rottnest Society, Conservation Volunteers

Australia, and various school and corporate

groups. Over 1,000 volunteers are

currently associated with the Island.

Volunteers participated in projects like

seawall painting, fence installation, tree

planting, weed removal, seed collection,

rubbish cleanups and general maintenance.

The Rottnest Voluntary Guides Association

also conducts guided tours, adding to the

visitor experience on the Island.

Emergency Services

Emergency response on the Island is

coordinated through the Rottnest Island

Local Emergency Management Committee,

which has Specified Public Authority

Status under Section 35 of the Emergency Management Act 2005.

Other Community Services

State Government services located on the

Island include a police station, a nursing

post and a primary school. The Water

Police and Department of Transport assist

with compliance activities within the Island’s

marine area. The Authority provides a post

delivery service on the Island and a private

barge operator provides freight transport.

Aboriginal Reconciliation

Under its �008-�011 Reconciliation Action

Plan (RAP), the Authority is committed

to promoting awareness, education and

action both internally (among its staff,

contractors, volunteers and business

partners) and with Island visitors to help

build relationships, develop respect and

create opportunities for Aboriginal people.

The Authority has made significant

progress in implementing its RAP initiatives.

For the past two years Aboriginal cultural

awareness training for Authority staff has

been conducted and is now incorporated

into the staff induction process. This

training has been very enlightening to

some staff who, as a consequence of the

training, have adopted a more empathetic

approach to interacting with Aboriginal

visitors. The course involves two days of

intensive and interactive sessions covering

the culture and history of Aboriginal

peoples in Australia, as well as current

issues and challenges.

In the future the Authority will also

encourage Island businesses, permanent

contractors and volunteer groups to attend

the sessions. This initiative has encouraged

greater sensitivity to Aboriginal cultural

issues from all staff working on

the Island.

Several Aboriginal trainees

and cadetships have been

sponsored during the past three

years to encourage Aboriginal

development of youth, and

to provide pathways for the

employment of Aboriginal

people within the Authority.

These positions have included:

• Aboriginal Projects Officer in a

permanent role;

• Aboriginal cadetship in Cultural

Heritage �009-�011;

• Aboriginal traineeship in Human

Resources January �011- ongoing; and

• Aboriginal traineeship in Holiday

Services, December �010 – May �011.

Grants totalling $�0,000 were offered to

several Aboriginal groups during the year to

help facilitate their access and connection

to Rottnest Island, and for cultural and

economic development purposes.

During the year the Authority sponsored

various events, such as the Wadjemup

Cup football competition conducted by the

Clontarf Foundation, and the NAIDOC Week

Rottnest Island Golf Tournament.

In addition, the annual Rottnest

Island Anzac Day ceremony included

representatives of the Aboriginal and Torres

Strait Islander community.

Expressions of interest for membership

on the Authority’s Aboriginal Reference

Panel were also called for during the year,

one of the many actions the Authority’s

RAP Working Group has successfully

progressed. The RAP Working Group

includes representation from the Authority’s

Aboriginal staff members.

A detailed summary of the Authority’s

progress against its Reconciliation Action

Plan is provided on page 74.

1� Rottnest Island Authority Annual Report �010-�011

TARGET 2010-11 Result 2010-11

Total cost of services – $34.5 million $3�.3 million

Profit – $69,000 $�.1 million

Net increase/(decrease) in cash held – (-$�9,000) $3.� million

The following table of financial ratios highlight a variety of areas where the Authority’s financial performance has improved over

recent years.

FINANCIAL RATIO 2011 2010 2009

Operating revenue per visitor $9�.55 $94.14 $71.56

Profit margin percentage

(Profit before depreciation and extraordinary items as a % of revenue)16% 1�% 9%

Cash ratio (Coverage of current liabilities with cash) 1.40 1.03 1.09

Agency Performance

Financial Summary During the �010-11 financial year the

Authority achieved an accounting profit

of $�.1 million and a positive cash

flow position of $3.� million. However,

the main contribution to these results

was a significant abnormal item; an

Australian Taxation Office Fuel Tax

Rebate adjustment of $1.7 million for

diesel fuel purchased in previous years.

After discounting this item, a modest

profit of $0.4 million and positive cash

flow of $1.5 million was achieved, both

results were better than expected.

This financial performance was the

result of prudent financial management,

in response to declining operating

revenues that resulted from lower than

expected visitation levels.

These results are summarised in the

table below.

Authority achieved accounting profit

The Rottnest Island Authority achieved positive cash flow at a time of a tourism industry stagnation

Rottnest Island met or exceeded the expectations of 94% of its visitors



The results are summarised in the table below. Other indicators can be found in the

Disclosures and Legal Compliance section of this report.

Summary of Key Performance Indictors Results 2010-11

Performance Indicator and Measures Target Result

Visitor satisfaction

Rottnest Island experience met or exceeded

expectations 90% 94%

Health of the natural environment – various

measures

Terrestrial Habitat D C

Inland Waters C A

Marine Habitat B A

Wildlife Management C A

Health of the cultural environment – various

measures

The proportion of heritage listed places with

‘statements of significance’70-89% 72%

The proportion of collection heritage items recorded

on database compared to currently known number of

items

70-89% 80%

The proportion of developments that follow heritage

legal requirements and conservation policies90-100% 82%

The proportion of State-registered places meeting

condition targets70-89% 67%

The proportion of State-registered places with

conservation plans less than 10 years old30-49% 13%

Efficiency

Average cost of recreational and holiday services

provided per visitor$89 $81

Average cost of natural environment and cultural

heritage management per Reserve hectare $7�3 $768

Key Performance Indicators Summary Performance in relation to the Authority’s

Key Performance Indicator targets was

very positive during the year.

The overall measure of visitor satisfaction

was exceeded by 4%, a performance which

has been consistent over several years.

Performance results in relation to natural

environment management were met or

exceeded targets. The results indicate

a positive trend towards more effective

environmental management on Rottnest

Island, a significant achievement given

Rottnest Island is under significant

environmental pressures and the need for

cost controls during the year.

The level of performance concerning

cultural heritage management was mixed

with targets being mostly met. These

results reflect the Authority’s efforts during

the year in protecting and conserving

the Island’s rich cultural heritage assets

based on its limited resources. An area

which requires improvement is the number

of heritage listed places with current

conservation plans. Several plans became

more than 10 years old during the year and

the results reflect the reduced performance

in regard to the target.

High level efficiency indicators are also

reported, enabling a comparison to be

made and provide some indication of where

resources are being applied regarding the

management of the Island.


Rottnest Island Management Plan 2009-2014

Rottnest Island Management Plan 2009-2014 progressed with

$3.5 million of initiatives implemented

The Rottnest Island Management Plan

2009-2014 (RIMP) was developed with

input from the community, stakeholders

and staff. The theme of the RIMP is

sustainability – environmental, social and

financial. The RIMP seeks to maintain the

balance between the functions set out in

the Rottnest Island Authority Act 1987

– providing holiday and recreation facilities

for visitors, and protecting and maintaining

the natural and built environment of the

A-Class Reserve.

The RIMP commenced operation in July

�009 and was allocated a total budget of

$14.5 million over the five year period.

The Authority has spent $3.5 million this

year which was more than the budgeted

amount of $3.� million.

A summary of the progress made in

relation to each initiative that commenced

in �010-11 is provided below.

Initiative ProgressBudget

2010-11

Expenditure

2010-11

1 Review the Rottnest Island Authority Act 1987

This initiative is being progressed in association with

Initiative 3. Minor amendments are planned for public

consultation during �011.

$115,000 $45,000

� Tourism and recreation strategy This initiative is being progressed in conjunction with Initiatives

15 and 17. In addition, a ‘Recreational Opportunity Spectrum’

was developed that depicts the location and current status of

recreational activities on the Island. The strategy is due for

completion by 30 June �01�.

$50,000 $40,000

3 Twenty-year vision for

Rottnest Island

Much research has been conducted to support this initiative

including an identification of Island values, sustainable visitor

capacity (Island and boating see Initiative 5), Recreational

Opportunity Spectrum, (refer Initiative �), strategic economic

framing exercise and external environmental and economic

threats analysis. Stakeholders will be consulted on any

future planning for Rottnest once all the research has been

completed.

Nil Nil

4 Sustainability accreditation Policies concerning Island practices including resource

usage on Rottnest Island have been developed. Baseline

data for resource usage (eg power, gas, water, waste) has

been established and forwarded to EarthCheck(TM) for

benchmarking with leading peer organisations.

$35,000 $40,000

5 Sustainable visitor research Completed in �009-10. Both ferry based and private boat

visitor profiles have been developed. Information has been

provided to relevant stakeholders. An Action Plan was

developed and is being implemented by the relevant business

units of the Authority.

NA NA

6 Development planning controls Completed. A development planning policy, guidelines

and processes have been implemented. The Authority’s

assessment team is operating effectively and efficiently to

assess development applications, including the Authority’s

own developments.

$95,000 $95,000



2010-11

Expenditure

2010-11

7 Address external environmental

and economic threats

Threats and potential adaptation strategies were identified

during sustainability workshops in May �010. Since then a

program of information gathering, research and strategy

development has been implemented, focusing on high risk

areas.

$35,000 $35,000

8 Aboriginal reconciliation The Reconciliation Action Plan was implemented. Highlights

include installation of interpretive signage, community grants

to assist Aboriginal people access Rottnest Island, education

program developed for school and youth groups, and

Aboriginal cultural training delivered to most Authority staff.

$100,000 $90,000

9 Maintain quality of RIA

accommodation

Planning has been initiated and a review of requirements for a

10-year rolling refurbishment plan has commenced for which

another $1.5 million was banked during the year for its future

implementation. Approximately $0.7 million was spent on

maintenance during the year.

$� million $�.� million

10 Provide a range of visitor

accommodation

Medium-term strategy subject to external funding. Potential

Longreach Bay private high quality accommodation

development was progressed. Plans to upgrade the camping

ground and boutique heritage accommodation at Kingstown

were developed.

Nil Nil

11 Upgrade Kingstown A business review of the Kingstown Barracks identified the

need to dedicate the facility to youth (people under 18 year of

age). A more detailed analysis of the whole Kingstown area is

required as part of the planned cultural heritage strategy.

Nil $�0,000

1� Review visitor accommodation

management options

This initiative will be considered as part of Initiative 3

concerning the Twenty-year vision development. Nil Nil

13 Expand recreational activities A variety of recreational activities and services were

introduced during the year. For example, a water park is now

available during the peak season, and the range of recreational

hire products was greatly expanded.

Nil Nil

14 Improve visitor facilities A variety of improvements were implemented:

• New eco-friendly toilets at Parker Point

• Improvements to several other toilet facilities

• Improved visitor signage around the Settlement

• New adult bike fleet: 750 purpose built bikes

$180,000 $385,000

15 Marine facilities - Boating

Management Strategy

This project is being implemented in conjunction with Initiatives

� and 17. A methodology has been established and skilled

resources engaged to enable the strategies to be developed.

The strategy is due for completion by 30 June �01�.

$50,000 $50,000

16 Review responsibility for utilities,

major infrastructure and non-

commercial services

Negotiations with Horizon Power to manage and/or provide

the Island’s utilities are continuing. Nil Nil

17 Terrestrial Management

Strategy (TMS)

The Conservation Action Planning methodology has been

adopted as the preferred planning process for the TMS.

Electronic mapping of environmental values has been created

and databases built to house and analyse environmental data

which will be used to inform the TMS. The strategy is due for

completion by 30 June �01�.

$50,000 $55,000



2010-11

Expenditure

2010-11

18 Implement the Marine

Management Strategy

Ongoing management of the five Sanctuary Zones through

surveillance, compliance patrols and maintenance of marine

markers. Participation in the Metropolitan Fish Monitoring

Collaborative Working Group with other relevant government

agencies. First year of Parker Point Nutrient Survey completed.

$30,000 $30,000

19 Education and interpretation for

environmental management

Visitor communications (programs, publications, displays, and

special events) and education programs that focus on nature

appreciation, changing behaviour and reducing environmental

impacts were implemented. Campaign engaging visitors on

issues such as interacting with wildlife in the Settlement was

implemented.

$30,000 $30,000

�0 Rottnest Island Research

Strategy

Funding is allocated each year for external parties to

conduct relevant research on Rottnest Island based on an

open and transparent process. Examples of projects funded

include assessing the disease status of the frog population,

freshwater-saltwater interaction on the survival of fauna

and a collaborative research project with the Department

of Environment and Conservation and University of Western

Australia to undertake a demographic and genetic study of

Rottnest quokkas.

$50,000 $55,000

�1 Cultural heritage conservation Battery Observation Post works completed. Interpretation

Strategy and Concept Plan for Old Mill and Hay Store

developed. Curatorial services established to better manage

artefacts. Nearly $�00,000 spent on maintaining the condition

of the Island’s heritage assets.

$�00,000 $195,000

�� Education and interpretation

products

Several new products were developed during the year

including:

• Introduction of a new audio commentary for the Rottnest

tour buses

• Distribution of an education activities brochure to all schools

in Western Australia

$85,000 $6,000

�3 Improve customer service Continued development of partnership between the Authority

and the Rottnest Island Business Community (RIBC). A stand

alone online training and Island education package has been

developed and made available to all RIBC members. A Chief

Executive Officer Award for exemplary customer service has

been instigated and a monthly award is given to an Authority

employee, RIBC employee and volunteer.

Nil $1,000

�4 Focus on safety and security The development of strategies and support actions to address

antisocial behaviour and to encourage preferred behaviours

on the Island is in progress, which includes the Rottnest

Police, Nursing Post and members of the Island’s business

community.

$30,000 $50,000

�5 Support volunteers Volunteering opportunities have been expanded, including

the implementation of frog, reptile and osprey monitoring

programs and self-guided community service packages.

Upgrades completed to the P-Hut volunteer accommodation

unit. Risk management plans have been completed for key

volunteer projects. Workshops were held with the major

volunteer groups to foster improved service delivery.

$30,000 $30,000


Recreational and Holiday Services

100 years of ‘holidaying’ on Rottnest Island was celebrated with various events and activities

Successful new online booking system with over 35% of accommodation bookings made through this system

Over 565,000 visits to Rottnest Island

An additional 27,000 (9%) ferry visitors compared to the previous year

Introduction of 750 new purpose built hire bicycles for Rottnest Island

These services address the following

corporate objectives:

• Rottnest Island provides a wide range

of recreational and holiday services

to Island visitors that create a high

degree of satisfaction; and

• The Authority generates revenue from

commercial activities to financially

sustain its operating and asset

replacement costs.

During the year 565,000 visits were made

to Rottnest Island. This comprised 331,000

full-fare paying passengers, 185,000

private boating visitors and 49,000

trips by staff and volunteers. All these

visitors contribute to the economy

of the Island.

There were an additional �7,000 (9%) ferry

visitors compared to the previous year.

Based on sample surveys of ferry based

visitors, most (70%) are from Western

Australia, 14% are from interstate and

16% are international visitors. Most (65%)

people come to experience Rottnest for

the day, but many (35%) stay in overnight

accommodation on the Island.

The Authority’s recreational and

holiday services comprise several

commercially viable businesses including

accommodation, tours and bike hire.

All businesses implemented significant

innovative product and process changes

for their dynamic market environments. It

was a year of acceleration for the Authority

towards greater profitability and positioning

for future growth.

Accommodation With over �4,600 reservations and

check-ins during the year, Accommodation

Services provided an efficient and friendly

welcome to over 100,000 overnight

visitors to Rottnest Island.


Accommodation is the Authority’s most

profitable business and it achieved a 3.5%

increase in sales revenue compared to the

previous year.

The Authority’s suite of accommodation

facilities comprises �91 self contained

units, a 164 bed dormitory style facility

at Kingstown, a 50 bed hostel, and a

camping ground offering 18 sites within the

Settlement area.

Prices vary to reflect the different levels of

comfort and location, with bungalows and

cabins offering good value all year round.

The Authority offers special prices and

packages during the quieter shoulder and

off peak months, when Rottnest Island is

often at its best and well worth a visit or

stay. For example, a four bed unit can be

hired for $45 per person per night for a

minimum five night stay, and this includes

ferry tickets, Island bus service and

bike hire.

A significant number of upgrades were

undertaken to the Rottnest Island

accommodation units to enhance ‘the

guest experience’. The upgrades were in

response to specific feedback from guests,

and innovative ideas from Authority staff.

Another main initiative was the launch

of the online booking portal for

accommodation, bike hire and rental

moorings in August �010. Approximately

$130,000 was invested in this new system.

Over 35% of accommodation bookings

were processed through the online portal

since its commencement, enabling visitors

to book their accommodation and other

recreational services �4 hours a day,

seven days a week. Based on customer

feedback, the Authority will implement

improvements to the online booking

system during �011-1�. Guests wanting

a more personalised service may phone

the Authority’s reservation centre or attend

in person at the new Visitor Centre in the

refurbished, Heritage Award winning B-Shed

at Victoria Quay Fremantle, or at the Visitor

Centre on Rottnest Island.

A total of 76,000 unit nights were sold

during the year, representing an occupancy

rate of 78% - well above the industry

average. Occupancy rates were maintained

during summer with some minor decrease

occurring during the quieter winter months,

despite additional sales being generated

from a number of attractively priced

package options and sales to the corporate

meetings market.

Independently monitored ballots were run

to allocate accommodation during the

high demand periods of the Christmas

week, and the January and April school

holidays. The ballot, which only applies to

seven weeks of the year, ensures fair and

equitable allocation of accommodation

during these very popular periods.

Kingstown BarracksIt was decided through the year that

this historic facility would be used

exclusively for school and youth groups

whose participants are under 18 years,

except during school holiday periods. To

encourage positive social activity that is

youth and family friendly, the Authority

made regulatory changes to prevent

the consumption of alcohol within the

Kingstown Barracks. These changes have

eliminated antisocial behaviour at the

Barracks which has been a problem area in

previous years.

Recreation Services The Authority’s recreational operations

comprise several commercial concerns

which generate profits and contribute to the

Island’s economy. Under the leadership of a

new and highly experienced manager from

the State’s tourism industry, these services

underwent major transformations through

the year. Some of these achievements are

outlined in the sections below.

Tours and TransportThe Authority provides several tour and

transport facilities to enable visitors to

get around and enjoy the Island. Services

include the complimentary shuttle bus to

accommodation around the Settlement,

the Island Discovery Tour, train tour,

and the Bayseeker ‘hop on hop off’ bus

service. Also offered are two heritage

based tours comprising a lighthouse tour,

and the guns and tunnels tour of the World

War II artillery installation.

The following table highlights the popularity

of the Authority’s tours with over �0% of all

visitors accessing a tour.

All tours were reviewed and improved

through the year to meet changing visitor

requirements. The Authority’s tours and

transport service made a modest profit

in �010-11 based on improved cost

management, and modest increases in

sales revenue. The profit helped to pay

for non-commercial services, such as

supporting community events on the

Island with transport services and tourism

familiarisations.

A survey of tours and transport services

during the year indicated high levels of

satisfaction (over 80%) for all its major

services.

ISLAND TOURS VISITORS

Island Discovery Tour 18,000

Bayseeker 61,000

Oliver Hill Train 13,000

Lighthouse 5,000

TOTAL 97,000

Bike and Other Hire ServicesDuring �010-11 Rottnest Bike and Hire

handled over 60,000 hire transactions on

bicycles alone. It achieved an increased

profit of 11% compared to the previous

year, a significant result considering the

stagnant local tourism environment and

aggressive competition from other Island

providers.

To meet changing visitor requirements and

the challenges of strong competition, the

Authority made innovative changes to its

Bike and Hire operations during �010-11.

The adult bicycle fleet was updated with

750 new adult bicycles purpose built for

Rottnest Island. This provides visitors

with a safer and more comfortable biking

experience. Other major improvements

included the redesign of the hire facility

with improved signage, new customer

processes including electronic payment

systems, new helmets and an improved

repair service.

�0 Rottnest Island Authority Annual Report �010-�011

Bike and Hire also expanded its

recreational hire items available to

visitors with the addition of paddleboards,

surfboards, body boards, wetsuits, life

jackets, beach cricket and beach soccer

sets. The introduction of masks and fin

sets prior to the summer period resulted

in 6,100 masks, snorkels and fins hired. In

addition a dive compressor was installed at

Bike and Hire which since then has refilled

over 1,400 dive tanks.

The Authority’s Bike and Hire operation was

required to take over management of the

Fun Park when private providers could not

be sourced. It continued to provide these

services in a safe and reliable manner,

which is highly valued and a traditional

part of the Rottnest Holiday experience for

young and old alike.

Corporate Meetings and ConferencesIn its second year of operation, the

Rottnest Island Conference Centre

continued to establish a solid reputation

as a quality corporate meetings venue.

The centre achieved 81 days of booked

functions, and client satisfaction

has been high as indicated by

the number of repeat bookings.

The successful ‘back of the

bus’ advertising campaign

on public transport buses on

the mainland helped to raise

awareness and generate

enquiries and sales for the

facility.

Conference activity has

been extended outside

the venue itself and

encompasses other

Island facilities.

Clients have included significant local and

national firms, and this year the centre

secured its first national conference from

the construction industry.

The Conference Centre significantly

contributed to the economy of Rottnest

Island, providing additional sales revenue

to both Authority and private businesses

operating on the Island. Almost $400,000

of economic activity was generated on the

Island from this service during the year.

EventsThe major Authority event this year has been

the celebration of 100 years of tourism on

the Island. The then Governor of Western

Australia, Dr Ken Michael AC, visited the

Island to officiate the beginning of this year

long event.

Activities included the Department of Sport

and Recreation’s Nature Play program

which was incorporated within the ANZAC

Day event. A pre-dawn ferry brought the

first of 800 parents and children to the

Dawn Service, which was followed by a day

of ‘free range’ activities that encouraged

families to explore the Island’s natural

environment through self directed activities.

This event was followed by Playgroup

Western Australia’s Rottnest Play Day

directed at 0-5 year olds and involved

partnerships with various peak bodies such

as the Museum of Western Australia.

The Events team incorporated the

management of the Picture Hall into

its operations and provided great

entertainment with a family focus.

The year’s calendar consisted of sixteen

major events which attracted nearly

�0,000 additional visitors to the Island (see

summary overleaf). The Authority either

conducted or hosted each of these events.

Rottnest Island – Celebrating 100 Years of Tourism 1911-�011 �1

Marketing The Authority has continued its marketing

partnership with the Rottnest Island Business

Community to leverage more media

coverage. A very successful television

campaign featuring Tom Williams (television

and radio presenter) as the face of Rottnest

was run over the summer months with the

tag line ‘Leave it all behind for the day’.

The ‘Telethon Tuesdays’ marketing campaign

was also introduced during the year by the

Authority and Rottnest Express, which made

return ferry fares available from $35

ex-Fremantle. This campaign was assisted

by the Authority through significantly

reduced admission fees. In addition, one

dollar from each of the 34,381 tickets sold

through the campaign was donated to the

Channel 7 Telethon Trust.

These campaigns contributed to a 9%

increase in ferry based visitors to the

Island, a major achievement in the current

tourism environment which includes a

strong Australian dollar encouraging locals

to holiday overseas.

There was a significant focus on

increasing information to visitors to

help them enjoy the Rottnest Island

experience. New information collateral

outlining whole of Island activities

was developed, signage including

‘bin skins’ on what to see and where

to find it was installed throughout

the Island, and new informative

signage was provided at the Main

Jetty in Thomson Bay.

The Authority conducted numerous industry

and media familiarisations to the Island in

partnership with Tourism Western Australia

and the Experience Perth Regional Tourism

Organisation. There were 150 tourism

industry and media writers that visited

the Island during the year. The Authority

leveraged these familiarisations and

media opportunities through the support

of the Island’s business community.

They generated increased awareness

about Rottnest Island to the national and

international tourism markets.

The Authority’s website rottnestisland.com

increased in popularity as the preferred

source of information about the Island.

An average of 40,000 unique visitors

per month and �00,000 page views per

month culminated in �.7 million website

‘hits’ during the year. The Rottnest Island

Facebook page, which also links to other

social media sites such as Twitter, had

nearly 46,000 members as at

30 June �011.

Event MonthAdditional Visitors

(estimated)

Wadjemup Cup November 160

ANZAC Day April 1,000

Rottnest Channel Swim February

4,600 ferry travellers

5,000 private boating

�,300 swimmers

Leavers November 1,500

Lighthouse to Leighton December 100

Brooks Marathon October 1,300

NAIDOC Golf Competition July 60

RottoFest September 400

Swim Thru December �,000

Festival of Sail April 400

Ocean Paddler January 300

Surfing WA October 70

UCI World Cycling Time Trial March 1�0

Rottnest Classic Golf Tournament July 1�0

Chairman’s Cup Golf Tournament May 60

The Rottnest Cup and Ledger Trophy August 1�0

TOTAL 19,610

�� Rottnest Island Authority Annual Report �010-�011

Natural Environment and Cultural Heritage Management

All natural environment management performance targets were met or exceeded

New online rental mooring booking system

New and innovative toilet at Parker Point

37 environmental and visitor safety projects were completed

The Natural Environment and Cultural

Heritage Management service has the

following objective:

• Rottnest Island’s natural

environment and cultural heritage are

conserved and enhanced as models

of sustainability within Australia.

Rottnest’s marine and

terrestrial reserve comprises

1,859 hectares of land and

3,800 hectares of surrounding

waters. The Authority manages

biodiversity conservation,

research and monitoring

programs, environmental

protection and ecological restoration

including coastal dune management.

Other responsibilities include water quality,

tree maintenance, landscaping and woodland

restoration, pest management, and providing

boating opportunities and facilities.

The Island’s rich cultural heritage is

also managed to ensure heritage assets

are identified, protected and conserved

for the enjoyment of current and future

generations of visitors. Cultural heritage

management includes care of 14� heritage

places, more than �,000 historic artefacts,

as well as an oral and archival history

collection. In addition to conserving places

and objects, cultural heritage management

provides services and support for schools

and university programs, special interest

and community groups.

The Island’s A-Class Reserve boasts:

• 254 bird species

• 19 reptile species including the threatened Rottnest Island

Bobtail and Dugite

• 64 hectares of threatened Rottnest Pine, Rottnest Tea Tree and

woodland community

• Nine species of seagrass

• 25 species of tropical coral and the southernmost extent of

coral communities

• 135 tropical fish species

• 225 temperate fish species

• Northernmost colony of New Zealand Fur Seals

• Three registered geoheritage sites of State significance

• Six geoheritage sites of international significance


Natural Environment

Terrestrial Conservation

The new Parker Point toilet facility was

constructed in �010-11, and is expected

to be open to the public in August �011.

This new environmental best-practice

facility uses a micro-flush hybrid toilet

system for waste management with zero

waste water going to ground and recycled

water used for flushing as part of a closed

system. A rainwater tank is used to provide

water for hand washing. The building was

designed for low maintenance and sets

the benchmark for similar future visitor

facilities.

The Recreational Opportunity Spectrum

(ROS) project was established to map

the types, locations and values of the

various recreational opportunities around

the Island (marine and terrestrial). The

ROS aims to describe the spectrum of

recreational types, as well as the range

of experiences available within each

recreational opportunity or activity. For

example, it can provide a map of snorkeling

areas, which could then be graded for the

quality of experience, the level of difficulty

and suitability for different demographics

of visitors.

In addition, the Authority continued to

manage the land area of the Reserve by:

• Completing Stage � of the Coastal

Walk Trail (site development plan,

facility, and signage design guides and

an interpretation strategy);

• Revegetating more land area and

stabilising 1.4 hectares of coastal

dunes; and

• Monitoring major fauna including

ospreys, reptiles, frogs and birds,

and managing pests threatening

local wildlife.

Marine Conservation

The Authority continued to implement its

Marine Management Strategy to manage

the sensitive marine area around the Island

including:

• Implementing the annual community

monitoring program ‘Reef Life Survey’;

• Completing the Reef Fish Baseline

Survey in collaboration with the

University of Western Australia, as part

of a long-term monitoring program;

• Monitoring fish stocks in collaboration

with other government agencies;

• Completing seasonal water, sediment

and seagrass sampling for the Parker

Point Nutrient Survey; and

• Monitoring for occurrence of the

potentially harmful algae in high-use

bays and bacteria levels during the

peak season.

Marine Facilities

The Authority’s marine facilities service

continued to meet the access needs of

visitors arriving by private boat to the

Island. Around 185,000 people access

the Island annually by private boat,

representing one third of all visitors.

This market segment provides valuable

economic activity on the Island.

Based on a trial from �007 to �009, the

Authority developed and implemented an

online moorings booking system for private

boat visitors to Rottnest Island. Visitors

can access the online booking system

�4 hours per day, seven days per week.

As well as providing a greatly enhanced

customer service, the system has resulted

in significant improvement in administrative

efficiencies. Improvements to the physical

rental mooring facilities were also

implemented.

Communication with private boating

visitors was improved, particularly through

the publishing of a regular electronic

newsletter.

Ranger Services

The Authority adopted a more educational

approach to obtaining compliance with

its regulations during the year, resulting

in fewer infringements being issued. The

Rangers are now focusing their efforts

on ‘park management’, rather than

enforcement activities. Rangers provided

a variety of park services including

attendance to 46 vessel incidents, �8

serious medical incidents, and 99 wildlife

incidents.

In addition, 37 environmental and visitor

safety projects were completed including:

• Geordie Bay erosion control measures

around the barbeque shelter;

• Installation of the Lighthouse

Emergency Phone;

• Mabel Cove coastal risk signage

replacement and track realignment;

and

• Little Parakeet Bay car park fencing

replacement and access stairs

upgrade.

Community Engagement and Research

Community engagement comprises several

activities including:

• The formal educational services

provided to school and youth groups;

• Information and promotion to all

visitors to the Island to help protect

and conserve the Island’s natural and

heritage features; and

• The management of many volunteer

groups seeking to help manage and

provide visitor services on the Island.

Educational programs focused on raising

awareness of the natural and cultural

environments are key strategies in ensuring

that visitors have an understanding and

appreciation of the Rottnest Island Reserve.

Education is provided through facilitating

school and visitor education programs,

scientific research, volunteer coordination,

and interpretation signage.

With a greater emphasis on servicing

school and youth groups at the Kingstown

Barracks, several education tools such

as the ‘Wadjemup Dreaming’ Aboriginal

product were developed. There were 96

schools that visited the Island during the

year, with over 4,000 students taking part

in educational activities.

Sustainability

The Authority is committed to making

Rottnest Island sustainable. A critical

element of this objective is to reduce the

level of resource usage including energy,

fuels and water. Reducing resource use


results in lower operating costs, less

carbon emissions and an improved visitor

experience. The Authority progressed

towards this objective by implementing

strategies to achieve sustainability

accreditation from EarthCheck, an

independent global sustainability

certification program specifically for the

tourism industry. While the Authority’s

program is still in its early stages, the

following major actions were implemented:

• A suite of policies were developed to

address transport, energy, water and

procurement practices;

• A variety of Island resource use

measures and targets were identified;

• A sustainable accommodation trial

was commenced with a holiday villa

retrofitted to reduce water, gas and

electricity consumption; and

• The new Parker Point toilet facility was

constructed using environmental best-

practices, a micro-flush hybrid toilet

system for waste management and

recycled water for flushing as part of a

closed system.

Cultural Heritage Identification, protection, conservation, interpretation and participation

• National Engineering Landmark

recognition for the World War II Coastal

Defence facility;

• Over $�00,000 spent on specialised

conservation and maintenance works;

and

• 54 State heritage listed sites, 16

registered Aboriginal sites,

and �,000 historic objects.

The Authority aims to ensure

that every opportunity

available for conserving the

Island’s incredibly diverse and

valuable history is achieved.

Working in partnership with

businesses, researchers and

visitors, the heritage of Rottnest

Island will be shared and

protected for the future.

Successful cultural heritage management

of Rottnest Island is delivered through:

• Aboriginal engagement and liaison;

• Identifying stories, histories and places

of significance;

• Protecting and conserving heritage

sites, buildings and objects;

• Interpreting places and artefacts,

stories and memories; and

• Participation in school education and

tertiary training programs, holiday

activities, volunteer programs and

group requests.

The following achievements were

undertaken in �010-11:

• Over 470 historic artefacts recorded in

the cultural collection database;

• Over $�00,000 spent on specialised

conservation and maintenance to

heritage places; such as the Kingstown

Barracks, former prison buildings and

the main sea wall;

• Delivery of heritage talks and research

of 14 special community-based

requests or programs including

conferences, media, schools and arts;

• National Landmark award given to

Rottnest Island by Engineers Australia

for the WWII Coastal Defences with an

event hosted at the Picture Hall;

• Finalisation of the plan for the Old

Hay Store and Mill (museum building)

and documentation of required

conservation works;

• Inaugural Winter Open House Program

event enabling public access and

engagement with historic buildings in

the Settlement;

• New museum display ‘Messing About in

Boats’ centred on the public donation

of a timber dinghy; and

• Most key performance indicator

targets relating to the identification,

conservation and protection of all

cultural heritage assets, including

building and artefacts, were met.


Infrastructure, Utilities and Services

The Authority provides a wide variety of utility services and community infrastructure which are normally the responsibility of other government

agencies and suppliers on the mainland (see list below).

Summary of utility services and infrastructure management provided by the Rottnest Island Authority in 2010-11

Item Quantity Supplied Rottnest Island Costs1 Mainland Prices

Power 5.6 million kW $0.47 per kWh $0.�� per kWh

Liquefied Petroleum Gas (LPG) TotalBottled

Reticulated

300,000 litres

$133.96 per 45 Kg

$1.98 per M3

$90 per 45 Kg

$1.18 per M3

Potable Water �0�,000 litres $4.09 per kL $1.44 per kL

Waste management Total Residential

Commercial

1044 tonnes

$165.65 per �40L $�59.50 per �40L

$66�.64 per 1100L $481.00 per �40L

Fuel (transported to the Island) Total Diesel

Unleaded

Premium Unleaded

1.3 million litres

1.1 million litres $1.87 $1.45

1�4,000 litres $1.83 $1.37

47,500 litres $1.88 $1.46

Luggage delivered 196,000 items $3.69 per item NA

Roads maintained (excl cleaning) 70 kms $3,571 per km NA

Jetties managed 6 NA NA

Airport managed 1 NA NA

Notes: 1. Rottnest Island Costs are actual costs and prices charged may be different. 2. NA denotes that comparative prices are not available or applicable.

Works and Contract Services

During �010-11, the Authority has

overseen the provision of key facilities,

operations and utility services on the

Island. It has delivered over $� million in

capital projects, and maintained the Islands

buildings and infrastructure to enhance the

visitor experience by providing a safe and

clean holiday environment.

Facilities and Utilities Management

The Authority is responsible for managing

the Island’s provision of utility services

and maintenance of all built infrastructure.

Programmed Facility Management (PFM)

is contracted to provide this service,

however, other providers are involved

for selected work or may be engaged

for specific improvements. PFM was

specifically engaged to deliver maintenance

of the Island’s buildings and equipment,

operation of utilities, public area cleaning,

waste management and general transport

services including luggage delivery.

Power

All power requirements for the Island are generated locally using a combination of diesel generators and a wind turbine. The Authority generates, distributes and retails power under licence from the Economic Regulation Authority.

The total power generated during the year was 5.6� million kilowatts, of which 1.575 million (�8%) was

generated by the Island’s wind turbine and the balance supplied through diesel generation. The wind turbine generated the equivalent of 405,1�6 litres of

diesel fuel, saving the Authority an estimated $539,000.

Water Services

The Authority provides potable water and waste water services on the Island under licence from the Economic Regulation

Authority.


There were �0�,496 kilolitres of potable

water produced during the year. The

desalination plant produced 71.5% of this

amount and the remainder was sourced

from groundwater bores. Potable water is

stored in a series of tanks connected to the

water distribution network.

Liquid Petroleum Gas

A mix of reticulated and bottled Liquid

Petroleum Gas (LPG) is used to provide

gas on the Island, including the Authority’s

accommodation facilities (e.g. hot water

systems and cooking facilities), as well as

run a range of appliances used by visitors

and residents, such as barbecues. Most

commercial businesses operating on the

Island also utilise LPG for their operations.

During the year �99,769 litres of gas were

used on the Island.

Waste Management

Approximately 1,044 tonnes of waste is

generated on the Island each year,

of which 39% is recycled. Waste suitable

for recycling is separated prior to

transportation and includes plastics,

glass, paper, cardboard, oils, tyres,

metals and biosolids. The Authority’s

waste management strategy has resulted

in reduced usage of the Island landfill site

and the majority of waste streams being

transported to the mainland.

Licensing

The Authority is required to comply with

the following licences and conditions

with regard to its utilities and major

infrastructure, which are the same as those

applied to large corporations such as Verve

Energy and the Water Corporation.

Function Renewal frequency

Electrical Supply Licence (Integrated Regional Licence) 30 years

Electrical Services (Power Reticulation) 30 years

Electrical Contractors Licence 1 year

Communications Two Way Radio Repeater 1 year

Communications Maritime Coast 1 year

Communications Maritime Ship 1 year

Water Operating Licence (Potable, Drainage and Sewerage) �0 years

Ground Water 10 years

Waste Management 5 years

Ground Well Licence N/A

Land Fill Site and Composting 3 years

Dangerous and Chemical Goods Storage and Transport 3 years

Gas Trading and Distribution Licence 1 year

Aerodrome Registration Ongoing

Rottnest Island Railway – Accredited Owner Operator Licence 1 year

Thomson Bay Main Jetty Licence 3 years

Thomson Bay Pipeline Fuel Jetty 3 years

Public Jetties Licences 3 years

Poisons Permit to Store Chlorine Gas 3 years

Licence to Extract Water � years

Reuse of Treated Effluent 3 years


Visitor numbers must be continually addressed in order for Rottnest Island to have a healthy and sustainable economy.

Significant Issues and Trends

Financial Security The Authority continues to work towards

financial sustainability. However, projects that

require significant capital investment will be

particularly difficult to implement given the

Authority’s limited reserves and resources.

The Authority will continue to pursue a

range of options to achieve long-term

financial sustainability, while upgrading

infrastructure and protecting and enhancing

the Island’s unique environment and values.

Capital investment products and services

that provide financial returns and contribute

to cash flows will continue to be a focus for

the Authority.

The State Government made a commitment

in the �011-1� budget process to

progressively fund the Authority’s natural

environment and cultural heritage

management functions. A $1 million

commitment was made for �011-1�

increasing to $3 million by �013-14, which

will greatly contribute to the Authority’s

financial sustainability.

This additional funding will contribute to

enabling the Authority to provide major

infrastructure and community services,

which are normally provided to tourism

and park services operators on the

mainland. These services consume a

significant part of the Authority’s financial

resources that could otherwise be invested

to further maintain and upgrade the

Authority’s accommodation inventory,

recreational facilities and other commercial

infrastructure.

The provision of utility services is a major

item as it requires significant capital

investment, high operating costs and

expertise to meet demanding regulatory

requirements. The Authority is continuing

to seek the engagement of an external

provider to manage the provision of utility

services on Rottnest Island, which includes

the provision of power, gas, water and

waste water management.

Island InfrastructureThe Island has experienced a rejuvenation

of the accommodation stock during the

past several years, bringing it up to the

standards found elsewhere in the State.

There is now a need to focus attention on

upgrading the other infrastructure on the

Island, which includes utilities, commercial

buildings, jetties, roads and pathways,

recreational facilities such as tennis courts,

as well as new and additional facilities

such as shade

covers. This

focus will require

a reprioritisation

of the Authority’s

resources and

efforts from other

areas for at least the

next two years.

Visitor Trends The number of tourist visits to Rottnest

Island has been varying over the past

10 years within a range of 450,000 to

550,000. This variation was caused by a

variety of factors such as fluctuations in the

local economy, weather patterns, currency

exchange rates and overseas events such

as the outbreak of new diseases.

Visitor numbers must be continually

addressed in order for Rottnest Island to

have a healthy and sustainable economy.

The Authority will continue to focus on the

local market as the State’s population is

steadily growing and the local economy

is forecasted to be buoyant over the next

ten years.


New Legislation The Rottnest Island Authority Act 1987

(the Act) has not been reviewed since its

proclamation. The Authority considers that

its functions, responsibilities and operating

conditions need to reflect changing

community expectations and pressures

impacting the management of the Island.

Areas that require clarification include:

• The Authority’s responsibility for all

community infrastructure and utilities

without the ability to recover full costs

to maintain asset investment;

• The Authority’s requirement to perform

in a commercial manner, without the

flexibility to act commercially due to

Government policy constraints; and

• Rottnest Island’s disadvantage from

having neither metropolitan nor

regional status. For example, the

Authority is not able to access various

grant funding normally available to

regional operators, but has all the

challenges of operating in a remote

location.

The Authority is exploring new ways of

governing the Island that will enable it to

achieve its sustainability objectives, while

still being acceptable to

the Western Australian

community. The

Island’s stakeholders

and community will be

consulted before any

legislation changes are

proposed. This is a major

undertaking and engagement

of the community will be

paramount to the success of this

initiative.

Sustainability Through the Rottnest Island Management

Plan, the Authority has articulated its

commitment to achieving sustainability in

three main areas - financial, environmental

and social. The Authority has taken a

strategic approach to protect and maintain

the Island for future generations. The

Authority has now established a strong

foundation for sustainability with the

development of relevant policies and

resourcing of a sustainability function.

It is envisaged that the next two years will

see significant progress in this area, with

tangible reductions in the resource usage

rates being achieved. During this period

an Environmental Management System will

be implemented and external independent

assessment (such as EarthCheck

Certification) will be sought in regard to the

Authority’s sustainability program.

Sustainability includes many social aspects.

The Authority is focused on implementing

its Aboriginal Reconciliation Action Plan with

the State’s Aboriginal community.

To assist in this endeavour, the Authority

will finalise the establishment of the

Aboriginal Reference Panel, a group it

will consult with about Aboriginal issues

impacting Rottnest Island.

Climate Change Impacts The Authority continues to prepare

itself for the potential effects of climate

change, which is already having some

minor impacts on the Island. There may

be significant impacts on the ecology,

landscapes and iconic species such as the

quokkas, crayfish and migratory wading

birds. Climate change may also adversely

impact marine facilities through changing

water levels, storms and storm surges, and

the terrestrial environment including the

Island’s heritage and other built structures,

resulting in additional costs to protect and

maintain such structures.

The Authority continues to research and

consult experts and stakeholders to

develop an understanding of the potential

impact of climate change, both on the

Island environment and on its tourism

business. Appropriate mitigation and

adaptation responses will be assessed

and factored into the management and

operations of the Island.


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Auditor General

Page 1 of 2

4th Floor Dumas House 2 Havelock Street West Perth 6005 Western Australia Tel: 08 9222 7500 Fax: 08 9322 5664

INDEPENDENT AUDITOR’S REPORT To the Parliament of Western Australia ROTTNEST ISLAND AUTHORITY Report on the Financial Statements I have audited the accounts and financial statements of the Rottnest Island Authority. The financial statements comprise the Statement of Financial Position as at 30 June 2011, the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and Notes comprising a summary of significant accounting policies and other explanatory information. Board’s Responsibility for the Financial Statements The Board is responsible for keeping proper accounts, and the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the Treasurer’s Instructions, and for such internal control as the Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility As required by the Auditor General Act 2006, my responsibility is to express an opinion on the financial statements based on my audit. The audit was conducted in accordance with Australian Auditing Standards. Those Standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Authority’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Board, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements are based on proper accounts and present fairly, in all material respects, the financial position of the Rottnest Island Authority at 30 June 2011 and its financial performance and cash flows for the year then ended. They are in accordance with Australian Accounting Standards and the Treasurer’s Instructions.

Auditor General

Disclosures and Legal Compliance


Page 2 of 2

Rottnest Island Authority Report on Controls I have audited the controls exercised by the Rottnest Island Authority. The Board is responsible for ensuring that adequate control is maintained over the receipt, expenditure and investment of money, the acquisition and disposal of public and other property, and the incurring of liabilities in accordance with the Financial Management Act 2006 and the Treasurer’s Instructions, and other relevant written law. As required by the Auditor General Act 2006, my responsibility is to express an opinion on the controls exercised by the Board based on my audit conducted in accordance with Australian Auditing Standards. Opinion In my opinion, the controls exercised by the Rottnest Island Authority are sufficiently adequate to provide reasonable assurance that the receipt, expenditure and investment of money, the acquisition and disposal of property, and the incurring of liabilities have been in accordance with legislative provisions. Report on the Key Performance Indicators I have audited the key performance indicators of the Rottnest Island Authority. The Board is responsible for the preparation and fair presentation of the key performance indicators in accordance with the Financial Management Act 2006 and the Treasurer’s Instructions. As required by the Auditor General Act 2006, my responsibility is to express an opinion on the key performance indicators based on my audit conducted in accordance with Australian Auditing Standards. Opinion In my opinion, the key performance indicators of the Rottnest Island Authority are relevant and appropriate to assist users to assess the Authority’s performance and fairly represent indicated performance for the year ended 30 June 2011. Independence In conducting this audit, I have complied with the independence requirements of the Auditor General Act 2006 and the Australian Auditing Standards, and other relevant ethical requirements.

COLIN MURPHY AUDITOR GENERAL 20 September 2011

Auditor General

Page 1 of 2

4th Floor Dumas House 2 Havelock Street West Perth 6005 Western Australia Tel: 08 9222 7500 Fax: 08 9322 5664

INDEPENDENT AUDITOR’S REPORT To the Parliament of Western Australia ROTTNEST ISLAND AUTHORITY Report on the Financial Statements I have audited the accounts and financial statements of the Rottnest Island Authority. The financial statements comprise the Statement of Financial Position as at 30 June 2011, the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and Notes comprising a summary of significant accounting policies and other explanatory information. Board’s Responsibility for the Financial Statements The Board is responsible for keeping proper accounts, and the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the Treasurer’s Instructions, and for such internal control as the Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility As required by the Auditor General Act 2006, my responsibility is to express an opinion on the financial statements based on my audit. The audit was conducted in accordance with Australian Auditing Standards. Those Standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Authority’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Board, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements are based on proper accounts and present fairly, in all material respects, the financial position of the Rottnest Island Authority at 30 June 2011 and its financial performance and cash flows for the year then ended. They are in accordance with Australian Accounting Standards and the Treasurer’s Instructions.


Annual Report 2010-2011 - DRAFT - input from CEO+GM+Board - 30 August 2011_2.DOC GR235/153889 38

CERTIFICATION OF FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

The accompanying financial statements of the Rottnest Island Authority have been prepared in compliance with the provisions of the Financial Management Act 2006 from proper accounts and records to present fairly the financial transactions for the financial year ending 30 June 2011 and the financial position as at 30 June 2011.

At the date of signing we are not aware of any circumstances which would render the particulars included in the financial statements misleading or inaccurate.

Laurie O’Meara AM John Driscoll Othmar Beerli Chairman Deputy Chair Chief Finance Officer

Date xxx Date xxx Date xxx



ROTTNEST ISLAND AUTHORITY STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2011 Note 2011 2010 $000 $000 INCOME Revenue Sales 6 44 120 Provision of services 7 29,478 28,469Interest revenue 1,172 734 Other revenue 8 388 294 Gains Gains on disposal of non-current assets 9 (5) 3 Total Income 31,077 29,620

EXPENSES Cost of sales 6 (109) 99Employee benefits expense 10 9,920 9,466 Supplies and services 11 15,365 18,600 Depreciation and amortisation expense 12 5,035 4,500 Finance costs 13 224 180 Accommodation expenses 14 242 227 Other expenses 15 288 603Total Expenses 30,965 33,675 Profit/(Loss) before grants and subsidies from State Government 106 (4,055)

Grants and subsidies from State Government 16 2,245 2,268 Services received free of charge 17 - 5Profit/(loss) for the period 2,139 (1,781) OTHER COMPREHENSIVE INCOME Changes in asset revaluation surplus 28 - 39,148Total other comprehensive income - 39,148TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 2,139 37,367Refer also to note 36 ‘Schedule of Income and Expenses by service

The Statement of Comprehensive Income should be read in conjunction with the accompanying notes.



ROTTNEST ISLAND AUTHORITY STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2011 Note 2011 2010 $000 $000 ASSETS Current Assets Cash and cash equivalents 28 14,467 10,956 Inventories 18 151 256 Receivables 19 1,043 1,338 Other financial assets 29 6,000 3,000Total Current Assets 21,661 15,551

Non-Current Assets

Property, plant , equipment and vehicles 20 210,501 212,196 Infrastructure 21 27,044 28,067 Intangible assets 22 1,335 1,231 Other Financial Assets 3,000Total Non-Current Assets 238,880 244,494

TOTAL ASSETS 260,541 260,045 LIABILITIES Current Liabilities Payables 24 3,125 4,918 Borrowings 25 421 67 Provisions 26 1,813 1,608 Other current liabilities 27 9,266 9,827 Total Current Liabilities 14,626 16,420

Non-Current Liabilities Borrowings 25 476 240 Provisions 26 696 680 Other non-current liabilities 27 1,033 1,133 Total Non-Current liabilities 2,205 2,053

Total Liabilities 16,830 18,474

NET ASSETS 243,711 241,571

EQUITY Contributed equity 28 50,032 50,032 Reserves 28 187,840 187,840 Retained earnings 28 5,839 3,700 TOTAL EQUITY 243,711 241,571

The Statement of Financial Position should be read in conjunction with the accompanying notes.



ROTTNEST ISLAND AUTHORITY STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2011

Note Contributed equity

Reserves Retained earnings

TotalEquity

$000 $000 $000 $000

Balance at 1 July 2009 28 50,032 148,691 5,481 204,204Total comprehensive income for the year - 39,149 (1,781) 37,368

Balance at 30 June 2010 50,032 187,840 3,700 241,572

Balance at 1 July 2010 50,032 187,840 3,700 241,572 Total comprehensive income for the year - - 2,139 2,139Balance at 30 June 2011 50,032 187,840 5,838 243,711

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



ROTTNEST ISLAND AUTHORITY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2011 Note 2011 2010 $000 $000 CASH FLOWS FROM OPERATING ACTIVITIES Receipts Sale of goods and services 44 120 Provision of services 28,952 27,815 Interest received 1,154 722 GST receipts on sales 2,861 2,839 GST receipts from taxation authority - - Other receipts 506 151 Payments Cost of Sales (4) 131Employee benefits (9,695) (9,215) Supplies and services (17,336) (18,392) Finance costs (224) (180) GST payments on purchases (2,320) (1,840) GST payments to taxation authority (541) (999) Other payments (297) (229) Net cash provided by operating activities 29 3,100 923

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of non-current physical assets (5) 3 Purchase of non-current physical assets (2,420) (3,042)

Net cash provided by/(used in) investing activities (2,425) (3,039)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Borrowings 393 -Repayment of Borrowings (119) - Net cash provided by/(used in) financing activities 274 - CASH FLOWS FROM STATE GOVERNMENT Grants and subsidies 2,245 2,268

Net cash provided by State Government 2,245 2,268 Net increase in cash held 3,194 152 Cash and cash equivalents at the beginning of the period 16,956 16,804Cash and cash equivalent assets at the end of the period 29 20,150 16,956

The Statement of Cash Flows should be read in conjunction with the accompanying notes.



ROTTNEST ISLAND AUTHORITY NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

1 Australian Accounting Standards

General The Rottnest Island Authority’s (the Authority) financial statements for the year ended 30 June 2011 have been prepared in accordance with Australian Accounting Standards. The term ‘Australian Accounting Standards’ includes Standards and Interpretations issued by the Australian Accounting Standard Board (AASB).

The Authority has adopted any applicable, new and revised Australian Accounting Standards from their operative dates.

Early adoption of standards The Authority cannot early adopt an Australian Accounting Standard unless specifically permitted by TI 1101 Application of Australian Accounting Standards and Other Pronouncements. No Australian Accounting Standards that have been issued or amended but not operative have been early adopted by the Authority for the annual reporting period ended 30 June 2011.

2 Summary of significant accounting policies

(a) General Statement The financial statements constitute general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the Australian Accounting Standards Board as applied by the Treasurer's instructions. Several of these are modified by the Treasurer's instructions to vary application, disclosure, format and wording. The Financial Management Act and the Treasurer's instructions are legislative provisions governing the preparation of financial statements and take precedence over Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the Australian Accounting Standards Board.

(b) Basis of Preparation The financial statements have been prepared on the accrual basis of accounting using the historical cost convention, except for land, buildings and infrastructure which have been measured at fair value.

The accounting policies adopted in the preparation of the financial statements have been consistently applied throughout all periods presented unless otherwise stated.

The financial statements are presented in Australian dollars and all values are rounded to the nearest thousand dollars ($’000).

The judgements that have been made in the process of applying the Authority’s accounting policies that have the most significant effect on the amounts recognised in the financial statements are included at note 3 ‘Judgements made by management in applying accounting policies’.

The key assumptions made concerning the future, and other key sources of estimation uncertainty at the Statement of Financial Position date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are included at note 4 ‘Key sources of estimation uncertainty’.

(c) Reporting Entity The reporting entity comprises the Rottnest Island Authority.



(d) Contributed equity AASB Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entitiesrequires transfers in the nature of equity contributions, other than as a result of a restructure of administrative arrangements, to be designated by the Government (the owner) as contributions by owners (at the time of, or prior to transfer) before such transfers can be recognised as equity contributions. Capital appropriations have been designated as contributions by owners by TI 955 Contributions by Owners made to Wholly Owned Public Sector Entities and have been credited directly to Contributed equity. The transfer of net assets to/from other agencies, other than as a result of a restructure of administrative arrangements, are designated as contributions by owners where the transfers are non-discretionary and non-reciprocal.

(e) Income Revenue Recognition Revenue is recognised and measured at the fair value of consideration received or receivable. Revenue is recognised for the major business activities as follows:

Sale of goods Revenue is recognised from the sale of goods and disposal of other assets when the significant risks and rewards of ownership transfer to the purchaser and can be measured reliably.

Provision of Services Revenue is recognised on delivery of the service to the client or by reference to the stage of completion of the transaction.

Interest Revenue is recognised as the interest accrues.

Grants, donations, gifts and other non-reciprocal contributions Revenue is recognised at fair value when the Authority obtains control over the assets comprising the contributions, usually when cash is received.

Other non-reciprocal contributions that are not contributions by owners are recognised at their fair value. Contributions of services are only recognised when a fair value can be reliably determined and the services would be purchased if not donated.

Rental income is accounted for on a straight line basis over the lease term. Rental income is recognised as income in the periods in which it is earned.

Gains Realised and unrealised gains are usually recognised on a net basis. These include gains arising on the disposal of non-current assets and some revaluations of non-current assets.

(f) Property, plant and equipment and infrastructure Capitalisation/Expensing of assets Items of property, plant and equipment and infrastructure costing $5,000 or more are recognised as assets and the cost of utilising assets is expensed (depreciated) over their useful lives. Items of property, plant and equipment, and infrastructure costing less than $5,000 are immediately expensed direct to the Statement of Comprehensive Income (other than where they form part of a group of similar items which are significant in total).

Initial recognition and measurement All items of property, plant and equipment and infrastructure are initially recognised at cost. For items of property, plant and equipment and infrastructure acquired at no cost or for nominal cost, the cost is the fair value at the date of acquisition.

Subsequent measurement Subsequent to initial recognition as an asset, the revaluation model is used for the measurement of land, buildings and infrastructure and historical cost for all other property, plant and equipment. Land, buildings and infrastructure are carried at fair value less accumulated depreciation (buildings and



infrastructure only) and accumulated impairment losses. All other items of property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses.Where market-based evidence is not available, the fair value of land and buildings is determined on the basis of existing use. This normally applies where buildings are specialised or where land use is restricted. Fair value for existing use assets is determined by reference to the cost of replacing the remaining future economic benefits embodied in the asset, ie. the depreciated replacement cost. Where the fair value of buildings is determined on the depreciated replacement cost basis, the gross carrying amount and the accumulated depreciation are restated proportionally. Independent valuations of land are provided annually by the Western Australian Land Information Authority (Valuation Services) and recognised annually to ensure that the carrying amount does not differ materially from the asset’s fair value at the end of the reporting period.

Independent valuations of buildings are provided every three years by the Western Australian Land Information Authority (Valuation Services) and recognised with sufficient regularity to ensure that the carrying amount does not differ materially from the asset’s fair value at end of the reporting period.

Fair value of infrastructure has been determined by reference to the depreciated replacement cost (existing use basis) as the assets are specialised and no market-based evidence of value is available. Land under infrastructure is included in land reported under note 20 ‘Property, plant, equipment and vehicles. Independent valuations are obtained every 3 to 5 years.

When infrastructure is revalued, the accumulated depreciation is restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.

The most significant assumptions in estimating fair value are made in assessing whether to apply the existing use basis to assets and in determining estimated useful life. Professional judgement by the valuer is required where evidence does not provide a clear distinction between market type assets and existing use assets. Refer to note 20 ‘Property, plant, equipment and vehicles’ and note 21 ‘Infrastructure’ for further information on revaluations.

De-recognitionUpon disposal or de-recognition of an item of property, plant and equipment and infrastructure, any revaluation surplus relating to that asset is retained in the asset revaluation surplus.

Asset revaluation surplus The asset revaluation surplus is used to record increments and decrements on the revaluation of non-current assets as described in note 20 ‘Property, plant, equipment and vehicles’.

Depreciation All non-current assets having a limited useful life are systematically depreciated over their estimated useful lives in a manner that reflects the consumption of their future economic benefits. Depreciation is calculated using the straight line method, using rates which are reviewed annually. Estimated useful lives for each class of depreciable asset are:

Estimated useful lives for each class of depreciable asset are:

Buildings …………………………………………………….. 20 to 40 years Computers & Electronic Equipment ……………………… 3 to 5 years Furniture …………………………………………………….. 3 to 5 years Plant & Vehicles ……………………………………………. 3 to 7 years Leasehold Improvements …………………………………. 10 to 15 years Infrastructure………………………………………………… 55 to 80 years Infrastructure – Gas Filing Stations ………………………. 1 to 3 years

(g) Intangible Assets Capitalisation/Expensing of assets Acquisitions for intangible assets costing $5,000 or more and internally generated intangible assets costing $50,000 or more are capitalised. The cost of utilising the assets is expensed (amortised) over



their useful life. Costs incurred below these thresholds are immediately expensed directly to the Statement of Comprehensive Income.

All acquired and internally developed intangible assets are initially recognised at cost. For assets acquired at no cost or for nominal cost, the cost is their fair value at the date of acquisition.

The cost model is applied for subsequent measurement requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses.

Amortisation for intangible assets with finite useful lives is calculated for the period of the expected benefit (estimated useful life which is reviewed annually) on the straight line basis. All intangible assets controlled by the Authority have a finite useful life and zero residual value.

The expected useful lives for each class of intangible asset are:

Software……………………………………………………… 3 to 5 years

Website Costs ………………………………………………. 1 to 3 years

Computer softwareSoftware that is an integral part of the related hardware is treated as property, plant and equipment. Software that is not an integral part of the related hardware is treated as an intangible asset. Software costing less than $5,000 is expensed in the year of acquisition.

Website costsWebsite costs are charged as expenses when they are incurred unless they relate to the acquisition or development of an asset when they may be capitalised and amortised. Generally, costs in relation to feasibility studies during the planning phase of a website, and ongoing costs of maintenance during the operating phase are expensed. Costs incurred in building or enhancing a website, to the extent that they represent probable future economic benefits that can be reliably measured, are capitalised.

(h) Impairment of Assets Property, plant and equipment, infrastructure and intangible assets are tested for any indication of impairment at the end of each reporting period. Where there is an indication of impairment, the recoverable amount is estimated. Where the recoverable amount is less than the carrying amount, the asset is considered impaired and is written down to the recoverable amount and an impairment loss is recognised. As the Authority is a not-for-profit entity, unless an asset has been identified as a surplus asset, the recoverable amount is the higher of an asset’s fair value less costs to sell and depreciated replacement cost.

The risk of impairment is generally limited to circumstances where an asset’s depreciation is materially understated, where the replacement cost is falling or where there is a significant change in useful life. Each relevant class of assets is reviewed annually to verify that the accumulated depreciation/amortisation reflects the level of consumption or expiration of the assets future economic benefits and to evaluate any impairment risk from falling replacement costs.

Intangible assets with an indefinite useful life and intangible assets not yet available for use are tested for impairment at the end of each reporting period irrespective of whether there is any indication of impairment.

The recoverable amount of assets identified as surplus assets is the higher of fair value less costs to sell and the present value of future cash flows expected to be derived from the asset. Surplus assets carried at fair value have no risk of material impairment where fair value is determined by reference to market-based evidence. Where fair value is determined by reference to depreciated replacement cost, surplus assets are at risk of impairment and the recoverable amount is measured. Surplus assets at cost are tested for indications of impairment at the end of each reporting period.

See note 23 ‘Impairment of Assets’ for the outcome of impairment reviews and testing.

See note 2(m) ’Receivables’ and note 19 for impairment of receivables.



(i) Leases Finance lease rights and obligations are initially recognised, at the commencement of the lease term, as assets and liabilities equal in amount to the fair value of the leased item or, if lower, the present value of the minimum lease payments, determined at the inception of the lease. The assets are disclosed as plant, equipment and vehicles under lease, and are depreciated over the period during which the Authority is expected to benefit from their use. Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding lease liability, according to the interest rate implicit in the lease.

The Authority has entered into a number of operating lease agreements for the hotel, buildings, motor vehicles, office and other equipment. Lease payments are expensed on a straight line basis over the lease term as this represents the pattern of benefits derived from the leased assets.

(j) Financial Instruments In addition to cash and bank overdraft, the Authority has two categories of financial instrument:

Receivables; Term deposits; and Financial Liabilities measured at amortised cost.

Financial instruments have been disaggregated into the following classes:

Financial Assets Cash and cash equivalents Restricted cash and cash equivalents Receivables Other financial assets

Financial Liabilities Payables Finance Lease Liabilities

Initial recognition and measurement of financial instruments is at fair value which normally equates to the transaction cost or the face value. Subsequent measurement is at amortised cost using the effective interest method.

The fair value of short-term receivables and payables is the transaction cost or the face value because there is no interest rate applicable and subsequent measurement is not required as the effect of discounting is not material.

(k) Cash and Cash Equivalents For the purpose of the Statement of Cash Flows, cash and cash equivalents (and restricted cash and cash equivalent) assets comprise cash on hand and short-term deposits with original maturities of three months or less that are readily convertible to a known amount of cash and which are subject to insignificant risk of changes in value.

(l) Inventories Inventories are measured at the lower of cost or net realisable value. Costs are assigned by the weighted average cost method.

Inventories not held for resale are measured at cost unless they are no longer required, in which case they are measured at net realisable value.

(m) Receivables Receivables are recognised at original invoice amount less an allowance for any uncollectible amounts (i.e. impairment). The collectability of receivables is reviewed on an ongoing basis and any receivables identified as uncollectible are written-off against the allowance account. The allowance for uncollectible amounts (doubtful debts) is raised when there is objective evidence that the Authority will not be able to collect the debts. The carrying amount is equivalent to fair value as it is due for settlement within 30 days. See note 2(j) ‘Financial Instruments’ and note 19 ‘Receivables’.



(n) Payables Payables are recognised at the amounts payable when the Authority becomes obliged to make future payments as a result of a purchase of assets or services at fair value, as they are generally settled within 30 days. See note 2(j) ‘Financial Instruments’ and note 24 ‘Payables’.

(o) Borrowings All loans payable are initially recognised at cost, being the fair value of the net proceeds received. Subsequent measurement is at amortised cost using the effective interest rate method.

(p) Provisions Provisions are liabilities of uncertain timing or amount and are recognised where there is a present legal or constructive obligation as a result of a past event and when the outflow of resources embodying economic benefits is probable and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at the end of each reporting period.

(i) Provisions – Employee Benefits All annual leave and long service leave provisions are in respect of employees’ services up to the end of the reporting period.

Annual Leave and Long Service Leave

The liability for annual and long service leave expected to be settled within 12 months after the end of the reporting period is recognised and measured at the undiscounted amounts expected to be paid when the liabilities are settled. Annual and long service leave expected to be settled more than 12 months after the reporting period is measured at the present value of amounts expected to be paid when the liabilities are settled. Leave liabilities are in respect of services provided by employees up to the end of the reporting period.

When assessing expected future payments consideration is given to expected future wage and salary levels including non-salary components such as employer superannuation contributions, in addition, the long service leave liability also considers the experience of employee departures and periods of service.

The expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.

All annual leave and unconditional long service leave provisions are classified as current liabilities as the Authority does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

The liability for long service leave has been determined using a shorthand method. An actuarial assessment of long service leave undertaken by PricewaterhouseCoopers in 2011 determined that the liability measured using the shorthand method was not materially different from the liability measured using the present value of the expected future payments.

Sick LeaveLiabilities for sick leave are recognised when it is probable that sick leave paid in the future will be greater than the entitlement that will accrue in the future.

Past history indicates that on average, sick leave taken each reporting period is less than the entitlement accrues. This is expected to continue in future periods. Accordingly, it is unlikely that existing accumulated entitlements will be used by employees and no liability for unused sick leave entitlements is recognised. As sick leave is non-vesting, an expense is recognised in the Statement of Comprehensive Income for this leave as it is taken.

Purchased Leave The provision for purchased leave relates to Public Service employees who have entered into an agreement to self-fund up to additional four weeks leave per calendar year. The provision recognises the value of salary set aside for employees and is measured at the nominal amounts



expected to be paid when liabilities are settled. The liability is measured on the same basis as annual leave.

Time in Lieu The flexible working hours provisions of the Authority’s enterprise bargaining agreement introduced the concept of annualised hours. At the end of the settlement period, when actual hours worked exceed the average aggregate ordinary hours, the employee will be paid for the excess hours, or the employee will take time in lieu at a mutually agreed time.

Superannuation The Government Employees Superannuation Board (GESB) administers the following superannuation schemes.

Employees may contribute to the Pension Scheme, a defined benefit pension scheme now closed to new members, or the Gold State Superannuation Scheme (GSS), a defined benefit lump sum scheme also closed to new members. Employees commencing employment prior to 16 April 2007 who are not members of either the Pension or the GSS Schemes become non-contributory members of the West State Superannuation Scheme (WSS). Employees commencing employment on or after 16 April 2007 became members of the GESB Super Scheme (GESBS). Both of these schemes are accumulation schemes. The Authority makes concurrent contributions to GESB on behalf of employees in compliance with the Commonwealth Government’s Superannuation Guarantee (Administration) Act 1992. These contributions extinguish the liability for superannuation charges in respect of the WSS and GESBS Schemes.

The Pension Scheme and the pre-transfer benefit for employees who transferred to the GSS Scheme are defined benefit schemes. These benefits are wholly unfunded and the liabilities for future payments are provided at the end of the reporting period. The liabilities under these schemes have been calculated separately for each scheme annually by Mercers Human Resource Consulting using the projected unit credit method.

The expected future payments are discounted to present value using market yields at the Statement of Financial Position date on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.

The GSS Scheme, the WSS Scheme, and the GESBS Scheme, where the current service superannuation charge is paid by the Authority to the GESB, are defined contribution schemes. The liabilities for current service superannuation charges under the GSS Scheme, the WSS Scheme, and the GESBS Scheme are extinguished by the concurrent payment of employer contributions to the GESB.

The Gold State Superannuation Scheme is a defined benefit scheme for the purposes of employee and whole of government reporting. However, from an agency perspective, apart from the transfer benefits, it is a defined contribution plan under AASB 119.

See also note 2 (q) ‘Superannuation Expense’.

(ii) Provisions – Other Employment On-Costs Employment on-costs, including workers’ compensation insurance, are not employee benefits and are recognised separately as liabilities and expenses when the employment to which they relate has occurred. Employment on-costs are not included as part of ‘Other expenses’ and are not included as part of the Authority’s ‘Employee benefits expense’. The related liability is included in ‘Employment on-costs provision’.

(q) Superannuation Expense The superannuation expense of the defined benefit plans is made up of the following elements:

Current service cost; Interest cost (unwinding of the discount); Actuarial gains and losses; and Past service cost.



Actuarial gains and losses of the defined benefit plans are recognised immediately as income or expense in the Statement of Comprehensive Income.

The superannuation expense of the defined contribution plans is recognised as and when the contributions fall due.

See also note 2(q)(i) ‘Provisions – Employee Benefits’ under the heading “Superannuation’

(r) Accrued Salaries Accrued salaries (refer note 24 ‘Payables’) represent the amount due to staff but unpaid at the end of the financial year, as the end of the last pay period for that financial year does not coincide with the end of the financial year. Accrued salaries are settled within a few days of the financial year end. The Authority considers the carrying amount of accrued salaries to be equivalent to the net fair value

(s) Resources Received Free of Charge or for Nominal Cost Services received free of charge or for nominal cost that can be reliably measured are recognised as revenues and as assets or expenses as appropriate at fair value.

(t) Segment Information Segment information is prepared in conformity with the accounting policies of the entity as disclosed in note 2 ‘Summary of significant accounting policies’. Segment revenues and expenses are allocated on the basis of direct attribution and reasonable estimates of usage.

Segment information has been disclosed by service. See note 36 ‘Schedule of Income and Expenses by service’

(u) Comparative Figures Comparative figures are, where appropriate, reclassified to be comparable with the figures presented in the current financial year.

3 Judgements made by management in applying accounting policies

The preparation of financial statements requires management to make judgements about the application of accounting policies that have a significant effect on the amounts recognised in the financial statements. The Authority evaluates these judgements regularly.

Operating lease commitments The Authority has entered into a number of leases for buildings for branch office accommodation. Some of these leases relate to buildings of a temporary nature and it has been determined that the lessor retains substantially all the risks and rewards incidental to ownership. Accordingly, these leases have been classified as operating leases.

4 Key sources of estimation uncertainty

Key estimates and assumptions concerning the future are based on historical experience and various other factors that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

Long Service Leave Several estimations and assumptions used in calculating the Authority’s long service leave provision include expected future salary rates, discount rates, employee retention rates and expected future payments. Changes in these estimations and assumptions may impact on the carrying amount of the long service leave provision.

5 Disclosure of changes in accounting policy and estimates

Initial application of an Australian Accounting Standard The authority has applied the following Australian Accounting Standards effective for annual reporting periods beginning on or after 1 July 2010 that impacted on the Authority.



AASB 2009-12 Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] This Standard introduces a number of terminology changes. There is no financial impact on the Authority resulting from the application of this revised standard.

AASB 2010-5 Amendments to Australian Accounting Standards ‘AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] (October 2010) This Standard introduces a number of terminology changes as well as minor presentation changes to the notes to the Financial Statements. There is no financial impact on the Authority resulting from the application of this revised Standard.

AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7] This Standard makes amendments to Australian Accounting Standards, introducing additional presentation and disclosure requirements for Financial Assets. The Standard is not expected to have any financial impact on the Authority. DTF has not yet determined the application or the potential impact of the amendments to these Standards for agencies.

Future impact of Australian Accounting Standards not yet operative The Authority cannot early adopt an Australian Accounting Standard unless specifically permitted by TI 1101 Application of Australian Accounting Standards and Other Pronouncements. Consequently, the Authority has not applied early any of the following Australian Accounting Standards that have been issued that may impact the Authority. Where applicable, the Authority plans to apply these Standards from their application date:

AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 1 Jan 2013 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 31, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12].The amendment to AASB 7 Financial Instruments: Disclosures requires modification to the disclosure of categories of financial assets. The Authority does not expect any financial impact when the Standard is first applied. The disclosure of categories of financial assets in the notes will change.

AASB 1053 Application of Tiers of Australian Accounting Standards 1 July 2011This Standard establishes a differential financial reporting framework consisting of two tiers of reporting requirements for preparing general purpose financial statements. The Standard does not have any financial impact on the Authority. However it may affect disclosures in the financial statements of the Authority if the reduced disclosure requirements apply. DTF has not yet determined the application or the potential impact of the new Standard for agencies.

AASB 2010-2 Amendments to Australian Accounting Standards arising from 1 July 2013Reduced Disclosure Requirements This Standard makes amendments to many Australian Accounting Standards, including Interpretations, to introduce reduced disclosure requirements into these pronouncements for application by certain types of entities. The Standard is not expected to have any financial impact on the Authority. However this Standard may reduce some note disclosures in financial statements of the Authority. DTF has not yet determined the application or the potential impact of the amendments to these Standards for agencies.



Long service leave (a) 210 296 Annual leave (a) 630 700 Other related expenses 74 71 9,920 9,466 (a) Includes a superannuation contribution component

Employment on-costs such as workers’ compensation and payroll tax are included at note 15 'Other Expenses'. The employment on-costs liability is included at note 26 'Provisions'.

11 Supplies and services 2011 2010 $000 $000 Contractors 10,751 14,539 Administration expense 1,035 908 Other Staffing Costs 1,543 1,112 Repairs and maintenance 1,028 1,106 Vehicle leasing 143 268 IT system development 76 46 Marketing expenses 456 382 Other supplies & services costs 335 239 15,367 18,600 12 Depreciation and amortisation expense 2011 2010 $000 $000

Depreciation Buildings 2,297 1,978 Computers and electronic equipment 54 50 Furniture 328 384 Plant and vehicles 625 521 Leasehold improvements 20 9 Infrastructure 1,472 1,495 4,796 4,437

Amortisation Intangible assets 239 63 239 63

Total depreciation and amortisation 5,035 4,500

13 Finance costs 2011 2010 $000 $000 Fees 224 180 224 180

14 Accommodation expenses 2011 2010 $000 $000 Lease rentals 183 191 Other accommodation expenses 59 36 242 227


AASB 9 Financial Instruments 1 Jan 2013This Standard supersedes AASB 139 Financial Instruments: Recognition and Measurement, introducing a number of changes to accounting treatments. The Standard was reissued on 6 Dec 2010 and the Authority is currently determining the impact of the Standard. DTF has not yet determined the application or the potential impact of the Standard for agencies.

6 Trading profit 2011 2010 $000 $000 Sales 44 120 Cost of Sales: Opening Inventory (31) (24) Purchases (108) (107) (139) (131) Closing Inventory 30 31 Cost of Goods Sold (109) (99) Trading profit (65) 21

7 Provision of services 2011 2010 $000 $000 Accommodation charges 15,244 14,796 Facilities and tours 3,914 3,752 Admission fees 5,272 4,883 Lease and licence income 3,258 3,133 Utility charges 1,180 1,292 Housing rentals 610 613 29,478 28,469

8 Other revenue 2011 2010 $000 $000 Insurance recoveries 69 83 Contribution to works 27 63 Miscellaneous 266 120 Donations 26 28 388 294

9 Net gain/(loss) on disposal of non-current assets 2011 2010 $000 $000 Cost of disposal of non-current assets Plant, vehicles and furniture - - Proceeds from disposal of non-current assets Plant, vehicles and furniture (5) 3

Net gain/(loss) (5) 3

10 Employee benefits expense 2011 2010 $000 $000 Wages and salaries 8,183 7,651 Superannuation - defined contribution plans 715 663

Superannuation - defined benefit plans (see note 9(i)) 108 85



Long service leave (a) 210 296 Annual leave (a) 630 700 Other related expenses 74 71 9,920 9,466 (a) Includes a superannuation contribution component

Employment on-costs such as workers’ compensation and payroll tax are included at note 15 'Other Expenses'. The employment on-costs liability is included at note 26 'Provisions'.

11 Supplies and services 2011 2010 $000 $000 Contractors 10,751 14,539 Administration expense 1,035 908 Other Staffing Costs 1,543 1,112 Repairs and maintenance 1,028 1,106 Vehicle leasing 143 268 IT system development 76 46 Marketing expenses 456 382 Other supplies & services costs 335 239 15,367 18,600 12 Depreciation and amortisation expense 2011 2010 $000 $000

Depreciation Buildings 2,297 1,978 Computers and electronic equipment 54 50 Furniture 328 384 Plant and vehicles 625 521 Leasehold improvements 20 9 Infrastructure 1,472 1,495 4,796 4,437

Amortisation Intangible assets 239 63 239 63

Total depreciation and amortisation 5,035 4,500

13 Finance costs 2011 2010 $000 $000 Fees 224 180 224 180

14 Accommodation expenses 2011 2010 $000 $000 Lease rentals 183 191 Other accommodation expenses 59 36 242 227



Accrued Revenue 74 53 1,982 2,315 Allowance for impairment of receivables (939) (977) 1,043 1,338

Reconciliation of changes in the allowance for impairment of receivables:

Balance at the start of the year 977 961 Doubtful debts expense written back in the income statement (9) 29 Amounts already provided for & written off as uncollectible (29) (13)

Balance at the end of the year (939) 977

The Authority does not hold any collateral as security or other credit enhancements relating to receivables.

20 Property, plant, equipment and vehicles 2011 2010 $000 $000 Land At fair value (a) 126,700 126,700 Buildings At fair value (a) 100,702 99,603 Accumulated depreciation (19,062) (16,096) 81,640 83,507 Computers and electronic equipment At cost 1,261 1,181 Accumulated depreciation (1,173) (1,118) 88 63 Furniture At cost 1,996 1,996 Accumulated depreciation (1,708) (1,381) 288 615 Plant and Vehicles At cost 4,505 3,547 Accumulated depreciation (3,001) (2,376) 1,504 1,171 Leasehold Improvements At cost 313 201 Accumulated depreciation (131) (110) 182 91 Works of art At fair value (ii) 26 26 26 26 Work in progress At cost 73 23 73 23

210,501 212,196


15 Other expenses 2011 2010 $000 $000 Furniture, fittings and equipment replacement 177 192 Doubtful debts expense (38) 31 Employment on-costs (a) 7 21 Research and development 38 15 Other – Write-down of assets 104 344 288 603

(a) Includes workers’ compensation and payroll tax employment on-costs. The on-costs liability associated with the recognition of annual and long service leave liability is included at note 26 'Provisions'. Superannuation contributions accrued as part of the provision for leave are employee benefits and are not included in employment on-costs.

16 Grants and subsidies from State Government 2011 2010 $000 $000 State Government Operating Grant 2,200 2,200 Office of Crime Prevention 25 54 Waste Management and Recycling - 2 Other 20 12

2,245 2,268State Government Operating Grant The State Government Operating Grant represents the contribution made under the Department of Treasury and Finance - Administered Transactions - Grants, Subsidies and Transfer Payments, Item 15 - Rottnest Island Authority.

17 Services received free of charge 2011 2010 $000 $000 State Government Department of Treasury and Finance - 5

Total services received free of charge - 5

18 Inventories 2011 2010 $000 $000

Inventories held for resale Visitors centre stock 25 25 Post office - - Bike hire stock 5 6 30 31

Inventories not held for resale Fuels 121 109 Bike hire stock - 116 121 225

151 256 19 Receivables 2011 2010 $000 $000

Receivables 1,537 1,790 GST receivable 166 177 Interest receivable 63 45 Other receivables 94 213 Prepayments 48 37



Accrued Revenue 74 53 1,982 2,315 Allowance for impairment of receivables (939) (977) 1,043 1,338

Reconciliation of changes in the allowance for impairment of receivables:

Balance at the start of the year 977 961 Doubtful debts expense written back in the income statement (9) 29 Amounts already provided for & written off as uncollectible (29) (13)

Balance at the end of the year (939) 977

The Authority does not hold any collateral as security or other credit enhancements relating to receivables.

20 Property, plant, equipment and vehicles 2011 2010 $000 $000 Land At fair value (a) 126,700 126,700 Buildings At fair value (a) 100,702 99,603 Accumulated depreciation (19,062) (16,096) 81,640 83,507 Computers and electronic equipment At cost 1,261 1,181 Accumulated depreciation (1,173) (1,118) 88 63 Furniture At cost 1,996 1,996 Accumulated depreciation (1,708) (1,381) 288 615 Plant and Vehicles At cost 4,505 3,547 Accumulated depreciation (3,001) (2,376) 1,504 1,171 Leasehold Improvements At cost 313 201 Accumulated depreciation (131) (110) 182 91 Works of art At fair value (ii) 26 26 26 26 Work in progress At cost 73 23 73 23

210,501 212,196



21 Infrastructure 2011 2010 $000 $000 At fair value 47,227 46,798 Accumulated Depreciation (20,183) (18,731) 27,044 28,067

The latest revaluation on infrastructure was performed in accordance with an independent valuation by Australian Valuation Partners Pty Ltd. The effective date of the valuation was 30 June 2009. Fair value was determined on the basis of depreciated replacement cost.

Reconciliation Carrying amount at start of year 28,068 27,810 Additions 499 1,633 Transfers - 119 Depreciation expense (1,473) (1,495) Carrying amount at end of year 27,044 28,067

22 Intangible assets 2011 2010 $000 $000 Right to Receive the Rottnest Dome Building 778 778 Computer software at cost 1,470 1,129 Accumulated amortisation (913) (676) 1,335 1,231 Reconciliation Carrying amount at start of year 1,231 884 Additions 343 410 Amortisation expense (239) (63) Carrying amount at end of year 1,335 1,231 23 Impairment of assets

There were no indications of impairment to Property, plant, equipment and vehicles, Infrastructure and Intangible assets at 30 June 2011. The Authority held no goodwill or intangible assets with an indefinite useful life during the reporting period. At the end of the reporting period other than the right to receive the Rottnest Dome building, there were no intangible assets not yet available for use. All surplus assets at 30 June 2011 have either been classified as non-current assets held for sale or written off.

24 Payables 2011 2010 $000 $000 Trade payables 2,887 4,723 Accrued expenses 113 75 Accrued salaries 125 120

3,125 4,918


(i) Land and Buildings were re-valued as at 1 July 2009 by the Western Australian Land Information Authority (Valuation Services). The valuations were performed during the year ended 30 June 2010. The fair value of all land and buildings has been determined by applying the non market value and depreciated replacement cost method. Refer note 2(f) ‘Property, Plant, Equipment and Vehicles and Infrastructure’. The Rottnest Island artworks were independently valued by Stafford Studios of Fine Art in June 2009. The valuation was performed on a replacement value basis.

Reconciliations Reconciliations of the carrying amounts of property, plant, equipment and vehicles at the beginning and end of the reporting period are set in the table below.

2010 Land Buildings Computers and electronic

equipment

Furniture Plant and

vehicles

Leasehold improvements

Works of art

Work in progress

Total

$000 $000 $000 $000 $000 $000 $000 $000 Carrying amount at start of year 108,104 63,261 85 1,123 1,026 22 26 1,391 175,038

Additions - 575 28 18 693 78 - 23 1,415

Transfers (104) 1,200 - (8) (7) - - (1,200) (119)

Other disposals - - - (134 ) (20) - - (191) (345)

Classified as held for sale - - - - - - - -

Revaluationincrements 18,700 20,449 - - - - - - 39,149

Depreciation - (1,978) (50) (384) (521) (9) - - (2,942)

Carrying amount at end of year 126,700 83,507 63 615 1,171 91 26 23 212,196

2011 Land Buildings Computers and electronic equipment

Furniture Plant and vehicles

Leasehold improvements

Works of art

Work in progress

Total

$000 $000 $000 $000 $000 $000 $000 $000

Carrying amount at start of year 126,700 83,507 63 615 1,171 91 26 23 212,196

Additions - 431 79 - 958 111 - 50 1,629

Transfers - - - - - - - - -

Disposals - - - - - - - - -

Revaluation increments - - - - - - - - -

Depreciation expense - (2,297) (54) (327) (625) (20) - - (3,324)

Carrying amount at end of year 126,700 81,640 88 288 1,504 182 26 73 210,501



21 Infrastructure 2011 2010 $000 $000 At fair value 47,227 46,798 Accumulated Depreciation (20,183) (18,731) 27,044 28,067

The latest revaluation on infrastructure was performed in accordance with an independent valuation by Australian Valuation Partners Pty Ltd. The effective date of the valuation was 30 June 2009. Fair value was determined on the basis of depreciated replacement cost.

Reconciliation Carrying amount at start of year 28,068 27,810 Additions 499 1,633 Transfers - 119 Depreciation expense (1,473) (1,495) Carrying amount at end of year 27,044 28,067

22 Intangible assets 2011 2010 $000 $000 Right to Receive the Rottnest Dome Building 778 778 Computer software at cost 1,470 1,129 Accumulated amortisation (913) (676) 1,335 1,231 Reconciliation Carrying amount at start of year 1,231 884 Additions 343 410 Amortisation expense (239) (63) Carrying amount at end of year 1,335 1,231 23 Impairment of assets

There were no indications of impairment to Property, plant, equipment and vehicles, Infrastructure and Intangible assets at 30 June 2011. The Authority held no goodwill or intangible assets with an indefinite useful life during the reporting period. At the end of the reporting period other than the right to receive the Rottnest Dome building, there were no intangible assets not yet available for use. All surplus assets at 30 June 2011 have either been classified as non-current assets held for sale or written off.

24 Payables 2011 2010 $000 $000 Trade payables 2,887 4,723 Accrued expenses 113 75 Accrued salaries 125 120

3,125 4,918



Within 12 months of Statement of Financial Position date 430 315 More than 12 months after Statement of Financial Position date 526 627 956 942 (c) The settlement of annual and long service leave gives rise to the payment of employment on-costs including workers' compensation insurance. The provision is the present value of expected future payments. The associated expense, apart from the unwinding of the discount (finance cost), is disclosed in note 15 'Other Expenses'.

(d) Defined benefit superannuation plans The amounts recognised in the Statement of Comprehensive Income are as follows: Pre-transfer benefit Gold State

Pension Scheme Superannuation Scheme

2011 2010 2011 2010 $'000 $'000 $'000 $'000 Current service cost 0 0 0 0Interest cost (unwinding of the discount) 15 16 3 3Net actuarial losses/(gains) recognised 8 5 0 2Total, included in Employee benefits expense (see note 10) ‘Employee benefits expense’ 23 21 3 5

The amounts recognised in the Statement of Financial Position are as follows: Present value of unfunded obligations 284 296 50 57Liability in the Statement of Financial Position 284 296 50 57 Reconciliation of the unfunded liability recognised in the Statement of Financial Position is as follows: Pre-transfer benefit Gold State Pension Scheme Superannuation Scheme 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Liability at start of year 296 309 57 52Current service cost 0 0 0Interest cost (unwinding of the discount) 15 16 3 3Net actuarial losses/(gains) recognised 8 5 0 2Benefits paid (35) (34) (10) 0Liability at end of year 284 296 60 57

Reconciliation of the fair value of plan assets is as follows:

Fair value of plan assets at start of year 0 0 0 0 Employer contributions 35 34 10 0 Benefits paid (35) (34) (10) 0 Fair value of plan assets at end of year 0 0 0 0

The principal actuarial assumptions used (expressed as weighted averages) were as follows:


25 Borrowings 2011 2010 $000 $000 Current CBA Bank overdraft 315 - Finance lease liabilities (secured) 106 67

Total current 421 67 Non-current Finance lease liabilities (secured) 476 240

Total non-current 476 240 26 Provisions 2011 2010 $000 $000 Current

Employee benefits provision Annual leave (a) 934 864 Long service leave (b) 617 546 Time in lieu 39 30 Superannuation (d) 88 55 Leave purchase 10 7 1,688 1,502

Other provisions Employment on-costs (c) 67 63 Long Service Leave on-cost provision 58 43 125 106 1,813 1,608

Non-current Employee benefits provision Long service leave (b) 339 304 Super prov - Lterm 333 352 672 656 Other provisions Employment on-costs (c) 24 24 24 24 696 680

(a) Annual leave liabilities have been classified as current where there is no unconditional right to defer settlement for at least 12 months after reporting date. Assessments indicate that actual settlement of the liabilities will occur as follows:

2011 2010$000 $000

Within 12 months of Statement of Financial Position date 510 489 More than 12 months after Statement of Financial Position date 424 407 934 896 (b) Long service leave liabilities have been classified as current where there is no unconditional right to defer settlement for at least 12 months after reporting date. Assessments indicate that actual settlement of the liabilities will occur as follows:



Within 12 months of Statement of Financial Position date 430 315 More than 12 months after Statement of Financial Position date 526 627 956 942 (c) The settlement of annual and long service leave gives rise to the payment of employment on-costs including workers' compensation insurance. The provision is the present value of expected future payments. The associated expense, apart from the unwinding of the discount (finance cost), is disclosed in note 15 'Other Expenses'.

(d) Defined benefit superannuation plans The amounts recognised in the Statement of Comprehensive Income are as follows: Pre-transfer benefit Gold State

Pension Scheme Superannuation Scheme

2011 2010 2011 2010 $'000 $'000 $'000 $'000 Current service cost 0 0 0 0Interest cost (unwinding of the discount) 15 16 3 3Net actuarial losses/(gains) recognised 8 5 0 2Total, included in Employee benefits expense (see note 10) ‘Employee benefits expense’ 23 21 3 5

The amounts recognised in the Statement of Financial Position are as follows: Present value of unfunded obligations 284 296 50 57Liability in the Statement of Financial Position 284 296 50 57 Reconciliation of the unfunded liability recognised in the Statement of Financial Position is as follows: Pre-transfer benefit Gold State Pension Scheme Superannuation Scheme 2011 2010 2011 2010 $'000 $'000 $'000 $'000 Liability at start of year 296 309 57 52Current service cost 0 0 0Interest cost (unwinding of the discount) 15 16 3 3Net actuarial losses/(gains) recognised 8 5 0 2Benefits paid (35) (34) (10) 0Liability at end of year 284 296 60 57

Reconciliation of the fair value of plan assets is as follows:

Fair value of plan assets at start of year 0 0 0 0 Employer contributions 35 34 10 0 Benefits paid (35) (34) (10) 0 Fair value of plan assets at end of year 0 0 0 0

The principal actuarial assumptions used (expressed as weighted averages) were as follows:



28 Equity Contributed Equity 2011 2010 $000 $000

Balance at start of the period 50,032 50,032 - -

Total contributions by owners 50,032 50,032

Reserves Asset revaluation surplus

Balance at the start of year 187,840 148,691 Net revaluation increments/decrements Land - 18,700 Buildings - 20,449

Balance at end of year 187,840 187,840

Retained Earnings Balance at the start year 3,700 5,481 Result for the period 2,139 (1,781)


29 Notes to the Statement of Cash Flows Reconciliation of CashCash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

2011 2010 $000 $000

Cash and cash equivalents 14,467 10,956 Other financial assets (current & non-current) 6,000 6,000 Bank Overdraft (315) -

20,152 16,956

Reconciliation of profit after income tax equivalent to net cash flows provided by/(used in) operating activities Profit / (loss) for the period 2,139 (1,781) Non cash items: Depreciation and amortisation expense 5,035 4,500

Net loss / (gain) on sale of property, plant and equipment 5 (3)

Doubtful debts expense (9) 23 Grants and subsidies from State Government (2,245) (2,268) Other expenses – write down of assets 344 (Increase) / decrease in assets: Current receivables (a) 293 (483) Current inventories 104 230


2011 2010 2009 Discount rate 5.28% 5.48% 5.34% Future salary increases 4.50% 4.50% 4.50%

Historic summary 2011 2010 2009 $000 $000 $000

Pension Scheme: Present value of unfunded obligation 284 296 309 Fair value of plan assets 0 0 0 Deficit 284 296 309

Pre-transfer Benefit - Gold State Superannuation Scheme: Present value of unfunded obligation 50 57 52 Fair value of plan assets 0 0 0 Deficit 50 57 52 Experience adjustments arising on plan liabilities: Pension Scheme 5 5 15

Pre-transfer Benefit - Gold State Superannuation Scheme (1) 3 4

Employer funding arrangements for the defined benefit plans(a) The amounts recorded for the Gold State Superannuation Scheme relate to the scheme as a whole (ie. The pre-transfer benefit component plus the concurrently funded benefit component). Employer contributions of $36,000 are expected to be paid to the Pension Scheme for the year ending 30 June 2012.

Movements in Other ProvisionsMovements in each class of provisions during the financial year, other than employee benefits, are set out below.

2011 2010 $000 $000Employment on-cost provision Carrying amount at start of year 313 117Additional provisions recognised 198 160Payments / other sacrifices of economic benefits 18 36Carrying amount at end of year 529 313

27 Other Liabilities 2011 2010 $000 $000 Current liabilities Refundable deposits and bonds 8,376 8,953 Leases in advance 100 100 Deferred Income 661 700 Unclaimed money 55 58 General Provisions 75 17

9,267 9,828 Non-current liabilities Leases in advance 1,033 1,133

1,033 1,133



28 Equity Contributed Equity 2011 2010 $000 $000

Balance at start of the period 50,032 50,032 - -

Total contributions by owners 50,032 50,032

Reserves Asset revaluation surplus

Balance at the start of year 187,840 148,691 Net revaluation increments/decrements Land - 18,700 Buildings - 20,449


Retained Earnings Balance at the start year 3,700 5,481 Result for the period 2,139 (1,781)


29 Notes to the Statement of Cash Flows Reconciliation of CashCash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

2011 2010 $000 $000

Cash and cash equivalents 14,467 10,956 Other financial assets (current & non-current) 6,000 6,000 Bank Overdraft (315) -

20,152 16,956

Reconciliation of profit after income tax equivalent to net cash flows provided by/(used in) operating activities Profit / (loss) for the period 2,139 (1,781) Non cash items: Depreciation and amortisation expense 5,035 4,500

Net loss / (gain) on sale of property, plant and equipment 5 (3)

Doubtful debts expense (9) 23 Grants and subsidies from State Government (2,245) (2,268) Other expenses – write down of assets 344 (Increase) / decrease in assets: Current receivables (a) 293 (483) Current inventories 104 230



Increase / (decrease) in liabilities: Current Payables (a) (1,793) 929 Current Provisions 205 298 Other liabilities (561) (447) Non-current provisions 16 (79) Non-current liabilities (100) (100)

Change in GST receivables / payables 11 (240)

Net cash provided by/(used in) operating activities 3,100 923

30 Commitments 2011 2010 $000 $000

Capital expenditure commitments

Capital expenditure commitments, being contracted capital expenditure additional to the amounts reported in the financial statements, are payable as follows:

Within 1 year 876 679 876 679

The capital commitments include amounts for: Buildings 490 384 Infrastructure 242 179 Plant Equipment and Vehicles 98 - Software Development 46 116 876 679 2011 2010 $000 $000

Lease commitments

Commitments in relation to leases contracted for at the balance sheet date but not recognised as liabilities are payable as follows:

Within 1 year 297 220 Later than 1 year and not later than 5 years 1,129 51 Later than 5 years 149 - 1,575 271 Representing Non-cancellable operating leases 1,575 271

Office accommodation is sublet from the Government Property Office and rent is payable monthly in advance. The lease runs for one year, with an option of a further year. The rental is subject to review on predetermined dates, based on CPI adjustment.

Office equipment is leased over four year terms with charges payable monthly in advance. Options exist to continue leasing beyond the expiry date or to purchase at residual value.

Finance Lease commitments 2011 2010 $000 $000

Minimum lease payment commitments in relation to finance leases are payable as follows:

Within 1 year 174 84 Later than 1 year and not later than 5 years 476 266 Minimum finance lease payments 650 350 Less future finance charges (69) (43)


Present value of finance lease liabilities 581 307

The present value of finance leases payable is as follows: Within 1 year 144 67 Later than 1 year and not later than 5 years 437 240

Present value of finance lease liabilities 581 307 Included in the financial statements as: Current (note 25 ‘Borrowings’) 144 67 Non-current (note 25 ‘Borrowings’) 437 240 581 307

The Authority has the option to purchase leased assets at their agreed fair value on expiry of the lease. These leasing arrangements do not have escalation clauses, other than in the event of payment default. There are no restrictions imposed by these leasing arrangements on other financing transactions. Certain finance leases have a contingent rental obligation; however these are not material when compared to the total lease payments made.

31 Contingent liabilities The following contingent liabilities are additional to the liabilities included in the financial statements:

Contaminated sitesUnder the Contaminated Sites Act 2003, the Authority is required to report known and suspected contaminated sites to the Department of Environment and Conservation (DEC). In accordance with the Act, DEC classifies these sites on the basis of the risk to human health, the environment and environmental values. Where sites are classified as contaminated – remediation required or possibly contaminated – investigation required, the Authority may have a liability in respect of investigation or remediation expenses. During the year the Authority reported three suspected contaminated sites to DEC. These have yet to be classified. The Authority is unable to assess the likely outcome of the classification process, and accordingly, it is not practicable to estimate the potential financial effect or to identify the uncertainties relating to the amount or timing of any outflows. Whilst there is no possibility of reimbursement of any future expenses that may be incurred in the remediation of these sites, the Authority may apply for funding from the Contaminated Sites Management Account to undertake further investigative work or to meet remediation costs that may be required.

32 Events occurring after the end of the reporting period There are no events that occurred after Statement of Financial Position date which would materially affecfinancial statements.

33 Explanatory statement

Significant variations between estimates and actual results for the financial year

Details and reasons for significant variations between estimates and actual results are detailed below. Significant variations are considered to be those greater than 10% and $100,000.

Actual 2011

Estimate 2011 Variance Variance

$000 $000 $000 % Interest revenue 1,172 677 495 73% Supplies and services 15,365 18,648 3,283 18% Depreciation and amortisation 5,035 4,501 (534) -12% Other expenses 288 731 443 61%



Present value of finance lease liabilities 581 307

The present value of finance leases payable is as follows: Within 1 year 144 67 Later than 1 year and not later than 5 years 437 240

Present value of finance lease liabilities 581 307 Included in the financial statements as: Current (note 25 ‘Borrowings’) 144 67 Non-current (note 25 ‘Borrowings’) 437 240 581 307

The Authority has the option to purchase leased assets at their agreed fair value on expiry of the lease. These leasing arrangements do not have escalation clauses, other than in the event of payment default. There are no restrictions imposed by these leasing arrangements on other financing transactions. Certain finance leases have a contingent rental obligation; however these are not material when compared to the total lease payments made.

31 Contingent liabilities The following contingent liabilities are additional to the liabilities included in the financial statements:

Contaminated sitesUnder the Contaminated Sites Act 2003, the Authority is required to report known and suspected contaminated sites to the Department of Environment and Conservation (DEC). In accordance with the Act, DEC classifies these sites on the basis of the risk to human health, the environment and environmental values. Where sites are classified as contaminated – remediation required or possibly contaminated – investigation required, the Authority may have a liability in respect of investigation or remediation expenses. During the year the Authority reported three suspected contaminated sites to DEC. These have yet to be classified. The Authority is unable to assess the likely outcome of the classification process, and accordingly, it is not practicable to estimate the potential financial effect or to identify the uncertainties relating to the amount or timing of any outflows. Whilst there is no possibility of reimbursement of any future expenses that may be incurred in the remediation of these sites, the Authority may apply for funding from the Contaminated Sites Management Account to undertake further investigative work or to meet remediation costs that may be required.

32 Events occurring after the end of the reporting period There are no events that occurred after Statement of Financial Position date which would materially affecfinancial statements.

33 Explanatory statement

Significant variations between estimates and actual results for the financial year

Details and reasons for significant variations between estimates and actual results are detailed below. Significant variations are considered to be those greater than 10% and $100,000.

Actual 2011

Estimate 2011 Variance Variance

$000 $000 $000 % Interest revenue 1,172 677 495 73% Supplies and services 15,365 18,648 3,283 18% Depreciation and amortisation 5,035 4,501 (534) -12% Other expenses 288 731 443 61%



Interest Revenue The variance is due to higher cash balances and interest rates in the 2011year than budgeted for 2010. Interest was also received from the ATO which was not budgeted for. The interest received was on funds paid to the ATO in 2010 relating to the fuel rebate claim which were reimbursed in 2011

Supplies and Services The Supplies and Services expense includes the offset of the fuel tax credits claimed. After a tax audit conducted by the ATO in 2009/2010 the Authority was advised that it was not considered to be the ‘owner’ of the fuel previously used for its operations and, therefore, was not entitled to claim fuel tax credits made for the period November 2003 to June 30 2009. A payment to the ATO of $1.5 million was required which was accounted for in Supplies & Services in 2010. An objection was lodged with the ATO disputing the validity of the Authority’s liability for the tax. This objection was upheld and the funds repaid to the Authority in the 2010-11 financial year. This repayment is reflected as an offset in the actual Supplies and Services expense for 2010-11.

Depreciation and amortisation The depreciation has increased due to the number of projects being completed in 2010. This included a significant value of software development which is depreciated over a short life.

Other Expenses The budget for Other Expenses included a provision for costs, including the operating costs associated with capital projects, which were not incurred.

Significant variances between actual and prior year revenue and expenditure

Significant variations are considered to be those greater than 10% and $100,000.

2011 2010 Variance Variance $000 $000 $000 % Interest revenue 1,172 734 438 60% Supplies and services 15,365 18,600 (3,235) -17% Depreciation and amortisation 5,035 4,500 535 12% Other expenses 288 603 (315) -52%

Interest Revenue The variance is due to higher cash balances and interest rates in the 2011 year than in 2010. Interest was also received in 2011 from the ATO on funds paid to the ATO in 2010 relating to the fuel tax rebate claim which were reimbursed in 2011 (see below – Supplies and Services).

Supplies and Services After a tax audit conducted by the ATO, the Authority was advised that it was not considered to be the ‘owner’ of the fuel previously used for its operations, and therefore, was not entitled to claim fuel tax credits made for the period November 2003 to June 30 2009. A payment to the ATO of $1.5 million was required which is accounted for in Supplies & Services in 2010. This payment had a significant adverse impact on the Authority’s financial performance for that year. An objection was lodged with the ATO disputing the validity of the Authority’s liability for the tax.This objection was upheld and the funds repaid to the Authority in the 2011 year.

Depreciation and amortisation The depreciation has increased due to the number of projects being completed in 2010. This included a significant value of software development which is depreciated over a short life.

Other Expenses The value of Other Expenses in the 2009/10 financial year included a one-off charge relating to the write down of assets to comply with the Authority's capitalisation policy. The charge has not been repeated in the 2010-11 financial year.


34 Financial Instruments

(a) Financial Risk Management Objectives and Policies Financial instruments held by the Authority are cash and cash equivalents, restricted cash and cash equivalents, borrowings, finance leases, Treasurer’s advances, loans and receivables and payables. The Authority has limited exposure to financial risks. The Authority’s overall risk management program focuses on managing the risks identified below.

Credit riskCredit risk arises when there is the possibility of the Authority’s receivables defaulting on their contractual obligations resulting in financial loss to the Authority. The maximum exposure to credit risk at end of the reporting period in relation to each class of recognised financial assets is the gross carrying amount of those assets inclusive of any provisions for impairment as shown in the table at note 33(c) ‘Financial Instrument Disclosures’ and note 2(n) ‘Receivables’. The Authority has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the Authority’s exposure to bad debts is minimal. At the end of the reporting period there were no significant concentrations of credit risk.

Liquidity riskLiquidity risk arises when the Authority is unable to meet its financial obligations as they fall due. The Authority is exposed to liquidity risk through its trading in the normal course of business.The Authority’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, loans and finance leases. The Authority has appropriate procedures to manage cash flows by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.

Market riskMarket risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the Authority’s income or the value of its holdings of financial instruments. The Authority does not trade in foreign currency and is not materially exposed to other price risks [forexample, equity securities or commodity prices changes]. The Authority’s exposure to market risk for changes in interest rates relates primarily to the long-term debt obligations.

All borrowings are due to the Western Australian Treasury Corporation (WATC) and are repayable at fixed rates with varying maturities. Other than as detailed in the interest rate sensitivity analysis table at note 33(c), the Authority is not exposed to interest rate risk because apart from minor amounts of restricted cash, all other cash and cash equivalents and restricted cash are non-interest bearing and have no borrowings other than the Treasurer’s advance (noninterest bearing), WATC borrowings and finance leases (fixed interest rate).

(b) Categories of Financial Instruments In addition to cash and bank overdraft, the carrying amounts of each of the following categories of financial assets and financial liabilities at the end of the reporting period are: 2011 2010 ($'000) ($'000)Financial Assets Cash & Cash Equivalents 13,837 10,956 Loans and Receivables 877 1,162 Held-to-maturity investments 6,000 6,000 Financial Liabilities Bank Overdraft 315 Financial Liabilities measured at amortised cost 3,706 5,225 (a) The amount of loans and receivables excludes GST recoverable from the ATO (statutory receivable)



34 Financial Instruments

(a) Financial Risk Management Objectives and Policies Financial instruments held by the Authority are cash and cash equivalents, restricted cash and cash equivalents, borrowings, finance leases, Treasurer’s advances, loans and receivables and payables. The Authority has limited exposure to financial risks. The Authority’s overall risk management program focuses on managing the risks identified below.

Credit riskCredit risk arises when there is the possibility of the Authority’s receivables defaulting on their contractual obligations resulting in financial loss to the Authority. The maximum exposure to credit risk at end of the reporting period in relation to each class of recognised financial assets is the gross carrying amount of those assets inclusive of any provisions for impairment as shown in the table at note 33(c) ‘Financial Instrument Disclosures’ and note 2(n) ‘Receivables’. The Authority has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the Authority’s exposure to bad debts is minimal. At the end of the reporting period there were no significant concentrations of credit risk.

Liquidity riskLiquidity risk arises when the Authority is unable to meet its financial obligations as they fall due. The Authority is exposed to liquidity risk through its trading in the normal course of business.The Authority’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, loans and finance leases. The Authority has appropriate procedures to manage cash flows by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.

Market riskMarket risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the Authority’s income or the value of its holdings of financial instruments. The Authority does not trade in foreign currency and is not materially exposed to other price risks [forexample, equity securities or commodity prices changes]. The Authority’s exposure to market risk for changes in interest rates relates primarily to the long-term debt obligations.

All borrowings are due to the Western Australian Treasury Corporation (WATC) and are repayable at fixed rates with varying maturities. Other than as detailed in the interest rate sensitivity analysis table at note 33(c), the Authority is not exposed to interest rate risk because apart from minor amounts of restricted cash, all other cash and cash equivalents and restricted cash are non-interest bearing and have no borrowings other than the Treasurer’s advance (noninterest bearing), WATC borrowings and finance leases (fixed interest rate).

(b) Categories of Financial Instruments In addition to cash and bank overdraft, the carrying amounts of each of the following categories of financial assets and financial liabilities at the end of the reporting period are: 2011 2010 ($'000) ($'000)Financial Assets Cash & Cash Equivalents 13,837 10,956 Loans and Receivables 877 1,162 Held-to-maturity investments 6,000 6,000 Financial Liabilities Bank Overdraft 315 Financial Liabilities measured at amortised cost 3,706 5,225 (a) The amount of loans and receivables excludes GST recoverable from the ATO (statutory receivable)



(c) Financial Instrument Disclosures Credit Risk and Interest Rate Risk ExposuresThe following Table discloses the Authority’s maximum exposure to credit risk, interest rate exposures and the ageing analysis of financial assets. The Authority’s maximum exposure to credit risk at the end of the reporting period is the carrying amount of the financial assets as shown below. The table discloses the ageing analysis of financial assets that are past due but not impaired and impaired financial assets. The table is based on information provided to senior management of the Authority.

The Authority does not hold any collateral as security or other credit enhancements relating to the financial assets it holds.

The Authority does not hold any financial assets that had to have their terms renegotiated that would have otherwise resulted in them being past due or impaired.




KEY PERFORMANCE INDICATORS

Desired Outcome

Rottnest Island visitors enjoy recreational and holiday experiences in healthy natural and cultural environments.

The Authority’s key performance indicators (KPIs) provide a guide to its performance regarding its stated outcome. State public sector policy requires effectiveness and efficiency indicators to demonstrate this performance. By their nature, these indicators are very high level and attempt to encompass all the Authority’s operations and costs. For example, the efficiency indicators are required to include all relevant costs, including corporate overheads, for each of the two services. The relationship between the Authority’s KPIs, outcome and services is outlined in the table below.

Government Goal: Social and Environmental Responsibility

Ensuring that economic activity is managed in a socially and environmentally responsible manner for the long-term benefit of the State.

Key Performance Indicators Services Provided to the Community

EFFECTIVENESS Visitor Satisfaction with the Rottnest Island experience Health of Island’s natural environment Health of Island’s cultural heritage

EFFICIENCY Average cost of recreational and holiday services provided per

visitor Average cost of natural environment and cultural heritage

management per Reserve hectare

1. Recreational and holiday services

2. Natural environment and cultural heritage management

The Authority regularly reviews and amends its indicators to reflect changes in a variety of factors impacting the Island. These could be visitor and community priorities for Rottnest Island, or changes in technology that enable more sophisticated measures to be implemented.

It should be noted that the Authority also has a suite of operational and commercial indicators that are used to manage and improve its performance. As well as comparing results to an annual target, comparisons to previous year’s results are included where available to provide a trend in performance.

Effectiveness Indicators

1. Visitor satisfaction with the Rottnest Island Experience

An independent research company is engaged to survey the Island’s visitors. Visitors are selected at random and requested to complete questionnaires. There were 1,970 completed questionnaires providing a confidence level of 95% with an error rate of +/- 2.20 %.

This indicator summarises a range of aspects addressed in the survey. Respondents are asked to rate Rottnest Island based on their satisfaction or perception of:

Recreational and holiday services and facilities;

General services and facilities such as public toilets and seating;

Accommodation facilities and services;

Natural environment and cultural heritage; and

Safety and cleanliness of the Island.

Respondents are asked to provide an overall rating of their experience compared to their expectations of their visit to Rottnest Island.



Visitor Rating Target 2010-11 Result 2009-10 Result Met or exceeded expectations 90% 94% 95% Below expectations NA 6% 5%

Comments Rottnest Island continues to provide visitors with an experience that meets their expectations.

2. Health of Rottnest Island’s Natural Environment

This indicator uses a suite of measures regarding the management of the natural environment of Rottnest Island such as flora and fauna and environmental risk factors. It is based on Environment Australia guidelines that describe three types of measures: pressure, condition and management. Environmental health standards and actions are contingent to the area being monitored. The results are calculated by the Authority’s own staff who are qualified in environmental management.

The indicator comprises four aspects of the environment each with selected measures, as described below:

Measure Explanatory Notes

Terrestrial Habitat Number of trees planted This indicator is aimed at measuring the rate of restoring the Island’s woodland

environment following extensive clearing of native woodlands over 100 years of early settlement. The number of trees planted each year provides an indicator of management effort and progress towards the Authority’s woodland restoration goal.

Number of hectares of weed control

Weeds adversely affect the environment of Rottnest Island and therefore they need to be constantly controlled. This indicator provides a measure of the level of management action to reduce weeds using area as an indicator.

Inland Waters Number of moaning frog sites identified

The abundance and distribution of frogs over time is an important indicator of the health of aquatic ecosystems as frogs are very sensitive to changes in their environment such as habitat modification, pollution, disease, predation and climate change. Therefore, more active sites is a positive indicator of the natural environment.

Marine Habitat Number of pollution events A pollution event is defined as a breach in Department of Health one-off trigger

levels for the presence of Enteroccocci bacteria in the water column at popular swimming locations. The following environmental factors are also known to have an influence in bacteria levels at popular bays: 1. oceanographic variability can influence results i.e. washing up of sea wrack

into a popular swimming bay; 2. rainfall events can wash animal faecal content into bays causing spikes in

bacteria concentrations; 3. presence of birds defecating in popular swimming bays.

Wildlife Management Percentage of active osprey nests

Ospreys are an important fauna species and are noted as being particularly sensitive to human disturbance, especially during breeding/incubation periods, which on Rottnest Island occurs from June to December. Therefore, more active sites is a positive indicator of the natural environment.

Number of red-capped robin at key sites

Bird counts are conducted by volunteers (Birds Australia) at the identified survey sites that are representative of both remnant vegetation and re-vegetated plots. A higher number of these birds is a positive indicator of the natural environment.

Number of new pests discovered

Rottnest Island has several terrestrial pests due to past habitation and use. Some pest species have been removed from the island (eg. cats). Some pest species are well established and eradication is not a practical option (eg. pheasants, mice and rats). The management approach for the Island is to limit the establishment of any new pests.



A graded range is used to rate these four aspects of the natural environment, where an ‘A’ rating denotes an ideal state of condition, pressure, or management action. Ratings of B, C, D and F denote lesser states of these factors (see first table below).

A suitable annual target grading was identified for each of the four aspects. The targets were based on several factors including the state of the current environment, risk factors and the Authority’s limited resources to implement conservation actions. The target grading for each aspect is calculated by averaging the graded measures comprising each aspect.

Because of the unique nature of Rottnest Island, it is not possible to compare results to ‘industry’ averages or a ‘peer’ destination. As environmental conditions and pressures change from year to year, it is also not appropriate to compare to previous years’ results.

Grading Legend:

Grade Description

A Good condition, pressure or management action B Satisfactory condition, pressure or management action C Acceptable condition, pressure or management action D Unsatisfactory condition, pressure or management action F Serious concern for condition, pressure or management action

The results for the 2010-11 year are:

Indicator Category *Target 2010-11 Results

Terrestrial Habitat D C

Inland Waters C A

Marine Habitat B A

Wildlife Management C A

*The RIA’s targets are approved by its governing body in relation to its functions under theRottnest Island Authority Act 1987, including the conditions imposed on the Authority by the Act. For example, the Authority is only required to maintain and protect the natural environment to the extent to which its resources allow (s.11(2)(c)).

Comments The condition and management of all aspects of the Natural environment were higher than expected.

Terrestrial The very high level of hectares weeded (10 ha) during the year helped achieve a higher than expected result for this measure.

Inland WatersThe higher number of active frog sites (10) identified achieved a more positive result than expected for this measure.

Marine Habitat No pollution events were detected which achieved a very positive result for this measure.

Wildlife Management Higher than expected counts of red-capped robins (79), and a proportion of active osprey nests (79%) achieved positive results for this measure.

3. Health of Rottnest Island’s Cultural Heritage

This indicator comprises three aspects which are monitored by selected measures to indicate the state of Rottnest Island’s cultural heritage. The results for the measures are reported as a percentage of the ‘ideal state’. The measures are calculated by Authority staff who are qualified in cultural heritage management.



The results for the measures of Rottnest Island’s cultural heritage:

Aspect Measure *2010-11 Target

%

2010-11 Result

%

2009-10 Results

%The proportion of heritage listed places with statements of significance 70-89 72 72

Identification The proportion of collection heritage items recorded on database compared to currently known number of items

70-89 80 72

Protection The proportion of developments that follow heritage legal requirements and conservation policies

90-100 82 89

The proportion of State-registered places meeting condition targets 70 - 89 67 66

Conservation The proportion of State-registered places with conservation plans less than 10 years old 30-49 13 45

*The RIA’s targets are approved by its governing body in relation to its functions under the Rottnest Island Authority Act 1987,including the conditions imposed on the Authority by the Act. For example, the Authority is only required to maintain and protect the man-made resources to the extent to which its resources allow (s.11(2)(c)).

Comments

Identification There are 142 places on the Authority’s Heritage Asset Register, of which 61 are heritage-listed with the Heritage Council of Western Australia (HCWA), and 14 Aboriginal sites registered with the Department of Indigenous Affairs (DIA) under the Aboriginal Heritage Act 1972. Performance in these areas was maintained with 72% of all 142 heritage places having Statements of Significance.

A significant effort was made during the year to record heritage items resulting in a significant improvement on last years performance. It is estimated that the total number of items is approximately 2000. This total is adjusted annually based on the discovery of stored but unrecorded artefacts and new acquisitions, which totalled an additional 482 items during the year.

Protection The majority of developments that required heritage assessment complied with heritage guidelines. Of the eleven Development Applications on Rottnest Island affecting heritage registered places, nine were referred to the HCWA or DIA for comment and approval prior to works commencing. One development was undertaken by a business without a development application, resulting in a retrospective referral (satellite dish on heritage structure), and another development for a fence did not proceed through the required process.

Conservation The proportion of heritage places meeting condition targets was maintained during the year compared to the previous year, although it was expected to improve.

In relation to current ‘conservation plans’, the Authority is not able to allocate the required funding to this area of cultural heritage management. There are 61 state-registered HCWA places and 14 state-registered DIA places (total 75). Of these 75 places, 10 (13%) have conservation plans ten years old or less. The reduced number of places having conservation plans ten years old or less is mainly due to places in areas such as Kingstown and Thomson Bay Settlement.

Efficiency Indicators

Service One: Recreational and Holiday Services

This indicator reflects the cost of providing Rottnest Island’s recreational and holiday services on a per visitor basis. ‘Visitors’ is determined from the number of people arriving by commercial ferry services only. The indicator is intended to track the level of resources used to service Rottnest Island visitors.



The indicator is calculated by dividing the total annual cost of providing all holiday and recreation related services to visitors, by the number for visitors for the year.

Title Target* 2010-11 Result

2009-10 Result

2008-09 Result**

Average cost of recreational and holiday services provided per visitor $89 $84 $99 $78

*Target based on the annual budget allocated to this service. **Results for this comparative year have been amended in accordance with a correction to the financial statements for the year.

Comments:

Reduced expenditure on this service compared to budget (and compared to the previous year) resulted in a lower cost per visitor. Reductions occurred mainly in the commercial services areas including accommodation, tours and transport, recreational hire and infrastructure maintenance, as well as reductions in associated corporate overhead costs.

Service Two: Natural Environment and Cultural Heritage Management

This indicator concerns the cost of managing Rottnest Island’s natural environment and cultural heritage. Its purpose is to track the level of resources used to manage the natural environment and cultural heritage.

The indicator is calculated by dividing the total cost of managing the natural environment and cultural heritage by the Rottnest Island Reserve’s total area of 5,669 hectares. The Reserve refers to the land and waters defined in Part 1 of the Rottnest Island Authority Act 1987.

Title Target* 2010-11 Result

2009-10 Result

2008-09 Result**

Average cost of natural environment and cultural heritage management per Reserve hectare

$723 $792 $613 $707

*Target based on the annual budget allocated to this service. **Results for this comparative year have been amended in accordance with a correction to the financial statements for the year.

Comments:

The increased level of resourcing expended on this service compared to budget resulted in a higher cost per output. The areas of increase were mostly a result of additional expenditure required for the management of the natural and heritage environments and the resulting increases in associated corporate overhead costs.

OTHER FINANCIAL DISCLOSURES

Pricing Policies The Rottnest Island Authority Act 1987 requires that overall revenue is adequate to meet the Authority’s expenditure. Therefore, the Act allows the Authority to have a pricing policy whereby commercial services are priced to recover the cost of its commercial and non-commercial operations such as environmental and cultural heritage management. Prices are set to achieve these objectives, and are regularly reviewed and consider market sensitivities and competitiveness.

The prevailing fees and charges are either ‘unregulated’, such as accommodation and recreational services, and only require Authority approval, or ‘regulated’ such as admission and mooring fees which are proposed by the Authority for approval by Government.

Several fees and charges were increased in 2010-11, mostly in line with the Consumer Price Index, consistent with the Authority’s strategic objectives.



Capital Investment

More than $ 2.4 million was spent on capital works including the following major items:

Improvements to accommodation including new barbecues and additional sofas; Upgrade to several heritage cottages at Kingstown; New visitor service centre at the B-Shed Victoria Quay Fremantle; Replacement of gas reticulation system at the Caroline Thomson area; Acquisition of 750 new custom built adult hire bikes; Infrastructure related projects including Main Jetty repairs and the replacement of sewer pipes

at Welch and Brand Way; and Refurbishment of the Authority’s main office at E-Shed in Fremantle.

Human Resources

The complex nature of the Authority’s business is reflected in a wide variety of occupational groups within the organisation which range from customer service and sales representatives to coach captains, environmental scientists and educators, professionals and administrators. In addition trainees and cadets are also sponsored to support indigenous youth development. The seasonal nature of the business is an additional challenge managers face as they strive to match the workforce to meet visitor demands

A comprehensive Employee Opinion Survey was conducted in 2010-11 with an employee response rate of 72%. Results showed a minor increase in employee satisfaction along with significant improvements in data collection, information and knowledge sharing and business results.

Employees considered that the Authority was performing well in the areas of people working as a team, leadership from direct managers, and balancing work and life demands. Several areas identified as needing improvement related to reward and recognition, and plans are already in place to increase performance in this area in 2011-12. In particular, a Performance Appraisal and Development System was developed and partially implemented during the year. The Fremantle staff offices were significantly expanded and additional facilities, including lunch areas, showers and meeting rooms were provided for the Island staff.

Employee Data Year ending June

2011June2010

Permanent 83 85 Fixed Term 42 34 Casual 18 18 Total Headcount 143 137 Full Time Equivalents 117 111

Note: Increases reflect higher employment rates for the same number of approved positions during the year.

GOVERNANCE DISCLOSURES

Members of the Rottnest Island Authority The Authority’s governing body is appointed by the Governor on the nomination of the Minister for Tourism for terms not exceeding three years and members may be re-appointed. Members are selected according to their experience relevant to the Authority’s operations. Profiles of the members of the Board of the Authority, together with details of meeting attendance, are set out below.

ChairmanLaurie O'Meara AM was appointed as a member of the Authority in June 2000 and took over the Chair in April 2004. Mr O’Meara is a past president of Tourism Council Western Australia and champion of the Tourism Accreditation Program. He was the inaugural President of the Australian Tourism Accreditation Association. From 2002 until 2008 Mr O’Meara was the Deputy Chair of Tourism Western Australia, the State organisation charged with marketing the State both nationally and internationally.



Mr O'Meara's extensive experience includes operation of the Emerald Hotel in Perth for the last twenty years. Mr O’Meara was awarded a Centenary Medal in the year 2000 and in 2006 was the winner of the prestigious Sir David Brand Medal for services to tourism. In the 2007 Queen’s Birthday Honours list he was honoured as a member of the Order of Australia (AM) for his services to tourism accreditation, tourism, heritage and the arts. At the 2009 Qantas Australian Tourism Awards, Mr O’Meara received the “Outstanding Contribution by an Individual (National)” award for his outstanding achievements in the Australian Tourism Accreditation Program.

Deputy Chairman John Driscoll was appointed a member of the Authority in 2010. John’s formal qualifications include a Bachelor’s Degree in Economics and a Master of Business Administration. He became Chairman and Chief Executive Officer of Marketforce in 2003 following a 15 year career with Marketforce, commencing as Group Media Director in 1989, through to the position of Managing Director in 2002.

John’s respect as one of the State’s leading marketers is reflected in his commitment to support organisations dedicated to improving professionalism in our industry. He is Chair to the Senior Advisory Panel of Marketing for the Curtin Business School, past Chairman of the Communications Council of Western Australia, Board Member of Trinity College and Chairman of Crime Stoppers Western Australia.

John has been holidaying at Rottnest for almost 50 years and is an active member of Rottnest’s boating community. He is a past Committee Member of the Rottnest Channel Swim Association and is a regular competitor in this event.

Denis Glennon AO was appointed to the Authority in August 2009. Denis has over 30 years of commercial and industrial experience at senior management and Board levels in the fields of sustainability, technology development and assessment, environmental management, and the delivery of environmental engineering projects across Australia and internationally. Denis has provided policy advice to local, state and national governments, served as Chair of Environment Business Australia for three years and is the longest serving member (12 years) of the Western Australian Environmental Protection Authority. In 2000 he was appointed an Officer in the General Division of the Order of Australia for“service to environmental protection through the management, control and treatment of industrial and hazardous wastes”.

Suzanne Hunt was appointed to the Authority in May 2010. Suzanne is an architect with over 25 years experience in Western Australia and overseas. She is principal of a boutique architectural and interior design practice and has worked in both the private and public sectors at all management levels. Suzanne has experience in architectural design, documentation, contract administration and strategic management on contemporary and heritage developments in all sectors. Her architectural experience in metropolitan and regional Western Australia as well as the United Kingdom incorporates the philosophies of contemporary design within a contextual basis.

Suzanne’s involvement with architectural conservation and adaptive reuse began soon after graduation, working in the United Kingdom as a project design architect on the refurbishment of listed industrial buildings into residential apartments in the 1980’s. From 1991 to 1996 she was employed by the Building Management Authority as the Project Architect for the Fremantle Prison Conservation and Future Use Projects; a Project Leader for the Supreme Court Building Perth, and Parliament House studies. In 2004 - 2005 she worked with the Department of Justice providing heritage advice on prison projects concurrently sitting on the Heritage Council’s Development Committee (2004 – 2006).

Sally Hollis was appointed to the Authority in December 2010. Sally has worked in tourism, hospitality and event management industries in Western Australia and the United Kingdom for over 25 years. She was a founding director of the Australian Tourism Accreditation Association and the Executive Officer of Tourism Council of Western Australia from 2000 – 2005. She is currently the National Project Manager of the Australian Tourism Accreditation Program and the Grants and Projects Manager with the Tourism Council. She was one of three State representatives on the Federal Minister for Tourism’s National Tourism Accreditation Framework Working Group (2008-10).

Sally has worked with the Department of Environment and Conservation, the Western Australian Indigenous Tourism Operators Committee, and other tourism environmental stakeholders to develop guidelines that encourage tourism businesses to work towards best practice standards in environmental



management and cultural and social sustainability. She was awarded the Pacific Asia Travel Association ‘Face of the Future’ in 2005 and has been an active member of a range of National and State advisory boards and committees. Sally is a regular holiday maker on Rottnest Island and is a keen participant of the Rottnest Channel Swim and Swim Thru.

Sue Murphy was appointed as a member of the Authority in August 2004 and appointed as Deputy Chairman in October 2006. Sue completed a Bachelor of Engineering (Honours) and has worked as an engineer in the private sector for 25 years. She is currently Chief Executive Officer of the Water Corporation of Western Australia. Sue retired from her appointment during the year.

Karen Jacobs was appointed to the Authority in November 2006. Karen focuses on developing and encouraging Aboriginal peoples’ involvement in enterprise and business opportunities. She is currently Director and Company Secretary of Noongar Property Holdings Pty Ltd, Board Director for Aboriginal Hostel Limited, Commissioner on the Conservation Commission of Western Australia, Chairperson of the Kaitajin Mia Mia Aboriginal Foundation (Bush University) and a Member of the Federal Minister for Tourism’s National Long Term Tourism Strategy Steering Committee. She is a former Board Director of Tourism Australia. Her professional qualifications include a Postgraduate Certificate in Policy Studies from Murdoch University and a Trade Certificate in Horticulture. Karen completed her appointment during the year.

Geoff Totterdell was appointed to the Authority in March 2009. Geoff graduated from the University of Western Australia with a Bachelor of Commerce and is a fellow of CPA Australia. He commenced his career in Canberra with the Auditor General’s Office and the Department of Treasury, joined Price Waterhouse in Perth in 1983 and was admitted to partnership in 1986, retiring in December 2006. He has consulted and advised in business recovery services.

Significant appointments have included Chairman of the Rottnest Conservation Foundation, Chairman of the Swan River Trust, Chairman of Dairy Western Australia and Vice President of the State division of CPA Australia. His knowledge covers a diverse number of industries including mining, technology, retailing, building construction, manufacture, agriculture, fishing and finance. He has been involved in competitive sailing and is regularly involved in boating activities in coastal waters, including Rottnest Island, the Murray River and the Peel Estuary. Geoff completed his appointment during the year.

Member Appointed Number of applicable meetings

for 2010-11

Meetings attended

Laurie O’Meara AM May 2000 11 10

Denis Glennon AO August 2009 11 9

Suzanne Hunt May 2010 11 9

John Driscoll December 2010 6 5

Sally Hollis December 2010 6 6

Sue Murphy August 2004 4 4

Karen Jacobs November 2006 5 3

Geoff Totterdell March 2009 7 7

Directors’ and Officers’ Liability Insurance An insurance premium has been taken out to indemnify Authority members against any liability incurred under sections 13 or 14 of the Statutory Corporations (Liability of Directors) Act 1996.

Finance and Audit Committee The objective of the Finance and Audit Committee (the Committee) is to report and, where appropriate, make recommendations to the Authority on financial, audit and risk related matters, to monitor the financial management and to ensure risk management is effective.



The Committee consists of three Authority members, one of whom shall act as Chairperson. The Authority appoints the members of the Committee for an initial period not exceeding three years after which they may be eligible for extension or re-appointment.

Resource staff for the Committee include the Chief Executive Officer (CEO), Chief Finance Officer, General Manager Governance, Strategy and Support, Manager Internal Audit, the Management Accountant, and any additional staff identified by the CEO in consultation with the Chairperson.

The Committee met on 11 occasions during the year.

Act Review Committee The Act Review Committee (the Committee) was established during the year to review the Rottnest Island Authority Act 1987 and propose changes to legislation based on financial, social and environmental sustainability while having regard for the 20-year vision for Rottnest Island. The Committee comprises three Authority members, one of whom acts as Chairperson, the Chief Executive Officer, General Manager Governance, Strategy and Support and the Manager Planning and Governance.

OTHER LEGAL REQUIREMENTS

Advertising

Advertising Agencies Nil

Market Research $31,770 Savant Surveys & Strategies $31,770

Polling Nil

Direct Mail Nil

Media Advertising $134,497 Optimum Media Decisions $113,574

Adcorp $20,923

Disability Access and Inclusion Plan Outcomes The Authority continued providing access-friendly services for people with disabilities in line with the six outcomes of its Disability Access and Inclusion Plan 2007-2012.

People with disabilities have the same opportunities as other people to access the services of and any events organised by the Rottnest Island Authority

All events and information about Rottnest Island are developed with consideration for people with special needs. The Authority continued its commitment to the Companion Card program for Island tours, transport and bike hire.

People with disabilities have the same opportunities as other people to access the buildings and other facilities of the Rottnest Island Authority

The Authority’s Sustainable Development Guideline requires consideration of disability access for all proposals. Access-friendly accommodation is available for those requiring this facility as are motorised wheelchairs (gophers), adult 'trikes' and tandem bikes and a bus with wheelchair lift / coach with wheelchair hoist.

People with disabilities receive information from the Rottnest Island Authority in a format that will enable them to access the information as readily as other people

The Authority supports the You’re Welcome WA access initiative. People can find information about disabled access on Rottnest Island on the Authority’s website at www.rottnestisland.com. Alternative format information is provided via virtual tours of accommodation units and free audio podcasts about the Island and its history. The website complies with the State Government Access Guidelines for Information, Services and Facilities.



People with disabilities receive the same level and quality of service from the staff of the Rottnest Island Authority as other people

Providing a friendly and welcoming service is one of the Authority’s values and operating principles. Regular staff training ensures that customers receive the same level and quality of service.

People with disabilities have the same opportunities as other people to make complaints to the Rottnest Island Authority

The Authority actively encourages people to provide feedback and offers a variety of means for this: telephone, post, email and fax or by completing the ‘contact us’ form on the website. All formal complaints are registered and followed up appropriately in order to achieve resolution.

People with disabilities have the same opportunities as other people to participate in any public consultation by the Rottnest Island Authority.

Public consultation is advertised in the media and on the Authority’s website. Feedback can be provided in electronic or written format.

Compliance with Public Sector Standards and Ethical Codes In 2010-11, two claims were received for breach of the Public Sector Recruitment Standard, one of which was withdrawn following successful mediation and one which was dismissed by the Public Sector Commissioner.

The Authority focused its attention on continuing to implement a higher standard of recruitment performance by introducing a key performance indicator to reduce the amount of days taken to complete the process to better than private enterprise standards. The Authority trained managers and supervisors in the Public Sector Standard in Recruitment, Selection and Appointment, and encouraged them to employ greater use of expert advice on recruitment panels.

Recordkeeping Plan The Authority’s recordkeeping Plan was approved by the State Records Commission in December 2005. A review was undertaken last year and an updated Recordkeeping Plan was provided to the State Records Office in June 2011.

Within the Authority, recordkeeping compliance is achieved by:

Regularly auditing the use of the TRIM Context recordkeeping system to ensure its effectiveness and efficiency in meeting compliance and operational requirements;

Ensuring the Authority Induction Program provides new employees with information regarding their recordkeeping roles and responsibilities;

Ensuring all new staff successfully complete an online Recordkeeping Awareness course; Providing all relevant employees with TRIM Records Management training; Regularly providing employees with information on contemporary recordkeeping practices; and Providing ongoing assistance to TRIM users.

Substantive Equality The Authority is committed to the elimination of systemic racial discrimination from all its policies, practices and services.

Occupational Safety, Health and Injury Management In accordance with the Occupational Safety and Heath Act 1984, the Authority continues to be highly committed to providing and maintaining a safe and healthy environment for its visitors, staff, volunteers and contractors where the risk of harm is as low as reasonably possible. This commitment is evident in the Authority’s Occupational Safety and Health (OSH) Policy, its comprehensive OSH Management System and a supportive Injury Management System that meets the legislative requirements outlined in the Workers Compensation and Injury Management Act 1981.



Injury Management System The Authority’s aim this year has been to increase the focus on early intervention in injury management, ensuring accurate medical assessment, management of the injury and effective rehabilitation planning. For each employee sustaining or aggravating an injury or disease, a Return to Work Plan is developed. During the year, the Authority also strengthened its Injury Management infrastructure with the inclusion of detailed procedures which have been communicated to employees in inductions and via the Authority’s intranet. The strategic objective is to attain a level of zero in lost time injuries per annum.

The Authority is strongly committed to consulting with staff in relation to Occupational Safety and Health (OSH) matters, and enabling all staff to contribute to decisions that may affect their safety and health at work. The OSH Committee has flourished with an average of 80% attendance from OSH representatives at meetings. The OSH representatives continue to play an important part in the investigation of hazards and reporting of incidents to the OSH Committee. Monthly Workplace inspections are conducted by the representatives.

The Authority’s OSH Management System is regularly monitored by way of annual internal audits. In 2010-11, the Authority recorded an increase in the number of lost time injuries/diseases in the workplace from two to three on the previous year. Two of the new injuries arose out of inadequate manual handling techniques and one was attributed to a trip hazard. As a result, the Authority has focused safety initiatives on Manual Handling Training and training in the Workplace Inspection Process to try and reduce the risk of injuries arising out of these areas.

The Authority was able to meet 3 out of the 5 targets set out by the 2007-12: Code of Practice: Occupational Safety & Health in the Western Australian Public Sector. This is outlined below. This outcome was determined by the increase in Lost Time Injuries sustained.

Indicator Target 2010–11 Results Number of fatalities Nil Achieved - Nil Lost Time Injury/Disease (LTI/D) Incident Rate

Nil or 5-10% reduction on previous year

Not Achieved - 12.9% (Increase from 8.7%)

Lost Time Injury Severity Rate Nil or 10% reduction on previous year

Achieved - 0%

Percentage of injured workers returned to work within 28 weeks

Report percentage Achieved - 100%

Percentage of managers formally trained in OSH and Injury Management responsibilities

Greater than or equal to 50%

Not achieved. 10% of managers have undertaken training

Occupational Safety and Health Initiatives Initiatives to improve occupational health included:

Ongoing implementation and review of the agency Safety Management Plan which outlines its Key Safety Objective of attaining a Zero Harm Status;

A complete staff building fire safety audit and implementation of required fire system equipment; An organisational review of risk and Hazard Management Practices; Implementation of Workplace Inspections procedures and forms; Review and update of Asbestos Management Policy and Procedures and development of an

Asbestos Management Plan; A review of First Aid Provision and Emergency & Evacuation Preparedness. Follow up training in

these areas has been provided; Implementation of Hazard, Incident and Near Miss Reporting and investigation procedures and

forms. Implementation of an Automated Injury Management System, Procedures and Return to Work

Plans; Development of safe operating procedures in relation to the at-risk work activities and conditions

identified in the organisational review; Manual Handling training for all staff; and A chemical audit was conducted and Material Safety Data Sheets were obtained.



Financial Estimates 2011-12

As required under Treasurer’s Instruction 953 the annual estimates for the Rottnest Island Authority for the 2011–12 financial year is provided in the following table.

2011-12 Budget $'000s

INCOME Revenue Sales 70Provision of service 30,397Commonwealth grants and contributions 38Interest revenue 840Other revenues 544GainsGains on disposal of non-current assets - Total Income 31,889

EXPENSESCost of sales 79Employee benefits expense 10,201Supplies and services 18,590Depreciation and amortisation 5,400Finance costs 174Accommodation 325Loss on disposal of non-current assets - Other expenses 311Total Expenses 35,080

Loss before grants and subsidies from State Government 3,191

Grants and subsidies from State Government 3,200Services received free of charge -

Profit / (Loss) for the period 9


Appendix 1

Rottnest Island Authority (RIA)

Reconciliation Action Plan (RAP) Progress Report as at 30 June 2011

RelationshipsBuilding relationships between Indigenous and non IndigenousAustralians through Executive leadership, recognition of culturaldifferences and respect for Aboriginal history on Rottnest Island.

Action Target Actual Progress

1.1 Establish a RAP Working Group ofAboriginal and Torres StraitIslander and other Australian staffto monitor and report on RAPprogress.

Working Group established. Working Group established.

Identification and coordinationof appropriate representatives.

The Terms of Reference hasbeen established and approved.

1.2 Work with Aboriginal people todevelop an agreed group ofAboriginal representatives forRottnest Island. Group of representatives

established.Advertisements planned forOctober 2011 calling forexpressions of interest.

1.3 Established Aboriginalrepresentative group advises theRIA on the cultural and spiritualhealing of Rottnest Islandrecognising and respecting thatthere aremen’s and women’ssites.

RIA observes representativegroup’s cultural program.

Program reviewed annually todetermine RIA’s observation.

Group is not yet operational(see action 1.2), however theterms of reference have beenprepared and approved by theAuthority.

1.4 Ensure Aboriginal representationon RIA Environment and CulturalHeritage advisory committees.

Aboriginal representation onEnvironment and CulturalHeritage advisory committeesinitiated and maintained.

Aboriginal representativeparticipated on bothcommittees in 2009 and 2010.The Committees have nowdisbanded.

1.5 Ensure development applicationscontinue to be assessed byAboriginal people for their impacton Rottnest Island’s Aboriginalcultural heritage.

Percentage of developmentapplications assessed for impacton Aboriginal cultural heritage.

100% of developmentapplications in the reportingperiod have been assessed fortheir impact on Aboriginalcultural heritage.

1.6 Work with Aboriginal people todevelop and implement a policyand procedure on consultationwith Aboriginal people.

Policy and procedure isdeveloped and implemented.

The policy and procedures havebeen drafted and will beimplemented in 2011 followingconsultation with Departmentof Indigenous Affairs.

Appendix RespectDeveloping respect between Aboriginal and Torres Strait Islanderpeoples and other Australians by internal and external education ofIndigenous culture and through our tourism operations.


2.1 In consultation with Aboriginalpeople, establish the AboriginalBurial Ground as a place ofremembrance that is culturallyaccepted by Indigenous groupswith ancestors buried there.

Rottnest Island Aboriginal Burialground project is externallyfunded and commenced withina five year period from 2009.

Funding is being sought. Burialground presentation has beenimproved and a concept planhas been developed. Section 18approvals have been obtainedfor this site as well as ‘TheQuod’ building.

2.2 Provide Aboriginal educationactivities in school term andholiday programs.

At least one Aboriginaleducation activity providedduring school terms and in eachholiday program.

Aboriginal education activitieshave now been incorporatedinto the education packagetitled ‘Wadjemup Dreaming’,and made available to 27,000students.

Cross cultural awarenesseducation a part of theAuthority staff induction.

Awareness educationincorporated into inductionpackage in 2010.

2.3 Encourage cross culturalawareness education through theRottnest Island Authority, itspartners and the Rottnest IslandBusiness Community. Facilitate cross cultural

awareness education forAuthority staff, businesses,permanent contractors andvolunteer groups.

Approximately 50% of Authoritystaff took part in a two daycross cultural awarenesstraining session. Further trainingwill be offered during 2011,aiming to achieve a 100%participation rate.

2.4 Authority staff are supported andencouraged to attend appropriateAboriginal cultural ceremonies onRottnest Island.

All staff advised and attendancesupported for appropriatecultural ceremonies.

Staff attendance to appropriatecultural ceremonies issupported by the Authority.Staff are encouraged to attendthrough emails or throughmonthly newsletters.

2.5 Rottnest Island Authority retainsand encourages events withAboriginal focus.

Anzac Day ceremony preservesWelcome to Country and otherAboriginal components.

Wadjemup Cup Aboriginalfootball carnival continues onRottnest Island.

NAIDOC week recognised in RIAoperations and Events calendar.

Anzac Day ceremony included aWelcome to Country by anAboriginal Elder who also laid awreath in remembrance ofAboriginal and Torres StraitIslander veterans who passedaway representing Australia atwar.

TheWadjemup Cup, a footballcarnival for Aboriginal youth,continued to be hosted by theAuthority.

Around $550,000 has beenspent on supporting Aboriginalactivities on Rottnest Islandsince 2004.


RespectDeveloping respect between Aboriginal and Torres Strait Islanderpeoples and other Australians by internal and external education ofIndigenous culture and through our tourism operations.


2.1 In consultation with Aboriginalpeople, establish the AboriginalBurial Ground as a place ofremembrance that is culturallyaccepted by Indigenous groupswith ancestors buried there.

Rottnest Island Aboriginal Burialground project is externallyfunded and commenced withina five year period from 2009.

Funding is being sought. Burialground presentation has beenimproved and a concept planhas been developed. Section 18approvals have been obtainedfor this site as well as ‘TheQuod’ building.

2.2 Provide Aboriginal educationactivities in school term andholiday programs.

At least one Aboriginaleducation activity providedduring school terms and in eachholiday program.

Aboriginal education activitieshave now been incorporatedinto the education packagetitled ‘Wadjemup Dreaming’,and made available to 27,000students.

Cross cultural awarenesseducation a part of theAuthority staff induction.

Awareness educationincorporated into inductionpackage in 2010.

2.3 Encourage cross culturalawareness education through theRottnest Island Authority, itspartners and the Rottnest IslandBusiness Community. Facilitate cross cultural

awareness education forAuthority staff, businesses,permanent contractors andvolunteer groups.

Approximately 50% of Authoritystaff took part in a two daycross cultural awarenesstraining session. Further trainingwill be offered during 2011,aiming to achieve a 100%participation rate.

2.4 Authority staff are supported andencouraged to attend appropriateAboriginal cultural ceremonies onRottnest Island.

All staff advised and attendancesupported for appropriatecultural ceremonies.

Staff attendance to appropriatecultural ceremonies issupported by the Authority.Staff are encouraged to attendthrough emails or throughmonthly newsletters.

2.5 Rottnest Island Authority retainsand encourages events withAboriginal focus.

Anzac Day ceremony preservesWelcome to Country and otherAboriginal components.

Wadjemup Cup Aboriginalfootball carnival continues onRottnest Island.

NAIDOC week recognised in RIAoperations and Events calendar.

Anzac Day ceremony included aWelcome to Country by anAboriginal Elder who also laid awreath in remembrance ofAboriginal and Torres StraitIslander veterans who passedaway representing Australia atwar.

TheWadjemup Cup, a footballcarnival for Aboriginal youth,continued to be hosted by theAuthority.

Around $550,000 has beenspent on supporting Aboriginalactivities on Rottnest Islandsince 2004.


RespectDeveloping respect between Aboriginal and Torres Strait Islanderpeoples and other Australians by internal and external education ofIndigenous culture and through our tourism operations.


2.6 Formalise procedures to includerecognition of traditional ownersand custodians at official eventson Rottnest Island.

Develop procedure. Procedure has been developedproviding the required wordingfor various forms of recognition.

2.7 Encourage consideration of use ofAboriginal names for relevanttourism, education activities andlocations.

Aboriginal names considered fortourism and education activitiesin consultation with Aboriginalpeople.

Specific names for educationactivities were not consideredduring 10/11.

The use of Aboriginal names willcontinue to be encouraged withactivities such as the ‘WelcometoWadjemup Rottnest Island’sign on the Main Jetty.

2.8 Fly the Aboriginal flag daily andmaintain it in good condition.

Flag flown every day in goodcondition.

The Aboriginal flag has beenflown at Rottnest Islandpermanently since 2004.

2.9 Promote and encourageeducation in Aboriginal subjectsto all staff through the annualscholarship program.

Scholarship notice containsinformation encouragingAboriginal studies.

A budget has been allocated tothe RIA’s Scholarship Program.Scholarship notices will containinformation encouragingAboriginal studies.

OpportunitiesCreating opportunities for Aboriginal and Torres Strait Islanderpeoples through business, employment and culturaldevelopment on Rottnest Island.


Develop Aboriginal recruitmentand retention strategy.

Draft strategy developed. PolicyHRPO 0011 encourages adiverse workforce.

Annual offering of at least oneAboriginal traineeship orcadetship.

Several Aboriginal staff havebeen employed by the Authorityduring the past three yearsincluding a fulltime AboriginalProject Officer and cadetship(both still current) and therecent appointed two Aboriginaltraineeships.

3.1 Encourage Aboriginalemployment and involvement onthe Island through annual offeringof traineeship or cadetship andthe targeting of employmentopportunities to Aboriginalcommunities.

Maintain registration with theNational Indigenous CadetshipProject.

Maintained registration with theProject.

3.2 Encourage and promote thedevelopment of Aboriginaltourism products, education,businesses and partnerships onRottnest Island.

Tender for Aboriginal bus toursfinalised.

Process complete. TheAboriginal Bus Tour wasimplemented however provednot to be commerciallysustainable. Other relevantproducts have been pursued tohelp achieve this target – seebelow.


OpportunitiesCreating opportunities for Aboriginal and Torres Strait Islanderpeoples through business, employment and culturaldevelopment on Rottnest Island.


Research and trial newAboriginal products, ventures oractivities on the Island.

The Authority has implementedan Aboriginal education producttitled ‘Wadjemup Dreaming’which is now available onRottnest Island to school, youthand corporate groups.

Completion of CoastalWalk Trailand incorporation ofinterpretative Aboriginal tours(subject to external funding).

Aboriginal representativesengaged as part of the CoastalWalk Trail Stage 2 project. Theyprovided advice and input intothe Site Development Plan andInterpretation Strategy.

3.3 Provide opportunities forAboriginal people to developvocational skills and economicopportunities by incorporatingAboriginal assistance inappropriate RIA cultural andnatural heritage projects. Shouldbe done in consultation withAboriginal people.

Investigate a location for anAboriginal welcome experience.

North Thomson Beach is thechosen location.

At least one Aboriginal artexhibit held on Rottnest Island.

The City of Fremantle Festival ofPhotography ‘FotoFreo’exhibition was held for the firsttime on Rottnest Island fromMarch 20 April 18 2010.

The Festival included anAboriginal exhibition at the SaltStore Gallery.

Investigate external fundingopportunities for theestablishment of an ‘artist inresidence’ scholarship.

An art exhibition titled ‘TheQuod Project’ is planned forDecember 2011 in the Salt Storeheritage building.

3.4 Promote the display of Aboriginalart from across the State on theIsland and create tourism linksback to the communities fromwhere the art originated.

Investigate external fundingopportunities for a dedicatedAboriginal arts centre.

RIA’s status to apply for fundingis restricted. Further fundingresearch will occur in 2011.


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