http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/RSS.ashxDSB PagesTue, 13 Apr 2010 12:45:20 +0200http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1DSB ANNUAL REPORT 20092010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2Financial highlights DSB Group Amounts in DKK million 2005 2006 2007 2008 2009 Relative changes 2008-2009 Profit and loss account Passenger revenues Revenue from transport contracts Shop sales etc. Sales of repair and maintenance of rolling stock etc. Leasing of rolling stock Net turnover Other operating income etc. Total income Total expenses Profit before depreciation, amortisation and write-downs Depreciation and write-downs Operating profit Net financials Profit before tax Profit for the year Balance sheet Balance sheet total Fixed assets Current assets Total equity Minority interests Provisions Non-current liabilities Current liabilities Interest-bearing liabilities, net Cash flow in DKK million Cash flow - operating activities Cash flow - investing activities - of which investment in tangible fixed assets Cash flow - financing activities Cash at bank and in hand at 31 December Key figures Operating profit margin Profit ratio Return on equity Return on capital employed Interest cover Solvency ratio Further information Average number of full-time employees Train journeys (in thousands of journeys) Train km (in thousands of train km) 4,164 4,326 917 194 29 9,630 904 10,534 7,647 2,887 1,569 1,318 -325 993 745 4,264 4,342 928 259 25 9,818 847 10,665 7,792 2,873 1,492 1,381 -373 1,008 726 4,391 4,247 902 253 25 9,818 866 10,684 7,940 2,744 1,444 1,300 -446 854 767 4,541 4,130 901 258 16 9,846 1,128 10,974 8,326 2,648 1,362 1,286 -545 741 558 4,223 4,453 866 151 174 9,867 1,013 10,880 8,685 2,195 1,347 848 -388 460 341 -7.0% 7.8% -3.9% -41.5% 987.5% 0.2% -10.2% -0.9% 4.3% -17.1% -1.1% -34.1% 28.8% -37.9% -38.9% 24,427 21,710 2,717 7,673 0 1,742 11,805 3,207 10,172 24,645 21,675 2,970 7,771 7 2,039 10,696 4,132 10,628 24,778 21,871 2,907 7,898 9 2,114 9,547 5,210 10,993 24,530 21,932 2,598 7,343 20 2,091 8,811 6,265 11,900 25,707 21,978 3,729 7,348 15 2,071 8,036 8,237 11,873 4.8% 0.2% 43.5% 0.1% -25.0% -1.0% -8.8% 31.5% -0.2% 2,331 -2,777 -3,015 521 1,238 2,121 -1,691 -1,863 -451 1,217 1,905 -1,500 -1,719 -968 654 942 -1,185 -1,529 -428 -17 1,667 -1,248 -1,240 -865 -463 77.0% -5.3% 18.9% 102.1% -2,623.5% 30.0 13.7 9.7 7.2 8.9 31.4 29.3 14.1 9.4 7.3 7.7 31.5 27.9 13.2 9.8 7.5 6.2 31.9 26.9 13.1 7.3 7.2 4.9 30.0 22.2 8.6 4.6 5.5 5.7 28.6 -17.5% -34.4% -37.0% -23.6% 16.3% -4.7% 9,078 163,555 57,341 9,207 166,395 58,375 9,196 168,930 56,730 9,229 175,632 58,777 9,308 194,769 70,013 0.9% 10.9% 19.1% Definition of key figures The key figures and definitions have been prepared in accordance with the Danish Society of Financial Analysts’ guidelines, Operating profit margin (EBITDA margin) = profit before depreciation, amortisation and write-downs x 100 / net turnover Profit ratio (EBIT margin) = operating profit x 100 / net turnover Return on equity = profit for the year x 100 / average equity Return on capital employed (ROCE) = (operating profit + financial income) x 100/ (total average equity + average interest bearing liabilities) Interest cover = Profit before depreciation, amortisation and writedowns / net financials Solvency ratio = total equity x 100 / balance sheet total2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=32010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=42 DSB AnnuAl RepoRt 2009 Publisher: DSB, Sølvgade 40, DK 1349 Copenhagen K Editor: Merete Ruager Journalist: Merete Thorøe Graphic design: Visual Communication, DSB Marketing Illustrations: Public Architects/Visual Communication, DSB Marketing Photography: DSB’s Billedarkiv Environmental-friendly printing Total emission for printing matter of 500 copies = 279 kg CO2 eq. The result per copy = 0,56 kg CO2 eq Circulation: 500 Printing: Norhaven, Viborg 541-568 Svanemærket tryksag2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=5http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=53 DSB AnnuAl RepoRt 2009 / contentS / CONTENTS DSB in Growth Financial review expectations for the future Railways in development DSB prepares for the future trains to boost traffic growth Foundation for growth Denmark’s new transport requirements Service and products Different customers – different needs Good service is a string of good travel experiences Climate and environment tailwind for green travel International business export success strengthens competitiveness in the home market DSB conquers Sweden Culture, reputation and responsibility Good leadership and growth go hand in hand Building a strong service culture customer satisfaction is crucial Social responsibility is an integral part of DSB on track: 2009 Corporate affairs corporate Governance Risks Annual Accounts Management statement and auditors’ reports Accounting policies profit and loss account Balance sheet equity statement cash flow statement notes to the annual accounts Other information other key figures Annual accounts for the business areas DSB’s Board of Directors and corporate Management DSB’s organisation trains in Denmark, Sweden and Germany the S-train network 4 6 12 14 16 18 20 25 26 28 32 34 36 37 38 40 44 46 50 57 64 73 74 76 77 78 99 102 104 106 108 1092010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=64 DSB IN GROWTh Despite the financial crisis, DSB recorded customer growth of 1 per cent in 2009. At the same time, total road transport declined by 1 per cent. This means that DSB achieved a rising market share in 2009 compared to road transport. If DSB Sweden and the Swedish part of the Øresund traffic are taken into account, DSB in 2009 carried 194.8 million passengers, equating to an overall growth of 11 per cent. Towards product quality of European exellence As punctual trains are crucial for our customers’ satisfaction, DSB took further steps in the autumn of 2009 to strengthen its punctuality strategy. For the years ahead, we have allocated DKK 500 million to improve punctuality and the goal is clear: through a comprehensive transformation of DSB, we must improve our product quality to an extent where the average delay is cut by 50 per cent by 2020. This level would place us at the top end of the European scale. In tandem with the extensive infrastructure investments, including a thorough change in attitude across the entire company, this target will be achieved. The change in attitude includes a new understanding of the fact that each second counts and each second is counted. We are highly satisfied with the fact that, in 2009, S-tog achieved its best punctuality levels for many years, a trend that is reflected in S-tog customers’ satisfaction. Long-distance and regional train traffic, however, were faced with a number of challenges in part due to track work on the South line and in part because of rolling stock issues for the otherwise reliable IC3 trains. As a result, punctuality fell below target during part of the year. This was, to some extent, rectified during the autumn, e.g. through the setting up of a special taskforce with focus on punctuality. Two killed in train accident Sadly, 2009 also saw a tragic accident where a train set hit a lorry at a crossing at Tølløse causing the death of engine driver Ronnie Aarup Zakrisen. The lorry driver also died from his injuries. DSBFirst On January 11, 2009, DSBFirst took over responsibility for train operations between Elsinore and Malmö and onwards to Karlskrona, Gothenburg and Kalmar. After a difficult start on the Danish section of the line, DSBFirst’s traffic has subsequently become more stable with significantly increased punctuality. IC4 settlement DSB has signed a contract for the delivery of IC4 and IC2 train sets with AnsaldoBreda. In May 2009, DSB agreed a settlement with AnsaldoBreda meaning that AnsaldoBreda will deliver the train sets in a given configuration after which DSB will upgrade the train sets. Together with the settlement, a new timetable has been agreed as have the consequences in the event of a lack of compliance with this plan in the form of rights of termination of contract and fines. The settlement means that DSB will receive compensation of DKK 2.25 billion of which 0.25 billion was paid in 2005/2006. Of the outstanding DKK 2 billion, DKK 1.5 billion will be paid in cash in three instalments while DKK 0.5 billion represents a discount on the price of future deliveries of spare parts and services.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=7http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=75 DSB AnnuAl RepoRt 2009 / pReFAce / To date AnsaldoBreda has complied with the settlement which means that one IC4 train set was delivered in the fourth quarter of 2009 and that, in December 2009, the company paid DSB DKK 0.6 billion as the first instalment of compensation. This is a positive development although there is still a long way to go before all the train sets are delivered. International breakthrough 2009 marked a breakthrough for DSB’s international strategy. In August, we won the regional train operations at Gothenburg and in October, regional train operations at Jönköping. Both operations will be taken over by DSB at the end of 2010. At the same time, DSB continues its successful operation in Stockholm, Roslagsbanan. DSB regards Sweden as its second home market and with the new operations, DSB will serve more section kilometres in Sweden than in Denmark. In early March 2010, DSB acquired 50 per cent of the German operator VIAS Gmbh in a deal that creates a bridgehead for DSB’s future operations in Germany. With its location in Frankfurt Am Main, VIAS is based in a central and strategically important part of Germany in terms of DSB’s future tendering activities in the German market. The future structure of the rail sector In September 2009, the Danish Minister of Transport presented the discussion paper “A Railway in Growth” which listed a number of ambitions for the public transport sector and the role of the railways. The paper proposes a 100 per cent increase in rail passenger transport compared to today. Consequently, public transport – and particularly the railways – will solve a significant part of the future climate and congestion challenges. The paper also points towards a number of areas that will assist in the strengthening and development of the rail sector. A key point in the Government’s proposal is that future developments should be focused on customer requirements. DSB welcomes the discussion and is pleased to note that, to a significant extent, it reflects DSB’s ambitions set out in its change programme, Point 2010, with its objective of doubling the number of customers, an objective that requires a strong and innovative railway sector. We are ready to meet the challenge as the operator in the Danish market with the power to impact seriously on the rail sector with strong customer focus and optimisation of public transport. On the backdrop of the results achieved in recent years, we feel well equipped for the task. The cohesion of rail operations is crucial for optimising operations. Strong focus on optimisation in relation to all forms of public transport will not only improve customer satisfaction, but also gain a rising market share at relatively lower cost. In this context, it is vital to ensure the cohesion of the overall production chain. An inexpedient division of the company would lead to a loss of synergy and undermine consistency to the detriment of customers. DSB and green transport The future years’ massive investment in public transport offers significant opportunities to contribute to climate improvements. Better infrastructure in the form of more capacity, new signalling and, therefore, increased frequency and punctuality are expected to increase the railways’ market share. An important climate benefit will derive from the increased electrification of the railways. Political negotiations about this continue, but DSB is also working on enhancing the railway’s environmental benefits on many other fronts. New innovative initiatives and a holistic view of public transport – with trains as the backbone – can persuade customers to switch from individual transport solutions to public and environmental-friendly alternatives. 2009 results With pre-tax profits of DKK 460 million, DSB recorded satisfactory results in line with expectations. Overall growth in the number of passengers was 11 per cent which is largely owing to the takeover of the Swedish part of the Øresund rail traffic. Søren Er2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=86 FINANCIAL REVIEW Pre-tax profits totalled DKK 460 million The DSB Group’s pre-tax profits totalled DKK 460 million, a decrease of DKK 281 million compared to 2008. The decline in profit is largely owing to a fall in gains relating to the sale of property of approx. DKK 250 million and the spin-off of the Coast Line. In addition, the results were affected by expenses relating to production expansion of the Swedish part of the rail traffic under the tender won by DSBFirst. This required a significant expansion of DSB’s production. Moreover, customer enhancement initiatives under the change programme, Point 2010, increased substantially in 2010. Conversely, increased effiency had a positive impact on the results. Furthermore, the result is positively affected by a compensation of DKK 150 million as a result of the settlement with AnsaldoBreda. Adjusted for the above changes, the result is on a par with last year and in accordance with expectations. Net turnover in line with 2008 In 2009, overall net turnover for the DSB Group totalled DKK 9,867 million, i.e. and increase of DKK 21 million compared to 2008. Passenger revenues amounted to DKK 4,223 million, which is a decrease of DKK 318 million, equating to 7 per cent. The decrease is attributable to the tender in the Øresund Region in that DSBFirst receives revenue from the transport contracts while passenger revenues are paid to the tendering authorities, c.f. section 9. Adjusted for this, there is an increase in passenger revenues of DKK 75 million. Conversely, revenues from transport contracts rose by DKK 323 million compared to 2008 and account for DKK 4,453 million. The increase is, in part, due to additional activities in Southern Sweden and in part to the spin off of the Coast Line where, as mentioned above, DSBFirst receives revenues from transport contracts instead of passenger revenues. Adjusted for this, there is a fall in revenues from transport contracts totalling DKK 95 million. The fall is owing to the assumptions relating to efficiency measures set out in the company’s transport contracts with the State. The efficiency measures entail ongoing reductions in revenue over the contract period. This pertains to both long-distance and regional trains as well as to S-trains. The lower exchange rate for the Swedish krona impacted negatively on growth in revenues from transport contracts from DSB’s Swedish operations, primarily Roslagtåg. By contrast, the costs relating to Swedish operations were positively affected by the lower rate of the Swedish Krona. Sales from shops etc. fell by DKK 35 million and totalled DKK 866 million for 2009. The fall is a consequence of 7-Eleven’s takeover of a number of shops on the Coast Line in late 2008. Sales of repair and maintenance of rolling stock etc. accounted for DKK 151 million, which is a fall of DKK 107 compared to 2008. The development is primarily owing to less external sales of train maintenance services following the change of operator on the Øresund traffic after the tender process. Leasing of rolling stock totalled DKK 174 million in 2009, i.e. an increase of DKK 158 million. This is owing to the lease of train sets to the Public Transport Authority in connection with the spin off of the Coast line. Other operating income etc. totalled DKK 1,013 million, i.e. a decrease of DKK 115 million compared to 2008. This is mainly owing to the fact that gains on the sale of property are approx. DKK 250 million down on the year. however, this has been partially offset by revenue relating to the public training programme for engine drivers. DSB’s payments for this programme rose correspondingly. Rising expenses Total expenses rose by DKK 359 million, or 4 per cent, and totalled DKK 8,685 million in 2009. This development is primarily owing to expenses relating to production expansions in Southern Sweden in connection with the start of operations of DSBFirst. At the same time, efforts relating to customer improvement initiatives unde2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=97 DSB AnnuAl RepoRt 2009 / FinAnciAl Review / Table 1: Productivity Growth 2009 costs per train km number of train journeys per employee number of train km per employee 124 20,925 7,522 2008 142 19,030 6,369 Abs. -18 1,895 1,153 Pct. -13% 10% 18% Increasing productivity Between 2008 and 2009, costs per train km fell by 13 per cent from DKK 142 to DKK 124 per train km. The number of train journeys per employee rose from 19,030 to 20,925 equating to a rise of 10 per cent while the number of train km per employee rose from 6,369 to 7,522, corresponding to an efficiency increase of 18 per cent. More employees The average number of full time employees was 9,308 in 2009, an increase of only 79 employees on 2008. This should be seen within the context of an additional 300 employees in Sweden following the production expansion in connection with the takeover of the Swedish section by DSBFirst. Efficiency measures corresponding to approximately 200 employees within the administrative functions were implemented in DSB in January 2009. Moreover, Kort & Godt also carried out a number of adjustments. Finally, Kort & Godt saw a reduction in staff levels as a result of 7-Eleven’s takeover of shops on the Coast line. DEVELOPMENT IN NuMBER OF CuSTOMERS Table 2: Number of customers Growth 1,000 customers long-distance and regional trains S-tog DSBFirst in Denmark total journeys in Denmark1 Journeys in Sweden2 in total elimination2 number of train journeys in total 1 2009 48,428 92,146 26,411 166,985 38,896 -11,112 194,769 2008 48,156 90,943 25,647 164,746 21,131 -10,245 175,632 Abs. 272 1,203 764 2,239 17,765 -867 19,137 Pct. 1% 1% 3% 1% 84% -8% 11% the comparative figure “ DSB First in Denmark” in 2008 includes journeys on the Danish part of the cost line and journeys across Øresund, wich were originally included under the long-distance and regional train journeys. compared with the previoulsy reported, cross-border travellers are now included under customer numbers per country. in the overall balance for the DSB Group, the number of customers who do not embark or disembark during their journey are eliminated. the comparative figures for 2008 have been adjusted accordingly. 2 Number of customers in the DSB Group The DSB Group’s total number of customers rose by 11 per cent in 2009, equating to an increase of 19.1 million on 2008. The increase is attributable to the expansion of activities in Southern Sweden following the start of operations for the successful tender in the Øresund Region and the 1 per cent growth in number of customers in Denmark. Developments in the Danish market for passenger traffic The transport market has been severely affected by the general economic slowdown, the fall in private consumption and falling employment. The Danish Road Directorate has, for instance, calculated that passenger car traffic in 2009 fell by more than 1 per cent nationwide with 2 per cent in the Greater Copenhagen area. Despite such pressures, long-distance and regional trains as well as S-trains saw growth in customer numbers. DSB thus continues to increase its market share of Danish passenger traffic at the cost of car traffic.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=10http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=108 Number of customers in Denmark The total number of customers in Denmark rose by 1 per cent in 2009 compared to 2008. The increase can be attributed to a 3 per cent growth in the number of DSBFirst’s Danish customers and a growth of 1 per cent for S-trains as well as longdistance and regional trains. Long-distance and regional trains The number of customers in long-distance and regional trains amounted to 48.4 million in 2009, i.e. a growth of 0.3 million or 1 per cent on 2008. The development was positively affected by new initiatives within long-distance and regional train traffic, including, for instance, +more, an advantage programme for DSB’s commuters. Despite a fall in employment figures, the number of commuter journeys was on par with 2008. The general economic slowdown has, however, resulted in a decline in both business and leisure travel. 2009 saw growth of 2 per cent in the number of customers in the East. The number of journeys within the Greater Copenhagen area has influenced positively the development which, however, have been partly offset by extensive track work on the South line. West of the Great Belt, the number of customers in 2009 was on par with 2008. In 2009, the total market for journeys across the Great Belt fell by 1 per cent compared to 2008 while DSB’s market share increased from 25.1 per cent to 25.7 per cent. Overall, therefore, DSB has strengthened its position in a weakening market. Table 3: Number of customers on long-distance and regional trains Growth 1,000 customers east west east/west across Storebælt other long-distance and regional trains 2009 25,375 13,960 8,175 918 48,428 2008 24,839 14,008 8,293 1,016 48,156 Abs. 536 -48 -118 -98 272 Pct. 2% 0% -1% -10% 1% S-tog The number of S-train customers increased by 1.2 million or 1 per cent compared to 2008. Despite the general economic slowdown, S-tog has maintained the positive development in customer numbers from preceding years, especially owing to continuing and very satisfactory punctuality levels. Moreover, there are positive effects from the introduction of wireless internet on trains, new sales channels and new ticket types such as the SMS ticket, the new loyalty programme S-More in S-tog and the introduction of night services. S-tog and the Public Transport Authority are currently considering whether to make night services permanent following the test period. DSBFirst DSBFirst in Denmark recorded growth in the number of journeys of 0.8 million customers or 3 per cent in 2009. Number of customers in Sweden Journeys in Sweden comprise journeys from the Swedish part of DSBFirst, IC Bornholm through Southern Sweden, other travellers to Sweden and the Roslag line in the Stockholm area. Strategically, the Øresund Region is important for DSB and DSB regards Sweden as its second home market. Measured in train kilometres, DSB’s Swedish activities have a market share of 16 per cent. On January 11, 2009 DSBFirst took over train operations between Elsinore and Malmö and onwards to Karlskrona, Gothenburg and Kalmar respectively. The takeover represents a substantial expansion in DSB’s activities, increasing production by 19 per cent. As part of DSB’s international strategy, in 2009 DSB won the tender for regional and commuter traffic in Sweden’s second largest city, Gothenburg, and the tender for Krösatåg, which operates train services around Jönköping. Both operations will begin in December 2010. Prior to taking over train operations around Gothenburg, a decision concerning a complaint relating to the result of the tender process has to be determined. There were 38.9 million journeys in Sweden in 2009 of which the expansion of activities contributed 16.7 million customers. For Roslagståg, the number of train journeys rose by approximately 2 per cent compared to 2008.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=11http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=119 DSB AnnuAl RepoRt 2009 / FinAnciAl Review / BuSINESS AREAS Table 4: Long-distance & Regional trains 1 Growth DKK million net turnover Revenues from passengers and travel agencies Revenue from transport contract Revenue from train services Sales of repair and maintenance of rolling stock leasing of rolling stock profit before depreciation, amortisation and write-downs operating profit margin number of train km (1,000 km) 1 2009 4,804 3,159 1,147 51 273 174 795 16.5 36,916 2008 4,794 3,139 1,177 47 258 173 833 17.4 36,812 Abs. 10 20 -30 4 15 1 -38 -0.9 104 Pct. 0% 1% -3% 9% 6% 1% -5% -5% 0% the figures in the table represent the long-distance & Regional trains segment. previously, the table was presented as the parent company DSB. in the table, the 2008 accounts have been adjusted for the spin-off of the coast line to make the figures comparable. Long-distance & Regional trains Adjusted for the spin-off of the Coast line, net turnover for Long-distance & Regional trains increased by DKK 10 million on 2008. Passenger and travel agency revenues totalled DKK 3,159 million in 2009, a rise of DKK 20 million. This is, in part, the result of increased revenue from seat reservations and a 1 per cent rise in passenger numbers. Revenue from the transport contract with the State fell by DKK 30 million, or 3 per cent, compared to 2008. This is a consequence of the assumptions relating to efficiency measures under the transport contract which means a reduction in revenue over the contract period. There was a positive development in revenue from train services which rose by 9 per cent and totalled DKK 51 million in 2009. Sales of repair and maintenance of rolling stock increased by DKK 15 million to DKK 273 million in 2009, primarily due to sales of services to DSBFirst. Leasing of rolling stock totalled DKK 174 million in 2009 which is on a par with 2008. Profit before depreciation, amortisation and writedowns fell by DKK 38 million and totalled DKK 795 million in 2009. The development is primarily a result of increased energy and staff expenses. The lower profit has resulted in a drop in operating profit margin of 0.9 percentage points to 16.5. Total production was 36.9 million train kilometres in 2009, an increase of 0.1 million train km on 2008. The increased production is partly owing to the fact that, in 2009, there were more InterCityLyn high speed services between Copenhagen and Århus at weekends and partly to last year’s lower production as a result of track works between Århus and Fredericia. Table 5: S-tog Growth Amounts in DKK million net turnover passenger revenues Revenues from transport contract profit before depreciation and write-downs operating profit margin train km (1,000 km) 2009 2,404 1,077 1,327 1,073 44.6 15,471 2008 2,386 1,031 1,355 1,055 44.2 15,286 Abs. 18 46 -28 18 0.4 185 Pct. 1% 4% -2% 2% 1% 1%2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=12http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1210 S-tog S-tog’s net turnover rose by DKK 18 million or 1 per cent. Passenger revenues totalled DKK 1,077 million in 2009 which represents an increase of DKK 46 million compared to 2008. Passenger revenues was positively affected by the agreement relating to revenue distribution in the Greater Copenhagen area for the period 2005-2007 and the 1 per cent increase in the number of customers compared to last year. This is partially offset by a minor fall in the average fare price. Revenues from the transport contract with the State fell by DKK 28 million to DKK 1,327 million in 2009. The 2 per cent reduction is owing to the assumptions relating to efficiency measures under the transport contract which means a reduction in revenues over the contract period. Profit before depreciation and write-downs totalled DKK 1,073 million in 2009 which represents an improvement of DKK 18 million compared to 2008. The improved result means that the operating profit margin rose by 0.4 percentage points to 44.6. Production increased by 0.2 million train km, which is owing to less track work and the introduction of train services at night. Table 6: Kort & Godt Growth Amounts in DKK million net turnover Sales from shops etc. income from commissions loss before depreciation and write-downs operating profit margin 2009 985 815 170 -10 -1.0 2008 1,039 858 181 -4 -0.4 Abs. -54 -43 -11 -6 -0.6 Pct. -5% -5% -6% -150% -150% Kort & Godt Net turnover for Kort & Godt fell by DKK 54 million primarily due to 7-Eleven’s takeover of shops on the Coast line in late 2008. Profit before depreciation, amortisation and writedowns fell by DKK 6 million compared to 2008. DEPRECIATION, AMORTISATION, NET FINANCIALS AND KEy RATIOS Depreciation, amortisation and write-downs Depreciation, amortisation and write-downs were DKK 15 million lower than in 2008 and totalled DKK 1,347 million. Lower investments In 2009, DSB invested DKK 1,354 million in fixed assets compared to DKK 1,597 million in 2008. The fall is primarily owing to the upgrading of Copenhagen Central Station which was completed in June 2008. Decreasing financial expenses In 2009, net financial expenses totalled DKK 388 million, which is DKK 157 million less than in 2008. This development is owing to the recognition of interest compensation in 2009 of DKK 145 million as a result of the settlement with AnsaldoBreda, and lower interest rates. Development in key ratios The lower result for 2009 compared to last year are primarily owing to gains on property sales in 2008 and the spin-off of the Coast line. In general, this had a negative effect on the development of the key ratios. As a consequence, the operating profit margin fell from 26.9 to 22.2 and the profit margin from 13.1 to 8.6. Return on equity fell from 7.3 to 4.6. Return on capital employed (ROCE) stood at 5.5 in 2009, which is 1.7 percentage points less than in 2008. This is primarily due to the lower result.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=13http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1311 DSB AnnuAl RepoRt 2009 / FinAnciAl Review / BALANCE ShEET The balance sheet total has increased As a result of the settlement with AnsaldoBreda S.p.A., a number of changes to the balance sheet occurred. The Group’s balance sheet total stood at DKK 25,707 million as at December 31, 2009 compared to DKK 24,530 million at year-end 2008. The rise of DKK 1,177 million is primarily owing to the recognition in the balance sheet of the outcome of the settlement with AnsaldoBreda S.p.A. Equity stood at DKK 7,348 million which represents a rise of DKK 5 million on the year. As at December 31 2009, solvency was 28.6, which is a fall of 1.4 percentage points compared to yearend 2008. This is primarily due to the increase in the balance sheet total. Provisions have decreased from DKK 2,091 million at the end of 2008 to DKK 2,071 million as at December 31, 2009. The DKK 20 million decrease is, in part, due to the settlement of obligations in connection with restructuring. Total liabilities stood at DKK 16,273 million as at December 31, 2009 which is DKK 1,197 million more than at year end 2008. The increase is primarily due to recognition in Accruals and deferred income of the expected expenses for the completion of the delivery of IC4 and IC2 train sets as well as for replacement rolling stock etc. deriving from the settlement with AnsaldoBreda S.p.A. Dividend to the Ministry of Transport The Board of Directors recommends that dividend to the Ministry of Transport for 2009 is set at DKK 158 million. The dividend is calculated as half of the year’s profits after tax, adjusted for agreed adjustments, including the adjustment for the change in revenue sharing in the Greater Copenhagen area. SPECIAL CIRCuMSTANCES Recognition of the IC4 settlement In May 2009, DSB agreed a settlement with AnsaldoBreda for compensation relating to the delivery of IC2 and IC4 train sets. As a result, DSB receives compensation totalling DKK 2,250 million, c.f. table 7 below. Table 7: Compensation from AnsaldoBreda These are replaced by revenues and expenses in the new company, DSBFirst: ƒ DSBFirst receives revenue from the transport contracts from the Danish and Swedish tender authorities which, in return, receive the passenger revenues. ƒ The new company, DSBFirst, incurs expenses relating to the operation of the Coast line and the new lines in Sweden. Accounting policies The Annual Report for the Independent Public Company DSB is presented in accordance with the provisions of the Danish Financial Statements Act for Class D companies, Danish Accounting Standards and the Act on the Independent Public Company DSB and on DSB S-tog A/S. The Annual Report is presented in accordance with the same accounting policies as in 2008. For 2008 and previously, the results for associated companies were recognised as the result before tax. As a consequence of a change to the Danish Financial Statements Act, the results are now presented after tax. Foreign exchange swaps entered into in order to hedge the Group’s long-term liabilities have been reclassified so that these follow the classification of the hedged loan. Previously, all foreign exchange swaps were recognised under Other receivables and Other liabilities respectively. The comparative figures concerning the reclassifications have been adjusted. Amount in DKK million cash compensation received before 2009 cash compensation in 2009 and 2010 (3 instalments) Discount triggered by future purchases from AnsaldoBreda total compensation 250 1,500 500 2,250 The compensation is accounted for as interest on prepayments, completion expenses, additional expenses and other compensation. The total positive impact from the settlement on 2009 operations amounts to approx. DKK 150 million (interest and other compensation). Adjustment for spin-off of the Coast line With DSBFirst’s takeover of operations on the Coast line on January 11 2009, a number of changes in DSB’s economy, including the spin-offs mentioned below, have taken place:2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=14http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1412 ExPECTATIONS FOR ThE FuTuRE The expansion of activities in Southern Sweden resulted in customer growth of 11 per cent compared to 2008 of which 1 per cent was in the Danish market. This means that in 2009, DSB won market shares in relation to the general development of road traffic in Denmark which declined during the year under review. DSB’s targeted effort to improve customer service and products, therefore, has paid off. This is further evidenced by the fact that DSB’s reputation increased by 10 per cent in 2009. The IC4 delivery with its own operating organisation is also proceeding according to plan. The foundation for the new DSB, therefore, is nearing completion and in 2010, investments in better products and customer improvement initiatives will be increased. Based on the change programme, Point 2010, certain customer-targeted activities will also be initiated. These include free bikes on S-trains, improved digital sales channels, increased confidence, even better cleaning and improved traffic information. A balanced economy will also be achieved through efficiency measures which have commenced or been implemented as part of Point 2010. The final results of the change programme will only impact fully on the accounts from 2011. Across DSB, employees are now focusing on the Point 2010 project and meeting the future challenges of the Danish rail market. The customers are at the centre of these endeavours on which DSB will build its future. having won the contract for rail traffic in the Øresund Region and the tenders for regional and commuter traffic in Sweden’s second largest city, Gothenburg, as well as regional train traffic in the Jönköping area, DSBFirst has laid a firm foundation for DSB’s expansion outside Denmark. Over the years ahead, DSB will continue to focus on tenders – especially in the German and Swedish market. As a consequence, DSB is being transformed from a transport company to a modern, commercial service business with international scope and a strong reputation – with customers as well as employees. This is the new DSB’s strategic objective and although we are well on the way, DSB will continue to adapt its organisation to maximise the potential in the Danish market and in our international focus areas. Expectations for 2010 Profit expectations for 2010 are influenced by the positive development in the number of customers for both S-trains and long-distance and regional trains. To support this growth, 2010 will see a range of new customer and product initiatives, including an expanded timetable with, for instance, non-stop services between Copenhagen and Århus and more InterCity high-speed trains. In addition, new and more frequent trains will be introduced on Zealand together with S-train services at night. Along with more focus on climate issues, these initiatives are expected to attract more customers in 2010. Customer development will also be affected by falling employment and extensive track work – especially on the S-train network. The result should further be affected by cost of production increase. For long-distance and regional trains, a rise in production is expected compared to 2009. This will largely comprise the expansion relating to “Nonstop Lyn” (non-stop high-speed trains) between Århus and Copenhagen, the new train system between Østerport and Roskilde and the extension of the ÅrhusFredericia line to Kolding. On the S-train network, production in 2010 will be slightly below the 2009 level owing to planned track work. For long-distance and regional train traffic, general improvements to punctuality are expected for 2010. S-train punctuality is expected to match the impressive results for 2009. Pre-tax profits for 2010 are expected to be in the region of DKK 450 million, which is largely on a par with 2009. The result, however, may be affected by expenses to possible restructuring. Events occurring after 31 December 2009 No events have occurred since the balance sheet date which woul2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=15http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1513 DSB AnnuAl RepoRt 2009 / FinAnciAl Review /2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=16http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1614 DSB ChANGES TO MEET ThE FuTuRE The wide range of projects under the Point 2010 change programme has ushered in a wave of cultural changes. Much has already been done and much more will follow over the years ahead. Fundamentally, Point 2010 is all about transforming a transport company into a modern, commercial service business. As competition is an integral part of our life, we are preparing the entire organisation in order to maintain our operations in Denmark and abroad while, at the same time, winning new tenders. This requires change across the board – large as well as small - to provide our customers with an even better product and make the organisation more efficient. Point 2010, therefore, impacts on a wide range of areas, e.g. TV and internet on S-trains, SMS tickets, lower absenteeism because of illness and better traffic information and punctuality. Although DSB must become even more market focused and efficient, we have already taken some significant steps. We also see the Government’s ambitions for massive growth in the rail sector with focus on customers, climate and economies of scale as a recognition of DSB’s development over the past years. With Point 2010 we are demonstrating our worth and preparing DSB for taking an active role in the development of a cohesive and well functioning public transport system. Four objectives Point 2010 has four main objectives: DSB must take a more market focused approach, be more efficient, more international and improve its image – all of which are the specific targets we aim to meet before the end of 2010. At year-end 2009, one objective had already been more than met and we are well on the way to deliver on two others. It may, however, be more difficult to fully achieve the last objective. Objective 3% DKK 400 million 40 million customers 60 Result ultimo 2009 1% DKK 325 million 39 million customers 55.8 Market focused efficient international Reputation2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=17http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1715 DSB AnnuAl RepoRt 2009 / the RAilwAyS in DevelopMent / More market focused The target is to achieve 3 per cent annual growth in the number of travellers in Denmark. At year-end 2009, the growth achieved during the year was 1 per cent. In 2008, we recorded growth in passenger numbers of 3.1 per cent, but since DSB’s market is decided by society’s transport requirements, it is difficult to achieve significant growth in a market that is weakening as a consequence of the financial crisis. For instance, car traffic fell by 1,5 per cent in 2009. That in spite of the downturn DSB has succeeded in achieving growth can be ascribed to the fact that even before the financial crisis had taken hold, DSB was well on the way to making train travel more attractive. DSB invests half of the implemented efficiency improvements in product and service-enhancing initiatives. More effective The aim is to cut annual costs by a total of DKK 400 million before the end of 2010. The position at the end of 2009 is that DSB has identified savings in the cost base with annual effect of DKK 325 million. In addition, specific plans have been made for the remaining part of the efficiency programme aimed at maximising efficiency potential based on comparisons with leading European rail operators. The DDK 400 million efficiency programme is in addition to the 2-3 per cent efficiency increase that DSB achieves annually. In January 2009, DSB also implemented efficiency improvements in its administration. One important aim was to handle this challenge in an effective yet considerate manner in relation to the 200 redundancies involved. As part of this, DSB put a crisis coach at the disposal of the employees involved and signed an agreement with an outplacement consultancy which provided the affected employees with advice, help in finding new jobs and advice on redundancy pay. More international The aim was for DSB to have 40 million customers outside Denmark, i.e. a quadrupling compared to 2007. In 2009, DSB won the major tender for Gothenburg’s regional traffic and for Jönköping’s regional traffic. When these lines are taken over in December 2010, DSB will carry around 55 million passengers abroad. This means that the objective has been more than met. Improved reputation The target is to achieve 60 points in the Reputation Institute’s survey. In 2009, the score was 55.8 points. On the backdrop of the fact that the Reputation figure for the fourth quarter in 2006 was as low as 37.1, DSB has already made significant advances since the launch of Point 2010. Cultural foundation In a complex company like DSB, a number of different focus areas are needed to meet the targets of Point 2010 and the challenges of the future. To accomplish this, a dynamic and proactive organisation with a clear division of responsibilities and strong leadership is required. In a transport company, the management must focus on safety, planning and stability. In a service company, however, focus must also be on customer requirements, flexibility and pro-activity. This we regard as the greatest challenge in 2010 – a challenge that demands a significant effort if DSB is to be able to operate as a competitive service business at all levels and in all respects. This is why the development of leadership skills and the embedding of a strong service culture must permeate the entire organisation and therefore ranks highly on DSB’s agenda for the coming year. Job satisfaction on the increase This year’s job satisfaction survey showed that employee satisfaction rose by 6 points since the last survey in 2007. This represents the largest advance since DSB started measuring job satisfaction in 2003. For the first time since 2004, job satisfaction at DSB is at a higher level than for the Danish labour market as a whole. The main explanation is that employees rate DSB’s reputation significantly higher. Loyalty shown to DSB has also risen significantly. With an increase of 10 points, loyalty has reached its2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=18http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1816 TRAINS CAN BOOST TRAFFIC GROWTh To attract more Danes on to the trains over the years ahead requires a substantial effort on the part of DSB. The upgrading of the infrastructure also plays an important role. One of DSB’s objectives is to encourage more Danes to choose public transport in preference to their cars. This is partly because traffic on Denmark’s major roads is expected to increase by approximately 70 per cent towards 2030.1 This increase will significantly impact on an already over-burdened road network which, in some locations, is experiencing such congestion that even small increases in traffic volume will bring traffic to a standstill. Motorists in the Greater Copenhagen area are already queuing for more than 100,000 hours per day and the lost time corresponds to a DKK 6 billion loss for society in the capital alone.2 One reason for such intense traffic is that in the morning rush hour each vehicle on the motorway only carries 1.18 passengers.3 Ever increasing traffic is also creating serious environmental and climate problems. Since the late 80s, traffic on the Danish road network has risen by approximately 50 per cent while, over the same period, CO2 emissions increased by 30 per cent.4 The increase in CO2 emissions from combined with congestion and capacity problems on the road network has resulted in Danish politicians’ pointing to public transport as the main solution to the problem. An ambitious target for train traffic The Government’s ambition is that public transport should account for the major part of the future growth in trafffic. This means that train services should at least double from the current 6.5 billion passenger kilometres per year to 13 billion in 2030. This, the Government accepts, is a highly ambitious target. At the same time, it represents a historic opportunity for the railways – and a substantial challenge for DSB. The Danish Parliament has decided that Denmark needs an upgraded and up-to-date infrastructure in the form of more track capacity and a new signalling system. The political agreement for “A Green Investment Plan” from January 2009 and the Ministry of Transport’s discussion paper on “A Railway in Growth” from September 2009 lays the foundation for a comprehensive renewal of the railway infrastructure. Reliable track and signalling is a crucial pre-condition in order for DSB to run punctual trains with shorter travel times and at greater frequency - three factors that are particularly important to encourage Danes to put their car keys away and opt for the trains. Punctuality, travel time and frequency alone cannot solve the challenges posed by the expected growth in traffic. To ensure stable and efficient operations, there must also be a massive effort in the form of communication, services and products to make the railways more attractive. DSB has the core competencies within all these areas and we have no shortage of great ideas for assisting the Government in meeting its ambitious targets. however, we are well aware that this huge task will require focus and dynamism over the years ahead. Trains’ many benefits using public transport has many advantages – for society as well as for the individual traveller. Trains can carry seven times as many passengers within a given area than the roads and, therefore, have an important role to play in alleviating pressure on the road network.5 In addition, the railways are a particularly energy efficient form of transport and impact less on climate and the environment than cars, buses and aircraft. To take an example, trains only emit one-third CO2 compared to cars and aircraft on the journey between Århus and Copenhagen. During rush hour, the difference is even greater because the trains carry more passengers. DSB works continually to optimise the environmental benefits of train travel. Customer surveys show that the environment is an important factor for many of our customers. For individual commuters it will, in a number of situati2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=19http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1917 DSB AnnuAl RepoRt 2009 / the RAilwAyS in DevelopMent / It’s already possible to double the number of seats by using double-decker and longer trains Between Slagelse and Copenhagen, for instance, trains account for 77 per cent of commuter journeys. Journeys are characterised by short travelling times, high frequency and modern trains. By contrast, only 54 per cent of commuters between holbæk and Copenhagen use the train because of the longer travel time, low frequency and, until the end of 2009 – when new double-decker carriages were introduced – older trains. It is, therefore, clear that there is significant growth potential in making trains more attractive and DSB intends to exploit this. With a new timetable from December 2009, customers now have a less complex timetable with more regional trains, especially in Zealand. The basic concept is to operate a timetable with fixed departures running throughout the day - as is the case with the S-trains. The new timetable also provides better services in the so-called triangle area in Eastern Jutland. New commuter high-speed trains between Odense and Copenhagen have also been introduced. The next important step towards an even more customer-friendly timetable will be direct hourly trains from Copenhagen to all Jutlandian lines and half-hourly operations on Zealand in the evenings and at weekends. These improvements, however, require both more track capacity and more rolling stock. The expansion of track capacity has been approved and the new IC4 and IC2 trains will be delivered on an ongoing basis up to the end of 2012. To provide customers with more comfortable trains until then, DSB has leased a further 45 new doubledecker carriages that will more or less replace the old blue carriages. More seats More seats must be made available during rush hour to increase passenger numbers. During peak travelling times, the railway’s market share is already relatively high, but in view of the fact that Danes are commuting over ever longer distances, there is also significant growth potential here and DSB intends to exploit this, too. On Zealand, the rush hour market share is, for instance, 20-50 per cent depending on the line, while over the full 24 hours it is 8 per cent nationwide. 1 2 3 4 5 6 It is already possible to double the number of seats by deploying double-deckers and longer trains. Over the next five years (approximately) we can make even more seats available. On the line between holbæk and Copenhagen, the combination of capacity expansion between Østerport and Ringsted and longer trains and more double-decker carriages will allow for a trebling of the number of travellers, from 1,900 to 5,500, in rush hours. Getting customers for the increased number of seats, however, will require more attractive departures and improved punctuality. Once more track capacity has become available, DSB can operate more trains and provide better punctuality because of increased capacity on the tracks. Necessary cohesion The Ringbanen on the S-train network is one example of increasing customer numbers when public transport provides a cohesive solution. The opening of the Ringbanen generated a 100 per cent rise in passenger numbers. Long-distance trains, regional trains and S-trains should, therefore, be integrated with buses, the metro and other means of local transport. DSB is partnering other operators of public transport to ensure that it is easy and convenient for passengers to switch between the different forms of transport, that waiting times between changes are short and that traffic information about connections and delays is accurate and comprehensive. An analysis carried out by the Ministry of Transport, Frederiksberg municipality and the City of Copenhagen demonstrates that more people would use public transport in Greater Copenhagen by making the rail network and the metro the backbone of the system and improving bus services at key points with links to the S-trains and the metro.7 Pub2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=20http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2018 ThE FOuNDATION FOR GROWTh DSB’s core product must be so good that customers prefer the train to meet their transport requirements. As quality creates growth this is crucial for getting more customers. More Danes must opt for the train. This means that DSB must deliver what Danes want and need. Our regular customer surveys provide the answer: punctual trains, relevant traffic information, security and cleanliness. The basic product must be right, and this ranks very high on DSB’s list of priorities – every day. Every second counts DSB’s customers must reach their destinations on time, particularly in rush hours when trains are crowded. In 2009, our customers on long-distance and regional trains suffered an average delay of 200 seconds per journey while S-train customers were delayed by an average of 66 seconds per journey. The ambition is to rank among Europe’s top three in terms of punctuality by 2020. The target is that customers must not experience a delay of more than 45 seconds in the case of S-trains and 90 seconds for long-distance and regional trains i.e. a 50 per cent reduction in delays. Consequently, DSB has begun to build a culture across the organisation where each second counts – and each second is counted. The means to fewer delays There are many different ways of improving punctuality. One pre-condition for ensuring that DSB’s own initiatives prove effective and contribute to halving delays is that they work in tandem with future improvements to the infrastructure. In a number of important areas, DSB is committed to making an extra effort to ensure quality across the value chain and give our employees the best possible means to achieve efficient operations. When DSB procures and maintains rolling stock, it must be done in such a way that operational stability is continually optimised. We are, for instance, currently in the process of renovating 20 ME engines to run twice as long without any repairs. Moreover, we will adjust the location of workshops and depots so they support efficient operations. To take one example, we are relocating the loading of catering away from Copenhagen Central Station where the trains were easily delayed for some minutes because of this. Customers also contribute DSB will also guide customers so as they can contribute to punctual departures. We have started closing doors shortly before departure so the last door closes fifteen seconds before the planned departure. This prevents passengers arriving at the very last minute to delay a full train and thus cause annoyance to several hundred other customers. Stations and platforms will also be designed to ensure a more streamlined customer flow. Traffic information in the form of screens, posters and signs will be placed where customers most need them and in a way where customers are guided through the station’s bottlenecks rapidly and efficiently, e.g. stairs to platforms. It will also be made easier for customers to find the right place to wait on the platform and the right carriage and seat. This will save seconds when passengers embark. Clear messages DSB’s customers also need clear and unambiguous information about traffic – especially in the event of irregularities. DSB and Rail Net Denmark, therefore, work closely together to improve the quality of traffic information. First and foremost, both companies now obtain customer information from the same data sources, which ensures consistent information on screens on platforms, in departure halls and in Kort & Godt shops. All staff involved with traffic information at DSB and Rail Net Denmark have been issued with guidelines for providing information based on customers’ needs. The new joint communication concept, known as Klar Besked (Clear Information), means that employees put themselves in the place of the customer, look ahead and focus on the possibilities available to customers in the current situation rather than focus on the problem itself. DSB and Rail Net Denmark have also dev2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=21http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2119 DSB AnnuAl RepoRt 2009 / the RAilwAyS in DevelopMent / co-operation with “natteravnene” Over the past few years, DSB has enjoyed a close partnership with “Natteravnene” (Night-Owls) who can use the S-trains for free in the evenings. Experience shows that the Night-Owls contribute to a sense of security at stations and on trains. DSB also works with private security companies, including on the Køge Bugt line, which has experienced incidents with gangs of youths. Following a number of robberies at Kort & Godt shops in the spring of 2009, co-operation with the patrols has been extended, which has led to lower incidents of violence and greater security. At larger stations and on certain lines outside the S-train network, DSB has contracts with security companies to prevent unruly behaviour and vandalism. A sense of security during the journey Security and safety are important for both customers and employees. unfortunately, over the past few years, there have been problems involving violence and vandalism by football fans returning from games. With support from the Prevention Fund, DSB has trained a number of train guards in conflict handling and football culture with the result that violence and vandalism have been significantly reduced. With police and fans both praising the specially trained guards, DSB has decided to train twenty more. Two new networks have been formed for the purpose of preventing violence, graffiti and vandalism in the Greater Copenhagen area. One network comprises representatives from DSB, the police, local councils and The Criminal Prevention Council while the other consists of traffic operators from Greater Copenhagen, e.g. DSB, Metro, Movia, Rail Net Denmark and Copenhagen Airport. In addition, a local partnership has been established to counter the sale and use of illegal drugs at and around Copenhagen Central Station to make the area safer for travellers. As customers feel that cameras add to a sense of security, DSB, in partnership with the local police and security consultants, has prepared a list of stations with greatest need for cameras. In 2009, Korsør, Odense, Århus and Copenhagen Central Station were upgraded with the latest CCTVs. In general, DSB has recorded fewer instances of violence directed at staff. Also there is less graffiti and vandalism at locations where surveillance and improved fencing have been established. DSB will systematically collect information about such events to monitor developments more closely. In addition, our ongoing customer surveys on security issues will be part of a prioritisation of focus areas. Clean lines Cleaning at the stations is yet another issue that ranks highly in DSB’s customer surveys. This is also an important factor in our competitiveness. Consequently, we work systematically to improve cleaning standards and have begun with ten stations in the Copenhagen area. In 2009, hellerup, Nørreport and Valby received a makeover, with seven other stations to follow in 2010. At the same time, a new cleaning concept has been prepared and implemented at all S-train stations. More punctual S-trains The proportion of delayed trains out of the total number of departures in 2008 and 2009 is given in the charts below. In 2009, the number of delays relating to long-distance and regional trains was 11.2 per cent, which is slightly above the target in the transport contract. This development can largely be ascribed to signalling failure and track works on, for example, the South and North West lines. There have also been a number of turbo problems with IC3 train sets. The causes have been identified and remedial measures initiated. Moreover, December was affected by heavy snow falls. Number of delays in % of all departures – long-distance and regional trains Number of delays in % of all departures – S-trains 20 20 15 15 10 10 5 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep oct nov Dec 0 Jan Feb Mar Apr May Jun Jul Aug Sep oct nov Dec 2008 2009 target in transport contract 2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=22http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2220 ThE DANES’ NEW TRANSPORT REQuIREMENTS As Danes travel ever longer distances every day, they spend more time doing so. DSB has launched a number of initiatives to transform transport time into more meaningful travel time. The Danes transport needs and transport habits are undergoing continuous change. The trend is for us to travel more and longer distances, including getting to work. One of the benefits of the train is that rather than having both hands on a steering wheel with eyes fixed firmly on the road, travellers can spend the time working, sleeping, reading, having a meeting or just relaxing. Internet access in all S-trains and on the line between Århus and Copenhagen is the first step towards providing internet access on all Danish trains. Quiet carriages and new meeting zones in certain InterCity high-speed trains between Århus and Copenhagen provide travellers with the very best conditions for making the best use of their time, i.e. meaningful travel time. For those travellers who want a break or spend time at the station before their departure, there will be lounges like those already established at Odense. Similar facilities are on the way in Århus and Copenhagen. Trains are overtaking cars Cars account for by far the majority of kilometres covered in Denmark. Out of all passenger transport in 2007, train journeys only covered 8.5 per cent of the total.1 Despite the flexibility of the car – anytime and from door-to-door – increasing traffic volumes will mean that the car will become its own worst enemy – especially in peak periods. Even so, passenger transport in Denmark is expected to continue to rise, i.e. by more than 3 per cent per year. As for car traffic, the major Danish roads can expect to see growth of 70 per cent towards 2030.2 This scenario points towards environmental problems, heavy congestion and more wasted time. The bigger the environmental problems and the more congestion on the roads, the greater the need for environmental friendly and efficient transport. In 2009, DSB gained market shares compared to total road traffic, which declined by more than 1 per cent nationwide and by around 2 per cent in Greater Copenhagen compared to 2008. Long-distance, regional trains and S-trains saw an increase in passenger numbers of 1 per cent over the same period. Although some 60 per cent of all Danish families own one or more cars,3 and despite the financial crisis and falling employment, DSB has maintained its commuter numbers. Indeed, DSB is one of the few train operators in Europe to record an increase in passenger numbers in 2009. Aalborg – Copenhagen in three hours Travel time is a key parameter for many people. Of those DSB customers who frequently take the train, 24 per cent say that shorter travelling time is one reason to opt for the train. Since January 2010, DSB customers have been able to travel non-stop between Århus and Copenhagen in around 2 hours 40 minutes. Nevertheless, one of the huge improvements in railway infrastructure of the future will be shorter travel times. When the so-called hour model materialises, customers will be able to cover the section between Aalborg - Århus – Odense – Copenhagen in three hours i.e. a reduction in travel time between Aalborg and Copenhagen of one and half hours. Once fully developed, the hour model is expected to save train passengers a total of three and half million hours per annum and reduce car traffic by almost 10,000 car journeys per day.4 1 2 3 4 c.f. “National Passenger Transport Work Divided into Means of Transport,” Danish Road Directorate c.f. ”Denmark’s Transport Infrastructure 2030 – Summary”, Infrastructure Commission, January 2008, page 7. c.f. “Families’ Access to Cars”, Danmarks Statistik,” June 2009 c.f. “Sustainable transport – better infrastructure”, Ministry of Transport, December 2008, page 20.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=23http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2321 DSB ÅRSRAppoRt 2009 / JeRnBAnen i uDviKlinG /2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=24http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2422 Commuting in Greater Copenhagen More than half Denmark’s population – 56 per cent - live in one of the 63 largest cities and towns with at least 10,000 inhabitants. And the population in these areas is constantly rising.5 This means that to an ever increasing extent, Danes require transport within large urban areas. This need is, of course, most pronounced in the Greater Copenhagen area where commuting is increasing and where commuting from the main municipalities continues to rise. The Øresund link has demonstrated how significant infrastructure investment can generate growth in the public transport sector. This trend has been assisted by the unemployment levels of recent years in Scania, which has been offset by a corresponding availability of jobs in the Greater Copenhagen area. In 2001, the Øresund Bridge’s first full year of operations, the Øresund trains carried 4.4 million customers against around 10 million in 2008. The railway is the backbone The railway is the backbone of the public transport system. In the Greater Copenhagen area, S-trains function like a rolling pavement while in the rest of the country, long-distance and regional trains link the different parts of Denmark and its regions together. Trains, however, cannot meet all transport requirements and its downside is they rarely bring travellers from door-to-door. As a result, DSB continually strives to make it easier for our customers to get to and from stations in a cohesive and appealing way. We are, for instance, expanding the number of parking spaces for both bicycles and cars and generally seeking to improve access at many stations. Moreover, we wish to make it easier for travellers to bring their bicycles on to trains. DSB is also working on numerous other ideas to make it easy for Danes to choose the train. One of these is a pick-up service linked to train departures by means of taxis, electric vehicles or possibly minibuses. A rented or shared cycle system at the end station – either on an hourly basis or as part of a monthly subscription – is another potential solution. It would also benefit customers if a number of practical services were introduced at stations, such as collecting pre-ordered groceries or packages from the postal services. 5 c.f. ”urban review at 1 January 2009”, Statistics Denmark trains and electric vehicles Train tickets, seat reservation and electric vehicle reservation could all be part of one package that can be booked over the internet… …and, in the slightly longerterm, from a mobile phone. Charge a private electric car at a large number of stations DSB has entered into a ground-breaking partnership with Better Place which, in the longer term, will provide Danes with door-to-door “green transport” by combining trains and electrical vehicles. The key to the partnership is to establish common sharing of electrical vehicles at larger commuter stations as well as facilities for recharging private electric vehicles at certain stations. The system will be designed so that customers do not have to prepare their journey in any great detail. Train tickets, seat reservations and electric vehicle reservation will all be part of a package that can be booked over the internet or, in the slightly longer-term, from a mobile phone.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=25http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2523 DSB AnnuAl RepoRt 2009 / the RAilwAyS in DevelopMent / S-light railway along Ring 3 To ensure mobility and accessibility in the Greater Copenhagen area, the public transport system must be further strengthened. The Ministry of Transport is currently preparing a report of public transport solutions in Ring 3 corridor, including a light rail along the Ring 3 and DSB has proposed that the solution should be a so-called S-light railway. The S-light railway will operate as a light railway at street level and on the S-train network as part of S-train services and will be based on known S-train technology. A light railway on Ring 3 could carry approximately 60,000 travellers per day – of which around 7,000 could be expected to use the light railway instead of the car. With an average of 1.54 persons travelling in every car, a light railway would reduce the number of car journeys in Greater Copenhagen by 4,500 per day. At the same time, this would reduce CO2 emissions from cars by approx. 3,500 tonnes per year and minimise air pollution in the busy local area along Ring 3. A light railway is also under consideration in Århus which would benefit from linking up with the Odder and Grenå lines, thus avoiding Århus h. In Odense, feasibility studies have been initiated regarding a light railway which, via the university of Southern Denmark, would link Odense Station with a Park and Ride facility off the motorway. the benefits of the S-light railway ƒ ƒ ƒ ƒ On the North line, the S-light railway would serve the educational and commercial sectors by providing changes at Lyngby, Buddinge, Gladsaxe and herlev. The S-light railway would link up with other S-train connections at Lyngby, Buddinge, herlev, Glostrup, Ishøj and hundige. A merging at Ishøj would allow the S-light railway to continue to hundige and Køge Nord with opportunities for future Park and Ride facilities. On the North line, there could be a merging with the hillerød line which would serve Virum, holte, Birkerød and Allerød without any need to change.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=26http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2624 SMS tickets hit the target Customers of Greater Copenhagen’s public transport have welcomed the traffic operators’ joint SMS ticket. Almost ten months after the launch on January 23, 2009, sales rounded their first million. Although compared to the clip card and seasons tickets, SMS tickets are not cheap, the method has become successful because it only involves pressing a few keys on a mobile phone. When S-trains started running through the night on a trial basis on Fridays and Saturdays in November 2009, SMS tickets were available at half price between 10 pm and 6 am on Fridays and Saturdays.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=27http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2725 DSB AnnuAl RepoRt 2009 / SeRvice AnD pRoDuctS / DIFFERENT CuSTOMERS – DIFFERENT NEEDS DSB’s many customers have, of course, different requirements. DSB has train journeys that match all budgets and services to suit everyone. Some people take the train everyday, others only rarely. Some value quiet compartments above internet access - or the other way round. For some passengers, price is the most important factor while others prefer to spend the time travelling relaxing or working. DSB continually strives to develop new ticket products and service concepts to make it simple and attractive for everyone to take the train. Benefits for regular customers To strengthen public transport and attract even more customers, DSB offers a range of services at different prices. Among commuters who use the train on an almost daily basis, 36 per cent stated that price is a major consideration in their choice of transport. In the autumn, therefore, DSB launched an advantage programme for loyal core customers that frequently use long-distance and regional trains. By signing up to the programme, customers can renew their season ticket online and automatically qualify for a discount of up to 13 per cent on the ticket price. In addition, season ticket prices have remained unchanged since 2008, and will be kept at this level throughout 2010. On the backdrop of general price increases, this means that, by and large, it has become cheaper to commute by train. As approximately 56 per cent of DSB’s journeys are commuter journeys, these competitive prices will benefit a very significant number of our customers. S-train customers have their own advantage programme which also offer discounts on experiences and events for the capital’s cultural offerings. Customers and their requirements play an active role in the development of new advantage programmes and special offers. Discounts that count For the past many years, DSB Orange has been a popular type of discount among price-sensitive custo- mers who are flexible in terms of departure. The price of the Orange ticket depends on the departure selected and how far in advance the ticket is booked. In addition, there are a number of Orange products with fixed discounts or prices, e.g. DSB Orange Sviptur (“flying visit”), DSB Orange Bytur (city trip), DSB Orange Bornholm and finally, DSB Orange Endagsbillet (one day ticket) which now applies on all Saturdays and Sundays throughout the year. As a family-friendly alternative to DSB Orange, DSB introduced a Family Ticket in the autumn 2009. The Family Ticket offers discounts of up to 63 per cent on all departures across all lines and at all times. More attractive for businesses In order to increase the use of public transport to and from work, DSB has launched a new internet portal, WorkPlus, which targets businesses. The new portal makes it easy for companies to order an ErhversKort (Business Card) or a VirksomhedsKort (Company Card) for their employees. The tax free ErhvervsKort is an ordinary season ticket for buses, trains and the metro which employers can offer their employees as an additional tax free perk. The VirksomhedsKort is a company card on which employees are not taxed providing users do not benefit from other tax deductible transport schemes. Work Plus also allows companies to organise their business travel better and get an easy overview of their travel budgets. As part of its new services to trade and industry, DSB, in partnership with Movia, has also offered to set up a shuttle bus scheme between companies and their local stations. Initially, Work Plus targets companies in Greater Copenhagen, but the plan is to introduce the scheme to companies elsewhere in Denmark.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=28http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2826 GOOD SERVICE IS A ChAIN OF GOOD TRAVEL ExPERIENCES DSB does not just provide transport from A to B. The customer’s journey comprises an extensive range of services, experiences and impressions and the chain provides the total travel experience upon which the customer evaluates DSB. The journey begins in the customer’s home when they decide which form of transport they are going to use. New screens offering news and information have been launched. Since January 19, 2010, customers have been able to travel on the new non-stop trains between Århus and Copenhagen. The journey takes just 2 hours and 40 minutes. At the sales desks of the future, DSB will be much closer to the customer: open and attractive outlets where DSB employees will meet customers face-to-face. Customers can get help at the automats from new automat guides With the SMS ticket, there is no need to use the ticket automats or go to the sales counters. A journey begins at home when the customer considers which method of transport he/she wants to use and does not end until he/she arrives at their destination – whether it be the workplace, the sports centre, a concert hall or perhaps a visit to relations in a different part of the country. In each case, the customer wants the total journey to be as easy and as comfortable as possible. How customers perceive us Frequent customer surveys show what customers consider to be the most important: punctual trains, traffic information, cleaning, security etc. however, the overall journey consists of much more. A good travel experience means: ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ That it is easy to plan the journey and buy the tickets. That it is quick to get to the station and that it is clean and tidy. That you can buy food and drink as well as entertainment for the journey. That it is easy to find the right platform and the right train. That train information is clear and unambiguous. That trains are comfortable with friendly and service-minded personnel. That passengers can work, sleep or chat according to preference. That proper food and drink are available and that the toilets are clean and in good working order. That the arrival station is practically designed so that travellers can easily continue their journey. That traffic information dovetails with other methods of transport. And so on. Taking its starting point from the customer’s point of view, DSB has defined the travel chain in every detail and identified no fewer than 408 different service points where customers come into contact with us. In other words, there are a huge number of factors that come into play when people decide whether to take the train next time. Each link in the journey chain constitutes “the moment of truth” in DSB’s meeting with its customers. This is why we must always take our starting point in our customers’ requirements and go that extra mile to provide a good experience at all service points. Service before, during and after the journey DSB is well on the way to improving the quality of the many service points in the journey chain. here are some examples that illustrate these improvements. Before the journey Passengers can board trains throughout Greater Copenhagen without having either money or a debit card on them. A mobile phone will do. With a few clicks you can buy a ticket via SMS for S-trains, regional trains, buses and the metro. With an SMS ticket, there is no need to use the ticket automat or visit the sales counter, which for many customers means that it has become even easier to use public transport.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=29http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=2927 DSB AnnuAl RepoRt 2009 / SeRvice AnD pRoDuctS / At the departure station It will become easier for customers to find a parking space at the station – and we will also see an end to parking bicycles in a confusion of other bikes. From the beginning of 2010, DSB has increased the number of parking spaces available for cars at seven stations and for bicycles at three stations. Between now and 2020, more parking spaces will be made available - first and foremost at stations with the greatest need. The station of the future will be inviting, light, lively and customer-friendly. In 2009, Sjælør, Avedøre, herlev and Ballerup stations were As part of the new internet service, in 2010 S-trains will offer immediate traffic information that is specific to the line the passenger is travelling on. Internet access will also enable travellers between Århus and Copenhagen to put their travelling time to maximum use. Many customers prefer quiet compartments where they can work and read undisturbed – or just relax. Quiet compartments have been available on longdistance trains for many years, but have now become a popular option on S-trains where customers Internet access ensures that passengers get the most out of their travelling time. DSB is in close and ongoing dialogue with commuters through commuter clubs around Denmark Meeting zones on board the train make the journey even more efficient for busy business travellers. It should no longer be necessary to park your bicycle between a confusion of other bikes. upgraded based on these principles. In addition to the upgradings of station buildings, new screens carrying news and information have been installed, special markings for blind and visually impaired passengers have been established on stairs and along gangways, and on platforms waiting rooms and equipment stores have been replaced in favour of more practical and customer-friendly facilities. For a journey to be simple and straightforward, buying or collecting a pre-paid ticket at a ticket automat should be made easy. At Odense, Århus and Copenhagen, customers using the automats are now assisted by automat guides. That help is close at hand means that customers use the automats more confidently. In addition, should errors occur, these are quickly discovered and rectified. In 2010, the scheme will be rolled out at all stations. On the train Short journey times are a priority for many customers. Since January 19, 2010, customers have been able to opt for the new non-stop train between Århus and Copenhagen. The journey takes just two hours and 40 minutes with the train continuing to Kastrup. From Monday to Thursday, there is one departure in the morning and afternoon from both cities. A train journey enables passengers to use their time profitably. S trains now offer free internet access so that customers can check their e-mails or surf the net while travelling. on long journeys tend to prefer them. Meeting zones also make taking the train more attractive for busy business people. DSB now offers meeting zones in a number of InterCityLyn (high-speed) services between Århus and Copenhagen. Those involved in the meeting are provided with a closed off section where they can meet undisturbed. The service is the same as on DSB1. At the arrival station Customers should feel secure both at the station and on the train. Consequently, DSB has established a close co-operation with “Natteravnene” (The Night Owls) who travel free on all S-train lines at night to make passengers feel secure. We also work with private security companies, including at Køge Bugt station, on regional trains and at major stations where the guards carry out regular patrols to prevent rowdiness and vandalism. After the journey As commuters know more about the needs of travellers, they can often offer the best and most detailed proposals for a better train journey. DSB, therefore, maintains a close dialogue with commuters through a number of commuter clubs around Denmark. In 2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=30http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3028 A FAIR WIND FOR A GREEN JOuRNEy In terms of sustainable transport, the train is second to none. Energy and climate benefits are significant – especially if several people take the train instead of the car. Rail travel is born green and its energy consumption and CO2 emissions per traveller are less than other types of transport. Cars make three to five times more CO2 impact on the climate than trains. In rush hour, the difference is even greater because the trains carry more people. If the overall passenger traffic in Denmark is expected to increase by more than 3 per cent per year, there are even larger CO2 savings to be made if the railways account for most of the traffic growth. In 2020 alone, more than half a million tonnes of CO2 could be saved if the railways absorb the traffic growth. The overall climate benefit for the years up to 2020 would then be more than 6 million tonnes of saved CO21. DSB wins the Climate Cup’s strategy prize Over the past 20 years, DSB has worked committedly to monitor and reduce its climate and environmental impact. Although trains are born with substantial environmental benefits, DSB aims to become even better at addressing the environmental changes and create long-term sustainable solutions. In 2009, we were awarded the Climate Cup strategy prize at Northern Europe’s largest climate conference, Nordic Climate Solutions. The award was given to DSB in recognition of its strategy in which climate change is a major driver of the company’s actions, commitment and willingness to influence customers’ behaviour. DSB’s climate strategy DSB’s climate strategy focuses on three specific areas: energy efficiency, cleaner energy sources and more customers. DSB takes a multi-pronged approach in its efforts to utilise energy more efficiently and to increase the use of sustainable energy sources. In 2009, we signed a climate partnership agreement with DONG Energy to ensure that the potential for energy savings and energy efficient solutions at DSB is fully exploited. One of the partnership agreement’s objectives is to increase demand for sustainable energy and contri- bute to sustainable development. All DSB’s electricity and catenary consumption is already “green power” from sustainable energy sources. DSB’s procurement of green power does not immediately minimise Denmark’s overall climate impact, but in the longer term, rising demand for green power will lead to more sustainable energy production. In the settlement with AnsaldoBreda for the supply of IC4 trains, DKK 800 million was earmarked for the upgrading of IC4. DSB has decided to invest part of this in environmental improvements to the trains. DSB is currently investigating technical opportunities such as particle filters. As part of DSB’s new concept for the Station of the Future, Sjælør and Avedøre stations have been made more climate-friendly. Platform roofs have been equipped with solar cell systems and energy efficient LED lighting has been installed. Solar cells and LED lighting can reduce Sjælør station’s power consumption by approximately 20,000 kWh annually which more or less corresponds to the annual consumption of five households. Moreover, the stations have been fitted out with more benches made from recycled plastic. As part of a climate partnership between DSB and Albertslund municipality, Albertslund station has become a green hub to promote the use of public transport. Albertslund, a pilot project for this type of co-operation, functions as a kind of environmental laboratory for a variety of ideas. The local council has, for instance, set up an environmental shop in the station’s former shop premises and parking facilities for bicycles have been extended. Efficient use of energy DSB is currently making its energy consumption more efficient in a number of ways. A variety of new initiatives for the S-trains were examined in 2009 and are now being implemented. These concern, for instance, optimising the use of surplus energy from braki2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=31http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3129 DSB AnnuAl RepoRt 2009 / cliMAte AnD enviRonMent /2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=32http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3230 utilisation of energy to heat and ventilate the trains. None of this is expected to impact on customer comfort. In addition, DSB S-tog is currently examining ways of saving the power used for heating and lighting when trains are parked at depots outside operational periods. Energy saving driving is an obvious way to utilise energy even more efficiently. S-train drivers have been briefed on how they can contribute to a reduction in power consumption by driving more energy efficiently. Alongside this, work continues on the provision of energy data from each journey and on training every driver to be aware of the effects of driving more energy efficiently. As a supplement to this, early 2010 saw the installation of a new function in the train driver’s cabin which helps the driver decide whether to maintain a steady speed by using power from the catenary system and let the train run on idle for certain periods in order to optimise the use of electricity. DSB S-tog expects to be able to save approximately 10 per cent of the energy used to operate the trains. DSB also believes that it is possible to reduce energy consumption by 10 per cent for long-distance and regional trains if the electronic driving guide, Green Speed, is installed in all trains. The guide is a GPS based system which provides drivers with up-todate information about the speeds required to meet the timetable. Energy savings can be achieved through more consistent driving with less braking and acceleration. Green Speed is scheduled for completion in 2011. In 2009, DSB disposed of its vehicle fleet and replaced it with new, but fewer, leased cars. As most of the new cars run on diesel and have a smaller engine than previous models, the new vehicle fleet is expected to halve fuel consumption for DSB’s cars. The electricity savings campaigns at DSB offices from 2008 continued into 2009 and involved around 2,000 administrative staff across Denmark. During the 2009 campaign, 1,200 electricity saving rails, 127 movement sensors and switch on/switch off clocks at approximately 50 coffee vending machines were installed. The campaign supports DSB’s environmental targets and its “Breaking the Curve” agreement with the Danish Electricity Savings Trust. More customers – higher occupancy While trains are “Green”, they would be even greener and more environmental-friendly if more people left their cars at home and took the train instead. DSB has initiated a broad range of activities to make the train even more attractive. We are, for instance, working with Better Place to offer flexible, convenient and climate-friendly travel. The core of the Better Place scheme is the combination of electric vehicles and trains where the train ticket, seat reservation and electric car form one coherent package that is easily accessible to the customer. The scheme will be launched with a pilot project in 2010 where a number of electric vehicles located at høje Taastrup and Skanderborg will allow customers to take the train from, e.g. one of the Århus suburbs to a meeting in Greater Copenhagen and back again in a climate and environmentalfriendly way. Road transport in Denmark emits a total of 13 million tonnes of CO2 annually. For each vehicle that is replaced by an electric car/train there will be savings of more than 2 tonnes of CO2. Besides the innovative combination of electric cars and trains, DSB is also looking to improve parking facilities for ordinary cars and bicycles at the stations. We also carry out ongoing assessments of how the combination of train speed and the flexibility of bicycles can be promoted. To take an example, DSB offers the combination of cycle-train transport with the option of bringing a bicycle free of charge on to the trains. We are also partnering the City of Copenhagen in its new city cycle concept. The train compared to other types of transport A journey by train generates three times less CO2 emissions per passenger km than the equivalent journey by car or 2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=33http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3331 DSB AnnuAl RepoRt 2009 / ClimAte AnD enviRonment / DSB’s climate strategy ƒ ƒ ƒ Climate impact will be 50 per cent lower per passenger km in 2020 than in 2005 (calculated as CO2). DSB will be CO2 neutral in 2030. Energy consumption will be 20 per cent lower per passenger km in 2020 than in 2005. (10 per cent from energy savings and 10 per cent from higher occupancy). Development in electricity and diesel consumption per passenger km index DSB’s total CO2 emissions per passenger km index 100 90 80 70 60 50 40 30 20 10 0 Rolling stock - diesel Rolling stock - electricity 100 90 80 70 60 50 40 30 20 10 0 2005 2006 2007 2008 2009 Development in energy consumption per passenger km Energy consumption per passenger km has risen slightly for diesel trains while it has fallen for electric trains. The increase for diesel trains is mainly due to the colder winter, with 7.7 per cent more degree days, which resulted in more consumption to heat the trains. The fall for electric trains relates to a higher occupancy in electric trains used by DSBFirst in Sweden. Developments in DSB’s CO2 emissions In 2009, DSB’s overall CO2 emissions per passenger km were 16 per cent lower than 2008. The decline is mainly the result of the fact that in 2009, DSB operated more passenger km with electricity powered rolling stock because DSBFirst’s figures in Sweden were included. From and including 2008, DSB has exclusively used electricity from sustainable energy sources. 2005 2006 2007 2008 2009 train other activities2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=34http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3432 ExPORT SuCCESS CREATES COMPETITIVENESS AT hOME With four train contracts in Sweden, DSB has become Scandinavia’s largest train operator. The aim is to become even larger in Sweden. DSB is also entering the German market. With the two new train contracts in Sweden in 2009, DSB will serve around 55 million passengers in Sweden at the end of 2010 when we take over operations on the new sections. As a result, we have already exceeded our target of 40 million customers outside Denmark in 2010. In August 2009, DSB, in partnership with FirstGroup, won the contract for regional transport around Gothenburg and in December 2009, this was followed by yet another prestigious train contract, i.e. regional transport in the Jönköping area. In addition, DSB has won the contract for Øresund transport in Southern Sweden, again in partnership with FirstGroup, and for the local transport on Roslagsbanan in Stockholm in conjunction with Tågkompagniet. These two new contracts link up DSB’s activities in Southern Sweden and provide the best possible platform for improving and streamlining train services in the area to the benefit of both the tendering authorities and customers. Even more opportunities in Sweden Although DSB has now gained most of Southern Sweden, there is still significant growth potential elsewhere in the Swedish passenger train market where tenders will be invited for a total of around 80 million train kilometres. Currently, the stateowned SJ retains sole rights to the majority of long-distance traffic. From October 2010, however, the forthcoming deregulation is expected to create further competition – including within long-distance traffic. On the basis of our experience from Southern Sweden and knowledge of the Swedish tendering authorities and labour market conditions, DSB is, in competitive terms, well placed to strengthen its operations in Sweden. Focus will, in part, be on future regional tenders and, in part, on the forthcoming deregulation of long-distance train transport. A foot in the door in Germany The German railway network is Europe’s largest. During the next few years, around one third of Ger- man passenger transport is expected to be put up for tender. Following some years with a relevantly small set-up, DSB established a stronger profile in Germany at the end of 2009. This includes an office in Düsseldorf and a staff of six, all of whom have extensive experience from the German rail sector. At the beginning of March 2010, DSB acquired 50 per cent of the German operating company VIAS Gmbh. The stake in the company will form a bridgehead for DSB’s future activities in Germany and the company’s location in Frankfurt am Main means that VIAS occupies a central and strategically important role in relation to DSB’s future tenders in the German market. Rurtalbahn Gmbh owns the remaining 50 per cent of VIAS. VIAS has operated the Odenwaldbahn in the Frankfurt area since 2005 and from December this year, will also operate Rheingau which runs along the Rhine between Frankfurt and Koblenz. The two contracts, totalling 4.1 million train km per year, cover 356 km and will run to 2015 and 2023 respectively. As in Sweden, DSB’s market strategy in Germany is to start on a small-scale during which DSB will familiarise itself with the local market and the local regulations in order to build a stronger position to win future transport contracts. Co-ownership of VIAS will provide DSB with a platform for future growth in Germany. DSB continually monitors developments in other European markets although focus remains primarily on the Swedish and German markets. The strategic priority is to achieve a certain size in selected foreign markets rather than be a niche player in several. DSB’s success in Sweden – where we have moved from 0 in 2003 to more than 20 million train km – remains the best proof that the strategy to build up local business with sound knowledge of local conditions is the right one.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=35http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3533 DSB AnnuAl RepoRt 2009 / inteRnAtionAl BuSineSS / Mod Flensburg Ham burg Berlin A m sterdam B asel München Øresundstra kken Krösatåg Västtra k International Roslagsbaban Mod Flensburg Ham burg Berlin A m sterdam B asel München Puttgarden Hamburg Advantages on the home front From the end of 2010, DSB will operate more kilometres in Sweden than in Denmark and the experience from foreign operations is an important factor behind DSB’s growth in the domestic market. The work involved in tenders and actual operations combined with experiences from partnership with other professional train operators are particularly useful for DSB’s Danish business, both in terms of delivering a better and more customer focused product and in respect of ongoing efficiency improvements to operations. DSB’s foreign competitors – DSB’s partners in some instances - typically rank among Europe’s largest train operators. DSB regards these international references as extremely important in relation to the general strengthening of DSB’s business. In other words, an offensive strategy in foreign markets will contribute to DSB becoming even more efficient and customer focused in its domestic market. Koblenz Fra nk fu rt ) (M Hanau en ad sb ie W DSB in Denmark and abroad Koblenz Rüdesheim Darmstadt Groß-Umstadt Wiebelsbach Rheingau ) (M t ur kf an Fr en ad sb ie W Odenwaldbahn Eberbach DSB Germany Travellers (million) Train km (million) Length of sections (km) 4 4 356 DSB Sweden* 55 23 2,349 DSB Denmark** 167 57 1,688 Rheingau Hanau Rüdesheim Darmstadt Groß-Umstadt Wiebelsbach *2009, for Krösatåg and västtrafik 2011) **2009 Odenwaldbahn Eberbach2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=36http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3634 DSB hAS CONQuERED SOuThERN SWEDEN DSB is forging ahead in Southern Sweden. Based on a strong combination of price and quality, DSB has won several large tenders in fierce competition with other highly professional train operators.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=37http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3735 DSB AnnuAl RepoRt 2009 / inteRnAtionAl BuSineSS / Fakta om DSB i Sverige Roslagståg (Stockholm) DSBFirst (Øresund transport in Sweden) 28 11 727 västtrafik (Gothenburg) Krösatåg (Jönköbing) Strömstad Åmål Töreboda Kårsta Österskär Stockholm Uddevalla Falköping Göteborg Borås Jönköping Nässjö Travellers (million) Train km (million) Length of sections (km) 11 2 65 15 8 957 1 2 600 Halmstad Varberg Värnamo Alvesta Vetlanda Oskarshamn Växjö Kalmar Hässleholm Helsingborg Kristianstad Karlskrona Krösatåg Västtra k Öresundstra ken Roslagsbanan København Malmö Sweden is DSB’s second domestic market. The Group made its debut in the Swedish market in 2003 when it took over Roslagsbanan operations in Stockholm. In June 2007, DSBFirst won the Øresund tender and in August 2009, DSB won the contract for regional transport around Gothenburg (Västtrafik). In December, regional transport at Jönköping (Krösatåg) followed. Once operations at Gothenburg and Jönköping are taken over in December 2010, DSB will have a market share of 25 per cent in terms of train kilometres, carry around 55 million Swedish customers annually and service more than 2,000 section km in Sweden. This is more than DSB’s current transport operations in Denmark. DSB Sweden AB has responsibility for DSB’s Swedish activities and stands prepared to benefit from the synergies arising from the increased volume. Finance, legal matters, procurement, wages and salaries and technical consultancy can be merged to optimise resources. Synergies are expected to be significant and will provide a strong competitive advantage in the expansion of DSB’s operations in Sweden. The Swedish model There are several differences between train operations in Denmark and Sweden. In Sweden, transport buyers primarily enter into gross contracts with the operators which means that DSB is obliged to deliver an accurately defined traffic volume of a specific quality. As a result, fare revenues do not accrue to DSB. In addition, the company is not responsible for ticket sales. This means that, in principle, transport buyers and not passengers are DSB’s primary customers. This, in turn, means a different division of responsibility between tenderer and operator who will exclusively be measured on the basis of contractual obligations. To some extent, this model restricts the financial headroom for new initiatives although it reduces financial risk. DSB Sweden, however, regards its Swedish passengers as its main customers in that Swedish customers resemble their Danish counterparts. The essential issues are punctual trains, traffic information, clean trains and a sense of security. The Swedish gross contracts contain a bonus scheme that includes punctuality, customer satisfaction and passenger growth. In the Scanian part of the Øresund transport, DSBFirst has, since February 2009, received a bonus for punctuality. In terms of customer satisfaction, on the Swedish side substantial requirements have been set to obtain the bonus and so far these have not been achieved. As a result, DSBFirst, together with the Swedish transport buyer, has initiated a project to increase customer satisfaction. On the Danish side, DSBFirst has been paid a bonus for customer satisfaction since operations began in January 2009. The Swedish organisation has focused on those parameters that are measured under the contracts, i.e. day-to-day follow-up on punctuality, staff absenteeism, the number of kilometres driven and the number of kilometres between unscheduled workshop visits. If any target is not met, remedial action is taken. Free traffic DSB’s Swedish regional train operations have many similarities to Danish long-distance services in terms of speed and distance between the stations. The Swedish long-distance services will, from October 2010, be deregulated. As ”free traffic” this will not be put out for tender as any operator, in principle, can decide to operate on the sections in question. For DSB, the lines between Stockholm 2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=38http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3836 LEADERShIP AND GROWTh GO hAND-IN-hAND Growth is only possible if the whole of DSB imbued with a winning culture where everybody agrees to meet customers’ expectations – every time. It all begins with leadership. DSB focuses on excellent leadership in a number of ways. In the business development project which, as part of Point 2010, will develop our common platform, dynamic leadership, performance management and service culture are among the areas designated for development. To transform the leadership and service culture, it is essential to set more precise parameters. DSB has, therefore, formulated clearer principles for leadership, created a focused leadership platform and, for the first time, set standards for excellent leadership. All leaders have performance appraisals with their line managers twice a year and are measured on their attitudes to leadership and business performance through a new leadership scorecard. To develop and strengthen talented leaders, DSB has initiated the development programme, high Potentials, where 34 prospective leaders learn what is required to support DSB’s business and future development and growth. The Swiss Business School, IMD, is the main supplier of the “Taking Danish Rail into the Future” programme. It is, however, not just DSB’s leaders who are involved with the vision, strategy, values etc. Approximately 9,000 DSB employees take part in a “value day” every second year. 2009 saw the start of a new culture that will carry DSB into the future when the new vision “Travel with Consideration” was rolled out, reformulated and a more focused version of the company’s values was debated. The seed for a new service culture was sown. Culture change and leadership were the headlines for two leadership conferences in 2009 when 450 executives met to review the company’s common strategic objectives. The Group’s management used this opportunity to honour two leadership teams for an extraordinary effort that has had a positive commercial effect on DSB. The honour is intended to generate inspiration and support for the development of a winning leadership culture that is a crucial pre-condition for all employees to contribute making DSB a competitive service company. health and working environment Lower absenteeism In 2009, the average DSB employee was absent for an average of 11 days. As part of Point 2010, the aim is to reduce absenteeism by 20 per cent between 2007 and the end of 2010. Absenteeism has fallen by 14 per cent from 2007 to 2009 and is due, amongst other things, to new guidelines on how DSB’s leaders handle absenteeism. In consequence, a travelling team that can assist other departments cope with significant absenteeism has been established. In addition, absenteeism across the organisation has been analysed by Falck healthcare which has led to a range of new initiatives. As a result, a pilot project will be implemented within Onboard Service, where employees with a high level of absenteeism are offered a thorough medical briefing and an action plan for a return to work. Health for everyone Since the early part of 2008, DSB has offered health checks for all employees. The checks have revealed that approximately half those examined need a lifestyle change. From 2010, therefore, DSB will offer free fitness membership to all employees providing the employees pay the registration fee. Those who are particularly overweight are offered special slimming programmes and nutritional advice. The working environment DSB units that have not yet been working environment accredited will receive accreditation during 2011. The large units within LongDistance & Regional Trains, which comprise approximately half DSB’s 9,000 employees, have already been certified. In 2009, we worked committedly to prepare the remaining sites for certification. The working environment accreditation confirms that we comply with a range of international quality guidelines and that the leadership is taking an active role in m2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=39http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=3937 DSB AnnuAl RepoRt 2009 / cultuRe, ReputAtion AnD ReSponSiBility / BuILDING A STRONG SERVICE CuLTuRE For DSB to attract more customers, they must have a quality experience that tempts them back and makes them recommend DSB to others. This means that customers must be made to feel welcome – before, during and after their journey. The customer is at the heart of DSB’s culture and should be treated like a welcome guest of the company. This, in brief, is the essence of the service culture that managers and employees are building together. having guests involves certain obligations; good hosts welcome their guests attentively and with commitment. A strong and firmly embedded service culture is crucial for transforming DSB from a transport supplier into a strongly service-minded organisation. The service culture should imbue the face-to-face encounters throughout the entire travel chain – i.e. in all situations where customers are in direct contact with DSB’s employees. Smile – and the world will smile too Providing service is nothing new for DSB. however, we must be even more aware of the need to do so more often and in more situations. Service is about what we do – but it is also about the way we do it. Since, to a large extent, service is characterised by symbols the small things often have a major impact on the customer’s experience. DSB should excel at going that extra mile for which customers will remember us. Consequently, all employees should consider how they can best contribute to providing the traveller with a good travel experience, such as showing empathy and interest in the individual customer. If everyone does their best to turn a task into an experience, we will initi- ate a positive circle where a positive attitude on the part of the customer will make it fun to go to work. DSB goes back to school Creating a strong service culture cannot be done through service handbooks or guides to good behaviour. It’s all about changing one’s approach to customers, for instance, through training and education. Initially, first line leaders will attend a training programme comprising practical training and using actors to illustrate excellent service in specific situations. It is then the responsibility of the leaders to train their teams. As role models, therefore, leaders must point the way for their employees and ensure that they themselves are service-minded, attentive, pleasant and responsible. To begin with, the service courses will be attended by the first line leaders and their teams working within customer-focused functions. In order for the service culture to impact fully, however, administrative colleagues in back-office functions will also receive training. The aim is for all DSB employees to have attended these courses by the end of 2010. In order to demonstrate the importance of good service and make it more prestigious to provide it, all leaders and employees will receive certificates upon completion of their training programmes. This means that they will have proof that they can provide the service DSB believes customers should have. DSB’s service culture – we Move you ƒ ƒ ƒ ƒ We We We We are always proactive are the hosts and meet every customer in a personal way look for opportunities to exceed our customers’ expectations make sure that problems are solved – quickly and on the spot The service culture headline – We Move you – came up during a seminar for leaders and employees. At DSB, we move our customers physically and we have an opportunity to move them spiritually – to win their hearts by surprising them and making them happy. We Move you describes the culture and attitude that we at DSB should apply to our work and to our customers.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=40http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4038 CuSTOMER SATISFACTION IS ThE ALPhA AND OMEGA DSB’s reputation and general customer satisfaction are closely linked to punctuality. DSB’s CustomerCompass shows that customer satisfaction with the S-trains is the highest for many years. As public transport – and not least the trains – will account for most of the expected growth in transport over the next decades, DSB must, of course, be able to attract many new customers. In this process, the quarterly assessments of DSB’s reputation and the half yearly customer satisfaction surveys – the CustomerCompass - are invaluable tools that accurately point to those areas where we need to improve. There is a close link between train punctuality and the surrounding world’s – including our customers’ – general evaluation of DSB. Delayed customers generally rate the evaluation points in the CustomerCompass lower than customers who are not delayed on their journey. Satisfaction with travelling on long-distance and regional trains, general index Satisfaction with cleaning and maintenance at the station, long-distance and regional trains index 7 7 Note: The half yearly customer satisfaction surveys are now presented according to a new method covering long-distance and regional trains as well as S-trains to make the results comparable. A scale from 0 to 10 is used in contrast to the previous scale of 1-5. Data for 2007 and 2008 has been converted to the new scale. 6 6 5 5 4 4 3 2007 2008 2009 3 2007 2008 2009 Long-distance and regional trains Punctuality which, in 2008, was the best for many years fell to a lower level in 2009. This was reflected in customer satisfaction levels where, in particular, business customers and customers East of the Great Belt expressed their dissatisfaction. The extensive track work on the South line, which affected many customers, is also reflected in the CustomerCompass. The fall in punctuality in 2009 also impacted on most other evaluation points that also recorded a fall in satisfaction. In the autumn of 2009, DSB initiated a range of new measures to improve punctuality. The aim is to halve the delays experienced by customers by 2020. Despite the decline in customer satisfaction in 2009, there are positive developments in some areas. Satisfaction with cleaning and maintenance of the long-distance and regional train stations is rising as is satisfaction with cleaning standards in toilets on the trains which increased from 5.02 in 2008 to 5.20 in 2009. This is largely due to a new cleaning concept with more stringent requirements for toilet cleaning. DSB will endeavour to improve cleaning further in 2010.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=41http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4139 DSB AnnuAl RepoRt 2009 / cultuRe, ReputAtion AnD ReSponSiBility / Satisfaction with S-trains in general index Satisfaction with traffic information at departing stations, S-trains index “DSB must do more to promote everything that’s good about trains. This is the only time of the day when I don’t owe anybody anything.” S-train customer 7 7 6 6 5 5 4 4 3 2007 2008 2009 3 2007 Screens loudspeeker-info S-trains Partly due to the good punctuality levels throughout the year, customer satisfaction with S-trains generally improved and is now the highest for several years. Satisfaction was also reflected in many other evaluation points, such as ticket sales, safety at the station, platform access, the number of departures and connections to other means of public transport. Development in DSB’s reputation index “When I’m in the train, I read, work, daydream or relax” Customer, Long-distance and regional trains 2008 2009 Customers have, for instance, become more satisfied with traffic information at S-train stations while satisfaction with screen information and the information announced on loudspeakers has risen significantly. however, S-train customers are less satisfied with the attitude of ticket inspectors, the external cleaning of the trains and the removal of graffiti in and on trains. 70 60 50 40 30 2007 2008 2009 Reputation In 2009, DSB’s reputation among the Danish population increased markedly and now stands at 55.8 points out of 100 in the Reputation Institute’s measurement of the reputation of major Danish companies. The fact that DSB’s reputation has taken a step upwards is a sign that DSB’s reputation has become more robust and stable. under Change2010, the target is to reach 60 before the end of 2010 – which was last achieved before 2005. As DSB’s reputation was as low as 37.1 in the 4th quarter of 2006, this is an ambitious target. The result for 2009, however, showed an improvement in our reputation of close to 50 per cent compared to 2005. DSB S-tog’s reputation has also improved significantly – from 51.9 in 2008 to 60.8 in 2009. S-trains’ stable and high level of punctuality throughout the year was a major factor.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=42http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4240 SOCIAL RESPONSIBILITy IS AN INTEGRAL PART OF DSB Social responsibility and consideration for the surrounding world is a natural component of DSB’s business and CSR has been integrated into all relevant policies and actions. DSB, therefore, regards the Annual Report as our CSR statement. Solar cell systems have been established at stations DSB demands that suppliers have an environmental policy in place and operate an approved environmental management scheme. In 2010, DSB contributed to the Denmark Collection charity by donating ticket revenue from a special Africa Train. In addition, many of DSB’s employees spent three hours of their free-time collecting money at the stations. DSB wants to maintain a dialogue with its customers and involve them in solving environmental challenges. Every second year, DSB’s employees are o ered a health check. All employees are covered by health insurance. Duvets from the Skier Train were donated to the homeless and to the Kongelunden asylum centre. In the following pages we set out our CSR objectives within five areas: Customers, Employees, Environment, Suppliers and Society/Ethics. Each area provides examples of actions initiated by DSB. The results achieved are described elsewhere in the Annual Report along with the relevant page references. DSB’s ambition is to make sustainable public transport the natural travel choice for Danes. In our vision, we describe it as “Travel with Care”. Every day, DSB is responsible for the hundreds and thousands of customers who choose to travel with us. however, our responsibility goes way beyond this. It also encompasses social, ethical and environmental responsibility for our employees, partners and the surrounding world in general. DSB has a CSR vision. Moreover, we have a range of policies in place that reflect our vision. Of cour- se, it is DSB’s actions that count, but the vision and our policies set out the guidelines and help to demonstrate what we mean by social responsibility. CSR has been integrated into our human resources policy, working environment policy, purchasing policy and communications policy. Organising the work To ensure ongoing development and achieve demonstrable results, our CSR work is organised in a way that involves both dedicated management focus and support as well as the involvement of employees across the whole organisation. Responsibility for co-ordinating and developing CSR at DSB lies with the head of CSR. DSB’s CSR board meets every quarter with CEO Søren Eriksen as Chairman. Once a month, the head of CSR meets with the decentralised CSR managers in DSB.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=43http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4341 DSB AnnuAl RepoRt 2009 / cultuRe, ReputAtion AnD ReSponSiBility / cSR-vision ƒ We wish to develop the economic, social, ethical and environmental aspects of our activities so they are in keeping with our values and support long-term growth for public transport to the benefit of people and the environment. We want to create a better environment for everyone by offering attractive transport solutions and reducing the environmental impact of our activities. We want to be an attractive and socially responsible workplace. For us this means focusing on a healthy and safe working environment, balance between working and private life and seeing opportunities in diversity and a multifarious composition of the workforce. ƒ ƒ Customers In 2009, DSB organised an extensive range of customer-focused activities. In newspaper advertisements, TV commercials and other forms of communication, therefore, we highlighted rail travel as an environmental-friendly form of transport and DSB as a green organisation. At DSB’s new environmental portal we encourage users to suggest green ideas that will inspire DSB to become even greener. In this way, DSB intends to establish a dialogue with customers and involve them in finding solutions to environmental challenges. Taking the train must be safe. A sense of safety and confidence means a great deal to our customers. On page 19 we describe in greater detail our efforts to improve safety at stations and on board trains. In 2009, for instance, we extended the partnership with Natteravnene (The Night Owls), a partnership that we will strengthen further in 2010. Stations are important for how our customers experience their meeting with DSB. We have started renovating the stations so they become more customer-friendly and sustainable. The concept for “The Station of the Future” with solar cells and LED lighting are described on pages 27 and 28. During 2010, we will expand this concept with the station as “The Green Gate to the City”. During Operation Dagsværk 2009 (a day when young people work instead of going to school and then donate the money earned to charity), DSB invited around 400 high school students to visit Denmark’s largest stations were they did some cleaning and donated their earnings to the cause of promoting democracy and equality in Zimbabwe. DSB monitors customer satisfaction on an ongoing basis. Twice a year, we use our CustomerCompass to assess a broad range of issues from journey satisfaction to train standards, traffic information, ticket purchase, cleaning at stations and on trains and satisfaction with DSB’s employees. The development in customer satisfaction is described on pages 38 and 39. “Customers should regard it as environmentally correct, safe and convenient to take the train, use our stations and communicate with DSB. Our customers should be able to see that we take responsibility for them.” Employees As a service business, DSB needs to attract the best and broadest possible pool of talent. At the same time, we want to reflect the society of which we are part. DSB, therefore, prepares employee accounts that show our current employee mix. DSB is a member of the National Network of Business Leaders which initiated high Five with support from the Danish Ministry of Employment. The objective is to create jobs or training for young people who find it difficult to join the labour market. Since 2007, DSB has opened its doors to five young people below the age of 25 with criminal records. Two have been employed in ordinary jobs and three in traineeships. DSB will now extend its partnership with high Five with the aim of taking on a further ten young people in 2010. Four DSB employees completed mentor training under the auspices of the high Five concept. DSB also works with the “Specialist” organisation for autistic people with special skills. These specialists have been employed in the Travel Card ( Rejsekort) tests and for cleaning discarded hand terminals before reuse. In 2010, we wi2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=44http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4442 “DSB must be an attractive workplace where diversity is seen as a strength. We will support diversity as socially responsible behaviour. We will work actively to secure a sound and safe working environment.” Integration is a challenge to society to which DSB wishes to contribute. We believe that the integration of the labour market is an efficient way to integrate society. DSB participated in the “Danish Workplace Culture” project which is supported by the Ministry of Integration. It can be tough for new employees from a different ethnic background to start a new job in a Danish workplace. Through making use of this project in S-tog’s preparations unit, DSB has trained a “culture agent” who has identified the workplace culture of the unit. In keeping with the project, DSB’s aim is to employ more people from non-Danish ethnic backgrounds in traineeship and job training programmes in 2010. DSB consistently focuses on promoting a healthy working environment and wishes, of course, for our employees to be fit and healthy. Over several years, we have worked systematically to obtain working environment certification for all units and so far, half the company has achieved working environment certification. The remaining units will follow in 2011. DSB also keeps track on the number of industrial accidents on an ongoing basis. See page 36 DSB also has a wide range of offers and activities in support of employees’ general health. All employees are offered a health check every second year and everyone is included in a company-wide health insurance scheme. Moreover, from 2010 DSB will offer all its employees membership of a fitness centre. Finally, many of DSB’s employees take part in the annual DhL run and in the “Cycling to Work” campaign. DSB regards job satisfaction, a spirit of community and pride in the workplace as important aspects to a good working environment. As we wish to recognise employees’ daily efforts, in 2009, we invited all employees to a large party. Towards the end of 2009, we conducted a job satisfaction survey which revealed significant advances in satisfaction figures (see page 15) “DSB wishes to have a holistically-oriented environmental focus and contribute to a reduction in the transport sector’s overall climate impact through a targeted effort to reduce our energy consumption and impact on the environment by means of targeted communication about the train’s environmental advantages”. Environment The environment and the climate are two important areas for DSB and have been so for many years. The transport sector’s substantial contribution to global CO2 emissions and the railways’ important role as part of the solution made COP15 a natural focus area in 2009. The more passengers we can move from cars to trains the more we will reduce Denmark’s CO2 consumption. A wide range of activities and initiatives were launched prior to the Climate Summit while others took place during the conference. A special COP15 taskforce was dedicated to ensuring a high level of customer satisfaction across the public transport system during the summit. The Task Force focused on good customer service and punctual trains, safety, clean stations and good traffic information for both the conference’s delegates and regular customers of public transport in Greater Copenhagen. uniformed Info Guards were positioned at all key points and posters, signs and loudspeaker announcements were translated into English. There were also contingency plans in place in the event of a breakdown in train or metro operations. More than 400 politicians, civil servants and NGOs arrived at Copenhagen Central Station by the special train, the Climate Express, ahead of the summit. The Climate Express was organised by the International Rail Organisation, uIC, and the arriving climate negotiators were received at a welcoming event by, amongst others, DSB’s CEO Søren Eriksen and Climate Minister Lykke Friis. At Copenhagen Central Station, DSB also conveyed climate 2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=45http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4543 DSB AnnuAl RepoRt 2009 / cultuRe, ReputAtion AnD ReSponSiBility / because of climate change. The mangrove forest, which has traditionally protected the area, has recently been cut down with the result that typhoons can now cause serious damage and the paddyfields are flooded with sea water, which makes the soil infertile and the plants wither away. Moreover, DSB supported the development of a completely new type of interactive learning and entertainment game where, as part of the Copenhagen Summit, children and young people from across the world had to save the planet. The Climate Mystery was played out on the net, and in the fictive drama DSB’s trains and stations were part of the set for many of the scenes in the film. Within DSB, we conducted a major electricity savings campaign in 2009 (see page 30). The positive experiences from the project will be continued in 2010 through the DSB GreenTeam to promote internal sustainability. DSB’s environmental effort – in addition to the COP 15 activities - are described separately on pages 28-31. This includes our strategic partnership with DONG Energy and Better Place and The Climate Strategy prize won by DSB in 2009. Moreover, each year, DSB publishes separate environmental accounts at www.dsb.dk “We will pro-actively ensure and develop responsible trade with our suppliers and business connections.” Suppliers For many years, DSB has operated a Code of Conduct. As a result, DSB has signed up to the uN Global Compact and we urge our suppliers to do the same. As DSB strives to minimise our impact on the environment, we require our suppliers to have a working environmental policy and an approved environmental management scheme. We are also working to ensure that no employees or customers are ex- posed to dangerous substances at work or in trains and we demand that our suppliers have a working environment policy in place and that they co-operate with DSB on working environment issues. DSB is carrying out a systematic survey of our suppliers with regard to identifying those who may not comply with our CSR requirements. Concurrently, we are developing a process for follow-up on these suppliers. The process will be initiated during 2010. “DSB must be an active player in society and constantly develop and work with CSR. We should demand the same from ourselves as we demand from our business partners and make sure we live up to them Society/ethics DSB wants to be a sustainable company. We therefore reject the use-and-discard culture and, in a number of cases, have ensured that obsolete equipment is used by others. One such example is that the duvets from the “Skier” train were donated to the homeless and the Kongelund asylum centre. Parents of children suffering from autism or ADhD have been given DSB’s discarded hand terminals to help them structure their children’s daily lives. A surplus of woollens has ended up as blankets in Romania and excess Christmas gifts for employees have been passed on to the family charity, Mødrehjælpen. These initiatives will be sustained in 2010. In connection with the Denmark Collection for Africa in 2009, DSB donated ticket revenues from two InterCity trains from Jutland to Copenhagen. In addition, in 2010, DSB contributed to the Denmark’s Collection by donating the fares from a special Africa train to the cause. Moreover many of DSB’s employees spent three hours of their leisure time collecting for the charity at the stations. DSB’s social responsibility commitment has, of course, an impact on the company’s general reputation and, therefore, contributes to DSB achieving the target of 60 points in the reputation survey from the Reputation Institute in 2010. The survey comprises seven different areas of which two - responsibility and ethics – relate directly to CSR. In relation to DSB’s Annual Report 2010 and the uN Global Compact Progress Report 2010, DSB will adjust the reporting on its CSR activities in line with the Global Reporting Initiative (GRI), wit2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=46http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4644 Changeover day on the Coast line On Sunday, January 11, DSBFirst took over the Coast line operations “On your bike” healthier employees, lower CO2 consumption and annual savings of approximately DKK 750,000 are among the reasons why DSB’s employees in Copenhagen will switch from taxis to bikes wherever possible. Significant decline in absenteeism In just one year, absenteeism at DSB has declined by 10 per cent. A targeted effort aimed at reducing absenteeism is one aspect of the Point2010 programme. The reason for the fall includes stronger focus on this issue and special absenteeism interviews with employees. Surf between Århus and Copenhagen In conjunction with TDC, DSB enables customers to connect to the Internet on the busy main line section between Århus and Copenhagen. DSB as part of a global network DSB supports the uN’s principles for responsible behaviour – also known as the uN’s Global Compact. This means that DSB has become part of the world’s largest network of businesses and organisations that focus on social responsibility as well as on the bottom line. S-bike: the folding bicycle is launched It can travel free on the S-train network, it folds together in a few seconds and there’s no risk of oil on your clothes. The folding bicycle, S-bike, can now be purchased through the advantage programme, S-more. AnsaldoBreda will continue to deliver the IC4 and IC2 trains DSB has settled the dispute with the Italian train manufacturer AnsaldoBreda. As a result, DSB will receive financial compensation totalling DKK 2.25 billion from AnsaldoBreda. DSB will be responsible for error rectification and the optimisation of the IC4 trains after delivery from Italy. January February March April May June Keeping track on 2009 Green messages for customers DSB’s customers can now place their waste in new environmental-friendly refuse bags with green messages printed on them, encounter Marketing’s environmental campaign in adverts in Danish newspapers and learn more about DSB’s environmental efforts in a new environmental newspaper distributed to customers. DSB S-tog became part of a climate partnership with Albertslund municipality which means that Albertslund station will become Denmark’s first green station. DSB: image builder of the year Together with the airline SAS, DSB recorded the biggest jump in the so-called RepTrack score from 2008 to 2009. Both companies advanced 6.5 points while many other companies stagnated or fell back. New IC4 management The IC4 project enters a new phase when Long-distance & Regional trains assign responsibility for IC4 and IC2 deliveries to a new unit, the IC4 programme, that will be given the necessary resources to ensure that the programme can handle all technical, legal and financial aspects. Torben Kronstam will head up the programme. New vision heralds new era “Join us” is DSB’s new slogan which, together with a new contemporary and outward-facing vision and a new green logo, will bring DSB into a new era. These initiatives also mark the start of a stronger focus on the climate and environment. DKK 250,000 for Africa DSB’s CEO Søren Eriksen takes to the stage in Tivoli’s concert hall to hand over DKK 250,000 to Radio Denmark’s annual Denmark Collection charity on behalf of DSB and the company’s employees. New service concept ensures a smooth service 150 employees and leaders have together developed DSB’s new service concept “We Move you.” The concept is a Point2010 initiative, with the key words being dynamic management, lower absenteeism, a better working environment and targeted service for customers.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=47http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4745 DSB AnnuAl RepoRt 2009 / cultuRe, ReputAtion AnD ReSponSiBility / S-train stations of the future S-tog will take a closer look at its stations to ensure that these are a part of the near environment, that they are used in a better way and meet customer requirements. The project is named “The Station of the Future”. Two killed following an accident A tragic accident at Tølløse in which a train hit a lorry at a crossing caused the death of trainee engine driver Ronnie Aarup Zakrisen. The driver of the lorry also died from his injuries. DSB wins climate award “DSB is the winner because the company operates a strategy in which climate change drives its actions and shows commitment and willingness to influence customer attitudes,” was the reason given for awarding DSB the Climate Cup 2009 Strategy Prize. DSB’s vehicles become greener DSB sold its car fleet and instead leases new vehicles to enhance safety, the environment and DSB’s bottom line. New double-decker carriages for Zealand DSB received a further 45 new doubledecker carriages to replace the majority of the blue Bn carriages in Zealand. July August September october november December What a party… Thousands of DSB employees partied in Nyborg where a huge marquee set the scene for two DSB LIVE parties. + more cares for commuters DSB launched the advantage programme + more for commuters. The programme helps commuters save time and money and enables DSB to get to know its customers better. Electric vehicles become part of the train journey In a partnership with the company Better Place, DSB will combine the train with electric vehicles and provide Danes with green transport from door-to-door. The two companies have signed a partnership for green and sustainable passenger transport for Danes. DSB and COP15 DSB serviced thousands of foreign customers during the united Nations Climate Summit COP15 in Copenhagen. DSB wins new contract in Sweden For the fourth time, DSB celebrated a winning bid in Sweden when the company won the tender for regional train traffic in the Jönköping area. With the latest success, DSB has consolidated its position as Scandinavia’s most successful train operator. DKK 1 billion for new parking areas Together with the Ministry of Transport, DSB has decided to significantly extend parking facilities for bicycles and cars at train stations for the benefit of DSB, its customers and the environment. The total investment will be around DKK 1 billion until 2020.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=48http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4846 CORPORATE GOVERNANCE Legislation DSB is an independent public company and consequently wholly owned by the Danish state. The Danish Minister of Transport undertakes the role of DSB’s owner. The state’s ownership must be executed with due regard for the Board of Directors and the Executive Board’s decision-making authority. DSB’s Board of Directors oversees the company’s results, management and organisation on behalf of the Minister of Transport while the Executive Board is responsible for day-to-day operations. Like other companies that are wholly or partly owned by the state, DSB is subject to the Public Limited Companies Act and the Financial Statements Act. In addition, the Act on Ministerial Responsibility, the Act on the Independent Public Corporation DSB and on DSB Stog A/S and other relevant legislation form the legal framework for the overseeing and management of DSB. DSB’s objectives, management and tasks are regulated by The DSB Act. With regard to financial reporting, DSB is subject to the Financial Statements Act, Danish accounting guidelines and the DSB Act. In addition, DSB must prepare annual accounts for business areas subject to the accounting regulations applying to DSB and, in relation to this, competitive legal conditions for DSB. The Act, the Articles of Association, the Board of Directors’ rules of procedure and the Executive Board’s brief reflect DSB’s responsibility as a state-owned company to exercise corporate governance in all respects. Recommendations Considerable attention has been given to corporate governance, including through the work of the Committee for Corporate Governance. In August 2005, this resulted in a number of recommendations which were adopted by the Copenhagen Stock Exchange in October 2005 as “Recommendations for Corporate Governance 2005” (revised in February 2008). The recommendations specify that it is just as legitimate to explain as to follow a specific recommendation (“follow – or – explain” principle) as the most important aim is to create transparency in corporate management. In December 2009, the Committee for Corporate Governance submitted new recommendations for comment. DSB will monitor developments and take appropriate action if the new recommendations are deemed to be relevant. The State has also worked with Corporate Governance, with some ministries publishing the State as Shareholder report in 2004. The report puts forward recommendations for the exercise of ownership and Corporate Governance in state-owned companies. DSB closely monitors the Government’s work with regard to competition in the rail sector, including the extent to which a potential decision to convert DSB to a limited company with the state as the main shareholder would affect DSB’s current work on corporate governance. DSB strives to ensure that the company’s objectives as well as its general principles and structures that regulate the interaction between the owner, management bodies and the company’s other stakeholders comply with the recommendations for Corporate Governance at any given time. DSB provides information about attitudes and activities relating to Corporate Governance in its Annual Report and on its website. Communication DSB’s aim is to make communication between the Company and its stakeholders (owner, customers and partners) as easy and efficient as possible. using the internet for communication is an integral part of this. DSB follows approved and published corporate communication policies which set out detailed guidelines for DSB’s internal and external communication. The communications policy also covers DSB’s values and, through this, sets out the framework for the company’s communications with internal and external stakeholders. The Annual Meeting The company’s supreme body, the Annual Meeting, is comparable to the general meeting of limited companies. The Minister of Transport can be compared to a sole shareholder and exercises authority at the Annual Meeting similar to th2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=49http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=4947 DSB AnnuAl RepoRt 2009 / coRpoRAte AFFAiRS / Articles of Association can only be changed by the Minister of Transport following discussions with the Board of Directors. Changes to the Articles of Association must be formally approved at the Annual Meeting. In addition to the Annual Report, which is adopted at the Ordinary Annual Meeting before the end of April, accounts for the corporation’s primary business areas are presented in accordance with the Accounting Regulations. These are subject to the Competition Law Guidelines. The Board of Directors DSB is governed by a Board of Directors consisting of nine members. Six, including the Chairman and Vice Chairman, are appointed by the Minister of Transport. The Chairman cannot perform tasks for DSB that are not a natural part of the Chairman’s responsibilities. An exception can be made in the case of individual tasks that the Chairman is asked to perform by and on behalf of the Board of Directors. Board members are elected for a period of two years. Board members can be re-elected. The Minister of Transport may remove directors appointed by him at any time. Directors appointed by the Minister must be selected from a broad social, managerial and business background so that the Board of Directors as a whole has experience with transport issues. Public servants, who are subject to ministerial authority, cannot be members of the Board in this connection, DSB’s status equals that of a state-owned company. In keeping with the provisions of the Public Limited Companies Act concerning election of employee representatives, the employees elect three members to the Board. The Chairmanship The Minister of Transport appoints the Chairman and Vice Chairman at the Annual Meeting. The Chairman and the Vice Chairman constitute the company’s chairmanship. As is also the case with other directors elected at the Annual Meeting the Chairman and the Vice Chairman cannot be employees of the company. The Chairmanship’s duties are governed by the rules of procedure of the Board of Directors. The functions of the Board of Directors The Board of Directors employs and dismisses the corporation’s Executive Board and determines the terms of the Executive Board’s employment. The Board ensures that the Executive Board regularly submits financial information, budgets and other important information relevant to the development of the corporation and its subsidiaries. The Board reviews the quarterly accounts and budgets and any deviations. During the year, the Board of Directors addresses the following issues: ƒ An examination of the Annual Report and the preliminary statement of accounts. ƒ At least once annually, the Board of Directors considers whether DSB’s organisation, including, in particular, the structure of DSB’s accountingfunctions, internal controls and IT system, is reliable, and whether control procedures are in place to safeguard against misuse. ƒ Once a year the Board of Directors submits a proposal to the Minister of Transport concerning the appointment of the state authorised public accountant at the Annual Meeting. ƒ Each quarter the Board of Directors reviews the quarterly accounts for the preceding quarter. ƒ Once a year the Board of Directors reviews the DSB Group’s insurance cover, including the extent to which the insurance cover is provided in accordance with the insurance policy laid down by the Board of Directors. ƒ Once a year the budget for the coming year and a budget forecast for the subsequent two financial years are approved. ƒ Each quarter a report is prepared, which as a minimum covers DSB’s liquidity, financing issues, passenger development, punctuality and other relevant quality targets, important transactions, cash flows and special risks. Board meetings A minimum of four board meetings must be held per year. In 2009, five ordinary and four extraordinary board meetings were held. Five ordinary board meetings are planned for 2010. In conjunction with one of the year’s board 2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=50http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=5048 CORPORATE GOVERNANCE accounting complies with relevant legislation and that DSB’s asset management is carried out satisfactorily. The Board of Directors determines the guidelines under which the Executive Board operates, including guidelines for the allocation of tasks between the Board of Directors and the Executive Board and the Executive Board’s competence with regard to financial issues. The instructions are submitted to the Minister of Transport for approval. The Executive Board’s salary, bonuses and other terms are set out in Note 6 in the annual accounts. Members of the Executive Board may not undertake other duties which do not promote the company’s interests without prior agreement of the Board of Directors. Briefing the Minister of Transport The Chairman and Vice Chairman are obliged to brief the Minister of Transport on matters of material importance. For instance, such briefings take place at quarterly meetings where the Minister is briefed on developments which may be of material financial or political importance. In addition, the Minister is briefed on the company’s and its affiliated companies’ insurance cover, including the extent of any excess for the individual insurance policies. Moreover, the Minister of Transport is presented with the annual accounts for business areas prepared in accordance with the Competition Law Guidelines. Investments The DSB Act and DBS’s Articles of Association stipulate that if DSB or DSB’s affiliated companies wish to make investments in excess of DKK 100 million, this must be submitted to the Parliamentary Finance Committee for approval. The limit is set out in the company’s Articles of Association and can be changed following approval by the Finance Committee. DSB’s foreign operations are regulated in accordance with article 5 of the Articles of Association. Loans The framework for the company’s and its affiliated companies’ raising of loans for operational as well as investment purposes is, in accordance with the DSB Act, determined by the Minister of Transport. The framework for loans for investment purposes must be approved by the Finance Committee. The current framework for loans for operational purposes and the principles for raising loans for investment purposes are set out in the Articles of Association. Auditing As stipulated in the Financial Statements Act, DSB’s annual accounts are audited by a state authorised public accountant and by the Office of the Auditor General of Denmark. The state authorised public accountant is appointed by the Minister of Transport at the Annual Meeting following a recommendation by the Board of Directors. The appointment is for one year at a time and reappointment is possible. Furthermore, the Office of the Auditor General of Denmark and the state authorised public accountant audit DSB’s accounts in accordance with the regulations in the Act on the Audit of State Accounts, etc. On presentation of the annual accounts, the state authorised public accountant must declare whether the requirements in the Accounting Regulations and the Competition Law Guidelines have been complied with. DSB also has an internal auditing department, which also covers DSB’s Danish affiliated companies. The Internal Chief Auditor reports directly to the Board of Directors.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=51http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=5149 DSB AnnuAl RepoRt 2009 / coRpoRAte AFFAiRS / Announcements sent to the Danish commerce and companies Agency 31.03.2009 14.04.2009 27.05.2009 28.05.2009 26.06.2009 27.08.2009 28.08.2009 09.11.2009 27.11.2009 01.12.2009 Announcement of the Financial Results for 2008 notice of DSB Annual Meeting Announcement concerning major contract Filing of quarterly accounts Filing of minutes of Annual Meeting Filing of interim Report Announcement concerning change to company’s activities Announcement concerning major contract Filing of quarterly accounts Announcement concerning change to company’s activities Financial calendar 2010 and DSB’s publications 27.04.2010 DSB Annual Meeting Expected filing of quarterly reports 27.05.2010 1st quarter 27.08.2010 interim report 29.11.2010 3rd quarter Announcement of the Financial Results for 2009 and the Annual Report for 2009 can be downloaded at www.dsb.dk2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=52http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=5250 RISKS Market conditions Market structure The passenger transport market is influenced by a range of factors. Rising energy prices, increased focus on the railways’ environmental and climate benefits and road congestion all contribute towards attracting more passengers. The same applies to easy access to stations, good parking facilities and getting to and from stations conveniently and easily. By contrast, rising car ownership, easy access to roads and general parking conditions in major cities all impact negatively on passenger numbers. General economic trends, including employment levels, also impact on passenger volumes. The past two years’ economic slowdown has, in DSB’s view, had an adverse effect on the passenger transport market. At the same time, however, we expect economic trends to give rise to stronger demand for public transport to the detriment of motor traffic. We do not expect future passenger transport to be significantly affected by the current economic conditions. Moreover, the authorities influence the market through taxes, levies and subsidies which all affect the transport sector. Adjustments to bridge tolls and changes in operating conditions for alternative means of transport such as domestic flights and bus transport also impact on the railways. The quality of the public transport system in general is also important to DSB. Consequently, DSB regards its relations with bus operators and the metro as a partnership in which the different transport operators complement each other. Travel cards The majority of Denmark’s transport operators have participated in the development of an electronic travel card which will replace the current ticket and card systems. undertaken by Rejsekort A/S, which is owned by the transport operators, the system affects central aspects of the companies’ activities and is regarded as an important upgrading of the overall ticket system. Significant delays will, therefore, affect the companies that maintain and operate the current systems. The project has been somewhat delayed and discussions between the supplier and Rejsekort A/S are ongoing. As the number of customers currently totals 1,300, the card has not been extensively launched. Moreover, the system’s software has not yet been fully developed, but is expected to be ready for a nationwide roll-out in August 2011. According to plan, the travel card will be in use in Southern and Western Zealand and tested in Northern Jutland during 2010. The plan envisages that the travel card will become operational in Greater Copenhagen, Northern Jutland and Southern Jutland and – we expect – at DSB’s stations in other parts of Denmark in 2011. DSB is monitoring the project closely. Prices and adjustments Since 2007, the setting of fares in the Greater Copenhagen area and in the rest of Denmark has been shared between the transport operators. however, in Greater Copenhagen and elsewhere a common fare system will be in force. By agreement between the parties, new fares have been set for 2010. The division of responsibility imposes particular requirements with regard to co-operation between the transport companies in the Greater Copenhagen area. Within this context, negotiations are proceeding between the transport operators with regard to the basis for revenue allocation in the Greater Copenhagen area. These discussions concern passenger numbers in the area in question. The parties have reached agreement on the revenue apportionment for the years 2005-2007. Negotiations for the years 2008 and 2009 have not yet been finalised and there are some uncertainties with regard to how the outcome and the consequences of these negotiations will impact on future revenue sharing. Transport contracts DSB is the leading player within the passenger transport segment in Denmark. Measured in terms of passenger revenues, DSB accounts for more than 50 per cent of services. The Ministry of Transport has signed two ten year contracts with DSB for the provision2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=53http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=5351 DSB AnnuAl RepoRt 2009 / coRpoRAte AFFAiRS / vices (excluding long-distance transport and S-train transport) will be put up for public tender. In 2007, DSB and its partner, FirstGroup plc, won the tender for the Coast line with operations commencing in January 2009. In 2008, the Central and West Jutland section was put up for tender with operations commencing in mid-December 2010. DSB bid for the line, but did not win. A tender for the Lillesyd line is planned for the autumn 2010. DSB is equally committed to winning tenders at home and abroad as this contributes positively to the development of DSB’s business – both in Denmark and internationally. Cases before the European Commission The two complaints lodged with the Eu Commission several years ago, in which the Danish Government was accused of extending illegal state subsidies to DSB, were settled on February 24, 2010. One concerned a complaint from the Gråhundbus company about the contracts between the Ministry of Transport and DSB concerning rail services between Copenhagen and ystad (“IC Bornholm”). The other case originated from a complaint from the industry association, Dansk Kollektiv Trafik DKT (Danish Public Transport) that claimed that DSB received excessive payments from the Ministry of Transport in connection with transport contracts. The Commission which considered the two complaints together determined that, in fact, DSB has received state subsidies, but that this does not amount to a contravention of the relevant state subsidy regulations and therefore, the subsidies were not illegal. The Commission also points out that a so-called “claw back clause” should be introduced into the Government’s transport contracts with DSB. In this way, the Government will be able to reclaim payments if the contracts result in an excessive contribution margin for DSB during the contract period. While the detailed content of the “claw back clause” has yet to be determined, it is expected to contain the necessary incentives for DSB to maintain focus on customer growth and efficiency measures. DSB is of the opinion that, following the Commission’s decision, there is no reimbursement obligation as a result of over compensation. It is uncertain whether the complainants intend to appeal against the Commission’s decision to the European Court. The fact that the Commission agrees with the Danish Government that the subsidies to date do not constitute illegal state subsidies means that there is now less risk that the Court might take the opposite view. The structure of the rail sector DSB is a key player in the Danish railway sector and, in addition to transporting the majority of rail tra- vellers, is responsible for the ownership of stations, rolling stock etc. In September 2009, the Ministry of Transport published its discussion paper “A Railway in Growth” in which the Ministry presents its proposals for a number of key issues and guidelines for the development of the rail sector. These are aimed at enhancing customer focus and increasing the railway sector’s market share. Based on this, the Ministry of Transport has initiated a project which, with the participation of DSB, aims at developing an overall strategy for the railway’s future structure. The Government is expected to present its strategy for the railways’ future structure during the autumn 2010. Environment Changing environmental requirements for DSB’s rolling stock and other activities can incur significant costs with regard to e.g. the installation of remedial equipment for the rolling stock. DSB continually strives to comply with prevailing legislation and regulations and has an ambitious environment and climate strategy in place, comprising a number of objectives, to reduce DSB’s environmental and climate impact. One important issue relates to soil pollution and the cleaning of polluted soil. Each year, DSB pays out substantial amounts for cleaning polluted soil and information on polluted land is registered in DSB’s G2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=54http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=5452 RISKS better DSB’s image, the more attractive it is to work for DSB and DSB wishes to continue to attract wellqualified employees. DSB invests time as well as money in maintaining a good working environment. As a result, more than half DSB’s employees work at working environment accredited sites. The ambition is for most of DSB’s units to be certified by the end of 2010 with the remaining units certified before the end of 2011. DSB works continuously at providing the best possible framework to enable its employees to combine their working and private lives successfully. DSB operates a pro-active health promotion programme which includes helping employees to stop smoking, free health checks, dietary advice and free fitness centres. Efficiency measures As part of the Point2010 strategic programme, in 2009, DSB organised several efficiency programmes designed to optimise the business and free up resources to improve customer-focus. As a result, 200 employees from staff and administrative functions were made redundant in January 2009. The years ahead will also see ongoing adjustments to DSB’s organisation in line with market requirements. cordance with their importance to DSB’s operations and secured by back-up and contingency plans. Operational factors Train deliveries DSB has signed contracts with AnsaldoBreda for the delivery of IC4 and IC2 train sets. In May 2009, DSB agreed a settlement with AnsaldoBreda as a result of which AnsaldoBreda will deliver the train sets in a specified configuration. DSB will subsequently upgrade and quality guarantee the train sets. With the settlement, a new timetable has been agreed for the delivery date and the consequences of not complying with this involve cancellation access and fines. Quality Good infrastructure is key pre-requisite for DSB supplying punctual trains – tracks, points, signals and catenary systems. Responsibility for the infrastructure lies with Rail Net Denmark, DSB’s main supplier, with whom DSB has signed an operator contract which sets out DSB’s use of the infrastructure, including agreed track quality. DSB has a direct influence on rolling stock. One of DSB’s most important priority areas is quality management and improved procedures with a view to minimising the number of delays and cancellations. DSB prepares statements of delays and cancellations and benchmarks have been set with a view to reducing the number of delays/cancellations. Since October 1, 2006, a travel guarantee has been in place under which customers who experience delays receive compensation. In January 2007, this scheme was extended to cover commuters who travel at fixed times. IT security IT plays a crucial role in DSB’s day-to-day operations and the execution of its train services. Threats such as hacking and the like are of increasing importance and give rise to risk as IT is increasingly used throughout DSB’s business areas and Group companies - both internally and in relation to our customers. DSB’s IT management continually monitors current risk scenarios and has appropriate contingency measures in place to counter the rising number of known and new risks. Central installations are protected against power cuts, fire and other accidents and the IT operations centre is duplicated. There is ongoing focus on avoiding situations where unauthorised persons can gain access to DSB’s data and IT systems. These, therefore, are protected by several control systems. Safeguarding against such risks does not merely depend on a central effort, but also rests on the individual employee’s due care. All DSB employees are informed about DSB’s IT security policy as described at DSB’s intranet to ensure the appropriate use of IT systems on a day-to-day basis. IT applications are operated and managed in accordance with special measures and qualified in ac- Internal controls and risk management DSB’s risk management and internal controls with regard to financial reporting are designed to achieve: ƒ financial reporti2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=55http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=5553 DSB AnnuAl RepoRt 2009 / coRpoRAte AFFAiRS / gislation and other regulations. There is, however, always a risk of a misuse of assets as well as errors and deficiencies in connection with financial reporting. Internal controls and risk management systems can only provide reasonable, not absolute, certainty that material errors and deficiencies are discovered and corrected. DSB’s Board of Directors and Executive Board continually evaluate key risks and internal controls in connection with the company’s activities and their possible impact on financial reporting. Internal controls and the risk management systems also comprise data given in the Annual Report regarding social and environmental issues. The internal controls and risk management systems are divided into the main areas below, which each describe the elements that support the overall control and risk environment. Control environment DSB’s Board of Directors and Executive Board are composed of individuals who, between them, possess the relevant skills for financial reporting in terms of risk management and internal control assessment. At least once a year, the Board of Directors assesses DSB’s organisational structure and the staffing of key areas – including areas concerned with the financial reporting process, including IT, taxes and levies. Every year, the Board approves DSB’s insurance and financial policies and the Executive Board approves other policies and procedures. The functions responsible issue guidelines and supervise the execution of policies and procedures. Systems have been put in place that, wherever relevant, ensure the appropriate segregation of the function. The organisational structure and the internal guidelines form the control environment. Risk assessment DSB’s Board of Directors and Executive Board carry out ongoing assessments of the risks to which the company is subject - including risks that may impact on the financial reporting process. The company’s internal audit carries out independent reviews whose aim is to evaluate and propose improvements to the efficiency of the internal control. The reviews primarily relate to accounting items that are based on estimates or generated by complex processes. Control activities The aim of the control activities is to ensure that the objectives, policies, manuals, procedures etc, laid down by the management are met and to prevent, reveal and amend errors or irregularities. These activities are integrated into DSB’s accounting and reporting procedures and comprise, for example, procedures for attestation, authorisation, approval, reconciliation, result analysis, the separation of incompatible functions, controls relating to IT applications and IT controls in general. Procedures have been set up to ensure that DSB complies with relevant legislation and other regulations regarding financial reporting at any given time. Information and communication DSB operates information and communication systems that ensure that financial reporting is correct and complete. The company’s accounting rules and procedures for financial reporting are laid down in DSB’s Accounting Manual. The Accounting Manual and other reporting instructions, including budgetary and month-end procedures - are updated whenever necessary and reviewed regularly. These, together with descriptions of business procedures etc. relevant to the internal controls relating to financial reporting, are available to all employees on DSB’s intranet. Supervision DSB employs a comprehensive financial management system to monitor the company’s results. This enables us to discover and correct any errors or irregularities in financial reporting at an early stage, including identified weaknesses in the internal controls and a failure to comply with procedures and policies etc. Compliance with defined guidelines is monitored on an ongoing basis. Reporting from individual director’s areas of responsibility and the affiliated companies is, therefore, checked on an2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=56http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=5654 RISKS “near misses”. Circumstances are analysed and causes identified. A thorough understanding of the causes of incidents is a pre-condition for ensuring effective prevention of injury to passengers, employees and damage to rolling stock. The safety-related information gathered from supervision or reports is registered and analysed to ascertain whether existing regulations, processes and technical conditions can be improved to ensure an even more secure train operation. Contingency In the event of disruption to operations, comprehensive contingency measures have been put in place to ensure the safety of employees and customers - on trains as well as at stations. DSB also work closely together with government and local council authorities and other transport operators on the handling of crisis situations. Contingency measures were tested at Storebælt, Øresund and at Nørreport Station in 2009. Terror prevention DSB’s terror prevention activities are managed on the basis of a terror prevention catalogue aimed at protecting and preventing terror actions directed at DSB. Adjustments to DSB’s terror prevention policies and activities are based on evaluations by the Police Intelligence Service, PET. DSB is party to a formalised partnership with PET and other relevant organisations. The Group’s risks are consolidated and hedged centrally within the areas of interest rates, foreign currency and energy risk. DSB continually employs financial instruments to limit financial risk and its impact on the accounts. Interest rate risks Interest rate risks arise in connection with interestbearing assets and liabilities. Interest rate fluctuations have an impact on DSB’s balance sheet and net financials. The interest rate risk is managed through a duration target which gives the typical interest rate guarantee on the loan portfolio. The aim is to achieve a duration target of 3-7 years. DSB’s financial policy stipulates that at least 33 per cent of the loan portfolio must be fixed rate. however, at least 50 per cent of the loan portfolio must be hedged by fixed interest or interest rate caps. Foreign exchange risks Exchange rate fluctuations primarily impact on net financials because of loans raised in international markets. The effect of foreign exchange fluctuations on operations and net financials is hedged by/ through forward foreign exchange contracts within the year. Loans raised in currencies other than DKK and EuR are converted to DKK through currency swaps at the time of borrowing. Foreign exchange risks relating to investments in foreign affiliated companies are hedged to the extent deemed expedient. Energy risks (oil and electricity) Part of the future oil procurement is hedged in order to minimise short-term price fluctuations. hedging can be undertaken for periods of several years. To reduce seasonal price fluctuations, certain purchasing agreements have been entered into in respect of electricity prices. Credit risks Credit risks relating to financial instruments are calculated on the basis of net market values. Credit risks arise, for instance, in connection with swaps. The Group has no significant concentration of credit risks as maximum limits for exposure to individual counterparts have been set. Moreover, DSB requires a satisfactory credit rating from Moody’s and Standard & Poors. Liquidity risks As part of the Group’s ongoing financing of operations, DSB ensures sufficient liquidity corresponding to six months’ liquidity requirements. The liquidity stand-by primarily consists of confirmed bank facilities and short-term deposits in banks. Financial matters The financial policy approved by the Board of Directors sets the framework for DSB’s financial management. The policy defines the acceptable risk profile and the financial instruments that can be used for hedging and the counterparties with whom DSB can enter into contracts. The aim of the financial policy is to limit any shortterm negative effects on earnings and cash flo2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=57http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=57552010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=58http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=58562010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=59http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=5957 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / MANAGEMENT STATEMENT & AuDITORS’ REPORTS Management statement The Board of Directors and the Executive Board have today discussed and adopted DSB’s Annual Report for 2009. The Annual Report is presented in accordance with the Danish Financial Statements Act, Danish Accounting Standards and the Act on the Independent Public Company DSB and on DSB S-tog A/S. We consider the accounting policies applied to be appropriate. Accordingly, the Annual Report gives a true and fair view of the Group and company’s assets, liabilities and financial position at 31 December 2009 and the results of the Group and parent company’s activities and cash flows of the group for the financial year January 1 to December 31, 2009. It is also our view that the Management Report contains a well-founded assessment of the developments in the Group and parent company’s activities and financial conditions, the annual result and the Group and parent company’s financial position in general and a description of the most important risks and uncertainty factors to which the Group and the parent company are subject. The Annual Report is presented for approval at the Annual Meeting. copenhagen, 24 March 2009 Executive Board Søren Eriksen CEO Board of Directors Mogens Granborg Chairman Steen Gede Vice Chairman Gunhild Lange Skovgaard Annette Sadolin Lilian Mogensen Lars Andersen ulrik Salmonsen Andreas hasle Flemming Rasmussen2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=60http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6058 MANAGEMENT STATEMENT & AuDITORS’ REPORTS To the Board of Directors We have audited the consolidated and annual accounts for the Independent Public Company DSB for the financial year January 1 to December 31, 2009, pages 1 and pages 64-98. The consolidated and annual accounts comprise the accounting policies, the profit and loss account, the balance sheet, the equity statement and notes for the Group and for the parent company and the consolidated cash flow for the Group. The consolidated and annual accounts have been presented in accordance with the Danish Financial Statements Act’s provisions for Class D Companies, Danish Accounting Standards and the Act on the Independent Public Company DSB and on DSB S-tog A/S. The Board of Directors’ and Executive Board’s responsibility The Board of Directors and the Executive Board are responsible for preparing and presenting consolidated and annual accounts that give a true and fair view in accordance with Danish Financial Statements Act’ provisions for Class D Companies, Danish Accounting Standards and the Act on the Independent Public Company DSB and on DSB S-tog A/S. Such responsibility comprises the design, implementation and maintenance of internal controls relevant to preparing and presenting consolidated and annual accounts which give a true and fair view free of material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. The Board of Directors and the Executive Board are also responsible for preparing a management report that gives a well-founded assessment in accordance with Danish disclosure requirements in the Danish Financial Statements Act and the Act on the Independent Public Company DSB and on DSB S-tog A/S. Auditor’s responsibility and basis of opinion Our responsibility is to express an opinion on the consolidated and annual accounts on the basis of our audit. We have conducted our audit in accordance with Danish Auditing Standards. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the consolidated and annual accounts are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the consolidated and annual accounts. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement in the consolidated and annual accounts whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the company’s preparation and fair presentation of the consolidated and annual accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and Executive Board, as well as evaluating the overall presentation of the consolidated and annual accounts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Our audit did not result in any qualification.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=61http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6159 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Opinion In our opinion, the consolidated and annual accounts give a true and fair view of the Group’s and parent company’s assets, liabilities and financial position at December 31, 2009 and of the results of the Group’s and parent company’s operations and consolidated cash flows for the financial year January 1 - December 31, 2009 in accordance with the Danish Financial Statements Act’s provisions for Class D companies, Danish Accounting Standards and the Act on the Independent Public Company DSB and on DSB S-tog A/S. Statement on the Management’s Report The audit has not covered the Management’s Report, but in accordance with the Danish Financial Statements Act, we have read through the Management Report in the Annual Report. We have not taken any further action beyond the audit of the consolidated and annual accounts. It is on the basis of this that we believe that the information contained in the Management’s Report is in accordance with the Consolidated and Annual Accounts. copenhagen, March 24, 2010 INTERNAL AuDIT Michael Ravbjerg Lundgaard Group Internal Auditor2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=62http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6260 ThE INDEPENDENT AuDITORS’ REPORT To the Minister of Transport We have audited the consolidated and annual accounts for the Independent Public Company DSB for the financial year January 1 to December 31, 2009, page 1 and pages 64-98. The consolidated and annual accounts comprise the accounting policies, the profit and loss account, the balance sheet, the equity statement and notes for the Group and for the parent company and the consolidated cash flow for the Group. The consolidated and annual accounts have been presented in accordance with the Danish Financial Statements Act’s provisions for Class D Companies, Danish Accounting Standards and the Act on the Independent Public Company DSB and on DSB S-tog A/S. The Board of Directors’ and Executive Board’s responsibility The Board of Directors and the Executive Board are responsible for preparing and presenting consolidated and annual accounts that give a true and fair view in accordance with Danish Financial Statements Act’ provisions for Class D Companies, Danish Accounting Standards and the Act on the Independent Public Company Company DSB and on DSB S-tog A/S. Such responsibility comprises the design, implementation and maintenance of internal controls relevant to preparing and presenting consolidated and annual accounts which give a true and fair view free of material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. The Board of Directors and the Executive Board are also responsible for preparing a management report that gives a well-founded assessment in accordance with Danish disclosure requirements in the Danish Financial Statements Act and the Act on the Independent Public Company DSB and on DSB S-tog A/S. In addition, it is the management’s responsibility that the operations covered by the consolidated and annual accounts comply with the Transport Contract, legislation and other rules and regulations as well as with current agreements and usual practice. Auditor’s responsibility and basis of opinion Our responsibility is to express an opinion on the consolidated and annual accounts on the basis of our audit. We have conducted our audit in accordance with Danish Auditing Standards. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the consolidated and annual accounts are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the consolidated and annual accounts. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement in the consolidated and annual accounts whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the company’s preparation and fair presentation of the consolidated and annual accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and Executive Board, as well as evaluating the overall presentation of the consolidated and annual accounts. The audit also comprises an assessment of whether operations covered by the consolidated and annual accounts are in accordance with2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=63http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6361 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / the Transport Contracts, legislation and other rules and regulations as well as with current agreements and usual practice. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Our audit did not result in any qualification. Opinion In our opinion, the consolidated and annual accounts give a true and fair view of the Group and parent company’s assets, liabilities and financial position at December 31, 2009 and of the results of the Group and parent company’s operations and consolidated cash flows for the financial year January 1 - December 31, 2009 in accordance with the Danish Financial Statements Act’s provisions for Class D companies, Danish Accounting Standards and the Act on the Independent Public Company DSB and on DSB S-tog A/S. It is also our opinion that the operations covered by the consolidated and annual accounts are in accordance with the Transport Contracts, legislation and other rules and regulations as well as with current agreements and usual practice. Statement on the Management’s Report The audit has not covered the Management’s Report, but in accordance with the Danish Financial Statements Act, we have read through the Management Report in the Annual Report. We have not taken any further action beyond the audit of the consolidated and annual accounts. It is on the basis of this that we believe that the information contained in the Management’s Report is in accordance with the Consolidated and Annual Accounts. copenhagen, March 24, 2010 KPMG Statsautoriseret Revisionspartnerselskab The National Audit Office of Denmark Kurt Gimsing State Authorised Public Accountant Torben Bender State Authorised Public Accountant henrik Otbo Auditor General Anne Aagaard head of Office2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=64http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6462 ThE INDEPENDENT AuDITORS’ REPORT STATEMENT REGARDING ThE MANAGEMENT AuDIT To the Minister of Transport Statement on the Management Audit carried out In connection with the financial audit of DSB’s consolidated and annual accounts for 2009, we have carried out an assessment of the parent company DSB as to the extent to which proper financial consideration has been taken in respect of DSB’s administration of selected areas and whether the information given in the annual report with regard to targets and results has been documented and is adequate for the parent company, DSB’s activities in 2009. Management’s responsibility for administration DSB’s management is responsible for establishing guidelines and procedures that ensure that appropriate financial consideration is taken in respect of DSB’s administration and that the information in the annual report with regard to targets and results has been documented and is adequate for the parent company, DSB’s activities in 2009. The auditors’ responsibility and the Management Audit In accordance with generally accepted public auditing standards, c.f. the Act on the Audit of State accounts etc., we have, for selected administrative areas, examined whether DSB has established business procedures that, to the greatest possible extent, ensure financially expedient administration. Moreover, we have random checked the information contained in the report concerning targets and results for the parent company DSB. Our work has been conducted with a view to achieving limited security that the administration of the selected areas has been carried out in a financially sound way and that the information in the Annual Report concerning the achievement of the profit targets has been documented and is adequate for the parent company DSB’s activities in 2009. Opinion During the Management Audit, we have not become aware of any issues that give us reason to conclude that the Management Audit in 2009 in the areas we examined have not been conducted in a financially sound way or that the information in the report concerning targets and results has not been documented and is adequate for the parent company DSB’s activities in 2009. copenhagen, March 24, 2010 KPMG Statsautoriseret Revisionspartnerselskab The Office of the Auditor General of Denmark Kurt Gimsing State Authorised Public Accountant Torben Bender State Authorised Public Accountant henrik Otbo Auditor General Anne Aagaard head of Office2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=65http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=65632010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=66http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6664 ACCOuNTING POLICIES The Annual Report for the Independent Public Company DSB was prepared in accordance with the provisions of the Danish Financial Statements Act for Class D companies, Danish Accounting Standards and the Act on the Independent Public Company DSB and on DSB S-tog A/S. The Annual Report has been prepared in accordance with the same accounting policies as the annual report for 2008. Reclassifications As a result of an amendment to the Danish Financial Statements Act adopted in 2008, recognition of the share of results of affiliated and associated companies has been changed in the profit and loss account. The company’s share of results in affiliated and associated companies has until now been recognised in two items in the profit and loss account divided into profit before tax under net financials and the tax on this under Tax on the profit for the year. In future, the share of results in affiliated and associated companies will be recognised in one line under Net financials as Profit after tax. Currency swap agreements entered into for hedging the Group’s long-term debt obligations are reclassified so that they follow the classification of the hedged loans. Previously, all currency swaps were included under Other receivables and Other liabilities. The reclassifications have no effect on the assets, liabilities, equity, result or cash flow. A restatement of comparative figures and the five year financial highlights has been carried out. General comments on recognition and measurement Assets are recognised in the balance sheet when it is probable that future economic benefits will accrue to the Group and the value of the assets can be reliably measured. Liabilities are recognised in the balance sheet when, as a result of a past event, a legal or actual obligation exists and it is probable that future economic benefits will flow from the Group and the value of the liability can be reliably measured. Initial recognition of assets and liabilities is made at cost. Subsequently, assets and liabilities are measured as described below for each individual item. Certain financial assets and liabilities are measured at amortised cost implying the recognition of a constant effective interest rate to maturity. Amortised cost is calculated as the initial cost minus any principal repayments and plus/minus the cumulative amortisation of any difference between cost and nominal amount. In recognising and measuring assets and liabilities, any gains, losses and risks occurring prior to the presentation of the annual report that evidence conditions existing at the balance sheet date are taken into account. Income is recognised in the profit and loss account as earned, including value adjustments of financial assets and liabilities measured at fair value or amortised cost. Equally, costs incurred to generate the year’s earnings are recognised, including depreciation, amortisation, write-downs and provisions as well as reversals as a result of changes in accounting estimates. Consolidated annual accounts The consolidated annual accounts comprise the parent corporation DSB and the affiliated companies in which the DSB Group controls more than 50 per cent of the voting rights. Companies that are not affiliated companies, but in which the DSB Group holds 20 per cent or more of the voting rights and exercises a significant influence on the operational and financial management of these companies are associate companies. The consolidated annual accounts are prepared on the basis of the annual accounts for DSB and the affiliated companies by combining accounting items of a similar nature and subsequently eliminating intragroup income and expenses, intra-group balances and dividends and profits and losses on transactions. Acquisitions of new companies are accounted for using the purchase method, according to which the identifiable assets and liabilities newly acquired are measured at their fair values at the date of acquisition. Provision i2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=67http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6765 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / companies. The tax effect of the restatement of assets and liabilities is taken into account. Any excess of the cost of the acquisition over the fair value of the identifiable assets and liabilities acquired (goodwill), including restructuring provisions, is recognised as intangible assets and amortised on a systematic basis in the profit and loss account based on an individual assessment of the useful life of the asset, not exceeding 20 years. Any excess of the fair values of the identifiable assets and liabilities acquired over the cost of the acquisition (negative goodwill), representing an anticipated adverse development in the acquired companies, is recognised in the balance sheet as provisions and recognised in the profit and loss account as the losses or costs are realised or transferred to Other provisions as the provisions become identifiable and can be reliably stated. Goodwill and negative goodwill from acquired companies can be adjusted until the end of the year after the acquisition. DSB’s investments in affiliated companies are offset by the affiliated companies’ net asset value at the time of acquisition (the past equity-method). The affiliated companies’ accounts used for consolidation are prepared in accordance with the Group’s accounting policies. Investments in associated companies are measured according to the equity method at the Group’s share of the equity of the company. Intra-group profits and losses are eliminated proportionally. The proportionate shares of the associated companies’ profits/losses after tax are included in the profit and loss account. Newly acquired companies are included in the consolidated annual accounts with effect from the time of acquisition and companies sold or divested are included until the time of divestment or date of settlement. Comparative figures are not restated for newly acquired, sold or divested companies or activities. Gains or losses related to the sale or closure of affiliated and associate companies are stated as the difference between the sales price or settlement price and the carrying value of net assets at the time of sale, including non-amortised goodwill and expected costs of sale or closure. The affiliated companies’ accounting items are fully recognised. Minority interests’ proportional share of the affiliated companies’ profit and equity is stated as separate items under the Profit and Loss account and Balance Sheet. Foreign currency translation Transactions denominated in foreign currencies are translated on initial recognition using the exchange rate on the transaction date. Differences between the exchange rate on the transaction date and the exchange rate on the payment day are recognised in the profit and loss account under Net financials. Receivables, liabilities and other monetary items denominated in foreign currencies that have not been settled at the balance sheet date are translated at the exchange rate at the balance sheet date. The difference between the exchange rate at the balance sheet date and the rate when the account receivable or liability occurred or was included in the latest annual report is recognised in the profit and loss account under Net financials. With regard to the recognition of foreign affiliated and associated companies, these are considered independent units. Their profit and loss accounts are translated using the average exchange rate and their balance sheet items are translated using the closing rate. Exchange rate differences arising from the translation of foreign affiliated companies’ equity at the beginning of the year to the closing rate and in connection with the translation of the profit and loss accounts from average exchange rates to the closing rate are taken directly to equity. Derivatives Initial recognition of derivative financial instruments is made in the balance sheet at cost and they are subsequently measured at fair value. Positive and negative changes in2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=68http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6866 ACCOuNTING POLICIES The profit and loss account Net turnover Passenger revenues are recognised at the time of transport. Provision is made in respect of the value of tickets sold that have not been used/expired at the balance sheet date. Discounts in connection with the sale and payments relating to the Travel Guarantee Scheme are deducted from the net turnover. Revenue from traffic contracts is recognised over the periods to which they relate, when the revenue can be reliably measured and expected to be received. Revenue for services is recognised as the services are rendered. The recognition criteria for other goods is when the delivery and the risk transition has occurred. Other operating income Other operating income includes income of a secondary nature in relation to the railway business, including the compensation sum when this can be reliably measured and expected to be received. VAT DSB has a right to deduct part of the purchase VAT because the corporation carries out activities which are both subject to and not subject to VAT. The nondeductible part of the purchase VAT is included in the profit and loss account and in balance sheet items. Costs of raw materials and consumables Costs of raw materials and consumables include the year’s purchases and the year’s change in stocks of raw materials and consumables and cost of goods sold in shops and trains, etc. Other external expenses Other external expenses primarily include expenses of a primary nature in relation to the railway business. Staff expenses Staff expenses include wages and salaries, remuneration, pension contributions and other staff expenses relating to the corporation’s employees, including the Executive Board and the Board of Directors. DSB pays pension contributions for public servants to the government, which has the pension obligation. The pension obligation for other employees is covered by pension schemes. Profit/loss of affiliated and associated companies The proportionate share of the profit after tax of the individual affiliated company is included in the pro- fit and loss account of the parent corporation after elimination of the share of intra-group profits/losses and deduction of amortisation of goodwill. The proportionate share of the profit after tax of the associated companies is included in the profit and loss account of both the parent corporation and the Group after elimination of the share of intragroup profits/losses and deduction of amortisation of goodwill. Net financials Net financials comprise interest income and expenses, exchange gains and losses relating to securities, liabilities and transactions in foreign currencies and amortisation of financial assets and liabilities. Tax on the profit for the year DSB is covered by the Danish rules on compulsory joint taxation of the Group’s affiliated companies. The affiliated companies are included in the joint taxation from the time at which they are included in the consolidation in the consolidated accounts and until they are excluded from the consolidation. The corporation manages the joint taxation and consequently makes all tax payments to the tax authorities. The current Danish corporation tax is distributed by settlement of the joint taxation contributions between the jointly taxed companies relative to their taxable income. In this connection, any companies with a tax loss receive joint taxation contributions from companies that were able to use their tax losses to reduce their own tax profit (full allocation). The tax for the year which comprises current tax, the year’s joint taxation contribution and changes in deferred tax, including differences as a consequence of changed tax legislation or rates, is included in the profit and loss account with the share related to the profit for the year and taken directly to equity in so far as the share related to items entered directly in equity are concerned. Balance sheet Intangible fixed assets Intangible fixed assets comprise develop2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=69http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=6967 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / identified, where the technical utilisation rate, sufficient resources and a potential future market or development potential in the corporation can be proven and where it is expedient to produce, market or use the project, are recognised as intangible fixed assets if the cost can be reliably determined and there is sufficient security that future earnings can cover production, sales and administrative expenses and the development costs themselves. Other development costs are recognised as costs in the profit and loss account as incurred. Interest and borrowing expenses on loans for financing development projects are recognised in the original cost providing these relate to the development period. All other financing expenses are recognised in the profit and loss account. Capitalised intangible fixed assets are measured at cost deducting accumulated amortisation or at recoverable value, if this is lower. Capitalised intangible fixed assets are amortised on a straight line basis after completion over the assessed economic useful life. The expected useful life for development projects is 3-5 years. Additions during the financial year are amortised proportionately according to the time of use. Intangible assets are written down to the recoverable amount if this is lower than the carrying amount. Impairment tests are conducted annually of each individual asset or group of assets. Profits and losses in respect of disposals are calculated as the difference between the sales price less sales costs and the book value at the time of sale. Profits and losses are recognised in the profit and loss account under Other operating income or Other external expenses. Tangible fixed assets Land and buildings are measured at cost less accumulated depreciation and write downs. Rolling stock, operating plant, fixtures and fittings, etc. are measured at cost less accumulated depreciation and write-downs. Tangible fixed assets in progress are measured at cost. Changes and improvements adding to the value of tangible fixed assets are capitalised. The cost comprises the original cost and costs directly related to the original cost until the time when the asset is ready for use. With regard to own produced assets, the cost covers direct and indirect costs for equipment, components, sub-contractors and wages/salaries. Furthermore, financing ex- penses are recognised which can be attributed to the cost. Prepayments on rolling stock not yet delivered are capitalised. Grants for investments are offset against the cost of the assets for which grants are received. Interest and borrowing expenses relating to loans raised for financing in connection with the production of tangible fixed assets, including prepayments, are recognised in the original cost if they relate to the production period. All other financing expenses are recognised in the profit and loss account. Depreciation is calculated on a straight-line basis over the expected financial useful life based on the following assessment of the assets’ expected useful lives Land Buildings Installations Rolling Stock Operating equipment, fixtures and fittings, etc. not depreciated 30 - 60 years 15 years 2-25 years 3- 20 years Additions during the financial year are depreciated proportionately according to the time of use. In respect of the original acquisition of the tangible fixed asset, account is taken of the shorter useful life of part of the asset, which is why this part, already at the time of acquisition, in terms of effects on the accounts, is treated as a separate asset with a shorter useful life and thus shorter period of depreciation. Costs for heavy maintenance inspection are recognised separately and depreciated over the useful life, the period until the next inspection. Tangible fixed assets are written down to the recoverable amount if this is lower than the carrying amount. In the event of an indication of a decrease in value, impairment tests are 2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=70http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=7068 ACCOuNTING POLICIES value according to the accounting policies of the parent corporation less or plus unrealised intra-group profits and losses. Net revaluation of investments in affiliated and associated companies is transferred to the net revaluation reserve according to the equity method under equity to the extent that the carrying amount exceeds the original cost. Loans to associated companies are measured at the amortised cost price. Other investments are measured at fair value. If a fair value cannot be reliably measured, the investment is measured at the original cost. All fair value adjustments are recognised in the profit and loss account. Other receivables are measured at the amortised cost price. Stocks Fuel for trains and Spare parts are measured at cost according to the average cost method. Cost comprises the purchase price plus delivery costs and any processing and other costs directly or indirectly attributable to stocks. Goods for sale in shops etc. are measured at cost, calculated in line with the FIFO method. Cost comprises the purchase price plus delivery costs. Obsolete spare parts are written down to the net realisable value if this is lower than the cost. The net realisable value for stocks is calculated as the sales amount less completion costs and costs incurred to effectuate the sale and is determined with due regard to marketability, obsolescence and development in the expected sales price. Receivables Receivables are measured at amortised cost, which usually corresponds to the nominal value. Writedown to counter losses is made where there is deemed to be objective indication of impairment of a receivable or a portfolio of receivables. If there is an objective indication of impairment of an individual receivable, write-down at an individual level is made. Receivables on which there is no objective indication of impairment at an individual level, are assessed on a portfolio level for objective indication of impairment. The objective indicators used for the portfolios are determined based on historical loss experience. Write-downs are calculated as the difference be- tween the carrying value of receivables and the expected cash flow, including the realisation value of any securities received. Prepayments and accrued income Prepayments and accrued income comprise incurred costs relating to the subsequent financial year. Prepayments and accrued income are measured at the amortised price which usually corresponds to the nominal value. Equity Reserve for net revaluation in line with the equity value comprises net revaluation of investments in affiliated and associated companies in relation to cost. Dividends are recognised as a liability at the time of adoption at the ordinary general meeting (declaration). The proposed dividend for the financial year is shown as a separate item under Equity. Provisions In connection with the establishment of the Company on January 1 1999, DSB was founded with a number of provisions relating to expected future losses or expenses which were identified in the acquired corporation’s plans for the acquisition, but which were not identifiable obligations on the balance sheet date. Some of these provisions did not meet the definition of a provision according to the current Financial Statements Act and Danish Accounting Standard No. 17 and were consequently reclassified to Negative goodwill on 1 January 2002 Provisions are recognised and measured as the best estimate of the costs necessary to liquidate obligations. Provisions for anticipated maturity beyond one year from the balance sheet date are measured at discounted value. Negative goodwill Negative goodwill under Provisions comprises provisions earmarked in connection with company formation. Negative goodwill is recognised in the profit and loss account as the losses or expenses are realised or transferred to Other provisions as obligations are identifiable and can be reliably stated. Other provisions Other provisions main2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=71http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=7169 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / for the year adjusted for tax on the taxable income for previous years and tax paid on account. Payable and receivable joint taxation contributions are included in the balance sheet under Debt to affiliated companies and Receivables from affiliated companies, respectively. Deferred tax is measured using the balance sheet liability method on all timing differences between the carrying amount and the tax base of assets and liabilities. however, deferred tax is not recognised on timing differences relating to goodwill which is not deductible for tax purposes and on office premises and other items, where timing differences, apart from business acquisitions, arise at the date of acquisition without affecting either the profit/loss for the year or the taxable income. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on the planned use of the asset or settlement of the liability, respectively. Deferred tax assets, including the value of tax loss carryforwards and net financing expenses, are recognised under other long-term assets at the expected value of their utilisation; either through elimination of tax on future earnings or by set-off against deferred tax liabilities in the same legal tax entity and jurisdiction. An adjustment is made of the deferred tax concerning elimination of unrealised intra-group profits and losses. Deferred tax is measured based on the tax rules and tax rates of the individual countries applicable according to the legislation in force at the balance sheet date when the deferred tax is expected to become payable as current tax. As the administration company and in accordance with joint taxation rules, DSB assumes liability for the affiliated companies’ taxation in line with the affiliated companies’ payment of the joint taxation contribution. Liabilities Liabilities are recognised at the date of borrowing at the net proceeds received after deduction of transaction costs incurred. In subsequent periods, financial liabilities are measured at the amortised cost, corresponding to the capitalised value using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the profit and loss account over the term of the loan as a financial expense using the effective interest method. Other financial liabilities, which comprise trade payables and affiliated and associated companies are measured at amortised cost, which usually corresponds to the nominal value. Non financial liabilities are measured at the net realisable value. Accruals and deferred income Accruals and deferred income comprise payments received relating to income in subsequent years. Accruals and deferred income are measured at the amortised cost price, which usually corresponds to the nominal value. Contingent assets, contingent liabilities and other financial commitments Contingent assets, contingent liabilities and other financial liabilities include events or situations that exist at the balance sheet date, but whose accounting effect cannot be finally determined until the outcome of one or more uncertain future events is known. DSB’s obligation to regulate pension contributions for public servants and employees employed on similar terms to public servants paid to the State is a defined benefit scheme. The liability is calculated at the capital value through an actuarial calculation based on relevant assumptions regarding interest rates, inflation, expected retirement age, salaries and mortality (projected unit credit method). In connection with the actuarial balance of the capital value, the accrual of already granted pay increases over the expected remaining period of employment (vesting period) takes place. Recognition as a liability occurs if the account shows that it is likely that DSB is liable for an acquired obligation and this can be reliably measured. The profit and loss account includes2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=72http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=7270 ACCOuNTING POLICIES Cash flow for investing activities Cash flow for investing activities includes purchases and sales etc. of fixed assets. Cash flow from financing activities Cash flow from financing activities comprises proceeds from raising loans, repayment and instalments on liabilities, capitalised interest and dividend received and paid. Cash at bank and in hand Cash and cash equivalents include cash and shortterm securities with insignificant exchange risk less current liabilities to banks, etc. Segmental Information DSB presents segmental information for the business segments in accordance with the breakdown into material legal entities. The segment reporting adheres to the Group’s accounting: policies, risks and internal financial management reporting.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=73http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=73712010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=74http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=74722010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=75http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=7573 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / pRoFit AnD loSS Account Parent company 2008 2009 Note Amounts in DKK million Revenues 6,334 889 432 7,655 5,928 710 348 6,986 1 2 net turnover other operating income Work performed by the enterprise and capitalised Total income Expenses 767 2,380 2,937 6,084 1,571 747 2,287 2,858 5,892 1,094 3 4,5 6 costs of raw materials and consumables other external expenses Staff expenses Total expenses Profit before depreciation, amortisation and write-downs Depreciation, amortisation and write-downs on intangible and tangible fixed assets Operating profit Net financials 156 0 49 309 -104 686 149 0 204 299 54 410 12 134 0 134 552 64 3 67 343 8 9 10 11 Result after tax in affiliated companies Result after tax in associated companies Financial income Financial expenses total net financials Profit before tax Tax tax on the profit for the year Adjustment of tax relating to previous year total tax Profit for the year The profit for the year is proposed for allocation as follows: DSB Minority interests Profit for the year 343 -2 341 117 2 119 341 -5 218 601 -388 460 1,631 2,742 4,312 8,685 2,195 9,867 492 521 10,880 2009 Group 2008 9,846 618 510 10,974 1,643 2,695 3,988 8,326 2,648 781 790 738 356 7 1,347 848 1,362 1,286 -6 68 607 -545 741 186 -3 183 558 552 6 558 The parent company's profit is proposed for allocation as follows: Dividend to the Ministry of transport transferred to equity: - net revalution according to the equity method - Retained earnings Total 78 107 343 1582010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=76http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=7674 Balance sheet - assets Parent company 2008 2009 Note 13 133 74 207 188 32 220 14 4,613 3,276 947 3,633 12,469 3,662 3,649 1,055 3,302 11,668 15 1,946 0 13 172 2,131 14,807 195 2,949 0 14 172 79 3,214 15,102 188 16 Amounts in DKK million Intangible fixed assets Group goodwill Rights and development projects etc. projects in progress Total intangible fixed assets Tangible fixed assets land and buildings Rolling stock operating equipment, fixtures and fittings and other equipment tangible fixed assets in progress and prepayments Total tangible fixed assets Financial fixed assets investments in affiliated companies investments in associated companies Subordinate loan capital in affiliated companies Subordinate loan capital in associated company other investments other receivables Total financial fixed assets Total fixed assets Stocks Receivables 215 106 1,278 205 1,804 50 2,049 16,856 285 593 2,142 191 3,211 12 3,411 18,513 17 18 trade receivables Recievables, affiliated companies other receivables prepayments and accrued income Total receivables Cash at bank and in hand Total current assets Total assets 574 2,363 199 3,136 154 3,729 25,707 83 224 172 110 589 21,978 439 5,554 10,606 1,471 3,535 21,166 0 191 32 223 2009 Group 2008 0 135 74 209 5,706 10,505 1,342 3,730 21,283 83 172 172 13 440 21,932 380 311 1,436 206 1,953 265 2,598 24,5302010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=77http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=7775 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Balance sheet - equity and liaBilities Parent company 2008 2009 Note Amounts in DKK million Equity 4,761 918 1,300 364 7,343 4,761 1,017 1,412 158 7,348 19 7,343 7,348 contributed capital net revalation reserve according to the equity method Retained earnings proposed dividend Total equity Minority interests Total equity and minority interests Provisions 712 314 1,026 595 398 993 23 2,939 697 3,636 3,513 89 3,602 20 21 22 negative goodwill other provisions Deferred tax liability Total provisions Non-current liabilities non-current loans Subordinate loan capital other non-current liabilities Total non-current liabilities Current liabilities 501 1,861 282 514 129 1,343 221 4,851 8,487 16,856 1,744 1,291 617 504 35 1,366 1,013 6,570 10,172 18,513 24 25 23 current portion of non-current liabilities Short-term loans Financial institutions trade accounts payable Debt to affiliated companies other liabilities Accruals and deferred income Total current liabilities Total liabilities Total equity and liabilities 2,454 1,291 617 709 1,998 1,168 8,237 16,273 25,707 7,333 6 697 8,036 654 1,417 2,071 4,761 0 2,429 158 7,348 15 7,363 2009 Group 2008 4,761 0 2,218 364 7,343 20 7,363 3 783 1,305 2,091 7,213 5 1,593 8,811 1,170 1,861 282 649 1,874 429 6,265 15,076 24,530 14 26 27 28 29 30 Security, mortgaging and public grants Derivatives for the Group contingent assets, contingent liabilities and other financial commitments Related parties Segment information - primary segment Accounting treatment of compensation from AnsaldoBreda S.p.A.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=78http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=7876 equity statement Amounts in DKK million Parent company Contributed capital Equity at 1 January 2008 Dividend paid profit for the year exchange rate adjustment re. affiliated companies Value adjustment of hedging instruments at 1 Jan Value adjustment of hedging instruments at 31 Dec change in equity in affiliated companies * Equity at 31 December 2008 Dividend paid profit for the year exchange rate adjustment re. affiliated companies Value adjustment of hedging instruments at 1 Jan Value adjustment of hedging instruments at 31 Dec change in equity in affiliated companies * Equity at 31 December 2009 4,761 4,761 4,761 Net revaluation according to the equity method 1,028 38 -148 918 78 21 1,017 Retained earnings 1,454 150 -7 -17 -271 -9 1,300 107 5 271 -262 -9 1,412 Proposed dividend 655 -655 364 364 -364 158 158 Total equity 7,898 -655 552 -7 -17 -271 -157 7,343 -364 343 5 271 -262 12 7,348 * change in equity in affiliated companies largely relates to a value adjustment of hedging instruments in DSB S-tog a/s. Group Contributed capital Equity at 1 January 2008 Dividend paid profit for the year exchange rate adjustment re. affiliated companies Value adjustment of hedging instruments at 1 Jan Value adjustment of hedging instruments at 31 Dec Equity at 31 December 2008 Dividend paid profit for the year exchange rate adjustment relating to affiliated companies Value adjustment of hedging instruments at 1 Jan Value adjustment of hedging instruments at 31 Dec Equity at 31 December 2009 4,761 4,761 4,761 Net revaluation according to the equity method 0 0 0 0 0 Retained earnings 2,482 188 -13 -51 -388 2,218 183 3 388 -363 2,429 Proposed dividend 655 -655 364 364 -364 158 158 Total equity 7,898 -655 552 -13 -51 -388 7,343 -364 341 3 388 -363 7,3482010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=79http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=7977 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / cash flow statement Amounts in DKK million Operating profit Adjustment for non-cash operating items, etc. Depreciation, amortisation and write-downs on intangible and tangible fixed assets change in negative goodwill and other provisions, net profit on the sale of intangible and tangible fixed assets, net net financials, paid corporation tax, paid Cash flow from operating activities before change in working capital Change in working capital change in receivables change in stocks change in trade accounts payable and other liabilities, etc. Total cash flow from operating activities Acquisition of intangible and tangible fixed assets, excl. capitalised interest Sale of intangible and tangible fixed assets etc. investment in associated company investment of subordinate loan capital in associate company Total cash flow from investing activities proceeds from long-term loans proceeds from short-term loans Repayments of and instalments on long-term loans Repayments of and instalments on short-term loans Dividend received Dividend paid Total cash flow from financing activities Total change in cash at bank and in hand cash at bank and in hand, 1 January Cash at bank and in hand, 31 December cash can be specified as follows: liquid funds Financial institutions the cash flow statement cannot be derived directly from the profit and loss account and the balance sheet. Group 2009 2008 848 1,286 1,347 -132 -48 -429 -4 1,582 1,362 -58 -278 -500 -4 1,808 -809 -59 953 1,667 -1,302 106 0 -52 -1,248 1,658 936 -1,215 -1,882 5 -367 -865 -446 -17 -463 -388 -100 -378 942 -1,588 412 0 -9 -1,185 2,612 1,861 -4,248 5 -658 -428 -671 654 -17 154 -617 265 -282 in 2008, short-term loans were recognised in the item Financial institutions etc. as recognised under liquid funds under the cash Flow Statement. in 2009, short-term loans are entered as a separate item in the balance sheet and transactions are recognised in the cash Flow Statement under total cash flow from financing activities. Adjustment of the comparative figures has been carried out. in 2009, DSB decided to reduce the Group’s liquid funds to improve the utilisation of external financing. instead the liquid funds contingency has been secured through irredeemable credit facilities with a number of Danish and foreign banks.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=80http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8078 notes to the annual accounts Parent company 2008 2009 Note 1 3,214 319 3,533 2,485 6,018 42 258 16 6,334 2,821 334 3,155 2,275 5,430 51 273 174 5,928 Amounts in DKK million Net turnover Specification by business areas: long-distance and regional trains S-trains other Total passenger revenues Revenue from transport contracts Total train operations Shop sales, etc. Sales of repairs and maintenance of rolling stock, etc. leasing of rolling stock Total Group 2009 2008 2,821 990 412 4,223 4,453 8,676 866 151 174 9,867 3,207 921 413 4,541 4,130 8,671 901 258 16 9,846 passenger revenues for the parent company include fines for passengers travelling without a valid ticket of DKK 11 million (2008: 14 million). For the Group, the amount was DKK 57 million (2008: DKK 54 million). 2 162 292 435 889 166 40 504 710 3 444 299 24 767 481 237 29 747 4 45 498 367 344 9 -2 1,119 2,380 67 400 357 333 13 -1 1,118 2,287 Other operating income Renting and leasing profit on the sale of intangible and tangible fixed assets Miscellaneous Total Costs of raw materials and consumables energy costs Spare parts, etc. cost of goods sold in shops etc. Total Other external expenses purchase of transport infrastructure charges Repair, maintenance and cleaning etc. non-deductible VAt loss on sale of intangible and tangible fixed assets Reversal of other provisions other external expenses Total 79 549 433 436 17 -3 1,231 2,742 80 533 429 443 14 -2 1,198 2,695 626 382 623 1,631 575 423 645 1,643 171 65 256 492 164 292 162 6182010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=81http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8179 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Parent company 2008 2009 Note 5 Amounts in DKK million Fees to external auditors are included in Other external expenses with Statutory audit: 1.1 0.4 1.0 0.6 KpMG the national Audit office of Denmark Other assurance statements: 1.1 KpMG Tax and VAT consultancy: 3.4 KpMG Other services: 9,8 11.3 4.3 10.4 KpMG Total the fees are inclusive of non-deductible VAt 6 2,575 349 13 2,937 2,466 380 12 2,858 Staff expenses Wages and salaries pensions other social security costs Total 5.4 14.2 3.7 1.4 3.1 0.6 2009 Group 2008 2.2 0.4 10.6 13.2 3,779 506 27 4,312 3,532 439 17 3,988 Fees for the Board of Directors total DKK 1,802 thousand (2008: DKK 1,737 thousand.). of which the chairman DKK 500 thousand (2008: DKK 500 thousand), Vice-chairman DKK 300 thousand (2008: DKK 300 thousand) and the other 7 (2008: 6) members DKK 1,002 thousand (2008: DKK 937 thousand). the executive Board receives a fixed salary and a performance-related salary linked to agreed individual targets. For 2009, the remuneration totalled: Performance Fixed salary ceo 3.7 related salery etc. 0.6 Severance pay for the executive Board and senior executives in connection with dismissal by DSB not owing to misconduct or the like on the part of the employee does not exceed 12 months’ salary. the general provisions of the Danish public Servants’ Act apply to the public servants. pension contributions paid to the government in respect on public servants are 19.6 per cent for DSB and 19.4 per cent for DSB S-tog a/s of the pensionable salary. For other employees, pension contributions are expensed in accordance with collective and individual agreement. Further reference is made to note 27. 6,406 5,944 Average number of employees* 9,277 9,200 * the average number of full-time employees is exclusive of employees transferred to the job exchange as staff expenses for these are covered by provisions.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=82http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8280 Parent company 2008 2009 Note 7 18 200 414 149 781 29 153 398 158 738 8 200 -44 156 199 -50 149 9 0 0 0 0 0 0 10 42 7 0 49 164 7 33 204 Amounts in DKK million 2009 Group 2008 Depreciation, amortisation and write-downs of intangible and tangible fixed assets Group goodwill intangible fixed assets land and buildings Rolling stock operating plant, fixtures and fittings Total Results after tax for affiliated companies Results before tax for affiliated companies tax, affiliated companies Results after tax for affiliated companies Results after tax for associated companies Results before tax for associated companies tax, associated companies Results after tax for associated companies Financial income interest on outstandings with associated companies interest on bank deposits, bonds etc. Dividend currency exchange gains, etc. Total 11 167 7 33 218 10 51 7 0 68 -7 2 -5 -8 2 -6 0 30 219 862 236 1,347 0 19 263 862 218 1,362 in 2009, DKK 145 million was included (2008: DKK 22 million) in interest compensation from AnsaldoBreda S.p.A. 11 1 300 8 309 0 270 29 299 Financial expenses interest on outstandings with affiliated companies interest on loans, bank debt etc. currency exchange losses, etc. Total 535 66 601 600 7 607 in 2008 and 2009, no financing interest was capitalised under tangible fixed assets. 12 0 134 134 0 134 0 64 64 3 67 Tax computed tax on profit for the year change in deferred tax relating to profit for the year Tax on profit for the year Adjustment of tax relating to previous years etc. Total tax Reconciliation of tax rate 25% 0% 25% 0 25% 1% 26% 0 Danish corporation tax rate Adjustment of tax relating to previous year, etc Effective tax rate for the year Tax paid during the year 25% 1% 26% 4 25% -1% 24% 4 0 117 117 2 119 0 186 186 -3 1832010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=83http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8381 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Note 13 Amounts in DKK million Intangible fixed assets Parent company Rights and development projects etc. Cost at 1 January 2009 Additions for the year transferred Cost as at 31 December 2009 Depreciation, amortisation and write-downs at 1 January 2009 Depreciation, amortisation and write-downs for the year Depreciation, amortisation and write-downs at 31 December 2009 Carrying value at 31 December 2009 carrying value at 31 December 2008 Group Rights and development projects etc. Cost at 1 January 2009 Additions for the year transferred Cost at 31 December 2009 Depreciation, amortisation and write-downs at 1 January 2009 Depreciation, amortisation and write-downs for the year Depreciation, amortisation and write-downs at 31 December 2009 Carrying value at 31 December 2009 carrying value at 31 December 2008 207 5 81 293 Projects in progress 74 57 -99 32 Total intangible fixed assets 281 62 -18 325 203 5 79 287 Projects in progress 74 57 -99 32 Total intangible fixed assets 277 62 -20 319 -70 -29 -99 188 133 32 74 -70 -29 -99 220 207 -72 -30 -102 191 135 32 74 -72 -30 -102 223 2092010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=84http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8482 Note 14 Amounts in DKK million Tangible fixed assets Parent company Operating equipment, fixtures and fittings and other equipment 2,239 6 85 -1,039 5,360 772 -142 8,172 301 -63 2,483 3,302 Land and buildings Cost at 1 January 2009 Additions for the year transferred Disposals for the year Cost at 31 December 2009 Depreciation, amortisation and write-downs at 1 January 2009 Depreciation and amortisation for the year Depreciation, disposals for the year Depreciation, amortisation and write-downs at 31 December 2009 Carrying value at 31 December 2009 carrying value at 31 December 2008 6,314 Rolling stock 7,542 Tangible fixed assets in progress and prepayments 3,633 807 -1,138 Total tangible fixed assets 19,728 813 20 -1,244 19,317 -1,701 -153 156 -1,698 3,662 4,613 -4,266 -398 141 -4,523 3,649 3,276 -1,292 -158 22 -1,428 1,055 947 3,302 3,633 -7,259 -709 319 -7,649 11,668 12,469 in 2009, a change to the assessment of the expected useful life of installations in buildings from 10 to 15 years and of rolling stock, iR4 and ic4, from 20 to 25 years was carried out. this has resulted in a reduction in the year’s depreciation, amortisation and write-downs of DKK 52 million. no public subsidy for capital investments has been received. no mortgage or other security has been given in tangible fixed assets. prepayments and cost for rolling stock include a total of DKK 45 million (2008: DKK 45 million) representing capitalised interest relating to the financing of new train sets. prepayments on non-delivered rolling stock are included in the carrying value at DKK 2,859 million (2008: DKK 2,999 million). Supplier AnsaldoBreda S.p.A. AnsaldoBreda S.p.A. Bombardier Siemens Total Rolling stock ic4 train sets ic2 train sets Øresund train sets Desiro train sets DKK million 2,246 408 146 59 2,8592010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=85http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8583 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Note 14 (cont.) Amounts in DKK million Tangible fixed assets Group Operating equipment, fixtures and fittings and other equipment 2,999 26 115 -64 7,815 968 -235 18,766 344 -22 3,347 3,535 Land and buildings Cost at 1 January 2009 Additions for the year transferred Disposals for the year Cost at 31 December 2009 Depreciation, amortisation and write-downs at 1 January 2009 Depreciation and amortisation for the year Depreciation, disposals for the year Depreciation, amortisation and write-downs at 31 December 2009 Carrying value at 31 December 2009 carrying value at 31 December 2008 7,764 Rolling stock 18,033 Tangible fixed assets in progress and prepayments 3,730 1,214 -1,409 Total tangible fixed assets 32,526 1,240 18 -321 33,463 -2,058 -219 16 -2,261 5,554 5,706 -7,528 -862 230 -8,160 10,606 10,505 -1,657 -236 17 -1,876 1,471 1,342 3,535 3,730 -11,243 -1,317 263 -12,297 21,166 21,283 in 2009, a change to the assessment of the expected useful life of installlations in buildings from 10 to 15 years and of rolling stock, iR4 and ic4, from 20 to 25 years was carried out. this has resulted in a reduction in the year’s depreciation, amortisation and write-downs of DKK 60 million. no public subsidy for capital investments has been received. no mortgage or other security has been given in tangible fixed assets. prepayments and cost for rolling stock include a total of DKK 243 million (2008: DKK 243 million) representing capitalised interest relating to the financing of new train sets. prepayments on non-delivered rolling stock are included in the carrying value at DKK 2,859 million (2008: DKK 3,000 million): Supplier AnsaldoBreda S.p.A. AnsaldoBreda S.p.A. Bombardier Siemens Total Rolling stock ic4 train sets ic2 train sets Øresund train sets Desiro train sets DKK million 2,246 408 146 59 2,8592010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=86http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8684 Note 15 Amounts in DKK million Financial fixed assets Parent company InvestInvestments in ments in affiliated associated companies companies Cost at 1 January 2009 Additions for the year Disposals for the year Cost at 31 December 2009 Value adjustments at 1 January 2009 profit for the year changes in equity exchange rate adjustment Dividend received Adjustment relating to previous year Value adjustments as at 31 December 2009 Carrying value as at 31 December 2009 carrying value as at 31 December 2008 1,032 900 0 1,932 914 149 16 5 -71 4 1,017 2,949 1,946 0 0 0 14 13 0 172 172 79 0 0 0 0 14 172 0 79 0 Subordinate loan capital in affiliated company 13 1 Other investments 172 Other receivables 79 Total financial fixed assets 1,217 980 0 2,197 914 149 16 5 -71 4 1,017 3,214 2,131 until 16 December, 2011, DSB has a put option for selling the investment in DB Schenker Rail GmbH to DB Mobility logistics AG at DSB’s cost price.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=87http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8785 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Note 15 (cont.) Amounts in DKK million Financial fixed assets Investments in affiliated companies Share of equity Name DSB S-tog a/s Kort & Godt A/S DSB Arkitekter A/S DSB ejendomsudvikling A/S DSB Rejsekort A/S *) DSBFirst Danmark A/S **) DSBFirst ApS - DSBFirst Danmark A/S **) - DSBFirst Sverige AB - DSBFirst Väst AB centouR A/S DSB Sverige AB - DSB tågvärdsbolag AB - Roslagståg AB - t-banebolaget Stockholm AB - DSB train Maintenance AB - DSB Östergötland AB - DSB Småland AB DSB norge AS DSB uK ltd. DSB Deutschland GmbH BSD ApS Total *) the affiliated company DSB S-tog a/s owns the remaining 50 per cent of the share capital of DSB Rejsekort A/S. **) DSB owns 75% directly and 17.5% indirectly corresponding to a total ownership of 92.5%. Domicile Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Sweden Sweden Denmark Sweden Sweden Sweden Sweden Sweden Sweden Sweden norway uK Germany Denmark Ownership share 100% 100% 100% 100% 50% 75% 70% 25% 100% 100% 51% 100% 100% 60% 50% 100% 100% 100% 100% 100% 100% 100% Share capital 500 million DKK 5 million DKK 1 million DKK 100 million DKK 25 million DKK 666,666 DKK 10 million DKK 666,666 DKK 10 million SeK 100,000 SeK 500,000 DKK 5 million SeK 1 million SeK 12,5 million SeK 100,000 SeK 100,000 SeK 100,000 SeK 100,000 SeK 100,000 noK 40,000 GBp 25,000 euR 125,000 DKK Parent company 2009 1,883 27 6 914 58 0 18 0 41 2 0 0 0 2,9492010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=88http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8886 Note 15 (cont.) Amounts in DKK million Financial fixed assets Investments in associated companies: Ownership share Parent company 2009 Group 2009 0 0 83 0 83 Name Rejsekort A/S Rejseplanen A/S Total *) DSB has no controlling interest Group Domicile Denmark Denmark Share capital 52%*) 29,723 '000 DKK 50% 0 1 million DKK Investments in associated companies Cost at 1 January 2009 Additions for the year Cost at 31 December 2009 Value adjustments at 1 January 2009 profit for the year Foreign exchange adjustment Value adjustments at 31 December 2009 Carrying value at 31 December 2009 carrying value at 31 December 2008 -15 83 83 98 -15 0 98 Subordinate loan capital in associated company 172 52 224 Other investments 172 172 0 0 0 Total Other financial receivables fixed assets 13 97 110 455 149 604 -15 0 0 -15 110 13 589 440 224 172 172 1722010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=89http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=8987 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Parent company 2008 2009 Note 16 96 94 5 195 73 113 2 188 17 697 56 66 459 1,278 506 27 457 1,152 2,142 Amounts in DKK million Stocks Fuel for trains Spare parts Goods for sale in shops etc. Total Other receivables Receivables relating to sale of properties Receivables relating to passenger revenue and contract payment Fair value of hedging instruments other receivables Total 506 39 459 1,359 2,363 73 300 66 439 2009 Group 2008 96 239 45 380 697 104 85 550 1,436 A significant proportion of Receivables relating to sale of properties is secured in escrow accounts. 18 75 130 205 60 131 191 19 Prepayments and accrued income prepaid expenses etc. prepaid salaries and pension contributions (public servants) Total Minority interests Mnority interests as at 1 January exchange rate adjustments Share of profit for the year increase in minority interests' ownership interest Dividend to minority interests Minority interests as at 31 December 20 226 -225 -1 0 Negative goodwill Negative goodwill at 1 January transferred to other provisions provisions utilised during the year Reversed Negative goodwill as at 31 December 3 -2 0 -1 229 -225 -1 0 3 20 0 -2 -3 15 9 -1 6 9 -3 20 68 131 199 76 130 206 the negative goodwill is recognised in accordance with the Act on the independent public company DSB and on DSB S-tog A/S.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=90http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9088 Note 21 Amounts in DKK million Other provisions Company formation Other obligations Total other provisions Restructuring Parent company Other provisions as at 1 January 2009 provisions made during the year provisions utilised during the year Reversed Other provisions at 31 December 2009 Group Other provisions at 1 January 2009 transferred from negative goodwill provisions made during the year provisions utilised during the year Reversed Other provisions at 31 December 2009 668 2 78 -190 -11 547 623 75 -176 -11 511 9 -2 -1 6 80 10 -12 78 712 85 -190 -12 595 9 106 18 783 2 96 -214 -13 654 -2 -1 6 -22 -1 101 the provision for restructuring costs covers expenses for public servants and other employees employed under collective agreements made redundant. the provision is expected to be significantly utilised over the next 10-15 years. company formation costs relate to the establishment of the independent public corporation DSB and the foundation of DSB S-tog a/s. the costs include entry of properties into the land register etc. the provisions are expected to be realised within the next 2-3 years. other obligations cover provision for compensation etc. and are expected to be realised within the next 15 years.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=91http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9189 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Parent company 2008 2009 Note 22 295 -23 134 -92 314 314 18 64 2 398 Amounts in DKK million Deferred tax liability Deferred tax liability at 1 January Adjustment relating to previous year Adjustment of deferred tax relating to transfer of asset change in deferred tax relating to the profit for the year change relating to financial instruments Deferred tax liability at 31 December Deferred tax relates to: 29 487 43 -178 80 -45 -102 314 44 586 39 -151 72 -76 -116 398 intangible fixed assets tangible fixed assets current assets provisions current liabilities tax loss carried forward carry forwardable net financing expenses Deferred tax liabilities at 31 December 44 1,929 78 -178 72 -290 -238 1,417 1,305 -4 108 8 1,417 2009 Group 2008 1,270 -3 182 -144 1,305 29 1,834 64 -215 80 -304 -183 1,3052010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=92http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9290 Parent company 2008 2009 Note 23 3,245 5,067 Amounts in DKK million Long-term liabilities Long-term loans Primary financial instruments Principal amounts in millions Group 2009 2008 9,545 7,999 Lender/type Parent company: eiB Bond loan Bond loan Bond loan Bond loan Bond loan Bond loan eMtn issue eMtn issue eMtn issue eMtn issue eMtn issue eurofima Total for parent company DSB S-tog a/s: eiB eiB eiB eiB eiB eiB Bond loan Bond loan Bond loan Bond loan Bond loan eMtn issue eMtn issue eMtn issue Total for DSB S-tog a/s Group total Currency Nominal interest % p.a. Expires Carrying value Principal amount after conversion to DKK 100 1.000 310 100 43 10 600 168 200 500 400 340 78 uSD noK noK uSD euR euR SeK noK noK noK noK noK euR Floating Floating 6.2 Floating Floating 4.23 4.05 6.18 5.49 4.57 5.50 4.53 Floating 2014 2010 2016 2010 2012 2012 2014 2010 2013 2014 2016 2016 2030 519 894 277 495 316 74 434 150 188 456 380 307 577 5,067 608 1,151 261 481 316 74 430 171 188 428 378 300 578 5,364 50 25 23 37 50 154 450 200 600 400 3.000 330 375 50 GBp GBp GBp uSD uSD uSD noK noK noK noK JpY SeK SeK cHF Floating Floating Floating Floating Floating Floating Floating 6.33 Floating 3.95 2.15 5.25 6.75 3.00 2011 2015 2015 2010 2014 2018 2010 2011 2012 2015 2016 2011 2014 2015 419 210 191 191 259 798 402 179 538 358 169 242 271 251 4,478 9,545 601 270 214 240 304 936 406 188 569 382 203 267 300 253 5,133 10,4972010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=93http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9391 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Parent company 2008 2009 Note 23 (Cont.) Amounts in DKK million Group 2009 2008 With regard to the Group, the carrying value of long-term loans is DKK 9,545 million (2008: 7,999 million). of this, DKK 2,212 million falls due in 2010. the amount is entered as current liabilities. All foreign exchange loans (excl. euR loans) are translated to Danish kroner via currency swaps. the total principal amount after conversion to DKK totals DKK 10,497 million (2008: 9,986 million). With regard to the parent company, the carrying value of long-term loans is DKK 5,067 million (2008: DKK 3,245 million). of this, DKK 1,553 million falls due in 2010. the amount is recognised as current liabilities. All foreign exchange loans (excl. euR loans) are translated to Danish kroner via currency swaps. the total principal amount after conversion to DKK totals DKK 5,364 million (2008: 4,207 million). Repayment of loans granted by the european investment Bank (eiB) maturing in 2015 began in 2004. the interest rate on the floating rate loans varied between 0.2 and 4.7 per cent per annum during the year. in respect of the debt portfolio, DKK 2,139 million was raised without state guarantee. the remaining loans are all guaranteed by the Danish state on which a guarantee commission is payable. to a significant extent, DSB undertakes fair value hedging of the loan portfolio, which is why the fair value is not significantly different from the carrying value. - - Subordinate loan capital 6 5 Subordinate loan capital falls due more than five years after the end of the financial year. 892 279 Other long-term liabilities 939 1,977 With regard to the Group, the carrying value of other long-term liabilities totals DKK 939 million (2008: DKK 1,977 million). of this, DKK 242 million falls due in 2010. With regard to the parent company, the carrying value of other long-term liabilities totals DKK 279 million (2008: DKK 892 million). of this, DKK 190 falls due in 2010. 4,137 5,346 Total long-term liabilities 10,490 9,981 The total principal amount after conversion to DKK falls due in the following periods: 501 1,803 189 1,714 4,207 1,817 29 2,132 1,386 5,364 under 1 year Year 2 Years 3-5 After 5 years Total Interest bearing liabilities, net interest bearing liabilities liquid assets and securities Subordinate loan capital Total 12,021 -154 6 11,873 12,160 -265 5 11,900 2,544 1,166 3,849 2,944 10,503 1,147 2,530 2,358 3,956 9,9912010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=94http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9492 Parent company 2008 2009 Note 24 527 450 366 1,343 541 456 369 1,366 25 121 74 26 221 117 72 824 1,013 26 Amounts in DKK million Other liabilities Staff related liabilities etc. Fair value of hedging instruments other liabilities Total Accruals and deferred income Sold, but unused tickets Financial instruments Miscellaneous Total Derivatives for the Group Group 2009 2008 755 691 552 1,998 671 679 524 1,874 210 136 822 1,168 196 182 51 429 to cover interest rate and foreign exchange risks, the DSB Group has entered into a number of financial contracts with a view to covering interest and foreign exchange risks. consequently, currency swap agreements have been entered into to hedge foreign exchange risks related to the portion of the company’s loan portfolio raised in foreign currencies. in addition, interest swap agreements have been entered into with a view to managing the interest rate risk on the loan portfolio. the fair value has been calculated on the basis of observable market data. please also refer to the reference concerning risks in the section on financial conditions on page 54. Contracts with positive fair value recognised under Other receivables. 6 31 29 0 66 355 74 28 0 457 currency swap agreements *) interest swap agreements**) Forward currency exchange and energy price hedging contracts etc.**) other financial contracts Total Contracts with negative fair value recognised under Other liabilities 0 237 5 188 20 450 403 9 44 0 456 currency swap agreements*) interest swap agreements **) interest options Forward currency exchange agreements and energy price hedging contracts**) other financial contracts Total 621 18 44 8 691 59 401 10 188 21 679 355 78 20 6 459 6 40 29 10 85 *) currency swap agreements recognised under other receivables and other liabilities are entered into with a view to hedging the Group’s current liabilities. **) the value adjustment is charged directly to equity although any ineffective hedging is recognised in the profit and loss account.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=95http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9593 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Note 26 (Cont.) Amounts in DKK million Currency swap agreements (in millions) Receiver Parent company: 168 200 500 400 310 340 600 400 600 100 100 100 100 Total for parent company DSB S-tog a/s: 50 25 23 450 200 600 400 330 375 37 103 50 154 3,000 50 Total for DSB S-tog a/s Group total 98 98 1,650 4,568 705 1,305 344 744 3,000 3,000 50 50 601 270 214 406 188 569 382 267 300 240 588 304 936 203 253 5,721 10,065 197 -183 -61 -24 -3 1 -33 -30 -15 18 -49 -53 -44 -138 -27 13 -628 -473 2011 2015 2015 2010 2011 2012 2015 2011 2014 2010 2011 2014 2018 2016 2015 2,918 600 400 430 536 481 563 608 4,344 197 171 188 428 378 261 300 120 77 -16 -1 29 2 16 6 -86 -43 12 355 14 -45 -88 155 2010 2013 2014 2016 2016 2016 2010 2010 2014 2010 2010 2010 2014 GBP NOK SEK USD JPY CHF Pays DKK Pays USD Carrying value Expiry2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=96http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9694 Note 26 (Cont.) Amounts in DKK million Interest swap agreements, nominal principal amounts in DKK million Pays fixed interest Carrying value Expiry Parent company 1,025 29 345 767 514 968 980 29 29 332 Total for parent company DSB S-tog a/s: 646 1,055 1,051 604 849 204 404 230 Total for DSB S-tog a/s Group total Forward exchange contracts and energy price hedging contracts etc. DSB has entered into forward exchange contracts to hedge uSD in connection with the purchase of diesel oil for trains. the forward contracts all fall due in 2010 and 2011 and mean that DSB's uSD exposure for 2010 is hedged at 66 per cent and for 2011 at 9 per cent. DSB has entered into oil price hedging contracts to cover 64 per cent of its oil consumption in 2010 and 13 per cent in 2011. DSB and DSB S-tog a/s have entered into fixed price contracts to hedge 77 per cent of its total electricity consumption in 2010 and 25 per cent in 2011. Other financial contracts (including interest rate options) other financial contracts include swap agreements aimed at stabilising the DSB Group's financing expenses or securing the fair value of loans raised by the DSB Group against changes in the swap spread. 5,043 10,061 -5 -38 -72 -28 -63 -21 15 -2 -214 -543 2010 2011 2012 2014 2015 2016 2017 2018 5,018 -24 -9 -11 -51 -33 -131 -91 2 2 17 -329 2010 2011 2012 2013 2014 2015 2016 2017 2018 2018-20302010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=97http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9795 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Parent company 2008 2009 Note 27 9.9 2.5 0.5 9.5 2.5 Amounts in DKK billion Contingent assets, contingent liabilities and other financial commitments contingent assets contingent liabilities purchase obligations 0.5 9.6 2.9 2009 Group 2008 10.0 2.9 contingent assets are derived from a settlement with AnsaldoBreda SpA. under the settlement, DSB will receive a discount on future purchases of spare parts and services from AnsaldoBreda. As at the end of 2009, DKK 496 million was outstanding. the management expects the discount to be realised. Since the asset’s existence is dependent on uncertain future events, revenue recognition will occur only in line with future purchases of spare parts and services from AnsaldoBreda. please also refer to note 30. contingent liabilities mainly include costs in connection with DSB’s obligations under section 32 of the Danish public Servants Act concerning severance or availability pay for which DSB is liable under the Act on the independent public company DSB and on DSB S-tog A/S. the maximum liability amounts to approx. DKK 8.2 million (2008: DKK 8.8 billion) for public servants employed by DSB. DSB pays an ongoing pension contribution for public servants and employees on similar terms to the State calculated as a percentage of pensionable salary to cover the State’s pension obligation for public servants. contribution rates are based on different assumptions with regard to retirement age and salaries. Deviations from these assumptions may result in an adjustment of the contributions in the form of an additional payment to or from the state. An actuarial calculation of the capital value on 31 December 2009 based on assumptions for interest rates, inflation, expected retirement age, salaries and wages and mortality shows that DSB is not committed to an obligation relating to retired public servants and employed public servants and employees employed on similar terms to state employees. there are uncertainties in respect of determining the assumptions used for calculating the capital value, and there are some uncertainties associated with establishing principles for the adjustment of pension contributions. this may significantly affect the settlement of the obligation relating to retired and employed public servants and employees employed on similar terms to state employees. DSB’s assessment that reasonable and realistic assumptions have been applied for the calculation of the capital value. contingent liabilities include operating guarantees of DKK 315 million for DSB’s affiliated companies vis-a-vis the awarding authorities. commitments relating to the leasing of rolling stock totals DKK 686 million (2008: DKK 865 million) of which DKK 247 million falls due in 2010 and DKK 439 in the years 2011 and 2014. As part of its normal business operations, DSB has service and maintenance obligations as well as purchase and selling obligations. purchase obligations mainly comprise contracts relating to investments in tangible fixed assets. As at 31 December, 2009, the purchase obligation on ic2 and ic4 train sets totalled DKK 1.5 billion (2008: DKK 1.6 billion). the Group’s Danish companies are jointly and severally liable for tax on the consolidated taxable income up to and including 2004. When, as the administration company, DSB receives payment from the jointly taxed companies in the Group, DSB assumes liability for this. DSB, DSB S-tog a/s, Kort & Godt, A/S, DSB ejendomsudvikling A/S and DSB Arkitekter A/S are jointly VAt registered and are jointly and severally liable for payment of the Danish companies’ aggregate VAt liabilities. As mentioned on page 51, the eu commission has settled two complaints against the Danish Government. DSB is party to a small number of pending lawsuits. the outcome of these is not expected, individually or together, to have a significant effect on the company’s financial position. DSB is of the opinion that, following the commi2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=98http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9896 Group Note 28 Amounts in DKK million Related parties Ministry of transport Board of Directors and executive Board Basis 100% owner Management control 2009 2008 the DSB Group’s transactions with the Ministry of transport and related agencies and institutions (primarily Rail net Denmark) comprise: Revenues Revenue from transport contracts traffic revenues Rental income and sale of repair work, goods and other services Expenses etc. infrastructure charges punctuality bonus to Rail net Denmark Guarantee commission to the Danish State 644 12 615 12 14 3,986 8 171 3,877 8 21 the above purchase of services is inclusive of non-deductible share of purchase VAt. transactions with related parties took place at arm’s length, including on a cost allocation basis.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=99http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=9997 DSB AnnuAl RepoRt 2009 / AnnuAl AccountS / Note 29 Amounts in DKK million Segment information - primary segment Segmental information is provided for business segments corresponding to the breakdown into major legal entities. others include other affiliated and associated companies. in the DSB Group intercompany transactions have been eliminated. DSB 2009 net turnover total operating income total operating expenses profit before depreciation, amortisation and write-downs Depreciation, amortisation and write-downs net financials profit/loss before tax Profit/loss for the year Fixed assets current assets Total assets equity Minority interests provisions non-current liabilities current liabilities Total equity and liabilities 2008 net turnover total operating income total operating expenses profit before depreciation, amortisation and write-downs Depreciation, amortisation and write-downs net financials profit before tax Profit for the year Fixed assets current assets Total assets equity Minority interests provisions non-current liabilities current liabilities Total equity and liabilities 6,334 7,655 6,084 1,571 781 -60 730 552 14,807 2,049 16,856 7,343 1,026 2,939 5,548 16,856 2,386 2,536 1,481 1,055 578 -292 185 141 8,856 592 9,448 1,781 1,063 4,274 2,330 9,448 1,336 1,399 1,376 23 3 3 23 13 273 286 559 233 7 1 18 300 559 9,846 10,974 8,326 2,648 1,362 -547 739 558 21,919 2,611 24,530 7,343 20 2,091 7,218 7,858 24,530 5,928 6,986 5,892 1,094 738 54 410 343 15,102 3,411 18,513 7,348 993 3,602 6,570 18,513 2,404 2,613 1,540 1,073 579 -287 207 154 8,595 600 9,195 1,883 1,108 3,819 2,385 9,195 1,986 2,179 2,153 26 30 -6 -10 -9 1,272 354 1,626 1,125 15 -5 20 471 1,626 9,867 10,880 8,685 2,195 1,347 -388 460 341 21,978 3,729 25,707 7,348 15 2,071 8,036 8,237 25,707 DSB S-tog a/s Other DSB Group2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=100http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=10098 Note 30 Accounting for compensation from AnsaldoBreda S.p.A. compensation in connection with the contract to supply ic4 and ic2 totals DKK 2,250 million. of this, DKK 1,750 million is received in cash and DKK 500 million in the form of a discount on future purchases of spare parts and services from AnsaldoBreda. of the DKK 1,750 million, a total of DKK 250 million was received in 2005 and 2006 and DKK 600 million in 2009. the remaining DKK 900 million will be received during the first half of 2010. compensation is divided into interest on pre-payments, a reduction in the agreed purchase sum and other compensation based on the accounting model determined by the management. interest on pre-payments totals DKK 505 million for the period from 2005 to 2012. Reduction of the agreed purchase sum covers compensation for completion costs and additional costs totalling DKK 1,245 million. the remaining amount of DKK 500 million will be recognised in line with the future purchase of spare parts and services from AnsaldoBreda As at the end of 2009 accrued interest in the balance sheet was recognised at DKK 110 million and accruals relating to additional costs in the period up to final delivery at a total of DKK 512 million. Also included is compensation for completion costs offset from the cost price of the assets. the overall positive impact on operations in 2009 totals DKK 150 million (interest and other compensation).2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=101http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=10199 DSB AnnuAl RepoRt 2009 / otHeR AnnuAl inFoRMAtion AccountS / / other key figures 2005 Passenger services (in thousands of journeys) east West east-West other 1) Long-distance and regional transport 2) S-trains, incl. lille nord (2005-2006) Øresund (DSBFirst) Roslagsbanan Total number of train journeys 35,512 12,854 7,840 7,093 63,299 90,456 9,800 163,555 2006 2007 2008 2009 36,401 13,537 7,939 8,311 66,188 90,407 9,800 166,395 37,060 13,925 8,103 10,335 69,423 89,052 10,455 168,930 24,839 14,008 8,293 1,016 48,156 90,943 25,647 10,886 175,632 25,375 13,960 8,175 918 48,428 92,146 43,123 11,072 194,769 note 1: other includes Øresund transport, ic Bornholm and international. note 2: From 2005 to 2007, the part of the Øresund traffic relating to the coastal and Kastrup lines etc. is included in long-distance and regional transport east. in 2008, DSBFirst accounts for journeys on the Danish part of the coastal line and journeys across the Øresund which were originally included in long-distance and regional transport. Passenger km (million) long-distance and regional transport S-trains, incl. lille nord (2005-2006) Øresund (DSBFirst) Roslagsbanan Passenger km in total Production (in thousands of train km) long-distance and regional transport S-trains incl. lille nord (2005-2006) Øresund (DSBFirst) Roslagsbanan Production in total 39,262 15,593 2,486 57,341 40,631 15,538 2,206 58,375 39,328 14,947 2,455 56,730 36,812 15,286 4,362 2,317 58,777 36,916 15,471 15,226 2,400 70,013 4,392 1,142 117 5,651 4,527 1,126 117 5,770 4,635 1,080 125 5,840 4,009 1,084 750 131 5,974 4,031 1,097 2,040 132 7,3002010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=102http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=102100 2005 Rolling stock in operation 1) 2006 96 44 24 64 12 36 12 5 119 12 29 14 67 136 8 2007 96 3 44 24 65 12 36 6 119 29 14 67 122 8 2008 96 8 44 24 65 12 10 35 6 119 33 14 67 127 8 2009 96 16 24 1 65 12 13 84 20 35 6 119 33 14 112 60 - ic3 (train sets) ic4 (train sets) 2) iR4 (train sets) Øresund train sets MR (train sets) leased Desiro train sets leased ice-tD DSBFirst, Øresund train sets DSBFirst, iR4 (train sets) Diesel locomotives – Me electric locomotives – eA S-trains (train sets) 3) new S-trains (train sets) 4) Ml/Fl (train sets) leased Roslagståg (train sets) Shunting locomotives/tractors leased double-decker coaches passenger coaches couchettes 96 44 24 64 12 37 12 27 114 12 29 14 67 136 8 note 1: Rolling stock which is included in the DSB Group’s ongoing operations as at 31 December, 2009, i.e. excluding leased MR train sets. note 2: number of ic4 train sets delivered from AnsaldoBreda note 3: converted to four carriage train sets note 4: converted to eight carriage train sets Railway stations operated1) long-distance stations, incl. joint stations long-distance stations in Denmark with seasonal stops Stations out of Denmark with seasonal stops S-trains incl. joint stations and lille nord S-train stations in total (lille nord is not included) S-train joint stations with long-distance and regional trains S-train excl. common stations Roslagsbanan Stations in Sweden served by DSBFirst 305 159 4 23 90 85 -10 75 39 306 160 4 23 90 85 -10 75 39 301 160 4 23 85 85 -10 75 39 287 160 4 9 85 85 -10 75 39 310 155 85 85 -9 76 38 41 note 1: the number of railway stations is defined as stopping places included in DSB’s timetable and serviced by DSB as operator, including stations abroad with seasonal stops. Km line operated by DSB in Denmark Km line operated by DSB in Sweden 1,729 141 1,730 141 1,711 141 1,711 141 1,688 7922010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=103http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=103101 DSB AnnuAl RepoRt 2009 / otHeR AnnuAl inFoRMAtion AccountS / / 2005 Average number of full-time employees DSB - of this social commitment 1) DSB S-tog a/s - of this social commitment 1) Kort & Godt A/S (formerly DSB Detail A/S) - of this social commitment 1) DSB Sverige AB Roslagståg AB DSBFirst Danmark A/S and DSBFirst Sverige AB - of this social commitment 1) Total for DSB Group 6,630 171 1,892 21 211 162 183 9,078 2006 2007 2008 2) 2009 6,744 166 1,885 25 195 191 192 9,207 6,846 168 1,829 22 159 170 192 9,196 6,434 149 1,335 15 934 29 195 234 97 9,229 5,974 129 1,367 19 839 32 9 241 878 3 9,308 note 1: the social chapter includes schemes such as flex jobs, light jobs, employment rehabilitation and early retirement schemes which were introduced in 1996 with a view to boosting public sector employment for persons with reduced working capacity in Denmark. note 2: Major changes to the organisation took place between 2007 and 2008 as a result of which employees were transferred from DSB and DSB S-tog a/s to Kort & Godt A/S.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=104http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=104102 annual accounts for Business areas According to the Accounting Regulations and the competition law guidelines for DSB issued by the Ministry of transport, DSB is required to prepare annual accounts for its main business areas in an aggregated form, For the parent corporation, annual accounts are prepared for the main business areas “Rail passenger traffic carried out as public service according to a negotiated contract” corresponding to the activities under the transport contract with the Ministry of transport and “Activities subject to competition”. the accounts for the business areas are prepared according to an adjusted full-cost allocation method using Activity Based costing methods as a principle for allocating income and expenses. principles and methods for allocation of income and expenses must be based on the individual product’s use of the overall capacity facilities, the presentation of annual accounts for main business areas must be based partly on income and expense records and partly on allocations according to key ratios based on statistical data. DSB’s annual accounts by main business areas appear overleaf, According to these, DSB recorded a profit before tax including revenue from transport contracts of DKK 476 million for railway passenger services offered as public service according to a negotiated contract and a loss before tax of DKK 16 million for “Activities subject to competition.” As required by Section 9(7) of the Accounting Regulations, DSB’s state authorised public accountant must issue a statement DSB as to whether the policies and methods applied in the 2009 annual accounts are in accordance with the requirements of Section 9(1)-(6) of the Accounting Regulations and the competition law Guidelines for DSB. According to Section 12(5) of the Accounting Regulations, DSB’s state authorised public accountant is required to issue a separate statement as to whether DSB’s bookkeeping and conduct of business are in accordance with the Accounting Regulations and competitive law Guidelines for DSB. consequently, the annual accounts for the business areas are not covered by the auditors’ reports for DSB’s Annual Report. With regard to the disclosure requirements stated in section 2,5 of the competition law guidelines for DSB regarding provisions, balance sheet and the development in changes in and specification of equity, please refer to the annual accounts.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=105http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=105103 DSB AnnuAl RepoRt 2009 / otHeR AnnuAl inFoRMAtion AccountS / / Rail passenger traffic carried out as public service according to a Amounts in DKK million net turnover, excl, revenue from transport contracts Revenue from transport contract other operating income Work performed by the enterprise and capitalised Total revenue cost of raw materials and consumables other external expenses Staff expenses Reversal of provisions Total expenses Depreciation, amortisation and write-downs on intangible and tangible fixed assets Operating profit total net financials* Profit/loss before tax Profit/loss for the year negotiated contract 3,207 2,275 294 348 6,124 599 2,046 2,605 -1 5,249 Activities subject to competition 446 0 416 0 862 148 242 253 0 643 Total for DSB parent company 3,653 2,275 710 348 6,986 747 2,288 2,858 -1 5,892 595 280 196 476 355 143 76 -92 -16 -12 738 356 104 460 343 * in the parent company DSB, the results for the affiliated and associated companies are recognised after tax. tax is apportioned at DKK 53 million for rail passenger transport carried out as public service in accordance with a negotiated contract and DKK – 3 million for Activities subject to competition.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=106http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=106104 DSB’S BOARD OF DIRECTORS Mogens Granborg chairman Annette Sadolin Andreas Hasle Steen Gede vice-chairman Lars Andersen flemming Rasmussen Gunhild Lange Skovgaard Lilian Mogensen Ulrik Salmonsen2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=107http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=107105 DSB AnnuAl RepoRt 2009 / otheR inFoRMAtion / DSB’S CORPORATE MANAGEMENT Søren Eriksen president and ceo Gert frost excecutive vice president, & ceo, DSB S-tog a/s Mogens Jønck excecutive vice president, commercial Bartal Kass excecutive vice president, Finance frank Olesen excecutive vice president, Director, long-Distance & Regional trains Lone Lindsby excecutive vice president, hR & organisation2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=108http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=108106 DSB’S ORGANISATION DSB Søren Eriksen communication Anna Vinding planning & traffic Ove Dahl Kristensen internal audit Michael R. Lundgaard corporate Secretariat and legal Affairs Peder Nedergaard N. commercial Mogens Jønck DSB S-tog a/s Gert frost long-distance & Regional trains frank Olesen Finance Bartal Kass hR & organisation Lone Lindsby DSB International Peter Christensen Digital Channels Anne Mette Koch Business Development Claus Klitholm Group Marketing Vacant Kort & Godt A/S Søren S. Rasmussen DSB Arkitekter A/S Gunnar Sørensen DSB Rejsekort A/S Søren H. Sørensen Production Lars Nordahl Lemvigh Engineeing and Maintenance Lars Wrist-Elkjær Sales Niklas Marschall IC4 Programme Torben Kronstam Train Maintenance Morten H. Jakobsen Production Per Baktoft Sales Anne-Lise B. Sørensen Onboard Service Erik Christensen Traffic Stig Friisbæk Finance and Secretariat Dorthe M. Caspersen Accounting Klaus Bohse M&A and Financial Analysis Michael Juhl-Sørensen Properties Act. Niels A. Dam Procurement and Logistics Ole Egebøl Regulatory Affairs Ann Sønder Group Finance & Risk Mangement * Gert Mikkelsen DSB Ejendomsudvikling A/S Steen Ø. Schmidt hR Susanne Mørch Koch IT René Munk-Nissen Strategy & Portfolio Management Lars Ø. Pedersen CSR Vacant * Refers to the CEO in safety matters DSB: corporate information Address DSB Sølvgade 40 1349 copenhagen K Denmark tel. +45 70 13 14 15 www.dsb.dk cvR no. 25050053 Ownership DSB is an independent public company owned by the Ministry of transport. Municipality of domicile copenhagen Auditors KpMG Statsautoriseret Revisionspartnerselskab the national Audit office of Denmark Bank nordea2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=109http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=109107 DSB AnnuAl RepoRt 2009 / otheR inFoRMAtion / DSB’s Board of Directors The Board of Directors and the Directors’ directorships in Danish and foreign companies. Mogens Granborg, Chairman Member of the Board of Directors of Folketeatret. chairman of Atv (the Danish Academy of technical Sciences Finance council). Joined DSB’s Board of Directors on 27 May, 2002. Steen Gede, Deputy Chairman Director, Sgups holding Aps. chairman of the Boards of Directors of elsparefonden, Forenede Service A/S, carl F. international A/S, and unicare nordic A/S with four subsidiaries. Member of the Board of Directors of Sanistå1, Søndagsavisen a-s, Gumlink A/S, Brandhouse A/S and F.A. thiele A/S. Joined DSB’s Board of Directors on 24 May, 2000. Gunhild Lange Skovgaard professor, Doctor of Medicine, university of copenhagen. consultant at the Dermatology Department, Bispebjerg hospital, Director of langepharm ApS, Member of the Board of Directors of unicare nordic A/S and DSB S-tog a/s. Joined DSB’s Board of Directors on 25 June, 1999. Lars Andersen Director of the economic council of the labour Movement. Member of the Boards of Directors of industripension holding A/S, industriens pensionsforsikring A/S and Arbejdernes landsbank A/S. Joined DSB’s Board of Directors on 25 June, 1999. Annette Sadolin chair of Østre Gasværk theatre, vice-chair of Dansk Standard, member of the Board of Directors of topdanmark Forsikring A/S, Skodsborg Kurhotel og Spa A/S, lindab international AB, Båstad, Sweden, Ratos AB, Sweden, ny carlsberg Glyptotek and DSv. Joined DSB’s Board of Directors on 28 April, 2009. Lilian Mogensen Member of the Board of Directors of the it university. copenhagen and Summit consulting. Joined DSB’s Board of Directors on 28 April, 2009. Ulrik Salmonsen engine instructor. chairman of Danske Jernbaneforbund. chairman of the Boards of Directors of Dan Kantine Service A/S and Dan ejendomsservice A/S. Member of the Board of Directors of lån & Spar Bank A/S and StK-ByG A/S and chairman of tjenestemændenes Forsikring. Joined DSB’s Board of Directors on 25 June, 1999. Andreas Hasle traffic inspector. chairman of hK trafik & Jernbane. Member of the Board of Directors of Dan Kantine Service A/S, Dan ejendomsservice A/S and nanocover A/S. Joined DSB’s Board of Directors on 25 June, 1999. flemming Rasmussen Mechanic. national chairman of Fo-Jernbanedrift. vice chairman of Dansk Metal Århus and Dan Kantine Service A/S. Member of the Board of Directors of Dan ejendomsservice A/S. Joined DSB’s Board of Directors on 27 May, 2003. DSB’s executive Board DSB’s Executive Board and members of the Executive Board’s directorships in other Danish and foreign companies Søren Eriksen, President and CEO chairman of the Boards of Directors of DSB S-tog a/s, DSBFirst Danmark A/S, DSB Rejsekort A/S, DSBFirst Sverige AB, DSBFirst ApS and DSB Sverige AB. Member of Danske Bank’s Shareholders’ committee. DSB’s corporate Management DSB’s Corporate Management’s directorships in other Danish and foreign companies Mogens Jønck, Excecutive Vice President, Commercial chairman of Kort & Godt A/S and DSB Arkitekter A/S, vice-chairman of Rejsekort A/S and DSB Rejsekort A/S, member of the Board of Directors of Roslagståg AB, Restaurationsselskabet nørrebro Bryghus A/S and Baldersbrønde Bryggeri A/S. frank Olesen, Excecutive Vice President, Long-Distance & Regional Trains Member of the Board of Directors of Mark information A/S Lone Lindsby, Director, Excecutive Vice President, HR & Organisation Member of the Board of Directors of Danmarks Jernbanemuseum. Bartal Kass, Excecutive Vice President, finance chairman of DSB ejendomsudvikling A/S, member of the Board of Directors of DSB First ApS, DSBFirst Danmark A/S, DSBFirst Sverige AB, Roslagståg AB, DSB norge A/S and DSB uK ltd. Gert frost, Excecutive Vice President, & CEO, DSB S-tog a/s chairman of pack tech A/S and Jens holst A/S. Member of the Board of Directors of DSB Rejsekort A/S, Mp3 A/S, A/S A.p. Botved and Magdalenas ApS.2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=110http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=110Kårsta Österskär Stockholm 108 Mod Flensburg Ham burg Berlin A m sterdam B asel München Strömstad Åmål Puttgarden Töreboda RAIL NETWORK IN DENMARK, SWEDEN AND GERMANy Uddevallä Falköping Øresundstra kken Krösatåg Västtra k International Roslagsbaban Strömstad Hamburg Åmål Kårsta Borås Göteborg Jönköping Nässjö Österskär Vetlanda Stockholm Töreboda Oskarshamn Värnamo Varberg Alvesta Veksjö Øresundstra kken Halmstad Krösatåg Västtra k Uddevallä Falköping Kalmar Roslagsbaban Strömstad Øresundstra kken Krösatåg Västtra k International Roslagsbaban Åmål Karlskrona Kristianstad Borås Göteborg Jönköping Töreboda Nässjö Vetlanda Berlin Oskarshamn Värnamo InterCityLyn (high-speed) InterCity Regional Trains S-trains Øresund transport International Other train services Ferry services Stops. See timetable Stops. International trains Halmstad Varberg Uddevallä Alvesta Falköping Veksjö Kalmar Borås Göteborg Mod Flensburg Ham burg Berlin A m sterdam B asel München Jönköping Nässjö Karlskrona Puttgarden Kristianstad Vetlanda Kårsta Oskarshamn Värnamo Österskär Stockholm Hamburg Varberg Alvesta Veksjö Halmstad Øresundstra kken Krösatåg Västtra k Roslagsbaban Kalmar Karlskrona Berlin Kristianstad Mod Flensburg Ham burg Berlin A m sterdam B asel München Puttgarden Mod Flensburg Hamburg Berlin Amsterdam Basel München Puttgarden Hamburg Be n rli 5 Koblenz Fra nk fu rt ) (M Hanau Rüdesheim Darmstadt en ad sb ie W Rheingau Groß-Umstadt Wiebelsbach Koblenz Rüdesheim Darmstadt ) (M t ur kf an Fr en ad sb ie W Odenwaldbahn Eberbach Hanau Berlin Groß-Umstadt Wiebelsbach Rheingau Odenwaldbahn Eberbach2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=111http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=111The s-Train neTwork2010-04-13T12:45:20+02:00http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=112http://ipaper.ipapercms.dk/DSB/DSBEnglish/Reports/2009Annual/?Page=1122010-04-13T12:45:20+02:00