GWM Water Annual Report 2015/16 2015/16 ANNUAL REPORT Vision Sustainable water for regional growth, a healthy environment and vibrant communities. Mission Providing innovative and affordable services through partnerships with stakeholders, customers and the community. Organisational Values Customer We will promote a culture that respects the views of our customers and our people Transparent with a ‘can do’ approach. We will be able to promote the merit of our decision making. Organisation We will work as a team to Efficient deliver agreed organisational We will ensure that the priorities whilst respecting performance of our people, assets the views of stakeholders. and resources are optimised in the provision of services. Accountable We will be accountable for the Disciplined actions we take and responsible We will ensure that our policies for those we influence. and processes support a consistent attainment of quality and safety in all aspects of our operations. Contents

Report of Operations...... 2 About GWMWater...... 4 Understanding Our Business...... 5 Our Board...... 6 Organisational Structure...... 10 How We Operate...... 11 Our Employees...... 12 Occupational Health and Safety...... 13 Water Consumption...... 14 Bulk and Environmental Entitlements...... 17 Recreation Water...... 21 Statement of Obligations...... 22 Economic Sustainability...... 23 Social Sustainability...... 26 Major Non-Residential Water Users...... 27 Environmental Sustainability...... 28 Sustainable and Resilient Water Services Systems...... 30 Management Strategies...... 31 Greenhouse Gas and Energy Emissions...... 32 Performance Reporting...... 36 Independent Auditor Report...... 40 Risk Management Compliance Attestation...... 42 Financial Statements...... 43 Financial Statutory Certificate 2015...... 94 Auditors Financial Report...... 95 Disclosure Index...... 97 Service Area Map...... (inside back cover)

GWMWater Annual Report 2015/16 | 1 Report of Operations

The Wimmera has experienced its second consecutive year of extremely low rainfall and the fifth consecutive year of below average rainfall that has yielded fifty percent or less than average inflow to storages across the five year period. Over the course of the summer, virtually the entire footprint of the GWMWater service area was acknowledged as being in drought. The continuation of these low rainfall years has only reinforced the reality of climate change and the potential impact on our region. It highlights the value of the rural pipeline extension projects that have saved significant volumes of water that are sustaining the natural environment, enhancing regional productivity and maintaining the social fabric of the region.

Drought has had a significant impact The most significant studies substantially funded by the on the principal agricultural activity acknowledgement of the value of Victorian Government to assess of the region in broad acre cereal the rural pipelines was the $40 the viability of further rural pipeline and pulse production. The water million commitment by the Victorian extensions. These studies will resources that have been secured Government and the $20 million also explore whether additional through pipeline projects have been pledge by the Commonwealth water savings can be obtained able to sustain livestock activities to the $80 million South West by reengineering the Rocklands- and maintain other agricultural, Loddon Project. The South West Taylors Lake channel, including horticultural and viticulture activities Loddon Project was a response an assessment as to whether the where connected to the rural to the impact of climate change outlet structure at Lake Toolondo reticulated pipeline networks. on a significant proportion of the can be remodelled to make water at Loddon Shire that has typically had low levels more easily accessible. The value of rural pipelines a reliable catchment to support created an unprecedented level farmers’ agricultural activities. With the prospect of a zero water of demand for rural areas outside This project will establish greater allocation to the recreation water the footprint of the rural pipelines connectivity of the water systems entitlement, the GWMWater to be connected to the reticulated by establishing a connection to Board underwrote supply to the pipeline network. During the the eastern catchments via the recreation lakes from uncommitted year, pipeline extensions to the Waranga western channel as growth water held by GWMWater. Landsborough Valley, Pella and part of the overall solution. The decision by the GWMWater Quambatook North were completed. Board was an acknowledgement This was in addition to many smaller Other parts of the region have of the important role these lakes extensions that were generally been identified as vulnerable from play in maintaining the social undertaken by landowners. Planning a water supply perspective under fabric of the communities in the for other rural pipeline extensions climate change. These areas in Northern Wimmera and Southern for Wartook South and Coonooer the East Grampians and West Mallee. The importance of which Bridge are well advanced. Wimmera will be the subject of in this season was heightened

2 | GWMWater Annual Report 2015/16 in the context of the drought. rural customers was particularly $25.2 million, $3.6 million better The connecting infrastructure for challenged in 2015/16 and gave rise than the $21.6 million recorded in the recreation lake was to the onset of Stage 2 restrictions 2014/15. The improved viability completed during the year and the in the latter summer period. is validated by the improved Ouyen community, supported by interest cover ratio which has the Rural City Council is In the Northern Mallee, our water increased from 3.4 times in well advanced in the conversion supply operations were challenged 2014/15 to 3.9 times in 2015/16. of the old urban water storages to by the onset of a blue green a recreation lake that will service algae event in the Murray River During the year, the new the greater Ouyen community. that commenced in the middle GWMWater Board reviewed the of summer and lingered well into strategic directions four months after In 2015/16 GWMWater completed autumn. The bloom primarily being formed on 1 October 2015. projects that wrap up the Wimmera centred on the upper reaches of The review did not give rise to a Mallee Pipeline fulfilling the the Murray River above Barham/ significant change to the strategic financial commitment it made to Koondrook to the Hume Weir directions from those established the project. All of the rural pipeline but gradually drifted downstream by the previous Board. There was extension projects mentioned to GWMWater extraction points a stronger acknowledgement of above were the beneficiary of some at , , and the environment that went beyond partial funding from the Wimmera Wemen. We were able to respond the context of climate change. By Mallee Pipeline unspent funds. with a mixture of reverse pumping acknowledging the implications The flagship $7.5 million Rural and water carting to maintain supply of climate change, the Board Pipeline Intelligence Project that and providing disclosure where also acknowledged the strategic involved the construction of the supply may have had elevated importance of rural pipeline Taggle low power communications levels of blue green algae. During extensions as a means of enhancing network and the installation of tags the event 69 Megalitres of water agricultural productivity of the region. on 14,218 rural water meters, 59 was carted to GWMWater storages flow meters, 362 pressure meters (67 ML) and customers (2 ML) at GWMWater welcomes the and 28 water quality meters was a cost of $0.881 million. We also acceptance by the Victorian completed during the year. This year undertook measures to improve Government that climate change we also finalised the installation the redundancy of the network, needs to be acknowledged. This of firefighting infrastructure across including a connection from has been reflected in the Statement the network with the Wimmera Quambatook into Supply System 5, of Obligations and is a central Mallee Pipeline now compliant a connection from Wimmera Mallee theme of the Water for with the CFA model for firefighting Supply System 3 to policy agenda that is presently infrastructure across the network. storage and a connection from being finalised. The possible futures the Eureka storage to the Piangil for the Wimmera Mallee region The Victorian Government also pipeline. The capital expenditure under climate change will continue funded a number of drought to improve the redundancy of the to present challenges for water initiatives with the most significant system cost $0.182 million. supply. We will continue to work with being standpipes and tanks that government and key stakeholders provided improved rural landowner The strength of revenue in 2015/16 in the region to ensure that these access to water in areas not covered provided us with the capacity to implications are well understood and by the rural pipeline network. fund the additional cost created by that we develop adaptive strategies the blue green algae event. The to secure supply for the competing The drought gave rise to the highest increased revenue combined with demands for water as well as water consumption year since the further improvements in productivity reducing our carbon footprint. onset of water restrictions in the has continued to enhance the period of the millennium drought. financial viability of GWMWater We present the GWMWater 2015/16 Urban water consumption was in 2015/16. Free cash flow from Report of Operations in accordance 10,211 ML with the most significant operations in 2015/16 was with Standing Directions 4.2 of the increase being in Stawell where Financial Management Act 1994. the Stawell Gold mine significantly increased its water consumption. Rural water consumption was also greater than in previous years with both the Wimmera Mallee and Northern Mallee experiencing increased water consumption of 12% and 7% respectively. Our Eastern Grampians system Peter Vogel Mark Williams that also provides access to Chairman Managing Director

GWMWater Annual Report 2015/16 | 3 About GWMWater

Grampians Wimmera Mallee Water Corporation (trading as GWMWater) is a government-owned Statutory Corporation established on 1 July 2004 under the Water Act 1989. The Hon Lisa Neville MP, Minister for Environment, Climate Change and Water was the responsible Minister for the period 1 July 2015 to 22 May 2016. The Hon Lisa Neville MP, Minister for Water was the responsible Minister for the period 23 May 2016 to 30 June 2016.

GWMWater has one of the largest technology, recycle 100 percent of we collect wastewater which is geographic footprints of all Victorian wastewater, operating pipelines, transferred, treated and completely water businesses, covering major storages, dams, weirs and reused. To deliver these services some 62,000 square kilometres pump stations to service our we manage a significant number of or 25 percent of Victoria. The customers. We have responsibility assets including bulk water supply service area is similar in size to under the Wimmera Glenelg Bulk reservoirs, hundreds of smaller Tasmania and includes thirteen Entitlement Order to perform storages, tanks, water towers and municipalities with seven where we the functions of Resource approximately 14,000 km of pipes. have full coverage and a further Manager and Storage Manager. six in part. We provide services to GWMWater is also resource Our water services are provided approximately 72,000 people living manager for groundwater and for use in and around homes, either on farms or in one of 71 urban surface water licencing. in businesses, on farms, for centres across Western Victoria. environmental purposes and Our large service area presents for recreational and sporting What We Do major challenges in the provision uses for community benefit. GWMWater is a vertically integrated of water and wastewater services. water business directly involved We harvest water in the Grampians, Our wastewater services operate in all aspects of the water cycle. extract water from groundwater mainly in our larger towns and bores or pump water from the involve extensive recycling We operate water and wastewater Murray River. From these points we for watering sporting fields, treatment plants in many of our store, treat, transfer and distribute parks and gardens, vineyards 71 towns, utilise desalination water. In sewered urban areas, and agricultural uses.

4 | GWMWaterWater Annual Annual Report Report 2015/16 2015/16 Understanding Our Business

GWMWater Strategic Directions Glenelg system. The Western and the region as a whole in We operate within a dynamic Region SWSS also embraced balancing social, environmental region in an environment that is the West Wimmera Groundwater and economic outcomes. very much weather dependant. Management Strategy developed Our strategic directions document by GWMWater and provided the We continue to drive sustainable for 2013-18 identifies six key framework for GWMWater’s 50 year resource management from themes which are linked together Water Supply Demand Strategy. our strategic planning through by the organisation’s vision of: to our operational practice. ‘Sustainable water for regional Our Water Our Future is the policy growth, a healthy environment document of 2004 that substantially set the policy agenda of the past and vibrant communities’. decade. Our Water Our Future saw Customer Strategic Themes the introduction of independent price Focus regulation, established the These themes are integrated framework for better defining through our corporate and Service water rights and further Financial business planning so that Excellence evolved the development all actions contribute to Sustainability of water markets as a achievement of our vision. way of enabling water to transfer to higher value use. Sstainale Government Framework Our operational framework Groth A new water policy document Infrastructure is strongly influenced by the ‘Water for Victoria’ has and Systems economic, social and environmental been the subject of a Our People policies of Government. consultative process during 2015/16. Water for From a water supply perspective, Victoria is in its advanced Environmental these policies need to be consistent stage of development and Improvement with the framework of the Murray its release is imminent. A core Darling Basin Plan (MDBP), the theme of Water for Victoria will be Western Region Sustainable Water an acknowledgement of climate Supply Strategy (Western Region change and an expectation that Sustainability is also synonymous SWSS) and Our Water Our Future. the water sector will be involved in with the liveability of our region planning for and mitigating against which is a key focus of our The Western Region SWSS the implications of climate change. current strategic directions. outlines the various supply sources in Western Victoria and the Our Sustainability Framework We welcome the initiatives of the extent that these are committed For GWMWater, sustainability Minister for Water to have climate to consumptive water use. For means being able to continuously change formally recognised and will GWMWater, the Western Region provide water and wastewater continue to develop initiatives that SWSS recognises the benefit of the services which support better adapt to climate variability Wimmera Mallee Pipeline on future customers, various stakeholders from a water resource use and water supplies in the Wimmera carbon efficiency perspective.

GWMWater Annual Report 2015/16 | 5 Our Board

GWMWater was constituted by Peter is a long established primary Association and stepped down Ministerial Order with effect from producer in the area and in November 2015. She has a 1 July 2004, under Sections 98 has a wealth of knowledge and Bachelor of Arts, Graduate Diploma and 100 of the Water Act 1989 experience in the water industry of Public Relations and has (the Act). Section 124 of the Act and primary production. Peter was completed the Australian Institute provides GWMWater with the appointed a Board member of of Company Directors course. powers necessary to perform its GWMWater (formerly Grampians functions, however those powers Water) in February 1995 and up until Caroline Welsh can only be exercised to perform September 2011 served as Deputy Caroline holds a Master of Business a function given to GWMWater Chair in successive Boards. In this (Agribusiness), a Graduate Diploma by an Act of Parliament. time, Peter played a pivotal role in of Rural Resource Management the delivery of the Wimmera Mallee and a Bachelor of Agricultural Key responsibilities of Pipeline, Chairing the Wimmera Science. Caroline is a partner in the Board include: Mallee Pipeline Project Steering the family cropping farm, Chair of a. Setting the broad strategy, Committee and representing the Birchip Cropping Group and objectives and performance GWMWater Board on the Wimmera on the Loddon Mallee Regional targets for the Corporation. Mallee Pipeline Project Council. Development Committee. She has previously held positions b. Risk management oversight for Peter became an elected member with the state government in Swan all key business and operational of the Victorian Water Industry Hill working with irrigators. risks including public health and Association (VicWater) Board in safety, occupational health and September 2014 and was elected David Jochinke safety and being informed and Chair of VicWater in October David is currently the business aware of residual risk levels. 2015, a positon he still holds. owner and manager of A.V Jochinke c. Reviewing the Corporation’s and Co. He is also a board member Mary Bignell - Deputy Chair progress towards achieving of the National Farmers Federation its specific goals. Mary has 20 years experience and Vice President of the Victorian working in the Wimmera with a d. Reviewing the internal financial Farmers Federation. David has a background in strategic planning, and operational controls for Diploma of Applied Science and evaluation, auditing and emergency the Corporation to ensure that has been an Australian Nuffield management in the private and they are effective and current Scholar and Australian Rural public sector. She has a Bachelor (including non-compliance, anti- Leadership Program recipient. of Agriculture Science and is fraud, anti-corruption and critical a member of the Australian incident reporting systems). Des Powell Institute of Company Directors. Des is a part time Commissioner e. Overseeing the development for the Victorian Commission for and approval of strategic plans, Mary is Deputy Chair of the Gambling and Liquor Regulation. corporate plans, annual reports, GWMWater Board, Chair of In addition he is a Director of key policies and procedures. the Environment and Works Victorian Regional Channels Committee and a member of the Peter Vogel OAM – Chairman Authority and Federation Training. Remuneration Committee. Peter Vogel OAM was initially Des is also Chair of Mackillop Family Services. He has a Bachelor appointed Chairman of the Bronwen Clark GWMWater Board in September in Economics and Politics and Bronwen is the Managing Director 2011 and was reappointed on is a Graduate of the Australian for Thriving Regions Consultants 1 October 2015. As Chairman, Institute of Company Directors. and is the Deputy Chair at Peter also Chairs the GWMWater Volunteering Western Victoria. Remuneration Committee Paul Battista Bronwen previously held a position and is an ex-officio member Paul previously served as Deputy as Community Representative on all Board Committees. Chairman for the Glenelg Region on the Wimmera Development Water Authority from October

6 | GWMWater Annual Report 2015/16 2001 to September 2005 and chairing the interdepartmental quality upgrades, investments that worked through a successful reference group for the Victorian have improved water security and amalgamation to form the Wannon Rural Drainage Strategy and the introduction of independent Water Corporation and served as is a member of the Victorian service and price regulation by the a Director from 2005 to 2010. He Catchment Management Council. Essential Services Commission. was also elected to the Southern Peta has a Bachelor of Chemical Grampians Shire in 2008 and Engineering, a Bachelor of Science Mark is a Certified Practicing re-elected in 2012 to current. (Pharmacology and Toxicology) Accountant and holds a Masters Paul is a member of the Audit, and is a Graduate of the Australian of Business Administration. Mark Governance and Risk Committee. Institute of Company Directors. brings a wealth of experience to Paul is committed to the shared the role beyond his water industry balances of water resources for Mark Williams – experience which includes roles the GWMWater region and to the Managing Director in the power industry, health water grid for the State of Victoria. Mark has been with GWMWater and public service where he and the former Grampians Water started his career in 1985. Peta Maddy since 1996. Mark was appointed Peta has a background in water Managing Director in 2012 and Mark has also served on the engineering and management prior to this held the position of Wimmera Health Care Group including her current role as an Chief Finance Officer. Mark has Board since 2001 and held the associate at the consulting firm been responsible for overseeing position of President from 2010 to Aither and as past President of the the commercial implementation 2016. Mark resigned his position Victorian branch of the Australian of water reforms in the region from the Wimmera Health Care Water Association. She is currently that include the delivery of water Group Board on 30 June 2016.

Board and Committee Attendance July 2015 – June 2016

Number of Audit Number of Number of Number of Governance and Environment and Remuneration Director Board meetings Risk Committees Works Committees Committees attended attended attended attended Peter Vogel 12* 6* 4 3 Mary Bignell 12* 4* 3 3 Bronwen Clark 8* 3 0 0 (Commenced 1 October 2015) Caroline Welsh 8* 0 3 2 (Commenced 1 October 2015) David Jochinke 9* 3 0 0 (Commenced 1 October 2015) Des Powell 8* 3 0 2 (Commenced 1 October 2015) Paul Battista 9* 3 0 1 (Commenced 1 October 2015) Peta Maddy 9* 0 3 0 (Commenced 1 October 2015) Chris Hewitt 3 1* 1 0 (Ceased 30 September 2015) Samantha Matthews 3 3* 0 0 (ceased 30 September 2015) Leo Delahunty 3 3* 0 0 (Ceased 30 September 2015) Reid Mather 2 1* 1 0 (Ceased 30 September 2015) Kate Vinot 3 1* 1 1 (Ceased 30 September 2015) Mark Williams 12* 6* 4 3 (Managing Director) Total number of meetings 12* 6* 4 3

* Includes Special Board and Committee Meetings

GWMWater Annual Report 2015/16 | 7 Standing Committees of the Board Environment and Works Committee

1 July 2015 - 30 September 2015 1 October 2015 - 30 June 2016 • Chris Hewitt (Chairman) • Mary Bignell (Chairperson) • Kate Vinot • Caroline Welsh • Reid Mather • Peta Maddy • Peter Vogel (Ex-Officio) • Peter Vogel (Ex-Officio)

The Committee has responsibility for the following:

a. Assessing the quality of d. Assessing the adequacy and g. Reviewing relevant internal GWMWater’s environmental effectiveness of internal controls. audit reports, incorporating reporting and management management responses. e. Evaluating the independence, policies and procedures. efficiency and effectiveness h. Reviewing operations, b. Monitoring compliance of relevant audits. maintenance and capital works with relevant laws and expenditure against adopted f. Where appropriate, evaluating regulations significantly business plan budgets. internal annual audit plans impacting on GWMWater. for risk assessment, scope, i. Monitoring and providing c. Monitoring actual performance approach and reviewing relevant input into the process against corporate and the coordination of internal of negotiating Environmental operational plans. audit programs. Entitlement and Bulk Entitlement Orders applicable to GWMWater.

8 | GWMWater Annual Report 2015/16 Remuneration Committee

1 July 2015 - 30 September 2015 1 October 2015 - 30 June 2016 • Peter Vogel (Chairman) • Peter Vogel (Chairman) • Mary Bignell • Mary Bignell • Kate Vinot • Caroline Welsh • Des Powell

The Committee has responsibility for the following:

a. Determine GWMWater c. Ensure the state government policy and practice for remuneration principles executive remuneration. are observed in relation to remuneration for executives. b. Determine the individual remuneration packages d. Observe the requirements of the for its executive staff. Government Sector Executive Remuneration Panel (GSERP) as varied from time to time.

Audit Governance and Risk Committee

1 July 2015 - 30 September 2015 1 October 2015 - 30 June 2016 • Leo Delahunty (Chairman) • Des Powell (Chairman) • Mary Bignell • David Jochinke • Samantha Matthews • Bronwen Clark • Peter Vogel (Ex-Officio) • Paul Battista • Peter Vogel (Ex-Officio)

All members of the Committee are independent in character and judgement. There are no relationships or circumstances which could affect, or appear to affect, the member’s judgement.

The Committee monitors and has oversight for the following: a. Financial performance d. The scope of work, g. GWMWater’s process for and the financial reporting independence and performance monitoring compliance with process, including the annual of the financial external auditor. laws and regulations and its financial statements. own code of conduct and e. The operation and code of financial practice. b. The scope of work, implementation of the risk performance and independence management framework. h. The Committee shall be of internal audit. committed to continuous f. Matters of accountability and improvement in Occupational c. The engagement and dismissal internal control affecting the Health and Safety. by management of any chief operations of GWMWater. internal audit executive.

GWMWater Annual Report 2015/16 | 9 Organisational Structure

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10 | GWMWater Annual Report 2015/16 How We Operate

Freedom of Information Information Available on Request its employees. These procedures The Freedom of Information Information relevant to the headings can be accessed on GWMWater’s Act 1982 allows the public listed in Financial Reporting website www.gwmwater.org.au. right of access to documents Direction 22G of the Financial held by GWMWater. Management Act 1994 is held at Reporting procedures the office of GWMWater and is You can make a protected There was one Freedom of available on request, subject to disclosure about GWMWater Information application received the requirements of the Freedom or its Board members, officers during 2015/16. Full access to of Information Act 1982. or employees by contacting the requested information was granted. Department of Environment Land, Compliance with the Water and Planning (DELWP) or Applications under the Act should Protected Disclosure Act 2012 the Independent Broad-Based be made in writing to the Freedom (formerly the Whistleblowers Anti-Corruption Commission on the of Information Officer, GWMWater, Protection Act 2001) contact details provided below. PO Box 481, Horsham 3402 The Protected Disclosure Act 2012 enclosing details of the encourages and assists people in Please note that GWMWater information requested and making disclosures of improper is not able to receive payment of the application conduct by public officers and protected disclosures. fee ($27.90 from 1 July 2016). public bodies. The Act provides Further charges may be payable protection to people who make Contacts depending on the complexity disclosures in accordance with the Department of Environment and nature of the request. Act and establishes a system for the Land, Water and Planning matters disclosed to be investigated PO Box 500, Building Act 1993 and rectifying action to be taken. East Vic 3002 GWMWater conducted an inspection Ph: 03 9637 8697 of its buildings and processes The Act enables people to make Website: www.delwp.vic.gov.au in relation to compliance with disclosures about improper the Essential Safety Measures conduct within the public sector Independent Broad-Based Anti- provisions of the Building Act without fear of reprisal. It Corruption Commission Victoria 1993. An inspection and reporting aims to ensure openness and GPO Box 24234, process has been developed and accountability by encouraging Melbourne Victoria 3001 incorporated within the GWMWater people to make disclosures and Website: www.ibac.vic.gov.au workplace inspection procedure. protecting them when they do. Phone: 1300 735 135 Email: see the website above National Competition Policy GWMWater has established for the secure email disclosure procedures for the protection of GWMWater has continued to comply process, which also provides persons from detrimental action with the legislative requirements for anonymous disclosures. and principles agreed under the in reprisal for making a protected National Competition Policy. disclosure about GWMWater or

2015/16 2014/15 number number The number of disclosures made by an individual to GWMWater and notified to the Independent Broad‑Based Anti‑Corruption Commission Assessable disclosures 0 0

GWMWater Annual Report 2015/16 | 11 Our Employees Staff Numbers 2015/16

Fixed term and On Going Employees (Excludes Casuals and Fixed Term) casual employees Employee (headcount) Full Time (headcount) Part Time (headcount) FTE FTE June 2016 166 151 15 159.25 14 June 2015 167 153 14 161 13

Fixed term Fixed term JUNE 2016 and casual JUNE 2015 and casual employees employees Employee Employee FTE Excludes FTE Excludes (headcount) (headcount) Casuals and FTE Casuals and FTE Excludes Casuals Excludes Casuals Fixed Term Fixed Term and Fixed Term and Fixed Term Gender Male 120 119.74 8.89 121 120.74 6.39 Female 46 41.52 5.35 46 41.62 4.21 Age Under 25 10 10.00 3.00 9 9.00 4.00 25-34 39 36.78 2.00 34 32.13 0.00 35-44 35 33.44 4.85 39 37.33 2.21 45-54 47 45.96 2.00 47 45.96 2.00 55-64 32 31.94 2.00 36 35.94 2.39 Over 64 3 2.63 0.00 2 2.00 0.00 Group Executive 0 0 4 0 0 5 Business Planning & 29 27.49 3.22 22 21.89 1.21 Performance Service 82 81.15 1.00 87 85.05 1.00 Delivery Stakeholder & 13 11.59 0.39 18 16.76 2.40 Governance Infrastructure 22 22.69 3.00 24 23.03 3.00 People & 6 6.00 0.00 6 6.00 0.00 Culture Water 6 5.32 1.50 Resources Executive 1 1.00 0.63 2 1.63 0.00 Assistants Information and Communication 6 6.00 0.50 7 7.00 0.00 Technology

Application of Merit and Equity Principles GWMWater is committed to ensuring all staff selection decisions are merit based and that equal employment opportunity principles are applied to all staff.

12 | GWMWater Annual Report 2015/16 Occupational Health and Safety

GWMWater has an ongoing Workplace inspection numbers years ago and this continues to commitment to provide a safe continued to achieve OH&S contribute to the overall reduction workplace and has stated policies strategy targets, due to a continual of harm in the workplace. and goals for achieving zero harm. focus on contractors safe work This is supported by maintaining arrangements, completing The overall lowering of injury a certified Occupational Health workplace noise assessments, and harm in the workplace has and Safety Management System completing fall prevention risk resulted in the lowest number of to meet the requirements of the assessments and confined space standard workers compensation relevant Australian Standard- worksite risk assessments. claims costs during the past AS/NZS 4801:2001. four years. This result was The number of hazard reports achieved due to a continued A highlight for 2015/16 was completed has remained the same, high standard of care, support the continued reduction in due to the implementation of an and communication provided by workplace injury claims costs. improved reporting system two GWMWater staff and management.

Occupational Health and Safety Performance Indicators Measure KPI 2012/13 2013/14 2014/15 2015/16 Number of incidents 55 53 44 43 Incidents Rate per 100 FTE 0.275 0.26 0.22 0.22 Number of lost time claims 3 5 0 5 Claims Rate per 100 FTE 0.015 0.025 0.00 0.025 Claim Costs Average cost per standard claim $14,922 $25,375 $1,836 $1,331 Medical Treatment Injuries Number of medical treatment injuries 7 6 2 2 Loss Time Injuries Number of lost time injuries 5 5 2 5 Number of workplace Inspections 127 239 232 201 inspections conducted Hazards Number of hazard reports completed 57 67 164 162

OH&S training completed in the past 12 months included: Agvet Chemical User’s Course Fall Prevention (safe Bullying and Harassment Fire extinguisher selection and use working at heights) Manual Handling First Aid Level 2 and CPR Implement traffic management Noise Awareness and traffic control Class B Asbestos Removal OH&S representative refresher Construction induction Chlorine Handling Ergonomic Training Operate 4 Wheel Drive Vehicles Confined Space entry Trenching & Shoring Contractor safety surveillance skills

GWMWater Annual Report 2015/16 | 13 Water Consumption Report 1 July 2015 to 30 June 2016

Industrial and Non-Residential Average Residential Concessional and Municipal Annual Consumption* ML No ML No ML No Total ML Total No ML Antwerp 0.0 1 0.0 2 3.0 9 3.0 12 3.2 Apsley 0.7 8 6.6 19 22.4 97 29.7 124 28.9 Ararat 155.5 42 261.4 418 727.6 3,719 1,144.6 4,179 1078.3 Berriwillock 3.4 9 4.6 12 20.5 69 28.5 90 24.4 Beulah 2.1 12 5.3 31 41.4 138 48.8 181 44.5 Birchip 2.8 14 21.8 83 110.5 369 135.1 466 114.6 Brim 4.2 7 0.2 5 9.6 47 14.1 59 13.2 Buangor 1.2 3 1.4 3 13.3 33 15.9 39 12.9 Charlton 17.7 17 54.4 127 154.3 561 226.3 705 210.2 Chillingollah - - 0.0 1 1.0 5 1.0 6 1.2 0.3 1 0.0 2 3.4 13 3.8 16 3.7 0.7 2 2.1 2 0.7 8 3.6 12 3.8 1.1 3 2.9 15 17.0 60 21.0 78 18.5 Dimboola 5.2 23 62.1 95 174.2 773 241.5 891 224.1 Donald 5.2 13 39.9 165 179.3 715 224.4 893 214.8 Dooen - - 0.7 3 3.0 15 3.7 18 3.7 Edenhope 4.8 17 25.9 83 87.0 451 117.7 551 108.2 Elmhurst 0.2 6 2.0 14 16.7 100 19.0 120 17.5 Glenorchy 0.1 2 0.0 3 9.0 57 9.1 62 7.3 Goroke 2.1 13 3.8 31 34.4 139 40.3 183 41.1 Great Western 19.4 7 18.4 17 25.3 117 63.0 141 54.6 Halls Gap 11.4 6 102.0 91 57.7 526 171.2 623 139.7 Harrow 2.1 8 1.3 17 23.5 71 26.9 96 26.5 Hopetoun 10.4 19 20.6 62 87.8 303 118.8 384 109.0 Horsham 21.0 62 348.9 1,001 1,983.1 7,739 2,353.1 8,802 2148.8 Jeparit 1.2 13 16.1 42 43.1 250 60.3 305 53.5 Jung 0.0 1 0.3 2 12.8 38 13.1 41 10.5 Kaniva 7.4 16 65.2 106 149.1 406 221.7 528 204.6 Kiata - - 0.3 3 2.6 18 2.9 21 2.6 Lake Bolac 13.8 13 13.4 33 40.4 127 67.6 173 61.1 Lalbert 1.2 4 5.9 13 13.3 42 20.4 59 18.8 Lascelles - - 1.2 6 6.3 25 7.6 31 6.9 Lillimur - - 0.0 1 7.1 18 7.1 19 6.7 1.2 9 17.2 28 46.1 132 64.6 169 60.4 Marnoo 0.6 5 1.5 15 14.8 50 16.9 70 15.1 Minyip 7.0 14 7.3 34 46.6 235 60.9 283 52.8

14 | GWMWater Annual Report 2015/16 Industrial and Non-Residential Average Residential Concessional and Municipal Annual Consumption* ML No ML No ML No Total ML Total No ML Miram - - 0.0 2 0.6 9 0.6 11 1.4 Moyston 0.3 3 0.5 6 26.0 86 26.8 95 23.9 Murrayville 4.2 9 37.2 34 70.8 156 112.2 199 110.8 Murtoa 1.3 16 16.4 60 88.2 414 105.9 490 97.4 Nandaly 0.9 7 0.8 6 3.7 20 5.4 33 4.7 Natimuk 11.7 16 11.4 29 54.4 228 77.5 273 62.0 Nhill 24.7 25 126.5 156 291.6 974 442.9 1,155 405.6 1.4 3 4.0 14 10.1 30 15.5 47 14.2 Ouyen 30.7 10 97.6 115 220.4 568 348.6 693 335.8 0.4 5 1.6 14 7.2 37 9.2 56 8.8 Pimpinio 0.3 2 0.9 3 7.2 33 8.5 38 8.5 Pomonal 0.6 2 2.0 9 30.9 123 33.5 134 26.7 Quambatook 11.9 13 14.4 25 34.9 131 61.1 169 56.7 Rainbow 15.2 21 16.3 52 69.9 305 101.4 378 95.0 Rupanyup 4.1 11 9.8 42 37.7 198 51.7 251 47.0 23.0 9 34.1 70 115.5 348 172.6 427 149.7 Serviceton 0.7 2 0.0 3 4.3 26 5.0 31 5.7 Speed 0.1 3 1.3 7 6.8 29 8.2 39 7.5 St Arnaud 3.5 27 189.6 212 256.7 1,202 449.8 1,441 408.7 Stawell 868.0 30 149.6 376 657.1 2,960 1,674.7 3,366 1429.0 Streatham 0.1 4 0.4 7 6.2 39 6.7 50 6.2 Tarranyurk - - 1.1 4 1.4 4 2.5 8 1.9 Tempy 0.5 6 1.9 5 7.4 19 9.8 30 8.7 Ultima 0.9 5 3.3 11 31.2 83 35.4 99 34.6 3.0 8 18.6 18 49.4 107 71.1 133 65.7 Waitchie 0.0 1 0.0 2 0.0 3 0.0 6 0.2 0.7 4 10.1 14 23.6 58 34.4 76 29.1 Warracknabeal 10.9 24 56.6 184 320.7 1,236 388.2 1,444 357.6 Watchem 0.1 5 3.7 11 11.0 71 14.7 87 13.4 Westmere - - 7.3 7 1.0 10 8.3 17 6.2 Wickliffe 0.1 2 6.9 8 18.7 35 25.8 45 21.4 Willaura 3.6 13 52.1 56 56.5 199 112.2 268 94.8 7.9 12 9.0 25 32.2 110 49.1 147 45.7 6.6 17 26.3 68 92.6 346 125.4 431 120.3 Yaapeet 0.6 1 0.8 6 8.3 28 9.7 35 8.7 1,342.1 686 2,027.0 4,246 6,842.2 27,700 10,211.3 32,632 9,258.9

* Average calculated between years 1 July 2011 and 30 June 2016

GWMWater Annual Report 2015/16 | 15 Weekly household drinking Month Week 1 Week 2 Week 3 Week 4 Week 5 water consumption 2015/16 July 2,802 2,802 2,802 2,802 2,802 GWMWater bills residential August 2,802 2,802 2,802 2,802 customers four times a year, September 2,802 2,802 2,802 2,802 once every three months. October 4,118 4,118 4,118 4,118 4,118 November 4,118 4,118 4,118 4,118 The calculated average weekly December 4,118 4,118 4,118 4,118 consumption per residential January 7,483 7,483 7,483 7,483 7,483 customer for July to September February 7,483 7,483 7,483 7,483 2015 is 2,802 litres per week, March 7,483 7,483 7,483 7,483 for October to December 2015 April 4,640 4,640 4,640 4,640 4,640 is 4,118 per week, for January May 4,640 4,640 4,640 4,640 to March 2016 is 7,483 and for June 4,640 4,640 4,640 4,640 April to June 2016 is 4,640.

GWMWater’s estimated total Customers serviced by • Hydraulic assessment of the unaccounted for water in 2015/16 the Buangor and Elmhurst Mount William Headworks was 1,579 ML (12%) for the supply systems received System and associated pipelines urban system. Unaccounted for uninterrupted water supplies. to identify system constraints. water comprises leakages from • Installing new monitoring pipes, mains flushing, fire fighting, Despite inflows into the Murray in the Mount William unmetered connections, metering system being below the long term Headworks System to provide errors and illegal connections. average, seasonal determinations more comprehensive and reached 100 percent for the 2015/16 real-time information on Supply and Distribution water year. This provided ongoing system performance. Inflows into the Grampians reservoir security for GWMWater’s supply • Commenced planning to upgrade system were approximately to its towns and pipeline users a section of pipeline between 37,000 ML for the 2015/16 water serviced from the River Murray. Lake Fyans and Stawell. year, equivalent to 17% of the • Replacement of a pump system historic average, and one of GWMWater’s urban customers which is now delivering greater the driest years on record. Low were required to observe the volumes of water to Stawell. inflows and a long, hot summer Permanent Water Saving Rules resulted in continued drawdown during 2015/16 water year, with Short duration water restrictions of storages to meet consumptive the exception of Stawell, Willaura, were implemented to conserve and environmental demands. Wickliffe, Moyston and users supplies in some of GWMWater’s supplied from the Mount William towns supplied from the River Grampians system storage volumes headworks system. Temporary Murray, in response to a blue green steadily decreased over the year water restrictions were implemented algae event stretching hundreds as water was released to meet in these areas in response to of kilometres along the length of entitlement holder demands. The unprecedented demand, which saw the Murray River. GWMWater reservoir system peaked at 179,350 the pipelines and pumps supplying has improved the redundancy of ML (32.3%) in September 2015, these towns unable to keep up, the Northern Mallee systems by and reached a low of 118,860 ML and town balancing storages were installing cross-connections and (21.4 %) in May 2016, the lowest heavily drawn upon. GWMWater reverse pumping capability to volume since August 2010. is undertaking a number of actions reduce the impact of any future to reduce the likelihood of water water quality issues in the River restrictions for these towns in future. Murray on supply to towns and rural customers serviced by the pipeline.

16 | GWMWater Annual Report 2015/16 Bulk and Environmental Entitlements

Bulk Entitlements and Environmental are used to supply towns, and As the Storage Manager, Entitlements grant the entitlement rural and commercial customers. GWMWater is responsible for the holder the right to use and supply management of the water resource water. GWMWater holds bulk GWMWater is also the Storage on behalf of entitlement holders, entitlements in the Wimmera– Manager and Resource Manager making seasonal allocations Glenelg, Murray, Goulburn, East for the Wimmera–Glenelg where applicable and delivering Grampians and Pyrenees which and East Grampians. water to entitlement holders.

Reporting for the Bulk Entitlement (Wimmera and Glenelg Rivers – GWMWater) Order 2010 The matters below relate to GWMWater’s reporting requirements in accordance with section 18.1 of this Bulk Entitlement:

BE Item Report Notes Clause Offtake Points Supply to Dad and Dave Weir Mt Zero Channel 3,219 ML Brimpaen Storages Wimmera Mallee Pipeline, System 6 496 ML Wimmera-Mallee Pipeline, Systems 1,2,3,4,6 Taylors Lake Outlet 63 ML Note 1 & 7. Supply By Agreement customers Licenced Diversion Domestic and stock diverters from 0 ML Note 2 Offtakes Rocklands - Toolondo Channel. Supply By Agreement customers Rocklands Offtake 0 ML direct from headworks 18.1 (b) Rocklands Offtake Glenelg River Compensation Flow 80 ML Lake Fyans Outlet Urban systems and Supply By Agreement customers 2,504 ML Urban systems and Wimmera-Mallee Lake Bellfield 10,765 ML Pipeline, Systems 1,2,3,4,6 & 7. Stawell Diversion Weir Stawell urban system 909 ML Ararat urban system and Supply Mt Cole Reservoir 389 ML By Agreement Customers Langi Ghiran Reservoir Urban systems and Supply By Agreement customers 0 ML Note 3 Panrock Reservoir Urban systems and Supply By Agreement customers 0 ML Note 3 Total Offtake 18,425 ML

GWMWater Annual Report 2015/16 | 17 Water supplied to primary entitlements (Schedule 2, Table 1) Pipeline and balancing storage losses 1,060 ML Commonwealth Environmental Water Holder 0 ML GWMWater Glenelg Compensation Flow 80 ML Recreation 2,504 ML Note 4 18.1 (c) Wimmera Mallee Pipeline Product 14,780 ML Coliban Water Wimmera Mallee Pipeline Product 226 ML Wannon Water Wimmera Mallee Pipeline Product 73 ML

Victorian Environmental Wetlands 142 ML Water Holder Wimmera Mallee Pipeline Product 7,970 ML Total Supplied to Primary Entitlements 26,836 ML Final water allocation to GWMWater Pipeline and balancing storage losses 33.4% (989 ML) Commonwealth Environmental Water Holder 0% (0 ML) 18.1 (d) Glenelg Compensation Flow 0.5% (17 ML) Recreation 0% (0 ML) Wimmera Mallee Pipeline Product 16% (7,155 ML) 18.1 (e) Metering Program Pending Note 5 18.1 (f) Transfers of an entitlement or part of this BE None Bulk Entitlement, licence or water right, entitlement or 18.1 (g) None assignment transferred to GWMWater supply systems 18.1 (h) Amendments to this Order None 18.1 (i) New BE granted to GWMWater under this Order None 18.1 (j) BE compliance failures Yes Note 6 18.1 (k) BE compliance difficulties and actions None

Notes to this Table: 1. Volume supplied by agreement 4. Delivery under the recreation Amendments to the program from Horsham Weir Pool. entitlement was supported are required prior to approval. by an allocation trade. 2. No regulated diversion 6. GWMWater has not yet licences are held. 5. A metering program for implemented an approved this Bulk Entitlement was metering plan. 3. Storage was not used for water submitted to the Minister supply purposes during 2014/15. for Water in October 2011.

Reporting for the Bulk Entitlement (Willaura, Elmhurst and Buangor Systems - GWMWater) Order 2012 The matters below relate to GWMWater’s reporting requirements in accordance with section 11.1 of this Bulk Entitlement: BE Item Report Notes Clause 11.1 (b) Annual amount of water taken 195 ML 11.1 (c) Metering program approved under sub-clause 10.4 Pending Note 1 11.1 (d) Any temporary or permanent transfer of this Bulk Entitlement None Any Bulk Entitlement, licence or water right in respect of 11.1 (e) None the waterway transferred to GWMWater 11.1 (f) Any amendment to this Bulk Entitlement None 11.1 (g) New bulk entitlement granted to GWMWater with respect to the waterway None 11.1 (h) Bulk Entitlement compliance failures Yes Note 2 11.1 (i) Bulk Entitlement compliance difficulties and actions None

Notes to this Table: 1. A metering program for this Bulk Entitlement 2. GWMWater has not yet implemented a metering plan was submitted to the Minister for Water approved by the Minister. in September 2013. Amendments to the program are required prior to approval.

18 | GWMWater Annual Report 2015/16 Reporting for the Bulk Entitlement (River Murray – Grampians Wimmera Mallee Water) Order 1999 The matters below relate to GWMWater’s reporting requirements in accordance with section 21.1 of this Bulk Entitlement.

BE Item Report Notes Clause 21.1 (b) Offtake Points Supply to Northern Mallee Pipeline Nyah pump station 356 ML (Nyah & Eureka system) Northern Mallee Pipeline Piangil pump station 390 ML (Piangil & Manangatang system) Wimmera-Mallee Pipeline Swan Hill pump station 1,179 ML (Supply System 5 - Swan Hill and Sea Lake) Northern Mallee Pipeline Liparoo pump station 1,688 ML (Ouyen system) Annuello pump station Private pipeline scheme 91 ML Hayesdale pump station Private pipeline scheme 63 ML Koolonong pump station Private pipeline scheme 21 ML Total Offtake 3,788 ML 21.1 (c) Any new offtake points None 21.1 (d) Amount of water returned under sub-clause 16.2 None 21.1 (e) Annual amount supplied to primary entitlement holders Urban supply systems 1,065 ML Rural properties 2,028 ML

GWMWater Community requirements 92 ML Pipeline operating requirements 429 ML (excludes private pipeline schemes) Private pipeline schemes 175 ML Total Supplied to Primary Entitlements 3,788 ML 21.1 (f) Metering program approved under sub-clause 20.2 Pending Note 1 21.1 (g) Any temporary or permanent transfer of this Bulk Entitlement None 21.1 (h) Transfer of Bulk Entitlement or assignment of water allocation under the Act None 21.1 (i) Amendments to this Bulk Entitlement None 21.1 (j) New Bulk Entitlement granted to GWMWater with respect to the River Murray None 21.1 (k) Bulk Entitlement compliance failures Yes Note 2 21.1 (l) Bulk Entitlement compliance difficulties and actions None

Notes to this Table: 1. A metering program for this Bulk Entitlement 2. GWMWater has not yet implemented an was submitted to the Minister for Water approved metering plan. in November 2011. Amendments to the program are required prior to approval.

GWMWater Annual Report 2015/16 | 19 Reporting for the Bulk Entitlement (Quambatook – Grampians Wimmera Mallee Water) Order 2006 The matters below relate to GWMWater’s reporting requirements in accordance with section 12.1 of this Bulk Entitlement.

BE Clause Item Report Notes 12.1 (b) Annual amount of water taken 133 ML 12.1 (c) Metering program approved under sub-clause 11.2 Pending Note 1 12.1 (d) Any temporary or permanent transfer of this Bulk Entitlement None 12.1 (e) Any period of restriction imposed on this entitlement None 12.1 (f) Any amendment to this Bulk Entitlement None 12.1 (g) New Bulk Entitlement granted to GWMWater with respect to this entitlement None 12.1 (h) Bulk Entitlement compliance failures Yes Note 2 12.1 (i) Bulk Entitlement compliance difficulties and actions None

Notes to this Table:

1. A metering program for this Bulk Entitlement 2. GWMWater has not yet implemented an was submitted to the Minister for Water approved metering plan. in November 2011. Amendments to the program are required prior to approval.

20 | GWMWater Annual Report 2015/16 Recreation Water

The recreation water pricing policy A specific objective of the Wimmera With the introduction of the was first introduced in 2013/14 Mallee Pipeline (WMP) project recreation contribution charge following strong community was to provide greater certainty and recreation water discounts, support as part of the 2013 Water for the provision of recreation GWMWater committed to Price Review. The pricing policy water and improve the liveability reporting annually on the value of provides for volumetric rate of the region. The dry seasonal contributions collected and discounts discounts to recreational and conditions in 2015/16 once provided with the Annual Report. sporting organisations funded again highlighted significance of through a recreation contribution these objectives to the region. In The following table provides charge of $16.00 per customer; comparison to 2014/15 the volume a summary of the value of $8.00 for concession card holders. of water supplied to recreational contributions collected and The contribution is collected from and sporting entities increased by discounts provided in 2015/16. customer accounts through the 109.5 ML to 694.4 ML with 319 service availability charge for recreational and sporting entities urban customers and primary accessing volumetric rate discounts. meter charge for rural customers.

Number / Volume 2015/16 Note Delivered $ Revenue Rural Recreation Contributions 4,214 65,984 Urban Recreation Contributions 27,258 373,260 Recreation Lake Water Revenue 1 51,423 Total Revenue 490,667

Expenditure Recreation Lake Water Discounts 2 2,634 ML 73,746 Recreational and Sporting Club Rural Volumetric Discounts (78 entities) 302.4 ML 109,189 Urban Volumetric Discounts (241 entities) 392.1 ML 235,973 Distribution Costs 262,792 Public Recreation Facilities 59,287 Recreation Water Planning and Administration 31,694 Total Expenditure 772,681

Net Result for the Year (282,014)

Notes:

1. Includes revenue from supply to Nhill entitlement. The volume reflects the deemed top up Lake from groundwater bore. volumes for lakes supplied from the River Murray and Grampians headworks system, groundwater supply 2. Discount value based on reduction from $48 per ML to to Nhill Lake, and, supplement to the reclaimed water $20 per ML applicable to the Recreation entitlement. supply to Edenhope Golf Club. The value of discount has not been adjusted to reflect the allocation trade from GWMWater’s consumptive

GWMWater Annual Report 2015/16 | 21 Statement of Obligations Dam Safety On 10 December 2015, the then GWMWater progressively conducts Minister for Environment, Climate risk assessments on all high risk Change and Water revised the headworks reservoirs on a priority Statement of Obligations (SoO). basis as part of an ongoing dam The main objective of the review is safety management program. to reintegrate planning for climate change adaptation as an integral Specific actions carried out part of the water business planning during the year to meet the framework. The GWMWater Board SoO requirements were: has considered and supports the amendments to the SoO with • Submission of a Dam Safety climate variability presenting some Report for relevant reservoirs significant challenges to water managed by GWMWater resource management in the region. • Management, operation and surveillance of all headworks reservoirs in accordance with ANCOLD Dam Safety Management Guidelines (2003) as part of an ongoing program • A formal Risk Assessment in accordance with ANCOLD Guidelines completed on Oliver’s Gully Reservoir and the Mt Cole Reservoir outlet. • A Consequence assessment in accordance with the 2012 ANCOLD Guidelines were completed for the St Arnaud No. 2 Reservoir.

22 | GWMWater Annual Report 2015/16 Economic Sustainability

Financial Summary 2011/12 to 2015/16 ($ Million) 2011/12 2012/13 2013/14 2014/15 2015/16 Operating revenue 46.59 52.98 56.10 61.00 62.93 Contribution revenue 18.94 2.52 4.54 3.69 2.72 Other revenue 0.98 1.00 1.20 0.98 1.39 Total Revenue 66.51 56.50 61.84 65.67 67.03

Operating expenditure 31.26 29.14 30.41 30.63 31.66 Environmental Levy 1.32 1.32 1.68 1.68 1.68 Depreciation 32.92 47.19 32.60 32.85 32.29 Channel Decommissioning Provision Expense - 4.75 - - - Loss on disposal of assets 0.47 0.15 3.13 0.75 0.16 Net fair loss/(gain) on revaluation of investment properties - (0.52) - 0.08 (0.02) Borrowing costs 8.81 8.74 9.12 9.19 8.67 Total Expenditure 74.78 90.77 76.94 75.18 74.44 Net result before tax (8.27) (34.27) (15.10) (9.51) (7.41)

Current assets 24.98 25.70 17.18 21.64 18.64 Non current assets 1,908.84 1,882.54 1,872.33 1,857.68 1,922.30 Total Assets 1,933.82 1,908.24 1,889.51 1,879.32 1,940.93

Current liabilities 25.63 30.04 30.50 23.23 19.69 Non current liabilities 301.83 295.89 287.15 290.01 294.24 Total Liabilities 327.46 325.93 317.65 313.24 313.93

Net Cash From Operations 17.50 10.24 16.35 21.62 25.21 Payments for property, plant and equipment 21.92 19.92 25.63 17.02 20.98 (including infrastructure)

Financial Performance

Performance indicator 2011/12 2012/13 2013/14 2014/15 2015/16 Immediate Liquidity and Debt Servicing (Interest Cash Cover) Cash flow from operations before net interest 3.1 2.2 2.8 3.4 3.9 and tax payments ÷ net interest payments Long Term Financial Viability (Gearing Ratio) Total debt (including finance leases) ÷ total assets 6.6% 7.2% 7.3% 7.3% 6.6% Internal Financing Ratio Net operating cash flow / Capital expenditure 79.9% 53.9% 66.8% 127.0% 120.2% Current Ratio Current assets/current liabilities (excluding long-term 1.1 1.0 0.6 1.1 1.2 employee provisions and revenue in advance). Long Term Profitability (Return on Assets) Earnings before net interest and tax ÷ Average total assets 0.0% (1.3%) (0.3%) (0.0%) 0.1% Owner’s Investment (Return on Equity) Net profit after tax ÷ average total equity (0.5%) (1.5%) (0.7%) (0.4%) 0.4% EBITDA Margin Earnings before interest, tax, depreciation 50.0% 38.1% 42.9% 49.5% 50.0% and amortisation/total revenue *

GWMWater Annual Report 2015/16 | 23 GWMWater has continued to been constrained by the capability sales process that produced a improve its financial viability and of the infrastructure. In the eastern ‘one off’ contribution revenue of economic sustainability beyond parts of our supply area we have $17 million that helped give rise to the completion of the Wimmera experienced an unprecedented a 3.1 interest cover. In 2012/13 the Mallee Pipeline in 2010/11. level of demand and the installation interest cover ratio was 2.2 times of emergency supply points on and in this 2015/16 financial year When planning for the construction our eastern boundary gave rise the interest cover was 3.9 times. of the pipeline, it was known that in to a tenfold increase in standpipe the immediate period post pipeline sales of $0.45 million in 2015/16. The overall net cash flow from construction that the financial operations over the period has indicators would indicate a level of Over the past five years the overall increased from $17.5 million in stress and that the improvement operating result has improved in 2011/12 to $25.2 in 2015/16. in financial performance would be all aspects. Operating revenue On the basis of anticipated contingent upon the realisation of has increased from $46.6 million future expenditure on renewal of benefits that were inherent in the in 2011/12 to $62.93 million in infrastructure renewal in the short business case. Over the past five 2015/16. For the commensurate to medium term this exceeds the years there has been a progressive period operating expenditure has requirements to meet the internal improvement in performance arising been contained from financing ratio. In 2015/16 the from the sale of growth water $31.26 million in 2011/12 to capital expenditure gave rise to an and the trailing revenue streams. $31.66 million in 2015/16. The internal financing ratio was 120%. This improvement in performance 2015/16 result would have been has been has been further better if not for the impact of the During the year GWMWater, with enhanced by the improvement blue green algae event on the financial support of the Victorian in the operating efficiency as a Murray River that gave rise to and Commonwealth Government result of the pipeline as well as increased costs of $1.2 million. committed to a major rural pipeline investments in SCADA and systems During this period effective treasury extension in the Loddon Shire in to support works management management has allowed borrowing the South West Loddon Water and back office functions. costs to be contained to the point Supply Project. This builds on where borrowing costs have smaller rural pipeline schemes The improved reliability of water decreased from $8.8 million in completed during the year in supply arising from the pipeline 2011/12 to $8.7 million in 2015/16 Pella and Quambatook and other has ensured that GWMWater has despite an increase in the overall schemes at Wartook and Coonooer been able to meet an increased borrowings as GWMWater fulfilled Bridge that are well advanced. level of demand. Over the five its financial commitment to the year period where there has Wimmera Mallee Pipeline. These rural pipeline schemes are been below average rainfall that playing a pivotal role in sustaining has given rise to system inflow The best indicator of financial the productivity of the domestic that has been consistently below viability is reflected in the and stock agricultural sector of the 50 percent of average inflow. performance of the interest cover region that is being challenged by GWMWater has been able to meet ratio. The 2011/12 result was implications of climate change. demands for water and has only boosted by the initial growth water

24 | GWMWater Annual Report 2015/16 Victorian Industry The benefits to the Victorian Consultancies Participation Policy economy in terms of skills and In 2015/16, there were 29 The Victorian Industry Participation technology including retaining consultancies where the total Policy (VIPP) applied to four projects local employment and a boost fees payable to the consultants during 2015/16. Two contracts to the regional economy we $10,000 or greater. The total totalling $6.1 million were completed expenditure incurred during 2015/16 whilst the other two projects The projects demonstrated in relation to these consultancies are ongoing. The four contracts a significant increase in the is $853, 917 (excl. GST). Details were part of regional projects management and technical skills of individual consultancies can where the contractors committed of suppliers within the region. The be viewed at GWMWater’s under the VIPP to include: local content also demonstrates website www.gwmwater.org.au. and reinforces that the region An overall level of local content has the capability to manage, In 2015/16, GWMWater engaged of greater than 90% of the commission and service large 38 consultancies where the total total value of the contracts technical engineering projects. fees payable to the consultants were less than $10,000 with a total expenditure of $121,563 (excl. GST).

ICT Expenditure

Non-Business As Usual (Non BAU) Business as Usual Non-Business As Usual Non-Business As Usual ICT Expenditure (BAU) ICT Expenditure Operational Expenditure Capital Expenditure (Total - Operational and Capital Expenditure) $1,840,937 $3,226,942 $0 $3,226,942

NOTE: Only includes capital expenditure from 2015/16 Financial Year.

GWMWater Annual Report 2015/16 | 25 Social Sustainability

Urban Water Restriction Levels/ Saving Rules. All 22 applications Permanent Water Saving Rules were approved in part or full. Under GWMWater’s Water Restrictions By-Law No.105 there Enforcing Water Restrictions were no water restrictions in place and Investigations of Breaches at 30 June 2016 in any of the towns of the Water Act 1989 and we service. Permanent Water Claims for Compensation Saving Rules apply in all 71 towns. GWMWater staff made 82 property visits, with 401 follow Rural Pipeline Water up telephone calls, to investigate Restriction Levels reports submitted by the public There were no rural pipeline and staff in relation to possible customers subject to water breaches of the Water Act 1989 restrictions under the Water or our by-laws or in response Restrictions By-Law No.105 as at 30 to claims for compensation. June 2016. Rural pipeline customers are encouraged to comply with the There were no breach notices Permanent Water Saving Rules. issued under the Water Restrictions By-Law No. 105 or Permanent Exemptions Water Saving Plan. Three customers were successfully prosecuted in the Our Water Reference and Magistrates’ Court for transgressions Assessment Panel considered under the Water Act 1989. 22 applications for exemption for the purposes which were not permitted under Water Restrictions By-Laws or Permanent Water

26 | GWMWater Annual Report 2015/16 Major Non-Residential Water Users

Under section 122ZJ of the Water Act 1989 GWMWater must include information on any non-residential customer who consumes greater than 200 ML from an urban water supply system.

Customer by Volume Range

Volumetric range – ML per year Number of customers Equal to or greater 200 ML less than 300 ML 0 Equal to or greater 300 ML less than 400 ML 0 Equal to or greater 400 ML less than 500 ML 0 Equal to or greater 500 ML less than 750 ML 1 Equal to or greater 750 ML less than 1000 ML 0 Total Number of Customers 1

Naming of customers and participation in water conservation programs

Name of Customer Information as to customers participation in the water conservation program Stawell Gold Mines Pty Ltd A water conservation plan has been prepared

Community Service Obligations

Value of Community Service Obligation Provided 2014/15 2015/16 Provision of concessions to pensioners $2.419M $2.551M Rebates paid to not-for-profit organisations under the Water and Sewerage Rebate Scheme $380,203 $390,000 Utility Relief Grant Scheme payments $33,941 $30,000 Water concessions on life support machines – Haemodialysis $447 $408.34

GWMWater Annual Report 2015/16 | 27 Environmental Sustainability

Sustainable Water Strategy System inflows in 2015/16 were The Western Region Sustainable some of the lowest ever recorded Water Strategy was released by the in the region, and system storage Victorian Government in November levels continued to decline. Water 2011 to provide a framework for consumption was at its highest protecting the needs of water users, level for several years across many rivers and aquifers. GWMWater is of GWMWater’s supply systems. implementing key policy directions However, the fully pipelined system from the strategy. A review of meant supplies remained secure the operation of the Wimmera- for the majority of customers. Water Glenelg Bulk and Environmental restrictions were temporarily in Entitlements was completed in place for Stawell and also Willaura, 2014 which re-confirmed many of Moyston, Wickliffe and Lake Bolac. the current operating arrangements while resulting in increased Water Recycling opportunities to access water for GWMWater achieved its target to recreation needs. Groundwater reuse 100 percent of reclaimed is actively managed in the wastewater generated from its western areas of the region with wastewater treatment plants. A the aim of achieving sustainable total of 2,091.4 ML was delivered to utilisation of this resource. reuse customers during 2015/16.

Water Supply Demand Strategy Biodiversity GWMWater’s Water Supply Demand Biodiversity is a key consideration Strategy assessed long term water in the planning for environmental demands under a range of supply management plans for major and climate scenarios. We are infrastructure projects. Works are continuing to focus on building located to avoid known sites of our understanding of demand ecological significance such as patterns and the future impact of ecological vegetation classes. climate variability. GWMWater will All projects require appropriate prepare an Urban Water Strategy planning approvals to be obtained during 2016/17 which will provide and any vegetation clearance is updated information about its offset through appropriate plantings. supply and demand arrangements.

28 | GWMWater Annual Report 2015/16 Water Conservation

Victorian Government Regional Community Rebate Program Showerhead Exchange Program The Community Rebate Program Customers were able to swap was a joint initiative of GWMWater their old showerhead for a new, and the Victorian Government. more efficient showerhead that The program aimed at reducing saves nine litres of water per water bills through a free water minute. Two types of water saving audit and the repair or replacement showerheads were available for of inefficient water fittings for exchange (wall mounted and hand eligible hardship customers. held) with 35 customers exchanging their showerheads in 2015/16. The total number of eligible customer was 148. The program Living Victoria Home was taken up by 30 customers Rebate Scheme with $16,400 being claimed for This scheme rewarded urban water audits and subsequent customers for their efforts to be repairs and replacement of water efficient in the home, garden inefficient water fittings. and small business by providing rebates on a range of water Water Tariff Reduction efficient products and appliances. A 15 percent tariff reduction is provided to not-for-profit The scheme finished on 30 June organisations that conserve water 2015, customers had until 30 by watering at night via dedicated September 2015 to submit their timed sprinkler systems. There claim. A total of 63 applications are currently 29 organisations were processed in 2015/16 benefiting from this initiative. with rebates for the purchase of tanks and other water saving products amounting to $54,200.

GWMWater Annual Report 2015/16 | 29 Sustainable and Resilient Water Services Systems

Regulated Water Supplies Swipe Card Standpipes and the There are four standing GWMWater continued to work Rural Pipeline Intelligence Project, customer committees of closely with Local Government which generated considerable the GWMWater Board: Environmental Health Officers interest from our rural customers. to assist their Councils manage • Regional Recreation the potential health risks in these GWMWater continues to strengthen Water Users Group towns and meet their obligations local relationships and contribute to • West Wimmera Groundwater in relation to the Food Act 2004. vibrant communities in our region Management Area by supporting a range of events and Implementation Committee Strategies for managing the fundraisers. Throughout the year, • Murrayville Water potential health risks associated we have provided sponsorship to Supply Protection Area with these water supplies include drought relief events, agricultural Implementation Committee issuing an annual untreated water shows, local festivals, fun runs, • Irrigation Diverters Committee supply notice to all customers, sporting clubs and schools by untreated water supply advice on providing water trailers, water These committees met regularly customer accounts and signage fountains and refillable drink bottles during the year to address on all publicly accessible taps in for use. We have also been proud key issues including: association with local government. to support the development of community gardens in several • Water allocations for recreational Year 9 and 10 Student towns within our region. lakes in the region Water Conference • Development of a Local Stakeholder Engagement Management Plan for The tenth annual student water Groundwater (Murrayville) conference for Year 9 and 10 As part of our ongoing • Contribution to a technical students was held in June 2016. engagement with customers and review of the West The conference promotes water key stakeholders GWMWater Wimmera Groundwater education for students living holds workshops twice a Management Strategy within GWMWater’s operating year, providing an opportunity • Review of Irrigation Diversion area who are potentially the for participants to discuss Rules for the Wimmera River next generation of customers. significant operational issues. Rocklands Recreation More than 800 students and Stakeholder workshops were held Management Plan Working Group their teachers have attended the in November 2015 and April 2016. conference over the past 10 years, The November 2015 workshop The Working Group continued researching a range of water related discussed the potential impact to develop the draft Recreation themes. This year students at the of an expansion of the State Management Plan for Rocklands conference crossed live via Skype to Water Grid in the region and the Reservoir during the year. The New Zealand, Nauru, Alice Springs, associated opportunities and committee also investigated Kalgoorlie and Lake Argyle to learn risks. Participants at the April 2016 options for improving the fishery how water is valued in other parts workshop examined the concept at Rocklands in conjunction of Australia and around the world. of value provided by GWMWater with Fisheries Victoria. and debated the importance Community Events of quality versus supply during Toolondo Recreation and Sponsorship times of water quality events. Management Plan Working Group GWMWater participates in the A Working Group to develop a The outcomes of both workshops Wimmera Machinery Field Days plan for the future management have been reviewed by the Board and Mallee Field Days each year. of Toolondo recreational facilities and will contribute to future policy Our displays featured Electronic commenced during the year. decisions and strategy development.

30 | GWMWater Annual Report 2015/16 Management Strategies

Corporate Management System Environmental Watering GWMWater is certified to GWMWater engages with the ISO 9001 for quality, ISO 14001 Commonwealth Environmental for environment and AS/NZS Water Office, Catchment 4801 for occupational health Management Authorities and the and safety. Operational sites Victorian Environmental Water continue to be periodically Holder to deliver environmental audited and opportunities for water in accordance with Bulk and improvement raised as needed. Environmental Entitlements.

Regional Catchment During the 2015/16 water year, a Management Strategy total of 5,000 ML was released to GWMWater is a partner with other the Wimmera system, including the agencies in the delivery of regional MacKenzie River, Wimmera River, catchment strategies. Waterway Upper Mt William Creek and Burnt management strategies have Creek. Some 3,417 ML (including also been developed recently passing flows) was released to the across the region by Catchment Glenelg River to provide benefits Management Authorities. below Rocklands Reservoir. A volume of 158 ML was distributed to multiple wetlands connected to the Wimmera Mallee Pipeline.

VEWH Authorised Volume Delivered

Volume (ML) (ML) Summary - Regulated Releases Lake Lonsdale - Taylors Lake 3,890 MacKenzie River - Burnt and Bungalally Creek 1,010 Upper Mt William Creek 100 Total Wimmera Catchment 6,000 5,000 Total Glenelg Catchment 4,000 2,970

Summary - Passing Flow Releases Wimmera Catchment - Lake Lonsdale 0 Wimmera Catchment - Huddlestons Weir 0 Glenelg Catchment - Rocklands Reservoir 447

Glenelg River Compensation Flow 80

Wimmera Mallee Pipeline Supplied Wetlands 249 158

GWMWater Annual Report 2015/16 | 31 Greenhouse Gas Emissions and Net Energy Consumption

GWMWater aims to minimise and vehicle fleet by retiring voluntary outcomes and are encouraged greenhouse emissions for the emission reduction certificates to continually improve on prior whole of business by implementing through the Australian Government performance. The environmental our Energy and Greenhouse Plan. Greenhouse Friendly Program. footprint of workplaces is measured To achieve this we follow the in terms of greenhouse gas Environment Protection Authority Office Based Environmental Data emissions and energy, water, waste carbon management principles GWMWater’s Sustainability Strategy and paper use. The results of of avoid, reduce, recycle, switch details actions and outcomes for these programs are communicated to cleaner fuels, sequester and sustainable practice across the to staff quarterly and strategies offset. We also attain zero net business. All staff contribute to these are developed to further reduce emissions for our offices, depots GWMWater’s environmental impact.

Whole of Business Emissions

Result Result Result Result Result 2011/12 2012/13 2013/14 2014/15 2015/16 Source of Emissions Tonnes Tonnes Tonnes Tonnes Tonnes CO2-e CO2-e CO2-e CO2-e CO2-e Water treatment and pumping 10,157.2 11,898.5 12,172.8 13,141.0 13,192.7 Sewage treatment 1 5,564.6 5,842.6 8,102.1 5,905.5 5,205.4 (includes fugitive emissions) Non-fleet (plant and equipment)2 71.3 79.7 37.0 63.6 61.0 Vehicle fleet 1,161.9 1,181.0 1001.0 1,029.0 837.0 Other 851.1 644.1 630.0 560.2 567.8 Offsets purchased (offset fleet emissions) (1,000) 0 0 0 0 Offsets retired (offset emissions 3 (1,500) (2,000) (1,638) (1,612) (1,446) applied to offices and depots) Other activities e.g. renewable (3.4) (3.5) (8.7) 0 0 energy generated Total net emissions 15,302.7 17,642.4 20,296.2 19,087.3 18,417.9

1. Fugitive emissions are calculated 2. Air travel as a scope three Friendly Certificates. GWMWater according to the requirements emission was not included for also generates solar energy at the of the National Greenhouse 2011/12. Air travel is included in corporate office. Solar energy is no Accounts Factors Workbook. the 2012/13 to 2015/16 figures. longer included as a greenhouse The formulae and methodology emissions offset. Emissions from 3. 1,446 voluntary offsets were for calculations is based on electricity consumption have retired to offset office and the National Greenhouse and remained steady during 2015/16. fleet emissions in 2015/16. Energy Reporting System Reductions in fugitive emissions (NGERS) Measurement Zero net emissions were achieved and emissions from liquid fuel Technical Guideline 2011. for offices, depots and fleet through consumption have led to an the surrender of Greenhouse overall reduction in emissions.

32 | GWMWater Annual Report 2015/16 Energy

Result Result Result Result Result Indicator Target 2011/12 2012/13 2013/14 2014/15 2015/16 Total energy use 2,405,643 1,947,609 1,938,365 1,711,206.6 1,793,285.2 No target set (electricity) (MJ) Greenhouse Zero net emissions associated emissions 808.6 644.3 630.0 560.2 564.7 with energy use for offices (tonnes CO2-e)1 and depots Greenhouse Zero net emissions associated emissions with energy (1,503.4) (1,003.5) (638.7) (560) (565) for offices use – offset and depots (tonnes CO2-e) Energy use per FTE 2 12,226 10,752.2 10,922.7 10,492.2 11,323.6 No target set (MJ per FTE) Energy per square metre of office 933 643.3 563.5 545.5 594.6 No target set space (MJ per m2)3

1. The greenhouse gas emissions conversion factors 2. Data is for corporate office only. have varied from year to year. The appropriate factor for each year has been applied.

Energy

Result Result Result Result Result Source 2011/12 2012/13 2013/14 2014/15 2015/16 Water MJ/ML1 3,575.5 3,857.2 4,029.2 2,139.0 2,303.0 Sewage MJ/ML 1,826.9 2,017.9 2,202.8 1,945.0 2,316.0 Water kWh/ML1 994.0 1,072.3 1,120.1 594.2 639.7 Sewage kWh/ML 507.9 561.0 612.4 540.3 643.3

1. Water includes urban, rural and bulk water supply. Higher figures up to 2013/14 reflect limited bulk water figures.

Waste

2011/12 2012/13 2013/14 2014/15 2015/16 Activity Target Result Result Result Result Result Units of waste 9,340 4,390 7,238 8,154 7,518 No target set generated (kg) Units of waste 89.2 45.3 68.9 77.6 78.1 69 per FTE (kg) Recycling rate (%) 63.3 71.8 79.5 77.8 78.6 85

To improve performance, staff are regularly educated about waste management. Waste audits are conducted quarterly and the results communicated to staff. Strategies to improve results are continually being sought.

Paper

2011/12 2012/13 2013/14 2014/15 2015/16 Activity Target Result Result Result Result Result Total units A4 equivalent copy 1,464 1,123 1,145 931 792 No target set paper used (reams) Units of A4 equivalent copy paper used 7.4 6.2 6.5 5.1 4.3 6 per FTE (reams) Percentage of recycled content of all 94.2 96.1 93.9 100 100 100 copy paper purchased (% white copy paper) Paper use has decreased per FTE in 2015/16. GWMWater is regularly promoting paper saving measures including technology and behavioural change. Much of the operational work allocation process is now paperless.

GWMWater Annual Report 2015/16 | 33 Water

2011/12 2012/13 2013/14 2014/15 2015/16 Activity Target Result Result Result Result Result Total water 1,426 1,424 1,326 1,496 1,212 No target set consumption (kL) Total water consumption 7.2 7.6 7.2 8.6 7.1 9 (kL per FTE) Water consumed per unit of office space 0.19 0.17 0.18 0.19 0.20 No target set (corporate office only) (kL per m2)

The decrease in water use overall and per FTE reflects positive changes in consumption at all sites.

Transportation

2011/12 2012/13 2013/14 2014/15 2015/16 Activity Result Result Result Result Result Energy consumed by fleet vehicles (MJ) Diesel 9,035,221 9,224,277 7,822,100 8,396,862 7,964,253 LPG 949,403 793,446 422,218 359,181 160,122 Unleaded 6,790,750 5,806,520 4,845,466 4,896,648 4,152,613 Total 16,775,374 15,824,243 13,089,784 13,652,691 12,276,988 Distance travelled (km) Diesel 1,913,099 1,900,049 1,849,956 1,732,731 1,788,292 LPG 187,424 152,944 115,574 47,893 29045 Unleaded 1,793,982 1,517,745 1,271,221 1,312,520 1,238,797 Total distance 3,894,505 3,570,738 3,236,751 3,093,144 3,056,134 Distance travelled by air 50,610 18,904 13,041 18,992 9,102 Greenhouse gas emissions (tonnes CO2-e)1 Diesel 631 694 588 631 590 LPG 58 52 28 24 10 Unleaded 473 436 363 367 298 Total2 1,162 1,182 979 1,022 898 Total per 1,000 km 0.3 0.33 0.30 0.33 0.29 Commuting to work Percentage of employees regularly using public transport, cycling, 18% 18% 18% 18% 18% walking or carpooling to and from work or working from home2

1. GWMWater surrenders voluntary carbon emission 2. Limited public transport available. certificates to achieve zero net emissions for fleet.

34 | GWMWater Annual Report 2015/16 Greenhouse Gas Emissions – tonnes CO2-e

2011/12 2012/13 2013/14 2014/15 2015/16 Activity Result Result Result Result Result Total associated with electricity use 13,116.6 14,969.2 15,645.1 16,530.2 16,437.0 Total from vehicle fleet 1,161.9 1,181.0 979.0 1,029.0 837.3 Total from air travel 17.1 2.8 3.9 5.6 3.1 Total offsets retired1 (1,500) (2,000) (1,638) (1,612) (1,446) Total offsets purchased (1,000)

Total offset from generation of 3 3 (3.4) (3.5) (8.7) 0 0 renewable energy from solar panels

Other sources Fugitive emissions 3,456.4 3,415.9 5,365.5 3,076.5 2,525.5 Registered/unregistered 71.3 77.0 59.0 58.0 61.0 plant and equipment Total net emissions2 15,319.9 17,642.4 20,405.8 19,087.3 18,417.9

1. In October 2010, 19,585 Emission Reduction 2. Total net emissions are for scopes one and two only. Units (ERU) were purchased and banked with 3. GWMWater is no longer counting renewable the Department of Energy Efficiency and Climate energy generation as an additional carbon offset. Change. 1,446 ERUs were retired to offset all office, depot and fleet emissions, based on actual totals.

Procurement GWMWater procurement activities are underpinned by the following principles:

• Value for money • Probity, transparency and fair competition • Compliance, accountability and risk management • Safety and environmental sustainability

Proper consideration of the impact of proposed purchases is undertaken where it is deemed appropriate and practicable to satisfy the underlying principles.

Suppliers that demonstrate responsibility through accredited quality, safety and environmental systems and policies are highly regarded. Consideration is also given to products which minimise environmental impacts through efficient use of raw materials, energy and water, and minimisation of waste and greenhouse gas emissions.

GWMWater Annual Report 2015/16 | 35 Performance Reporting

Certification of Performance Report for 2015/16 We certify that the accompanying Performance Report of Grampians Wimmera Mallee Water Corporation (trading as GWMWater) in respect of the 2015/16 financial year is presented fairly in accordance with the Financial Management Act 1994.

The Performance Report outlines the relevant performance indicators for the financial year as determined by the Minister for Water and as set out in the 2015/16 Corporate Plan, the actual and comparative results achieved for the financial year against predetermined performance targets and these indicators, and an explanation of any significant variance between the actual results and performance targets and/or between the actual results in the current year and the previous year.

As at the date of signing, we are not aware of any circumstances which would render any particulars in the Performance Report to be misleading or inaccurate.

Peter Vogel Chairman

Mark Williams Managing Director

Sally Marshall Executive Manager Business Performance and Planning (Chief Finance and Accounting Officer)

Dated this 12th day of August 2016

36 | GWMWater Annual Report 2015/16 Financial Performance Indicators

Variance Variance KPI 2014/15 2015/16 2015/16 Key Performance Indicator to Prior Notes to Target Notes Number Result Result Target Year % % F1 Interest Cover (Cash) Net operating cash flows before net interest and tax 3.4 3.9 3.3 14.7% 1a 18.2% 1b payments ÷ net interest payments (times) F2 Gearing Ratio Total debt (including finance 7.3% 6.6% 7.1% (9.6%) (7.0%) leases) ÷ total assets * 100 F3 Internal Financing Ratio Net operating cash flow / net 127.0% 120.2% 77.0% (5.4%) 56.1% 2a capital expenditure * 100 F4 Current Ratio Current assets/current liabilities (excluding long-term 1.1 1.2 0.6 9.1% 100.0% 3a employee provisions and revenue in advance) (times) F5 Return on Assets Earnings before net interest and tax ÷ average 0.0% 0.1% (0.1%) 100.0% 4a (200.0%) 4b total assets * 100 F6 Return on Equity Net profit after tax ÷ (0.4%) 0.4% (0.8%) (200.0%) 5a (150.0%) 5b average total equity * 100 F7 EBITDA Margin Earnings before interest, tax, depreciation and amortisation/ 49.5% 50.0% 50.3% 1.0% (0.6%) total revenue * 100

Notes:

1a. The improvement in the Interest Cover (Cash) ratio in 2015/16 is due to a combination of an increase in operating receipts from customers of $3.6 million arising from customer growth, price increases and higher consumption; lower payments to suppliers, employees and financing costs of $1.6 million. 1b. The favourable Interest Cover (Cash) ratio result compared to the budget is mainly due to lower interest payments of $1.2 million. The decrease in interest payments is due to higher operating receipts from customers from customer growth, price increases and higher consumption, and, lower payments on the capital program resulting in lower borrowings. 2a. The Internal Financing Ratio result is significantly better than the budget due to lower interest payments, lower expenditure on the capital program. There was also an increase in, State Government capital contributions arising from drought initiatives projects and an increase in receipts from customers relative to budget. 3a. The Current Ratio result is favourable compared to budget due to higher cash reserves and lower current borrowings impacted by lower expenditure on the capital program. 4a. The Return on Assets ratio results are impacted by operating deficits before net interest and tax. The improvement in 2015/16 reflects stronger operating revenue from increased water consumption and reduced non-operating expenditure compared with 2014/15. 4b. The Return on Assets ratio result improved to budget mainly due to a reduced non-operating expenditure. 5a. The 2015/16 results recorded a positive Return on Equity of 0.4%, an improvement on last year largely due to income tax revenue. Income tax revenue relates to changes in the deferred tax position and increased from $3.1 million in 2014/15 to $14.1 million in 2015/16. 5b. The improvement in the Return on Equity ratio compared to the budget reflects an overall improvement in the operating deficit before tax of $4.4 million and income tax revenue of $14.1 million from changes to the deferred tax position.

GWMWater Annual Report 2015/16 | 37 Water and Sewerage Service Performance Indicators

Variance Variance KPI 2014/15 2015/16 2015/16 Key Performance Indicator to Prior Notes to Target Notes Number Result Result Target Year % % WS1 Unplanned water supply interruptions No. of customers receiving more than (5) unplanned interruptions in the year/total number of water 2.10 4.40 0 109.5% 6a 100.0% 6b (domestic and non-domestic) customers * 1000 (number) WS2 Interruption time Average duration of unplanned water supply 75.77 86.76 100 14.5% 7a (13.2%) 7b interruptions (minutes) WS3 Restoration of unplanned water supply Unplanned water supply interruptions restored within (5) 99.36 97.72 97 (1.7%) 0.7% hours/total unplanned water supply interruptions*100 (no.) SS1 Containment of sewer spills Sewer spills from reticulation and branch sewers contained within five hours/total sewer 99.33 99.25 98 (0.1%) 1.3% spills from reticulation and branch sewers *100 (no.) SS2 Sewer spills interruptions No. of residential sewerage customers affected by 97.96 99.24 100 1.3% (0.8%) sewerage interruptions restored within five hours % (no.) WSR1 Rural water supply deliveries No. of orders delivered/total N/A N/A N/A N/A N/A number of orders*100 (no.) WSR2 Unavailability of Domestic and Stock supply Duration that domestic and stock service is unavailable in excess 0.00 1.64 2.50 100.0% 8a (34.4%) 8b of on-property storage (%) WSR3 Groundwater Supply No. of transfers processed within target period/total number of 100.00 100.00 100 0.0% 0.0% transfers processed*100. (no.)

6a. There were recurring shutdowns 7a. Whilst unplanned interruption 8a. A Blue Green Algae outbreak due to mains burst in Dimboola, Nhill incident numbers increased in in water sourced from the and St Arnaud and a combination 2015/16, 11 incidents were of Murray River resulted in a of breaks and whole town outages durations greater than five hours partial system shutdown of the in Culgoa & Berriwillock. These and up to nine hours. One incident’s Northern Mallee Pipeline. resulted in a greater number duration was for 19.75 hours in of customers experiencing Nhill. These incidents have severely 8b. Whilst the target was not more than 5 interruptions. impacted the results for this target. exceeded, the Blue Green Algae in the source water 6b. A greater than expected 7b. Performance is within the impacted the overall result. number of unplanned shutdowns target of 100 minutes. in sections of some towns resulted in the target being exceeded.

38 | GWMWater Annual Report 2015/16 Customer Responsiveness Performance Indicators

Variance Variance KPI 2014/15 2015/16 2015/16 Key Performance Indicator to Prior Notes to Target Notes Number Result Result Target Year % % CR1 Water quality complaints No of complaints per 4.24 2.99 4.00 (29.5%) 9a (25.3%) 9b 1000 customers (no.) CR2 Sewerage service quality complaints No of complaints per 0.35 0.12 1.20 (65.7%) 10a (90.0%) 10b 1000 customers (no.) CR3 Sewerage odour complaints No of complaints per 0.67 0.35 0.16 (47.8%) 11a 118.8% 11b 1000 customers (no.) CR4 Billing Complaints No of complaints per 1.08 0.60 3.00 (44.4%) 12a (80.0%) 12b 1000 customers (no.)

9a. In 2015/16 a better result 10a. Improved notification and pump stations as required. was achieved due to improved response to sewer service 11b. There has been an increased maintenance practices and interruptions has resulted incidence of odours at manholes flushing in resumption of supply in a reduction in complaints and sewer pump stations. Works are following repairs from breaks. The compared to last year. underway to rectify these issues. Quambatook water treatment plant 10b. The positive variance relative was in operation for the full year and 12a. The decrease in billing to target reflects the improved poor water quality in Quambatook complaints is attributed to the notification and response by was a significant source of continual review of accuracy of GWMWater in responding to complaints in the preceding year. accounts as they are generated. sewer service interruptions. In the case of rural accounts 9b. The overall variance to 11a. There has been an increase in this improvement has been target result is a combination the incidence of odour complaints greatly assisted by the Rural of the impact of Quambatook at manholes and sewer pump Pipeline Intelligence Project. and a general reduction in stations. One pump station has water quality complaints. 12b. Complaints in the category been fitted with carbon filters which continue to decline as processes eliminate odour, carbon filters and systems are being improved. may be fitted to further sewer

Environmental Performance Indicators

Variance Variance KPI 2014/15 2015/16 2015/16 Key Performance Indicator to Prior Notes to Target Notes Number Result Result Target Year % % E1 Effluent re-use volume (end use) Percentage recycled for 100.30 101.50 100 1.2% 1.5% each category (%) E2 Total net CO2 emissions Net tonnes CO2 19,088.10 18,417.90 19,700 (3.5%) (6.5%) 13b equivalent (tonnes)

13b. A reduction in fugitive to the reduction include energy emissions has contributed to efficiency measures and increasing the lower amount of emissions the use of solar power. in 2015/16. Other contributions

GWMWater Annual Report 2015/16 | 39 Level 24, 35 Collins Street Melbourne VIC 3000

VAGO Telephone 613 8601 7000 Independent Auditor Report Facsimile 6138601 7010 Victorian Auditor-General's Office Website www.audit.vic.gov.au

INDEPENDENT AUDITOR'S REPORT

To the Board Members, Grampians Wimmera Mallee Water Corporation

The Performance Report I have audited the accompanying performance report for the year ended 30 June 2016 of the Grampians Wimmera Mallee Water Corporation which comprises the performance report, the related notes and the certification of performance report has been audited. The Board Members' Responsibility for the Performance Report The board members of the Grampians Wimmera Mallee Water Corporation are responsible for the preparation and fair presentation of the performance report and for such internal control as the board members determine is necessary to enable the preparation and fair presentation of the performance report that is free from material misstatement, whether due to fraud or error. Auditor's Responsibility

As required by the Audit Act 1994, my responsibility is to express an opinion on the performance report based on the audit, which has been conducted in accordance with Australian Auditing Standards. Those standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the performance report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the performance report. The audit procedures selected depend on judgement, including the assessment of the risks of material misstatement of the performance report, whether due to fraud or error. In making those risk assessments, consideration is given to the internal control relevant to the entity's preparation and fair presentation of the performance report 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 entity's internal control. An audit also includes evaluating the overall presentation of the performance report. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

40 | GWMWater Annual Report 2015/16 Auditing in the Public Interest Independent Auditor's Report (continued)

Independence

The Auditor-General's independence is established by the Constitution Act 1975. The Auditor-General is not subject to direction by any person about the way in which his powers and responsibilities are to be exercised. In conducting the audit, I and my staff and delegates have complied with all applicable independence requirements of the Australian accounting profession. Opinion

In my opinion, the performance report of the Grampians Wimmera Mallee Water Corporation in respect of the 30 June 2016 financial year presents fairly, in all material respects.

MELBOURNE Dr Peter Frost 19 August 2016 Acting Auditor-General

GWMWaterAuditing Annual in the ReportPublic Interest 2015/16 | 41 Urban water consumption of 9,345 ML in 2014/15 was consistent with water consumption in 2013/14. This is 30 percent greater than urban consumption prior to the completion of the Wimmera Mallee Pipeline when most urban centres were subject to Stage 4 restrictions. The improved reliability of water supply has significantly enhanced the liveability of the region. This is indicative of the extent that rural domestic and stock customers are more reliant on pipeline water and the return to livestock production as an integral part of rural agricultural activities.

The overall financial viability of GWMWater improved significantly in 2014/15. Free cash flow from operations was $21.6 million, $5.3 million better than the $16.3 million recorded in 2013/14. This result has been influenced by a combination of stronger operating revenue and improved operating efficiency. The improved viability is best demonstrated by the improved interest cover ratio which has increased from 2.8 times in 2013/14 to 3.4 times in 2014/15.

The Wimmera Mallee region has a strong agricultural base that is primarily broad acre cereal production. By virtue of the pipeline solution and the improved reliability of the water supply, there has Riskbeen a shift backManagement to livestock. The opportunities identified by the business cases for pipelining solutions have started to be realised. ComplianceIntensive agriculture, particularly in relationAttestation to poultry production, has expanded. The mineral sands developments are well advanced and viticulture opportunities have also been secured. I, Peter Vogel certify that GWMWaterThe climate has science complied that underpinswith the the assessments of likely Ministerialfuture of Standingthe Wimmera Direction Mallee 4.5.5 region under climate change will – continueRisk Management to present Frameworkchallenges for water supply management. We andwill Processes. continue to GWMWater’swork with government and key stakeholders to Audit,ensure Governance that these implicationsand Risk are well understood, and that we Committeedevelop adaptive has verified strategies this. to secure supply for the competing demands for water as well as reducing our carbon footprint.

PeterPeter Vogel Vogel ChairmanChairman

Dated this 12th day of August 2016

Mark Williams Managing Director

GWMWater Annual Report 2014/15 Page 3

42 | GWMWater Annual Report 2015/16 Financial Statements

Contents Operating Statement...... 44 Balance Sheet...... 45 Statement of Changes in Equity...... 46 Cash Flow Statement...... 47 Notes to the Financial Statements...... 48 Statutory Certificate...... 94 Auditors Report...... 95 Disclosure Index...... 96

GWMWater Annual Report 2015/16 | 43 Grampians Wimmera Mallee Water Corporation Comprehensive Operating Statement For the Financial Year ended 30 June 2016

Notes 2015/16 2014/15 $'000 $'000

Revenue from Operating Activities General Rates and Charges 3 62,926 61,000 Contributions Revenue 4 2,716 3,690

Revenue from Non-Operating Activities Interest 5 55 63 Other revenue 6 1,330 921

Total Revenue 67,027 65,674

Expenses from Operating Activities Employee Benefits 7 15,023 14,206 Depreciation and Amortisation Expense 8 32,288 32,854 Operation, Maintenance and Administration Expenses 9 16,633 16,414 Environmental Contributions 1,684 1,684

Expenses from Non-Operating Activities Net loss/(gain) on disposal of non-financial assets 21 160 754 Net fair loss/(gain) on revaluation of investment properties 20 (18) 76 Borrowing and Interest costs 10 8,673 9,193

Total Expenses 74,443 75,181

Net result before tax (7,416) (9,507)

Income tax expense/(revenue) 11 (14,146) (3,095)

Net result after tax 6,730 (6,412)

Other comprehensive income Items that will not be reclassified to net result Gain/(loss) on revaluation of property, plant, equipment and infrastructure 28 75,242 695 Tax effect of revaluation increment revenue/(expense) 28 (22,461) (208)

Total comprehensive result 59,511 (5,925)

The above Comprehensive Operating Statement should be read in conjunction with the accompanying notes.

44 | GWMWater Annual Report 2015/16 Grampians Wimmera Mallee Water Corporation Balance Sheet As at 30 June 2016

Notes 2015/16 2014/15 $'000 $'000 ASSETS

Current Assets

Cash and Cash Equivalents 12 1,235 3,697 Receivables 13 15,548 16,198 Prepayments 15 254 229 Inventories 16 1,600 1,514 Total Current Assets 18,637 21,638

Non-Current Assets

Receivables 13 150 98 Property, Plant, Equipment and Infrastructure 17 1,912,861 1,847,661 Intangible Assets 19 8,608 9,266 Investment Properties 20 676 654 Total Non-Current Assets 1,922,295 1,857,679

TOTAL ASSETS 1,940,932 1,879,317

LIABILITIES

Current Liabilities

Payables 22 7,282 7,264 Employee Benefits 23 5,808 5,363 Borrowings 25 6,669 10,602 Total Current Liabilities 19,759 23,229

Non-Current Liabilities

Employee Benefits 24 334 310 Borrowings 25 121,946 126,115 Deferred Tax Liabilities 26 171,894 163,581 Total Non-Current Liabilities 294,174 290,006

TOTAL LIABILITIES 313,933 313,235

NET ASSETS 1,626,999 1,566,082

Equity

Contributed Capital 27 1,173,853 1,172,447 Asset Revaluation Reserves 28 575,619 522,837 Accumulated Deficit 29 (122,472) (129,202)

TOTAL EQUITY 1,626,999 1,566,082

The above Balance Sheet should be read in conjunction with the accompanying notes.

GWMWater Annual Report 2015/16 | 45

9 487 150

6,730 1,406 (6,412) 52,781

$'000 1,571,857 1,566,082 1,626,99 Total

- - - -

,412) 6,730

(6

(122,790) (129,202) (122,472) $'000 Funds Accumulated Accumulated

Surplus/(Deficit)

- - -

487

52,781

522,350 522,837 575,618 $'000 Asset Reserves Revaluation

- - -

ons 150 $'000 1,406 1,173,853 1,172,297 1,172,447 by Owners by Contributi

29 ,

28 , Notes 27

Statement of Changes Equity in Statement

For the Financial Year ended 30 June 2016 Year ended 30 June For Financial the

Grampians Wimmera Mallee Water Corporation Corporation Water Mallee Wimmera Grampians

2014 1Balance atJuly result for year the Net Other income comprehensive owner capacity as its in with TransactionsState the 2015 June 30 Balance at result for year the Net Other income comprehensive owner as in withcapacity its Transactions State 2016 June 30 Balance at The above Statement of ChangesEquity in should be read in conjunctionwith the accompanying notes.

46 | GWMWater Annual Report 2015/16 Grampians Wimmera Mallee Water Corporation Cash Flow Statement For the Financial Year ended 30 June 2016

Notes 2015/16 2014/15 $'000 $'000 CASH FLOWS FROM OPERATING ACTIVITIES

Receipts Receipts from customers 65,448 63,935 Receipts from government 996 1,092 Interest received 48 59 GST received from the Australian Tax Office 1,696 1,111 68,188 66,197

Payments Suppliers and employees (34,091) (35,361) Interest and other costs of finance paid (8,886) (9,215) (42,977) (44,576)

Net Cash (Outflow)/Inflow Operating Activities 31 25,211 21,621

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant, equipment and infrastructure (22,881) (17,961) Payments for investment properties - (30) Payments for intangible assets (217) (54) Proceeds from disposal of property, plant, equipment and infrastructure 2,120 1,025

Net Cash (Outflow)/Inflow Investing Activities (20,978) (17,020)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings - 264 Repayment of borrowings and advances from Government (7,632) (133) Proceeds from contributed capital by State Government 1,406 150 Repayment of finance leases (470) (408)

Net Cash (Outflow)/Inflow Financing Activities (6,696) (127)

Net Increase/(Decrease) in Cash Held (2,463) 4,474

Cash and cash equivalents at beginning of the financial year 3,697 (777)

Cash and Cash Equivalents at the End of the Financial Year 12 1,235 3,697

Financing arrangements 25

The above Cash Flow Statement should be read in conjunction with the accompanying notes.

GWMWater Annual Report 2015/16 | 47 Grampians Wimmera Mallee Water Corporation Notes to the financial statements For the Financial Year ended 30 June 2016

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Accounting

1.1.1 General The financial report includes separate financial statements for Grampians Wimmera Mallee Water Corporation (GWMWater) as an individual reporting entity. This financial report is a general purpose financial report that consists of a Comprehensive Operating Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and notes accompanying these statements.

The general purpose financial report has been prepared in accordance with Australian Accounting Standards (AAS's), Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board, the requirements of the Financial Management Act 1994 and applicable Ministerial Directions. Where applicable, those paragraphs of the AAS’s applicable to not-for-profit entities have been applied. The Corporation is a not-for– profit entity for the purpose of preparing the financial statements.

The financial report has been prepared on a going concern basis.

The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when the cash is received or paid.

The annual financial statements were authorised for issue by the Board on 12 August 2016.

The Principal Address is: GWMWater 11 McLachlan St Horsham Victoria 3402

1.1.2 Accounting policies Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

Unless otherwise stated, all accounting policies applied are consistent with those of the prior year.

1.1.3 Functional and presentation currency Items included in this financial report are measured using the currency of the primary economic environment in which GWMWater operates (‘the functional currency’). The financial statements are presented in Australian Dollars, which is GWMWater’s functional and presentation currency.

1.1.4 Classification between Current and Non-Current In the determination of whether an asset or liability is current or non-current, consideration is given to the time when each asset or liability is expected to be realised or paid. The asset or liability is classified as current if it is expected to be turned over within twelve months being the Corporation’s operational cycle – see Note 1.3.1 for a variation in relation to employee benefits.

1.1.5 Rounding All amounts shown in the financial statements are rounded to the nearest thousand dollars, unless otherwise stated. Figures in the financial report may not equate due to rounding.

1.1.6 Historical cost convention These financial statements have been prepared under the historical cost convention, except for the revaluation of financial assets, certain classes of property, plant, equipment and infrastructure and investment properties.

48 | GWMWater Annual Report 2015/16 Grampians Wimmera Mallee Water Corporation Notes to the financial statements For the Financial Year ended 30 June 2016

1.1.7 Accounting estimates The preparation of financial statements in conforming with AASs reuires the use of certain accounting estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, income and epenses. Actual results may differ from these estimates. t also reuires management to eercise its udgement in the process of applying the entity’s accounting policies.

stimates and udgements are continually ealuated and are based on historical eperience and other factors, including epectations of future eents that may hae a financial impact on the entity and that are belieed to be reasonable under the circumstances. t is epected that the estimates and assumptions adopted are not liely to cause a material adustment to the carrying amounts of assets and liabilities within the net financial year.

1.2 Revenue recognition

1.2.1 General rates and charges eenue is brought to account when serices hae been proided or when a tariffcharge is leied or determined.

olumetric charges are recognised as income when the serices are proided. Meter readings are undertaen progressiely through the year and when unread at balance date, an estimate of outstanding reenue is determined by multiplying the number of days since the last meter reading and multiplying by the customers aerage consumption adusted for any seasonal factors.

Trade waste charges are recognised as reenue at the end of the serice deliery period. olume meters are read and appropriate charges leied as per the trade waste agreements.

1.2.2 Government grants and contributions Goernment grants and contributions are recognised as operating reenue on receipt or when the entity obtains control of the contribution and meets certain other criteria as outlined by AAS – whicheer is the sooner, and disclosed in the omprehensie perating Statement as contributions reenue. oweer, grants and contributions receied from the ictorian State Goernment, which were originally appropriated by the arliament as additions to net assets or where the Minister for inance and the Minister for Water hae indicated, are in the nature of owners’ contributions, are accounted for as Equity – ontributions by wners.

1.2.3 Interest nterest income is recognised using the effectie interest rate method, in the period in which it is incurred.

1.2.4 Assets acquired for no cost Where assets are constructed by priate deelopers, (water and wastewater mains) and these assets are controlled by the orporation upon completion, the fair alues of those assets are recognised as contributions reenue in the omprehensie perating Statement in the accounting period in which the wors are completed and a certificate of compliance issued.

1.2.5 Developer contributions/fees paid by developers Water infrastructure assets built by deelopers in new land subdiisions that on completion are proided to the orporation or fees paid by deelopers to connect new deelopments to the Corporation’s existing water and wastewater supply systems, are recognised as reenue when they are receied.

1.2.6 Sale of fixed assets In accounting for the sale of property, plant, equipment and infrastructure, the ‘net amount’ of gross proceeds from sales less the written down alue of the assets disposed is reflected as a profit(loss) on disposal and recognised in the omprehensie perating Statement.

1.2.7 Lease or rental income ncome from operating leases (eg. rentals) is recognised in income on a straightline basis oer the lease term.

GWMWater Annual Report 2015/16 | 49 Grampians Wimmera Mallee Water Corporation Notes to the financial statements For the Financial Year ended 30 June 2016

1.3 Expense recognition

1.3.1 Employee benefits hese expenses include all costs related to employment including salaries and wages, fringe benefits tax, leae entitlements, redundancy payments and orCoer premiums

Superannuation ater has employees that are members of different public sector industry schemes. he Corporation has obligations in relation to defined benefits schemes that ary according to the industry scheme the employee is affiliated with.

he amount charged to the Comprehensie perating tatement in respect of superannuation represents the contributions made by the Corporation to superannuation schemes in respect to the serices of employees of the Corporation both past and present. uperannuation contributions are made to the plans based on the releant rules of each scheme and any releant compulsory superannuation requirements that ater is required to comply with.

1.3.2 Depreciation and amortisation of non-current assets ll noncurrent physical assets that hae a limited useful life are depreciated. here assets hae separate identifiable components that hae distinct useful lies andor residual alues a separate depreciation rate is determined for each component.

epreciation is calculated using the straight line method to allocate their cost or realued amounts, net of their residual alues, oer their estimated useful lies, commencing from the time the asset is held ready for use. he assets residual alues and useful lies are reiewed, and adusted if appropriate, at each balance sheet date.

Intangible assets with finite useful lies are amortised as an expense on a systematic basis typically straightline, commencing from the time the asset is aailable for use. he amortisation periods are reiewed and adusted if appropriate at each balance date. Intangible assets with indefinite useful lies are not amortised. oweer, all intangible assets are assessed for impairment annually and useful life is consistent with prior year.

epreciation rates and useful lies hae been reiewed as part of the realuation process conducted in the financial year. ies and depreciation rates hae been reiewed and adusted as at une to reflect asset condition, expected usage and utility to ater.

Asset Class Useful Life Useful Life 30 June 2015 30 June 2016 and il il uildings rban ater Infrastructure astewater Infrastructure ural istribution Infrastructure eadwors Infrastructure lant, Equipment and ehicles ixtures and ittings Intangible Inestment roperties

1.3.3 Operating, maintenance and administration expenses outine maintenance, repair and minor renewal costs are expensed as incurred. here the expense incurred relates to the replacement of a component of an asset, the cost exceeds the capitalisation threshold and it meets the definition of an asset, the cost is capitalised and depreciated.

50 | GWMWater Annual Report 2015/16 Grampians Wimmera Mallee Water Corporation Notes to the financial statements For the Financial Year ended 30 June 2016

1.3.4 Environmental contribution levy he the ct amended the the ater ct to mae proision for enironmental contributions to be paid by ater upply Corporations.

he ct establishes an obligation for ater Corporations to pay into the consolidated fund annual contributions for the first period, from ctober to une in accordance with the preestablished schedule of payments, which sets out the amounts payable by each Corporation. he contribution period was extended beyond .

he purpose for the enironmental contribution is set out in the ct, and the funding may be used for the purpose of funding initiaties that see to promote the sustainable management of water or address waterrelated initiaties.

ater has a statutory obligation to pay an enironmental contribution to the epartment of Enironment, and, ater and lanning. his contribution is recognised as an expense during the reporting period as incurred.

1.3.5 Borrowing and interest costs orrowing and interest costs are recognised as expenses in the period in which they are incurred.

orrowing and interest costs include interest on ban oerdrafts and shortterm and longterm borrowings, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and finance lease charges.

1.3.6 Financial accommodation levy hen ater carries borrowings in excess of illion it is obligated to pay to the ictorian oernment a inancial ccommodation ey .

he amount of the ley is based on the credit ris of ater relatie to the tate of ictoria as assessed by an independent ratings agency. rates had been capped at basis points for the period uly to une . rom uly margins reerted to maret based rates which are applied to all financial accommodation accessed from reasury Corporation ictoria C.

fter a epartment of reasury and inance des top reiew for , incurred by ater was basis points and is accounted for as a borrowing cost for the purpose of presentation in general purpose financial statements.

1.3.7 Grants and other transfers rants and other transfers to third parties other than contributions to owners are recognised as an expense in the reporting period in which they are paid or payable. hey include transactions such as grants, subsidies, personal benefit payments made in cash to indiiduals other transfer payments made to tateowned agencies, local goernment, nongoernment schools, and community groups.

1.4 Assets

1.4.1 Cash and cash equivalents ater considers cash and cash equialents on the alance heet to include cash on hand and cash at ban, deposits at call and those highly liquid inestments with an original maturity of three months or less, which are held for the purpose of meeting short term cash commitments rather than for inestment purposes, and are readily conertible to nown amounts of cash with an insignificant ris of changes in alue.

or Cash low tatement presentation purposes, cash and cash equialents include ban oerdrafts, which are included as borrowings on the alance heet.

GWMWater Annual Report 2015/16 | 51 Grampians Wimmera Mallee Water Corporation Notes to the financial statements For the Financial Year ended 30 June 2016

1.4.2 Receivables eceiables are recognised initially at fair alue and subsequently measured at amortised cost, less allowance for doubtful debts. rade receiables are due for settlement no more than days from the date of recognition. Collectability of receiables is reiewed on an ongoing basis. ebts which are nown to be uncollectible are written off. n estimate allowance for impaired receiables is established, based on obectie eidence that ater will not be able to collect all amounts due according to the original terms of receiables.

eceiables consist of contractual receiables and statutory receiables. Contractual receiables, such as debtors in relation to goods and serices, and accrued income are classified as financial instruments and categorised as loans and receiables. tatutory receiables, such as amounts owing from the ictorian oernment and oods and erices ax input tax credits recoerable are recognised and measured similarly to contractual receiables except for impairment, but are not classified as financial instruments because they do not arise from a contract.

1.4.3 Prepayments repayments represent payments made in adance of receipt of goods or serices or that part of expenditure made in one accounting period coering a term extending beyond that period.

1.4.4 Inventories Inentories comprise stores and materials used in the construction of new wors and for the repair and maintenance of existing assets. ll inentories are measured at the lower of cost and current net realisable alue. Costs are assigned to inentory quantities on hand at balance date on a weighted aerage cost C basis.

Inentories also include goods held for distribution at no or nominal cost. Inentories held for distribution are measured at cost, adusted for any loss of serice potential. ases used in assessing loss of serice potential for inentories held for distribution include current replacement cost and technical or functional obsolescence. echnical obsolescence occurs when an item still functions for some or all of the tass it was originally acquired to do, but no longer matches existing technologies. unctional obsolescence occurs when an item no longer functions the way it did when it was first acquired.

1.4.5 Fixed assets roperty, plant, equipment and infrastructure represent noncurrent assets comprising land, buildings, fixtures and fittings, urban water infrastructure, wastewater infrastructure, rural distribution infrastructure, headwors infrastructure, plant, equipment and ehicles used by the Corporation in its operations. Intangible assets and inestment properties are disclosed separately as fixed assets. Items with a useful life of more than one year cost or alue in excess of the alues identified in the table below are recognised as an asset. ll other assets acquired are expensed.

ixed ssets are grouped into the following classes of assets land, buildings, inestment properties, urban water infrastructure, wastewater infrastructure, rural distribution infrastructure, headwors infrastructure, plant, equipment and ehicles, intangibles and fixtures and fittings. he leel at which expenditure is recognised as capital in each of these categories is consistent with the preious year and fall within the following ranges

and uildings , rban ater Infrastructure , astewater Infrastructure , ural istribution Infrastructure , eadwors Infrastructure , lant, Equipment and ehicles ixtures and ittings Intangibles Inestment roperties ,

52 | GWMWater Annual Report 2015/16 Grampians Wimmera Mallee Water Corporation Notes to the financial statements For the Financial Year ended 30 June 2016

here the Corporation constructs assets, the cost at which they are recorded includes an appropriate share of fixed and ariable oerheads.

ssets acquired at no cost or for nominal consideration by the Corporation are recognised at fair alue at the date of acquisition.

1.4.6 Measurement of Non-Current physical assets ll noncurrent physical assets are recognised initially at cost and subsequently realued at fair alue less accumulated depreciation and impairment in accordance with the requirements of inancial eporting irection

ealuations hae been conducted in accordance with . cheduled realuation is undertaen eery fie years with an annual assessment of fair alue to determine if it is materially different to carrying alue. If the difference to carrying alue is greater than per cent, a management realuation is undertaen while a moement greater than per cent will normally inole an approed aluer usually the aluer eneral of ictoria to perform detailed assessment of the fair alue. If the moement in fair alue since the last realuation is less than or equal to per cent, then no change is made to carrying amounts.

lant, equipment, and ehicles are measured at fair alue.

Infrastructure assets, are measured at fair alue less accumulated depreciation and impairment in accordance with . hese assets comprise of substructures or underlying systems that are held to facilitate storage, treatment and transfer of water to meet customer needs. hey also include infrastructure assets that underlie sewerage systems.

1.4.7 Revaluation of Non-Current physical assets ealuation increments are credited directly to equity in the asset realuation resere, except that, to the extent that an increment reerses a realuation decrement in respect of that class of asset preiously recognised as an expense in determining the net result, the increment is recognised as reenue in determining the net result.

ealuation decrements are recognised immediately as an expense in the net result, except that, to the extent that a credit balance exists in the asset realuation resere in respect of the same asset, they are debited to the asset realuation resere.

ealuation increases and realuation decreases relating to indiidual assets within a class of infrastructure, property, plant, equipment and infrastructure are offset against one another within that class but are not offset in respect of assets in different classes.

sset realuation reseres are not transferred to accumulated surplusdeficit on derecognition of the releant asset.

and and uildings were independently alued at une by using Egan aluers. or and, the aluation methodology used has been maret alue adusted for community serice obligations where applicable. ue to their specialised nature uildings hae been alued using depreciated replacement costs.

Infrastructure assets were independently alued at une by the using under the instructions of . he aluation methodology used was depreciated replacement costs using a reenfields approach for assessing costs and only included assets that were constructed before uly . Cost models were built based on actual construction information complimented by a ariety of information sources including capacity, height, material type, length and depth that could be applied broadly across the range of assets in each category.

he aluation was based on independent assessments. he effectie date of aluation is une .

GWMWater Annual Report 2015/16 | 53 Grampians Wimmera Mallee Water Corporation Notes to the financial statements For the Financial Year ended 30 June 2016

1.4.8 Impairment of assets Intangible assets with indefinite useful lies are tested annually as to whether their carrying alue exceeds their recoerable amount. ll other assets are assessed annually for indicators of impairment, except for  inentories  deferred tax assets  financial instrument assets and  inestment properties that are measured at fair alue.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying alue exceeds their recoverable amount. Where an asset’s carrying amount exceeds its recoverable amount, the difference is writtenoff by a charge to the Comprehensie perating tatement except to the extent that the writedown can be debited to an asset realuation resere amount applicable to that class of asset.

he recoerable amount for most assets is measured at the higher of depreciated replacement cost and fair alue less costs to sell. he recoerable amount for assets held primarily to generate net cash inflows is measured at the higher of the present alue of future cash flows expected to be obtained from the asset and fair alue less costs to sell. It is deemed that, in the eent of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

reersal of an impairment loss on a realued asset is credited directly to equity under the heading realuation resere. oweer, to the extent that an impairment loss on the same class of asset was preiously recognised in the Comprehensie perating tatement, a reersal of that impairment loss is also recognised in the Comprehensie perating tatement.

1.4.9 Intangible assets Intangible assets represent identifiable nonmonetary assets without physical substance.

Intangible assets are initially recognised at cost. ubsequently, intangible assets with finite useful lies are carried at cost less accumulated amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the Corporation.

ermanent water entitlements purchased are treated as an intangible asset on the alance heet at cost in accordance with and , and will not be subect to amortisation, as permanent water entitlements hae an indefinite life. ermanent entitlements will be tested annually for impairment.

1.4.10 Investment properties Inestment properties represent properties held to earn rentals or for capital appreciation or both, but exclude properties held to meet serice deliery obecties of the Corporation.

Inestment properties are initially recognised at cost. Costs incurred subsequent to initial acquisition are capitalised when it is probable that future economic benefits, in excess of the originally assessed performance of the asset, will flow to the Corporation. here an inestment property is acquired at no cost or for nominal consideration, its cost shall be deemed to be its fair alue as at the date of acquisition.

ubsequent to initial recognition at cost, inestment properties are realued to fair alue with changes in the fair alue recognised as reenue or expenses in the period that they arise. he properties are not depreciated nor tested for impairment.

n independent aluation of the Corporations inestment properties was performed by using Egan aluers, to determine the fair alue. his conforms to ustralian aluation tandards, and was based on independent assessments with an effectie date une .

54 | GWMWater Annual Report 2015/16 Grampians Wimmera Mallee Water Corporation Notes to the financial statements For the Financial Year ended 30 June 2016

ental revenue from the leasing of investment roerties is recognised in the omrehensive erating tatement in the eriods in hich it is receivable, as this reresents the attern of service rendered through the rovision of the roerties.

1.4.11 Accounting treatment of BOOT contracts – Water Treatment Services Agreement n WWater entered into a Water reatment ervices greement W, ith uatoer to rovide ater treatment services to rarat, taell, alls a, reat Western and omonal.

he W relates to the construction of four ater treatment lants on a uild n erateransfer basis. he contract term for the W is years. nder the contract, the ororation ill ay a volumetric charge for water treated as metered at the point of delivery to GWMWater’s reticulation system. At the end of the 25 year eriod, onershi of the ater treatment lants reverts to the ororation for one dollar.

nder the W all substantial riss of onershi and oeration of the ater treatment facilities are vested ith uatoer. oll ayments under the agreement are based solely on the volume of ater treated and toll reductions aly for excursions from agreed ater uality arameters. he riss assumed by the contractor under the agreement include ra ater suly ris, demand ris, ra ater uality ris and ris of technical obsolescence.

he W has been assessed in the context of nterretation to determine hether the W contains a lease. ased on the assessment made the folloing conclusions have been made

. he W conveys to WWater the right to use the ater treatment facilities and, therefore, the arrangement contains a lease.

. he lease element of the W should be classified as a finance lease. s there are no minimum ayments under the lease a method needed to be determined to establish a minimum lease obligation. n transition to , the contract as reassessed to determine its aroriate value in the context of ater volumes delivered under the contract. his reassessment as based on volumes that ould reflect the minimum volumes to be sulied at the consumtive levels of the relevant tons at the most extreme level of restriction under the restriction by la.

hese minimum volumes ere considered the most aroriate basis for establishing the minimum lease obligations and the resective value of the asset and liability ere imaired from the reviously assumed minimum volume of , .

n aital ommunity nfrastructure rading rust and aital ore nfrastructure rust acuired onershi of uatoer ty td.

1.4.12 Leased assets Finance leases eases of roerty, lant, euiment and infrastructure here the ororation has substantially all the riss and rewards incidental to ownership are classified as finance leases. Finance leases are capitalised at the lease’s incetion at the loer of the fair value of the leased roerty and the resent value of the minimum lease ayments. he corresonding rental obligations, net of finance charges, are included in borroings.

ach lease ayment is allocated beteen the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. he interest element of the finance cost is charged to the omrehensive erating tatement over the lease eriod so as to roduce a constant eriodic rate of interest on the remaining balance of the liability for each eriod. he roerty, lant, euiment and infrastructure acuired under a finance lease are depreciated over the shorter of the asset’s useful life and the lease term.

GWMWater Annual Report 2015/16 | 55

eases in which a sinificant portion of the riss and rewards of ownership are retained y the lessor are classified as operatin leases. ayments made under operatin leases net of any incentives received from the lessor are chared to the omprehensive peratin tatement on a straihtline asis over the period of the lease in the periods in which they are incurred as this represents the pattern of enefits derived from the leased assets.

onsistent with AA GWMWater determines the policies and procedures for oth recurrin fair value measurements such as infrastructure property plant euipment infrastructure investment properties and financial instruments in accordance with the reuirements of AA and the relevant Financial eportin irections.

Fair value is the price that would e received to sell an asset or paid to transfer a liaility in an orderly transaction etween maret participants at the measurement date. he fair value measurement is ased on the followin assumptions  that the transaction to sell the asset or transfer the liaility taes place either in the principal maret or the most advantaeous maret in the asence of the principal maret either of which must e accessile to the entity at the measurement date and  that the entity uses the same valuation assumptions that maret participants would use when pricin the asset or liaility assumin that maret participants act in their economic est interest.

he fair value measurement of a nonfinancial asset taes into account a market participant’s ability to generate economic enefits y usin the asset in its hihest and est use or y sellin it to another maret participant that would use the asset in its hihest and est use.

udements aout hihest and est use must tae into account the characteristics of the assets concerned including restrictions on the use and disposal of assets arising from the asset’s physical nature and any applicable leislativecontractual arranements.

n accordance with pararaph AA .2 entities can assume the current use of a nonfinancial physical asset is its unless maret or other factors suest that a different use y maret participants would maimise the value of the asset.

All assets and liailities for which fair value is measured or disclosed in the financial statements are cateorised within the fair value hierarchy descried as follows ased on the lowest level input that is sinificant to the fair value measurement as a whole  evel — uoted unadusted maret prices in active marets for identical assets or liailities  evel 2 — aluation techniues for which the lowest level input that is sinificant to the fair value measurement is directly or indirectly oservale and  evel — aluation techniues for which the lowest level input that is sinificant to the fair value measurement is unoservale.

For the purpose of fair value disclosures GWMWater has determined classes of assets and liailities on the asis of the nature characteristics and riss of the asset or liaility and the level of the fair value hierarchy as eplained aove.

n addition GWMWater determines whether transfers have occurred etween levels in the hierarchy y reassessin cateorisation ased on the lowest level input that is sinificant to the fair value measurement as a whole at the end of each reportin period.

evel fair value inputs are unoservale valuation inputs for an asset or liaility. hese inputs reuire sinificant udement and assumptions in derivin fair value for oth financial and nonfinancial assets.

56 | GWMWater Annual Report 2015/16

nobserable inputs shall be used to measure fair alue to the etent that releant obserable inputs are not aailable thereby alloing for situations in hich there is little if any market actiity for the asset of liability at the measurement date oeer the fair alue measurement obectie remains the same ie an eit price at the measurement date from the perspectie of a market participant that holds the asset or oes the liability herefore unobserable inputs shall reflect the assumptions that market participants ould use hen pricing the asset or liability including assumptions about risk

ater in conunction ith and other eternal aluers here applicable monitors changes in the fair alue of each asset through releant data sources to determine hether realuation is reuired

inancial instruments are initially measured at fair alue plus in the case of a financial asset or financial liability not at fair alue through profit and loss transaction costs that are directly attributable to the acuisition or the issue of the financial asset or liability ubseuent to initial recognition the financial instruments are measured as set out belo

oans and receiables are nonderiatie financial assets ith fied or determinable payments that are not uoted in an actie market hey are included in current assets ecept for those ith maturities greater than months after the reporting date hich are classified as noncurrent assets oans and receiables are included in trade and other receiables in the alance heet oans and receiables are recorded at amortised cost less impairment

t each reporting date the orporation assesses hether there is obectie eidence that a financial instrument has been impaired n the case of aailableforsale euity inestment a significant or prolonged decline in alue of the instrument belo its cost is considered as an indicator that the inestment is impaired

f any such eidence eists for aailable for sale financial assets the cumulatie loss measured is the difference beteen the acuisition cost and the current fair alue less any impairment loss on that financial asset preiously recognised in profit or loss is remoed from euity and recognised in the omprehensie perating tatement

mpairment losses are recognised in the omprehensie perating tatement mpairment losses recognised in the omprehensie perating tatement on euity instruments classified as aailable for sale are not reersed through the omprehensie perating tatement

ayables consist predominantly of trade and sundry creditors hese amounts represent liabilities for goods and serices proided to ater prior to the end of the financial year hich are unpaid at financial year end he amounts are unsecured and are usually paid ithin days of recognition

ayables are initially recognised at fair alue being the cost of the goods and serices and subseuently measured at amortised cost

ayables consist of contractual and statutory payables

ontractual payables such as accounts payable and unearned income including deferred income from concession notes ccounts payable represent liabilities for goods and serices proided to ater prior to the end of the financial year that are unpaid and arise hen ater becomes obliged to make future payments in respect of the purchase of those goods and serices ontractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost

GWMWater Annual Report 2015/16 | 57

tatutory payables such as goods and serices ta and fringe benefits ta payables are recognised and measured similarly to contractual payables but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost because they do not arise from a contract

roision is made for benefits accruing to employees in respect of salaries and ages annual leae and long serice leae for serices rendered to the reporting date

iabilities for salaries and ages and annual leae epected to be settled ithin months of the reporting date are recognised in employee benefit liabilities in respect of employees’ services up to the reporting date and are measured at the amounts epected to be paid hen the liabilities are settled at their undiscounted alues

mployee benefits hich are not epected to be settled ithin months are measured at the present alue of the estimated future cash outflos to be made by the entity in respect of serices rendered by employees up to the reporting date egardless of the epected timing of settlements liabilities in respect of employee benefits are classified as a urrent iability unless there is an unconditional right to defer the settlement of the liability for at least months after the reporting date in hich case it ould be classified as a noncurrent liability

urrent iability – unconditional representing or more years of continuous serice is disclosed as a current liability een here the orporation does not epect to settle the liability ithin months because it does not hae the unconditional right to defer the settlement of the entitlement should an employee take leae ithin months

he components of this current liability are measured at  resent alue – component that the orporation does not epect to settle ithin months and  ndiscounted alue – component that the orporation epects to settle ithin months

onurrent iability – conditional representing less than years of continuous serice is disclosed as a non current liability here is an unconditional right to defer the settlement of the entitlement until the employee has completed the reuisite years of serice onditional is reuired to be measured at present alue

n calculating present alue consideration is gien to epected future age and salary leels eperience of employee departures and periods of serice pected future payments are discounted using market yields at the reporting date on national goernment bonds ith terms to maturity and currency that match as closely as possible the estimated future cash outflos

mployee benefit oncosts including payroll ta and orkers compensation are recognised and included in employee benefit liabilities and costs hen the employee benefits to hich they relate are recognised as liabilities

Performance payments for the Corporation’s Executive Officers are based on a percentage of the annual salary package proided under their contracts of employment liability is recognised and is measured as the aggregate of the amounts accrued under the term of the contracts to balance date

orroings are initially recognised at fair alue net of transaction costs incurred orroings are subseuently measured at amortised cost ny difference beteen the initial amount recognised net of transaction costs and the redemption amount is recognised in the omprehensie perating tatement oer the period of the borroings using the effectie interest method

orroings are classified as current liabilities unless the orporation has an unconditional right to defer settlement of the liability for at least months after the alance heet date

58 | GWMWater Annual Report 2015/16

ater has classified borroings hich mature ithin months as current liabilities and has discretion to refinance or rollover these loans ith the reasury Corporation of ictoria pursuant to section of the orroings and nvestment Poers ct orroings non as am debt are classified as current borroings

Provisions are recognised hen the corporation as a result of a past event has a legal or constructive obligation that can be estimated reliably and it is probable that an outflo of economic benefits ill be reuired to settle the obligation

he amount recognised as a provision is the best estimate of the consideration reuired to settle the present obligation at the end of the reporting period taing into account the riss and uncertainties surrounding the obligation

he Corporation is subect to the ational ax Euivalent egime E hich is administered by the ustralian axation Office O he income tax expense or revenue for the period is the expected tax payable or receivable on the current period’s taxable income based on the national corporate income tax rate of 30% (2014/15 30%), adusted by changes in deferred tax assets and liabilities attributable to temporary differences beteen the tax bases of assets and liabilities and their carrying amounts in the financial statements and to unused tax losses

eferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply hen the assets are recovered or liabilities are settled based on those tax rates hich are enacted or substantially enacted at balance date he relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability he Corporations deferred tax liabilities exceed the level of deferred tax assets and therefore a net deferred tax liability has been disclosed in the alance heet

Current and deferred tax is recognised in the Comprehensive Operating tatement except to the extent that it relates to items recognised in other comprehensive income or directly in euity

dditions to net assets hich have been designated as contributions by oners are recognised as contributed capital Other transfers that are in the nature of contributions or distributions have also been designated as contributions by oners

he asset revaluation reserve is used to record the asset revaluation increments and decrements in the value if non current physical assets

n obligation to pay a dividend only arises after consultation beteen the oard the inister for Environment Climate Change and ater and the reasurer olloing this consultation the reasurer maes a formal determination. Although this process has not yet been completed at the reporting date, the Board’s preliminary assessment of the dividend in respect of is ero

evenues expenses and assets are recognised net of goods and services tax except here the amount of incurred is not recoverable from the O n these circumstances the is recognised as part of the cost of acuisition of the asset or as part of an item of expense

eceivables and payables are stated inclusive of he net amount of recoverable from or payable to the O is included as a current asset or liability in the alance heet Cash flos arising from operating activities are disclosed in the Cash lo tatement on a gross basis – ie inclusive of he component of cash flos

GWMWater Annual Report 2015/16 | 59

arising from inesting and financing actiities hich is recoerable or payable to the taxation authority is classified as operating cash flos.

ommitments for future expenditure include operating and capital commitments arising from contracts. hese commitments are disclosed by ay of a note (refer to ote 33) at their nominal alue and inclusie of the goods and serices tax () payable. n addition, here it is considered appropriate and proides additional releant information to users, the net present alues of significant indiidual proects are stated. hese future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the Balance heet.

ontingent assets and liabilities are not recognised in the Balance heet, but are disclosed by ay of ote 34 and ote 35 and if uantifiable are measured at nominal alue. ontingent assets and liabilities are presented inclusie of receiable or payable respectiely.

ertain ne accounting standards and interpretations hae been published that are not mandatory for the 30 une 201 reporting period, belo are the standards applicable to ater. As at 30 une 201, the folloing releant standards and interpretations had been issued but ere not mandatory for financial year ending 30 une 201. ater has not and does not intend to adopt these standards early.

AAB he ey changes include the simplified 1 an 201 hile the preliminary assessment reuirements for the classification and has not identified any material measurement of financial assets, a ne hedging ater impact arising from AAB , it accounting model and a reised impairment loss ffectie ate ill continue to be monitored and model to recognise impairment losses earlier, as 1 uly 201 assessed by ater. opposed to the current approach that recognises impairment only hen incurred.

AAB 15 eenue from he core principle of AAB 15 reuires an entity to 1 an 201 he changes in reenue ontracts ith ustomers recognise reenue hen the entity satisfies a recognition reuirements in performance obligation by transferring a promised ater AAB 15 may result in changes to good or serice to a customer. ffectie ate the timing and amount of reenue 1 uly 201 recorded in the financial statements. he tandard ill also reuire additional disclosures on serice reenue and contract modifications. hile the preliminary assessment has not identified any material impact arising from AAB 15, it ill continue to be monitored and assessed by ater. AAB 1 eases he ey changes introduced by AAB 1 include 1 anuary 201 reliminary assessment has the recognition of most operating leases (hich are identified that the operating currently not recognised) on balance sheet. ater leases ill be recognised on the ffectie ate balance sheet once adopting the 1 uly 201 change to AAB 1.

AAB 2010 Amendments to he reuirements for classifying and measuring 1 an 201 hile the preliminary assessment Australian Accounting financial liabilities ere added to AAB . he has identified any material impact tandards arising from AAB existing reuirements for the classification of ater arising from AAB 2010, it ill (ecember 2010) AAB 1, 3, 4, financial liabilities and the ability to use the fair ffectie ate continue to be monitored and 5, , 101, 102, 10, 112, 11, 120, alue option hae been retained. oeer, here 1 uly 201 assessed by ater. 121, 12, 12, 131, 132, 13, 13, the fair alue option is used for financial liabilities 13, 1023 103 and the change in fair alue is accounted for as follos nterpretations 2, 5, 10, 12, 1  the change in fair alue attributable to changes 12 in credit ris is presented in other comprehensie income () and

60 | GWMWater Annual Report 2015/16

 other fair alue changes are presented in profit or loss. f this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit ris are also presented in profit or loss.

AAB 20141 Amends arious AAs to reflect the AABs 1 an 201 hile the preliminary assessment decision to defer the mandatory application date of has not identified any material AAB to annual reporting periods beginning on or ater impact arising from AAB 20141, after 1 anuary 201 as a conseuence of hapter ffectie ate it ill continue to be monitored edge Accounting, and to amend reduced 1 uly 201 and assessed by ater. disclosure reuirements.

AAB 20144 Amends AAB 11 roperty, lant and uipment 1 an 201 he assessment has indicated that and AAB 13 ntangible Assets to establish the there is no expected impact as the – principle for the basis of depreciation and ater reenuebased method is not used amortisation as being the expected pattern of ffectie ate for depreciation and amortisation. consumption of the future economic benefits of an 1 uly 201 AAB 11 AAB 13 asset prohibit the use of reenuebased methods to calculate the depreciation or amortisation of an asset, tangible or intangible, because reenue generally reflects the pattern of economic benefits that are generated from operating the business, rather than the consumption through the use of the asset.

AAB 20145 Amendments to Amends the measurement of trade receiables and 1 anuary 201 hile the preliminary assessment Australian Accounting the recognition of diidends. has not identified any material tandards arising from rade receiables, that do not hae a significant ater impact arising from AAB 20145, AAB 15 financing component, are to be measured at their ffectie ate it ill continue to be monitored transaction price, at initial recognition. 1 uly 201 and assessed by ater. iidends are recognised in the profit and loss only hen • the entity’s right to receie payment of the diidend is established • it is probable that the economic benefits associated ith the diidend ill flo to the entity and • the amount can be measured reliably.

AAB 2015 Amendments to his tandard defers the mandatory effectie date 1 anuary 201 his amending standard ill Australian Accounting of AAB 15 from 1 anuary 201 to 1 anuary 201. defer the application period of tandards – ffectie ate of ater AAB 15 to the 2011 reporting AAB 15 ffectie ate period in accordance ith the 1 uly 201 transition reuirements.

AAB 2013 Amendments to his tandard amends AAB 15 to clarify the 1 anuary 201 he assessment has indicated that Australian Accounting reuirements on identifying performance there ill be no significant impact tandards – larifications to obligations, principal ersus agent considerations ater for the public sector, other than AAB 15 and the timing of recognising reenue from ffectie ate the impact identified in AAB 15. granting a licence. he amendments reuire 1 uly 201 • A promise to transfer to a customer a good or service that is ‘distinct’ to be recognised as a separate performance obligation • or licences identified as being distinct from other goods or serices in a contract, entities need to determine hether the licence transfers to the customer oer time (right to use) or at a point in time (right to access).

AAB 2015 he Amendments extend the scope of AAB 124 1 an 201 he amending standard ill elated arty isclosures to notforprofit public result in extended disclosures on – sector entities. A guidance has been included to ater the entitys ey management assist the application of the tandard by notfor ffectie ate personnel (), and the related profit public sector entities. 1 uly 201 party transactions. AAB 10, AAB 124 AAB 104

GWMWater Annual Report 2015/16 | 61

AA Amendments to he standard amends AA mpairment of anuary he assessment has indicated that Austraian Accounting Assets to remove references to using depreciated there is minima impact iven tandards – ecoverabe repacement cost as a measure of vaue in use ater the speciaised nature and Amount of onash for notforprofit entities ffective ate restrictions of pubic sector assets enerating peciaised Assets uy the eisting use is presumed to be of otforrofit ntities the highest and best use hence current repacement cost under AA air aue easurement is the same as the depreciated repacement cost concept under AA

n addition to the ne standards above the AA has issued a ist of amending standards that are not effective for the reporting period as isted beo n genera these amending standards incude editoria and references changes that are epected to have insignificant impacts on pubic sector reporting he AA nterpretation in the ist beo is aso not effective for the reporting period and is considered to have insignificant impacts on pubic sector reporting  AA  AA  AA  AA –  AA –  AA –  AA –  AA – aragraphs  AA –  AA –  AA –  AA –

62 | GWMWater Annual Report 2015/16

GWMWater’s Treasury activities are regulated by a Treasury Policy consistent with the Victorian Governme

GWMWater’s Tre

ect the fair value or future cash flows of GWMWater’s GWMWater’s exposure to market risk is primarily through interest rate risk, there are no e

GWMWater Annual Report 2015/16 | 63

The following table summarises the sensitivity of the Corporation’s financial assets and financial liabilities to interest rate risk and other price risk

ash and ash uivalents ,

ates and harges ebtors ,

Pensioner ebate ebtors

ther ebtors

Private chemes

ccrued ncome ,

General reditors

ank verdraft

orrowings – TV , , , , ,

orrowings – inance ease T ,

dvances from government WP

ccrued xpenses ,

ther Payables

ates and harges ebtors are net of provisions

ash and ash uivalents ,

ates and harges ebtors ,

Pensioner ebate ebtors

ther ebtors

Private chemes

ccrued ncome ,

General reditors

ank verdraft

orrowings – TV , , , , ,

orrowings – inance ease T ,

dvances from government WP

ccrued xpenses ,

ther Payables

ates and harges ebtors are net of provisions

64 | GWMWater Annual Report 2015/16

Credit ris is the potential for loss of capital or income when counterparty fails to honour a financial obligation during the term of the transaction Credit ris arises principally from the Corporations receivables

he goal of credit ris management is to reduce the possibility of default by the counterparty ater mitigates against credit ris by establishing authorised counter parties setting appropriate transaction limits with each counterparty monitoring limit usage and updating and reviewing counterparties and limits hese principles are anneures to the ater reasury olicy

here ater enters into a contract for the provision of construction services the ris of performance andor default is managed by provision of appropriate securities hese securities are in the form of guarantees andor retentions that are held for the term of the contract he amount of security is based on the level of ris and potential conseuential loss as a conseuence of inadeuate or nonperformance he ris of the contractor is assessed by credit references and checs and the etent of these checs will depend on the materiality of the contract

n relation to the provision of water and wastewater services ater has preferential raning over other creditors nder the ater ct ater can tae possession of property after three years and sell the property to settle unpaid monies owed n addition to this ater can restrict supply to enforce payment of unpaid accounts

iuidity ris is the ris that an unforeseen event or miscalculation in the reuired level of available cash results in insufficient funds being available to meet ongoing cash reuirements

he aim of iuidity is management is to ensure that ater has sufficient funds available to meet obligations as they fall due on a day to day basis and in the longer term maintains refinancing ris within acceptable parameters

ater manages liuidity ris by maintaining adeuate reserves baning facilities and reserve borrowing facilities by continuously monitoring forecasts and actual cash flows and matching the maturity profiles of financial assets and financial liabilities

ater operates under the overnments fair payments policy of settling financial obligations within days and in the event of dispute mae payments within days of resolution ater has sufficient cash flow from operations and accommodation to meet its operating reuirements and contractual commitments for capital wors

he fair value of financial instruments must be estimated for recognition and measurement or for the disclosure purposes

efer to ote for accounting policy relating to disclosure of fair value measurement hierarchy

ater considers that the carrying amount of financial instrument assets and liabilities recorded in the financial statements to be a fair approimation of their fair values because of the shortterm nature of the financial instruments and the epectation that they will be paid in full

GWMWater Annual Report 2015/16 | 65

ervice Charges

olumetric Charges

rade aste

overnment Contributions

onovernment Contributions

eveloper Contributions – assets received from developers

ural rowth ater ales

Cash and Cash uivalents

ater ydrantstandpipe ales

nformation tatements

appingnspection ees

ther evenue

alaries and ages

nnual eave

ong ervice eave

mployer uperannuation Contributions

ther

uildings

itures and ittings

rban ater nfrastructure

astewater nfrastructure

eadwors nfrastructure

ural istribution nfrastructure

lant uipment and ehicles

ntangibles

66 | GWMWater Annual Report 2015/16

GWMWater Annual Report 2015/16 | 67

–

68 | GWMWater Annual Report 2015/16

GWMWater Annual Report 2015/16 | 69

70 | GWMWater Annual Report 2015/16

$’000 $’000

4,980

(17,262)

$’000 $’000

$’000 $’000

$’000 $’000

$’0 $’000

- - - - - - - -

391 602 $’000 $’

18,301 19,294

$’000 $’000

GWMWater Annual Report 2015/16 | 71 0 0

0

0

0

0

0

0

0 0

72 | GWMWater Annual Report 2015/16 0 0

The CSO adjustment is a reflection of the valuer’s assessment of the impact of restrictions associated with an asset to

For GWMWater’s specialised buildings, the depreciated replacement cost method has been utilised due to t

Water’s infrastructure assets was performed by VGV (using KPMG). The

GWMWater Annual Report 2015/16 | 73

)

( () () , , , , , , $’000 $’000 $’000

, , $’000 $’000 $’000

, , , , , , , ,

(,) (,) (,)

() $’000 $’000 $’000

, (,) (,) ,) , , , , , ,

( (,)

() , , , $’000 $’000 $’000

, , (,) (,) , , , , ,

, $’000 $’000 $’000

, , , (,) (,)

, , , , , ,

() () $’000 $’000 $’000

2

() () () , , , , , , $’000 $’000 $’000

(,) (,)

)

()

( $’000 $’000 $’000

, , , , , , (,) (,) 0 0 0

tal

0 Opening alance dditions (isposals) classes financial Transfers between of Transfersinevel (out) epreciation mpairment loss Subtotal evaluation Subtotal Closing alance 0 Opening alance dditions (isposals) classes financial Transfers between of Transfersinevel (out) epreciation mpairment loss Subtotal evaluation Subto Closing alance

74 | GWMWater Annual Report 2015/16 0 0

Specialised and  and subject to restriction as to use Maret pproach CSO djustments andor sale  and in areas where there is not an active maret Specialised uildings  Specialised buildings with limited epreciated  Cost per suare metre alternative uses andor substantial eplacement Cost  seful life customisation e.g. water treatment plant, water pump stations etc. Fitures and Fittings  Specialised items with limited epreciated  Cost per suare alternative uses andor substantial eplacement Cost metreunit customisation  seful life Plant and uipment  Specialised items with limited epreciated  Cost per unit alternative uses andor substantial eplacement Cost  seful life customisation Waste Water  Waste water mains epreciated  Cost per unitmetre nfrastructure  Waste water treatment plants eplacement Cost  seful life  Sewer pump stations rban Water  Water mains epreciated  Cost per unitmetre nfrastructure  Water treatment plants eplacement Cost  seful life  Water pump stations  Water bores  Water storages ural istribution  Pipeline epreciated  Cost per unitmetre nfrastructure  Channels and structures eplacement Cost  seful life  Water (distribution) pump stations  Water bores  Water storages  ecycled water mains eadwors  Major structures epreciated  Cost per unitmetre nfrastructure  Storages eplacement Cost  seful life  eadwors channels and structures  Water pump stations  Water bores  Water storages

GWMWater Annual Report 2015/16 | 75 0 0

0 0 0

dditions isposals () () ()

mortisation () () (,) 0 0 0 0

dditions isposals () ()

mortisation () () () 0 0 0 0 0

0 0 $000 $000

0

et gain(loss) from fair value adjustments ()

dditions

isposals ()

Transfers from land and buildings

ental ncome

irect operating epenses from the property that generated rental income () ()

0 GWMWater obtains independent valuations for its investment properties annually. t the end of each reporting period, the directors update their assessment of the fair value of each property, taing into account the most recent independent valuations. The directors determine a property’s value within a range of reasonable fair value estimates.

The best evidence of fair value is current prices in an active maret for similar investment properties. Where such information is not available, the directors considered the most appropriate method of establishing maret value of a property is the capitalisation method utilising discounted rentals and high yield rates, which is reflective of ris.

GWMWater has four investment properties three investment properties were valued using maret evidence to ascertain fair value. One property is a commercial building where the summation method of valuation was applied. There were no comparable sales or rental returns available to use as a basis for establishing value of the property, the capitalisation rate is and indicated a yield of . ( capitalisation rate ).

76 | GWMWater Annual Report 2015/16 0 0

0 0

nvestment roperties

0 0

nvestment roperties

0 0 $000 $000

roeeds on disposal of nonfinanial assets

and

uildings

rban ater nfrastruture

astewater nfrastruture

lant uipment and ehiles

itures and ittings

eadwors nfrastruture

ural istribution nfrastruture

ntangible assets

nvestment roperties

0

eneral reditors

rued penses

ther

GWMWater Annual Report 2015/16 | 77 0 0

0 0 $000 $000 mployee benefits that are unonditional and epeted to settle within months after the end of the period measured at nominal value

nnual eave

nnual eave on osts

ong ervie eave

ong ervie eave on osts

rual

on osts

mployee benefits that are unonditional and are not epeted to settle within months after the end of the period measured at present value

nnual eave

nnual eave on osts

ong ervie eave

ong ervie eave on osts

0

he following assumptions were adopted in measuring the present value of long servie leave entitlements

eighted average inrease in employee osts

eighted average disount rates

ong ervie eave

ong ervie eave on osts

0

ong ervie eave representing less than years of ontinuous servie measured at present

value

78 | GWMWater Annual Report 2015/16 0 0

0 0 $000 $000

an verdraft

orrowings urrent i

orrowings inane ease urrent

dvanes from government urrent ii

00

orrowings nonurrent i

orrowings inane ease – nonurrent

dvanes from government nonurrent ii

i orrowings from reasury orporation itoria for the year ended une is une hese borrowings are seured by the itorian overnment ii nseured advane from the epartment of nvironment and ater and lanning under the reener overnment uilding rogram

he fair value of urrent borrowings euals their arrying amount as the impat of disounting is not signifiant he fair values of nonurrent borrowings are based on ash flows disounted using borrowing rates varying from to to interest and depending on the term of the borrowing

otal failities

an verdraft

000 000

nused at balane date

an verdraft 12

000 000

he ban overdraft faility may be drawn at any time and may be terminated by the ban without notie oans and an verdraft are seured by the future revenue of the orporation and a guarantee from the reasurer of itoria

GWMWater Annual Report 2015/16 | 79 0 0

0 0 $000 $000

00

0

0

80 | GWMWater Annual Report 2015/16 0 0

0 0 $000 $000

0

0

0 0

GWMWater Annual Report 2015/16 | 81

00

0 0

0

0 0 0

0

0 0 0

82 | GWMWater Annual Report 2015/16

0

00

0

0

0 0 0

– – – –

Interest rate exposure and maturity analysis of financial liabilities 0 0

GWMWater Annual Report 2015/16 | 83 0 0

0 0 $000 $000

0

3,550

-

1,619

84 | GWMWater Annual Report 2015/16 0 0

0 0 0 0

$000 $000 $000 $000

0 00

00 00

00

0 0 $000 $000

0 0

Total other significant operating leases at balance date, not recognised in the financial statements as liabilities:

0

106

GWMWater Annual Report 2015/16 | 85 0 0

0 0 $000 $000

– – – – – –

86 | GWMWater Annual Report 2015/16 0 0

0 0

$513608.27 (30 June 2015: $495,839). The Minister’s remuneration is disclosed in the financial statements of the

han responsible persons included under ‘Remuneration of Responsible Officers’ above, whose remuneration received or receivable exceeded $100,000 during the reporting period, are

0 0 0 0

$ $0 $ $

GWMWater Annual Report 2015/16 | 87 0 0

0 0

$000 $000

nnual eave 1,819 1,799

ong ervice eave 4,093 3,631

RO 230 243

n accordance with statutor reuirements, Mater orporation maes emploer superannuation contributions in respect of its emploees to the ocal uthorities uperannuation und (the und). The und has two categories of membership, each of which is funded differentl. The defined contribution section provides lump sum benefits based on ears of service and final average salar. The defined contribution section receives fixed contributions from the orporation and M ater’s legal or constructive obligation is limited to these contributions. Obligations for contributions are recognised as an expense in omprehensive Operating tatement when the are made or due.

ontributions b Mater (excluding an unfunded liabilit paments) to superannuation plans are detailed below:

0 0

$’000 $’000

uper scheme:

tate uper Revised cheme efined enefits 17.30

tate uper ew cheme efined enefits 7.410.3 148 160 ccumulation tate uper ccumulation cheme 9.259.5 und 12 10

ision uper efined enefits 9.2510.25 83 111 ccumulation ision uper aver lan 9.259.5 und 709 684 ccumulation Other 9.259.5 und 345 338

0

The unds accumulation categor, ision uper aver, receives both emploer and emploee contributions on a progressive basis. mploer contributions are normall based on a fixed percentage of emploee earnings (for the ear ending 30 June 2016, this was 9.5 reuired under uperannuation uaranteed egislation). Our commitment to defined contribution plans is limited to maing contributions in accordance with our minimum statutor

88 | GWMWater Annual Report 2015/16 0 0 reuirements. o further liabilit accrues to the emloer as the suerannuation benefits accruing to emloees are reresented b their share of the net assets of the und.

he uerannuation uarantee contribution rate is legislated to rogressivel increase to b . he uerannuation uarantee rate ill remain at . for ears increasing to from ul and eventuall to from ul .

s rovided under aragrah of – ater does not use defined benefit accounting for its defined benefit obligations under the Fund's Defined Benefit category. This is because the Fund’s efined enefit categor is a multiemloer sonsored lan.

s a multiemloer sonsored lan the und as established as a mutual scheme to allo for the mobilit of the orforce beteen the articiating emloers ithout attaching a secific liabilit to articular emloees and their current emloer. herefore there is no roortional slit of the defined benefit liabilities assets or costs beteen the articiating emloers as the defined benefit obligation is a floating obligation beteen the articiating emloers and the onl time that the aggregate obligation is allocated to secific emloers is hen a call is made. s a result the level of articiation of ater in the und cannot be measured as a ercentage comared ith other articiating emloers. hile there is an agreed methodolog to allocate an shortfalls identified b the und ctuar for funding uroses there is no agreed methodolog to allocate benefit liabilities assets and costs beteen the articiating emloers for accounting uroses. herefore the ctuar is unable to allocate benefit liabilities assets and costs beteen emloers for the uroses of because of the ooled nature of the Fund’s defined benefit category.

ater maes emloer contributions to the defined benefit categor of the und at rates determined b the Trustee on the advice of the Fund's Actuary. The Fund’s employer funding arrangements comrise of three comonents as detailed belo

 egular contributions – hich are ongoing contributions needed to fund the balance of benefits for current members and ensioners  unding calls – hich are contributions in resect of each participating employer’s share of any funding shortfalls that arise and  etrenchment increments – hich are additional contributions to cover the increase in liabilit arising from retrenchments.

ater is also reuired to mae additional contributions to cover the contribution ta aable on the contributions referred to above.

mloees are also reuired to maes member contributions to the und. s such assets accumulate in the und to meet member benefits as defined in the rust eed as the accrue.

Regular contributions On the basis of the results of the most recent full actuarial investigation conducted b the unds ctuar as at March 2016, GWMWater makes employer contributions to the Fund’s Defined Benefit categor at rates determined by the Fund’s Trustee, on advice from the Fund’s Actuary. For the year ended 30 June 2016, this rate was 9.5% of members’ salaries. This rate increased from 9.25% for the year ending 30 June 2014 and will increase in line with the reuired uerannuation uarantee contribution rate.

GWMWater Annual Report 2015/16 | 89 0 0

n addition, GWMWater reimburses the Fund to cover the ecess if the benefits paid as conseuence of retrenchment above the funded resignation or retirement benefit the funded resignation or retirement benefit is calculated as the B multiplied by the benefit.

Funding calls The Fund is reuired to comply with the superannuation prudential standards. nder the superannuation prudential standards 160, the Fund is reuired to target full funding of its vested benefits. There may be circumstances where

 a fund is in an unsatisfactory financial position at an actuarial investigation (ie. It’s vested benefit index (VBI) is less than 100% at the date of the actuarial investigation or  a fund’s VBI is below its shortfall limit at any time other than at the date of the actuarial investigations.

f either of the above occur, the fund has shortfall for the purposes of 160 and the fund reuired to put a plan in place so that the shortfall is fully funded within three years of the shortfall occurring. There may be circumstances where the Australian rudential egulation Authority AA may approve a period longer than three years.

The Fund monitors its B on a uarterly basis and the Fund has set its shortfall limit at 9%.

In the event that the Fund Actuary determines that there is a shortfall based on the above requirement, the Fund’s participating employers including GWMWater are reuired to make an employer contribution to cover the shortfall. The methodology used to allocate the shortfall was agreed in 199 to fairly and reasonably apportion the shortfall between the participating employers.

sing the agreed methodology, the shortfall amount is apportioned between the participating employers based on the pre1 July 1993 and post30 June 1993 service liabilities of the Fund’s defined benefit category, together with the employer’s payroll at 30 June 1993 and at the date the shortfall has been calculated.

The pre1 July 1993 and post30 June 1993 service liabilities of the Fund are based on

 The service periods of all active members split between the active members pre1 July 1993 and post30 June 1993  The service periods of deferred members split between the deferred members pre1 July 1993 and post30 June 1993 service period and  The pensioner including fied term pension liabilities which are allocated to the pre1993 period.

The pre1 July 1993 component of the shortfall is apportioned between the participating employers based on the employer’s share of the total participating employer payroll at 30 June 1993.

The post30 June 1993 component of the shortfall is apportioned between the participating employers based on the employer’s share of the total participating employer payroll at the date the shortfall has been calculated.

Due to the nature of the contractual obligations between the participating employers and the Fund, and that the Fund includes lifetime pensioners and their reversionary beneficiaries it is unlikely that the Fund will be wound up. n the unlikely event that the Fund is wound up and there is a surplus in the Fund, the surplus cannot be applied for the benefit of the defined benefit employers where there are ongoing defined benefit obligations. The surplus would be transferred to the fund accepting those defined benefit obligations including the lifetime pension obligations of the Fund.

n the event that a participating employer is woundup, the defined benefit obligations of that employer will be transferred to that employer’s successor.

90 | GWMWater Annual Report 2015/16 0 0

he Fund surplus or deficit (i.e. the difference between fund assets and liabilities) is calculated differently for funding purposes (i.e. calculating required contributions), for the calculation of accrued benefits as required in AA 25 and for the values needed for the AASB 119 disclosure in GWMWater’s financial statements. AAS 25 requires that the present value of the defined benefit liability be calculated based on benefits that have accrued in respect of membership of the plan up to the measurement date, with no allowance for future benefits that may accrue.

Retrenchment increments uring 011, ater made one payment 3, to the Fund in respect of retrenchment increments, (011 nil).

The Fund’s interim actuarial investigation identified the following in the defined benefit category of which ater is a contributing employer  A VBI surplus of 130. million and  A total service liability of 39 million. The VBI surplus means that the market value of the fund’s assets supporting the defined benefit members would have been entitled to if they had existed on 30 June 01.

he total service liability surplus means that the current value of the assets in the Fund’s defined benefit category plus expected future contributions exceed the value of expected future benefits and expenses.

ater was notified of the of the 30 June 01 actuarial investigation results in late August 01.

The Fund’s latest actuarial investigation as at 30 June 01 identified the following in the defined benefit category of which ater is a contributing employer  A VBI surplus of .1 million and  A total service liability surplus of 3 million.

Following the actuarial review conducted by the rustee on 31 ecember 011, a funding shortfall of 3 million for the Fund was determined. A call to mployers for additional contributions was made for the financial year 30 June 01 for a top up payment. ater was notified that a contribution was required and was recognised as an expense in the omprehensive perating tatement in 0111. ater has not been advised of any further adustments.

GWMWater’s share of the shortfall amounted to 1,1,.93 (excluding contributions tax) which was accounted for in the 0111 omprehensive perating tatement within mployee Benefits and in the Balance heet in urrent iabilities rovisions.

 o further amount has been accounted for in the 011 omprehensive perating tatement within mployee Benefits or in the Balance heet in urrent iabilities mployee Benefits  ater received an early payment discount of 3,11.9 and this has been accounted for in the 0113 omprehensive perating tatement within mployee Benefits and in the Balance heet in urrent iabilities rovisions.

GWMWater Annual Report 2015/16 | 91 0 0

The Funds liability for accrued benefits was determined by the 215 interim actuarial investigation pursuant to the requirements of Australian Accounting Standard AAS25 follows

0 0 $ $ et Market Value of Assets 29.2 25.9 Accrued Benefits per accounting standards 2.1 21.9 ifference between Assets and Accrued Benefits 29.1 29. Vested Benefits Minimum sum which must be paid to members when they leave the fund 22.

The financial assumptions used to calculate the Accrued Benefits for the defined category of the Fund were

0 0 et Investment eturn . p.a. .5 p.a. Salary Inflation .25 p.a. .25 p.a. rice Inflation 2. 5 p.a. 2.5 p.a.

The next full actuarial investigation of the Fund’s liability for accrued benefits will be based on the Fund’s position as at une 21.

0 0

$000 $000 mployer contributions to Vision Super accumulation and defined

benefit funds 1 1

mployer contributions payable to Vision Super at reporting date 9 1

The epected contributions to be paid to the defined benefit category of Vision Super for the year ending une 21 is nil.

GWMWater contributes in respect of certain employees to the State Superannuation Boards ew Scheme and the evised Scheme.

In accordance with statutory requirements the orporation contributes to these schemes as follows

ontributions to the new scheme are based on the level of contribution of each participating employee. These contributions are

ero . . . 5. 9.5 . 1.

92 | GWMWater Annual Report 2015/16 0 0

of eber eployees salary

ny unfunded liability in respect of eployees of ater who are ebers of the tate uperannuation chees controlled by the ictorian uperannuation oard will be recognised by the epartent of Treasury and Finance in its alance heet

The eployer contributions payable at une was nil The orporation has no loans with the tate uperannuation oard

xgratia expenses are the voluntary payent of oney or other nononetary benefit eg a write off that is not ade either to acuire goods services or other benefits for the entity or to eet a legal liability or to settle or resolve a possible legal liability or clai against ater ater ade no ex gratia expenses for both individual ites and in aggregate that are greater than or eual to ater ade nil copensation payents to eployees for reporting period which were recognised in ployee enefits in the oprehensive perating tateent

0 0

$000 $000

. ounts received or due and receivable by the auditor of the

orporation for uditing the accounts of the orporation

GWMWater Annual Report 2015/16 | 93 Financial Statutory Certificate 2016

We certify the, attached financial statements for the Grampians Wimmera Mallee Water Corporation (trading as GWMWater) have been prepared in accordance with Standing Directions 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards, Interpretations, and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the Comprehensive Operating Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2016 and financial position of the Corporation at 30 June 2016.

At the time of signing, we are not aware of any circumstance which would render any particulars included in the financial statements to be misleading or inaccurate.

We authorise the attached financial statements for issue on 12 August 2016.

Peter Vogel Chairman

Mark Williams Managing Director

Sally Marshall Executive Manager Business Performance and Planning (Chief Finance and Accounting Officer)

Dated this 12th day of August 2016

94 | GWMWater Annual Report 2015/16 Level 24, 35 Collins Street Melbourne VIC 3000

VAGO Telephone 61 3 8601 7000 Facsimile 61 3 8601 7010 Victorian Auditor-General's Office Website www.audit.vic.gov.au

INDEPENDENT AUDITOR'S REPORT

To the Board Members, Grampians Wimmera Mallee Water Corporation The Financial Report I have audited the accompanying financial report for the year ended 30 June 2016 of the Grampians Wimmera Mallee Water Corporation which comprises the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement, notes comprising a summary of significant accounting policies and other explanatory information, and the financial statutory certificate. The Board Members' Responsibilityfor the Financial Report The board members of the Grampians Wimmera Mallee Water Corporation are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards, and the financial reporting requirements of the Financial Management Act 1994, and for such internal control as the board members determine is necessary to enable the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error. Auditor's Responsibility As required by the Audit Act 1994, my responsibility is to express an opini�n on the financial report based on the audit, which has been conducted in accordance with Australian Auditing Standards. Those standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The audit procedures selected depend on judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, consideration is given to the internal control relevant to the entity's preparation and fair presentation of the financial report 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 entity's internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the board members, as well as evaluating the overall presentation of the financial report.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

GWMWaterAuditing Annual in the ReportPublic Interest 2015/16 | 95 96 | GWMWater Annual Report 2015/16 Disclosure Index The Annual Report of GWMWater has been prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the corporation’s compliance with statutory disclosure requirements.

Page Legislation Requirement Reference Charter and Purpose FRD 22G Manner of establishment and relevant Minister 4 FRD 22G Purpose, functions, powers and duties 4 FRD 22G Initiative and key achievements 2 FRD 22G Nature and range of services provided 4 Management and Structure FRD 22G Organisational structure 10 FRD 22G Names of Board Directors 10 Financial and Other Information FRD 10 Disclosure index 96 FRD 12A Disclosure of major contracts 25 FRD 15B Executive officer disclosures 86 Operational and budgetary objectives and FRD 22G 23 performance against objectives FRD 22G Employment and conduct principles 12 FRD 22G Occupational health and safety policy 13 FRD 22G Summary of the financial results for the year 23 FRD 22G Significant changes in financial position during the year 23 FRD 22G Major changes or factors affecting performance 2 & 23 FRD 22G Subsequent events 36 FRD 22G Application and operation of Freedom of Information Act 1982 11 Compliance with building and maintenance FRD 22G 11 provisions of Building Act 1993 FRD 22G Statement on National Competition Policy 11 FRD 22G Application and operation of Protected Disclosure Act 2012 11 FRD 22G Details of consultancies over $10,000 25 FRD 22G Details of consultancies under $10,000 25 FRD 22G Statement of availability of other information 11 FRD 24C Reporting of office-based environmental impacts 28 FRD 25 Victorian Industry Participation Policy disclosures 25 FRD 27C Presentation and reporting of performance information 36 FRD 29A Workforce data disclosures 12 SD 4.5.5 Risk management and compliance attestation 42

GWMWater Annual Report 2015/16 | 97 Page Ministerial Reporting Directions Reference MRD 01 Performance reporting 36 MRD 02 Reporting on water consumption and drought response 14 MRD 03 Environmental and social sustainability reporting 28 Disclosure of information on bulk entitlements, transfers of water MRD 04 17 entitlements, irrigation water usage and licence entitlements MRD 05 Annual reporting of major non-residential water users 27

Page Financial Statements Reference Financial statements required under Part 7 of the Financial Management Act 1994 SD 4.2(a) Statement of changes in equity 46 SD 4.2(b) Operating statement 44 SD 4.2(b) Balance sheet 45 SD 4.2(b) Cash flow statement 47 Compliance with applicable Australian Accounting SD 4.2(c) 48 Standards and other authoritative pronouncements SD 4.2(c) Compliance with ministerial directions 48 SD 4.2(d) Rounding of amounts 48 SD 4.2(c) Accountable Officer’s declaration 94 SD 4.2(f) Compliance with model financial report 94 Other disclosures in notes to the financial statements FRD 03A Accounting for dividends 59 FRD 17A Long service leave, wage inflation and discount rates 78 FRD 19 Private provision of public infrastructure 85 FRD 21B Responsible persons and executive officer disclosures 86 FRD 102 Inventories 52 FRD 103D Non-current physical assets 53 FRD 104 Foreign currency 63 FRD 105A Borrowing costs 67 FRD 106 Impairment of assets 54 FRD 109 Intangible assets 54 FRD 107A Investment properties 54 FRD 110 Cash flow statements 47 FRD 112D Defined benefit superannuation obligations 88 Accounting and reporting pronouncements FRD 120 60 applicable from 2009/10 reporting period FRD121 Infrastructure assets 73

Page Legislation reference Freedom of Information Act 1982 11 Building Act 1993 11 Protected Disclosure Act 2012 11 Victorian Industry Participation Policy Act 2003 25

98 | GWMWater Annual Report 2015/16

Service Area

Ouyen< Manangatang !

! (! Ouyen< < Manangatang ! ! (! Walpeup < UnderboolWalpeup ^_!

! ! River Underbool (!^_ Chinkapook ! ! River (! Chinkapook^_ ^_! ^_! ^_! ! ^_ Cowangie ! Chillingollah ! ^_ ^_ MurrayvilleCowangie Nandaly ! Chillingollah ! ^_ Murrayville Nandaly ^_ ! ! Tempy ^_ ^_ Waitchie ! ! ! Tempy Lake ^_^_ ^_ Patchewollock ! Waitchie Tyrell ! Murray ! Speed Lake ^_ ^_ ^_ Patchewollock ! Tyrell Murray ^_Speed

! Lake

< ^_Ultima !

Sea Lake ! Lake Boga < < ^_Ultima Sea Lake

!

^_ ^_ ^_! Lalbert

< ! Woomelang ! Lalbert

! ^_ ! Culgoa^_ Lake < < HopetounWoomelang ^_ ! ! Culgoa ! < Hopetoun Lake Albacutya ^_ Yaapeet ^_ Albacutya ^_! Yaapeet

Nullawil

! ! Quambatook

Rainbow< Nullawil ^_ (!

! ! ! Quambatook Rainbow< < Beulah ^_ (! !

< !

Beulah ^_

!

^_ < Birchip ! < Birchip <

Hindmarsh

Lake < Wycheproof ! Brim

Hindmarsh ^_ !

< Wycheproof<

! Brim !

Jeparit< ^_ Creek < !

Jeparit< < Creek !

^_Tarranyurk !

^_ Warracknabeal< Tarranyurk ! Lake <

Warracknabeal< <

! Buloke ! Charlton ! Lake < < <

Nhill <

^_Antwerp Buloke ! Charlton ! < !

Nhill < < ^_

Lillimur AntwerpRiver ! Kiata ! ! !

^_ Miram < !

Lillimur ^_ ! < ! River^_ \(! Kiata ! ! \(! ! ^_ Miram < < Donald ! River

^_ ! ^_

\(! \(!

Serviceton Kaniva Donald River

<

Serviceton <

Kaniva ! ! < < Dimboola < < ! Minyip < ! River Dimboola

River Batyo Yarriambiack Pimpinio Batyo Catyo

Catyo Avon

Pimpinio ^_! Jung

! < Avon ! Murtoa <

^_ Jung ^_ ! River St< Arnaud

< < ! ! Rupanyup ! Wimmera Murtoa < < < < ^_ ! River St Arnaud ! < ! Rupanyup ! Wimmera ^_ < < !

Goroke ^_! Dooen ^_

!

! Natimuk <

< Dooen ^_ Goroke ^_ ! Marnoo

! ! Natimuk < < < < Horsham ^_ ! Marnoo Avoca ! < < Horsham Wimmera Avoca Richardson Wimmera Richardson TAYLORS TAYLORS LAKE LAKE Glenorchy Glenorchy^_! Apsley ! ! ^_ Apsley ^_ LAKE

River !

^_ TOOLONDO LAKE LONSDALE

< WARTOOK River

! TOOLONDO RESERVOIR LONSDALE

< < Edenhope WARTOOK RESERVOIR

< LAKE

ROCKLANDS < Harrow ! !

< < ! River LAKE FYA NS Great Western ROCKLANDS RESERVOIR Halls Gap < < Harrow ^_ ! ! River < ! Great Western ^_ RESERVOIR Halls Gap FYA NS < Elmhurst ! Glenelg LAKE (!! Pomonal Elmhurst ^_

!

Glenelg LAKE (!! PomonalBELLFIELD ^_

BELLFIELD

MOORA <

! MOORA MOORA < < Ararat ! MOORA RESERVOIR

^_! Buangor

Buangor

Legend Willaura <

! Legend Willaura < <

(!

(! Drinking water services

Drinking< water services

Wickliffe Streatham

< < Drinking water with sewer services ! !

Wickliffe Streatham!

< ^_ < ^_ ^_ Drinking water with sewer services ! ! ! ! < ^_ _ ^_ ^_ < Westmere ^ Non drinking water services

11 McLachlan Street (PO Box 481) ISSN 1838-2495 Horsham Victoria 3402 Telephone: 1300 659 961 © State of Victoria, GWMWater 2016. This publication is copyright. No part may be reproduced by any process except in accordance Email: [email protected] with the provisions of the Copyright Act 1968. Website: www.gwmwater.org.au