Southern Rural Water Annual Report 2011–12 Contents
Highlights of our year 01 An introduction to Southern Rural Water 02 Our year in summary Message from the Chairperson and Managing Director 04 Our performance at a glance 06 Governance Governance information 08 Organisational structure 08 Board activities for this year 09 Director Profi les 10 Sustainable water cycle Strategic and technical 12 Environmental sustainability 14 Reporting of Offi ce-based Environmental Data 18 Working with stakeholders 20 Involved in communities 20 Freedom of information 22 Customer service excellence Water Supply 23 Groundwater and Rivers 28 Serving customers 29 Social sustainability 31 Learning and growth Leadership team 32 Our people 34 Occupational health and safety 34 Whistleblowers 35 Strengthening our business Strategic planning 36 Managing risk 37 Legislative compliance 38 Financial report Financial report overview 39 Comprehensive Operating Statement 43 Balance Sheet 45 Statement of Changes in Equity 46 Notes Signifi cant accounting policies 49 Independent auditor’s report Compliance certifi cate — Financial report 81 Compliance certifi cate — Performance report 83 Independent auditor’s report — Performance report 84 Appendices Appendix 1 – Regulated systems water data 86 Appendix 2 – Unregulated systems water data 90 Appendix 3 – Bulk entitlements 97 Appendix 4 – Annual reporting of major non-residential water users 101 Disclosure index 102 Highlights of our year:
Seasonal • We announced $8 million worth Partnerships of leading works for the MID2030 • We saw continued great seasonal modernisation project to begin in • We were instrumental in forming a allocations for customers in all of winter 2012, and proposed a further partnership between Lower Murray our irrigation districts, and minimal $22m for works in coming years Water, Goulburn Murray Water, restrictions for customers in ourselves, the VFF and DPI to unregulated systems • We launched an online groundwater launch the fi rst Victorian Rural Water hydrograph service, showing Innovation Awards • Blue Rock Dam spilled for the fi rst groundwater levels throughout our time in 15 years region via an interactive map • We worked with a range of other groups to introduce the fi rst ever • We managed minor, moderate • We had success in minimising illegal Glenmaggie Clean Up Day and major fl oods through Lake boating access at Melton Reservoir Glenmaggie, reducing the fl ooding impact on those downstream • We minimised anti-social and Governance dangerous behaviour at Pykes Creek • We farewelled long-standing Projects Reservoir through education and Board Chairperson, Jan Greig, and hands-on compliance work welcomed Terry Burgi to the role • We fi nalised the state and federal government funded Channel Engagement • We also farewelled long-standing Automation Project in the Macalister Board member and Audit Committee Irrigation District, which included: • We launched “Local Water Reports” chair, Alan Hawkes and welcomed which will reach every groundwater new Board members Russell Napper, • automating 59 regulators and rivers customer Naomi Pye and Harry Peeters • conversion of 14,200 ML of water • We continued to consult closely with savings into an environmental our customers and stakeholders on entitlement for the Macalister River the development of Water Plan 3, • We launched our fi rst ever releasing it for public comment in May groundwater atlas (for South West • We were chosen as one of the top Victoria) as part of the Southern three Employers of the Year in the Groundwater Futures project 2012 Victorian Training Awards
www.srw.com.au Southern Rural Water Annual Report 2011–12 01
An introduction to Southern Rural Water
Gippsland and Southern Vision History Rural Water Corporation Outstanding rural water management for a In the early 1990s, major change was afoot prosperous southern Victoria in Victoria’s water sector. (trading as Southern Rural Irrigator protests over the Rural Water Values Water) manages rural water Corporation’s charges led to the across the southern half • Listening deeply to work effectively McDonald Review. of Victoria, from the Great • Caring about safety, the environment, In 1992, the review set in train the Divide to the coast, and our customers and communities, and establishment of the Rural Water each other Corporation and fi ve regions, each from the South Australian • Creating solutions that lead to with its own Board of Management. On border to the New South sustainable outcomes 1 July 1994, the fi ve regional boards became independent rural water Wales border. • Delivering timely, effective service authorities – including the Gippsland Our customers are principally the farmers, • Demonstrating our high Rural Water Authority and Southern Rural graziers and growers of southern Victoria, personal standards Water Authority. but we also supply water in bulk to • Refl ecting to improve what we do On 1 July 1995, these two were non-metropolitan urban water corporations merged to form what is today known as and to Latrobe Valley electricity generators. Southern Rural Water, the trading name Southern Rural Water manages of the Gippsland and Southern Rural three irrigation districts, the state’s Water Corporation. largest groundwater operation and Since then, Southern Rural Water has its second largest non-metropolitan continued to strive to manage rural headworks business. water through close engagement with its Southern Rural Water is a statutory water customers and stakeholders. corporation established under the Water Act 1989. The Hon Peter Walsh MLA, Minister for Water was the responsible Minister for 2011–12.
The responsible Minister appoints a skills-based Board, which is responsible for setting Southern Rural Water’s strategic direction.
02 Southern Rural Water Annual Report 2011–12 www.srw.com.au
Our services GROUNDWATER AND RIVERS Southern Rural Water’s main business We implement government regulations and centres are located in Maffra, Werribee, policy for groundwater and surface water Ringwood and Warrnambool, with smaller management, in accordance with delegated offi ces scattered across our region of powers from the Water Act 1989. We responsibility. We employ 162 people and assess licence applications, issue licences our area covers 37% of the state. to construct new farm dams and bores (if approved) and manage new and existing IRRIGATION groundwater and surface water licences.
We manage the delivery of water to the Southern Rural Water is also the appointed Werribee, Bacchus Marsh and Macalister Resource Manager for a range of surface Irrigation Districts, and maintain the water catchments (mostly in Gippsland), channels, pipelines and drains for and provides administrative support to the these districts. Victorian Drillers’ Licensing Board.
LARGE DAMS
We also harvest, store and manage water in Glenmaggie, Narracan, Blue Rock, Melton, Merrimu, Pykes Creek and Rosslynne reservoirs. This water is then supplied to irrigators, urban water corporations and power generators, or retained for government.
A further part of our responsibilities is to manage recreational facilities at our major water storages and weirs.
Southern Rural Water
Office locations Combined office and major water storage Major water storage only
Macalister Irrigation District
Werribee Irrigation District Bacchus Marsh Irrigation District
Pykes Creek Rosslynne Hamilton Ballarat Merrimu Bacchus Marsh Ringwood Bairnsdale Melton Glenmaggie Werribee Blue Rock Maffra Koo-wee-rup Morwell Colac Warrnambool Narracan
www.srw.com.au Southern Rural Water Annual Report 2011–12 03 Our year in summary
Message from the Chairperson and Managing Director
This year saw Southern to be launched in October 2012. This will be We were actively engaged in the followed by an atlas for the Port Phillip and development and release of the Western Rural Water move from Westernport region. and Gippsland Region’s Sustainable Water strategy to action following During the year we continued work on Strategy. We see these as very positive years of careful planning. implementing our Western Irrigation Futures initiatives in advancing the policy framework Strategy. This strategy outlines the way for sustainable water management in these We are excited to have started work on we will work to improve water security mostly rural areas. We will be actively MID2030, our strategy for modernising and quality for our Werribee and Bacchus involved in implementation over the next the Macalister Irrigation District, through Marsh irrigation districts. We have put into our Leading Works program. We are few years. place an allocation system that preserves planning around $30m of works over the more water for dry seasons, and we are During the year we also undertook design next six years, starting in the 2012 winter in the process of fi nalising arrangements or construction on a number of major period with further regulation automation, for the Werribee Recycled Water Scheme headworks projects where we expect to outlet rationalisation and initial testing for a which will provide the chance for our have signifi cant expenditure in the coming balancing storage. We are also planning a customers to secure supply during dry submission to the state government to seek years. This includes starting the spillway seasons. During the year we submitted joint funding of Stage 1 of the MID2030 works at Melton reservoir, completing the a business case to government for joint project, at a value of $140m ($2011 real) installation of a bulkhead also at Melton, funding of the modernisation of Werribee starting in the 2013–14 fi nancial year. progressing repairs to the spillway apron Irrigation District. While government was We have now completed the $27m at Yallourn Weir and starting installation not in a position to assess this bid for the state and federal government funded of an auxiliary valve to automate fl ows 2012–13 budget year, we look forward to channel automation project in the making a bid in a future year. down the Main Southern Channel at Macalister Irrigation District, and have Lake Glenmaggie. sought conversion of 14,200 ML of We are confi dent that this will provide water savings into an environmental a sustainable and affordable future for We continued our focus on training and entitlement for the Macalister River. This our Werribee Irrigation District. While development and were pleased to be year, a total of 14,000 ML was released the strategy actions will assist, Bacchus advised that we are one of three fi nalists in down the Macalister River from the Marsh remains problematic in dry seasons the Victorian Training Awards. environmental entitlement. due to the lack of an available, affordable We are pleased that we remain strong We achieved a major milestone with the alternative water source. It remains largely fi nancially. Despite a diffi cult year due to launch of the South West Groundwater reliant on river water supply, although reduced delivery revenue in the Macalister Atlas, the fi rst of three to be delivered with full dams we can be confi dent of two through the Southern Groundwater Futures years’ supply. Irrigation District, we still delivered an operating cash fl ow surplus and a minimal project. Partnering with the National We completed a further major piece of Water Commission, we have been able to planning with the release of our draft Water increase in debt. provide a unique insight into groundwater Plan 3 in May 2012. We believe that we Turning to seasonal conditions, for in South West Victoria. The atlas brings can maintain the pace of improvement of the second year in a row, most of our together information from a range of our business with modest price rises – sources to explain the hydrogeology, customers will start 2012–13 in a strong varying between 0% to 1.4% per annum. regulatory framework, groundwater water supply position. After two relatively We also took an innovative approach to characteristics such as yield and quality, wet years, our catchments, reservoirs, service measurement – which we believe environmental issues and benefi cial uses. customers farm dams, rivers, streams and refl ects the needs and expectations of The atlas received universal acclaim our customers. We look forward to the aquifers have benefi ted, particularly in the as an innovative and ground-breaking next phase of consultation, which has Central and Eastern areas. This leaves us initiative. We are now working with the now started. optimistic for the 2012–13 year. stakeholder reference group to develop a groundwater atlas for Gippsland, planned
04 Southern Rural Water Annual Report 2011–12 www.srw.com.au Our year in summary in year Our
We again reached a 100% allocation in the Werribee Basin. In Werribee and Bacchus Marsh, our seasonal allocation reached 100% High Reliability Water Share and 70% Low Reliability Water Share. Because of the wet conditions, demand for water was low and we fi nished the season with storages at or about 90% full.
It was another great year for the Macalister Irrigation District with regular rainfall over spring, summer and autumn, allowing irrigators to maximise production when they would normally be drying off paddocks.
We would like to thank the customers, stakeholders and communities who supported us in striving to provide great service at a fair price, particularly our hard-working customer consultative committees. We were pleased to see the Chair of the Macalister Committee, Graeme TERRY BURGI CLINTON RODDA Anderson, recognised this year with an Chairman Managing Director Order of Australia Medal for his extensive community service.
We would also like to acknowledge the two Board members who departed, Jan Greig (Board Chair) and Alan Hawkes (Chair of Accountable Offi cer’s Audit and Risk Policy Committee) for their attestation many years of dedicated service to the In accordance with the Financial organisation. They were catalysts for much Management Act 1994, I am pleased to of the work that happened this year and will attest that Southern Rural Water’s annual continue into the future. report is compliant with all statutory In closing, we would like to thank our Board reporting requirements. directors and Southern Rural Water staff for their great efforts over the course of the year.
CLINTON RODDA Managing Director, Southern Rural Water 1 July, 2012
www.srw.com.au Southern Rural Water Annual Report 2011–12 05 Our year in summary
Our performance at a glance
Sustainable water cycle Working with stakeholders Goal We manage water sustainably, recognising social, We meet our obligations to stakeholders, and help them economic & environmental demands meet their objectives
Activities • Licensing groundwater and surface water use • Governance and compliance • Supporting groundwater reform through our Southern • Financial management Groundwater Futures project • Building relationships • Enhancing catchments • Improving reporting • Meeting our environmental obligations • Adding value
Major achievements • Launching the fi rst groundwater atlas for South • Responding effectively to fl oods and other West Victoria as part of the Southern Groundwater incidents across our region, including major fl oods Futures project through Gippsland • Launching our fi rst interactive groundwater hydrograph • Continued improved ratings from our stakeholder service showing readings from all state observation pulse check bores in our region • Forming a partnership with Lower Murray Water, • Major contributions to the Western and Gippsland Goulburn Murray Water, the VFF and DPI to launch the Sustainable Water Strategies Victorian Rural Water Innovation Awards • Environmental releases of 14,000 ML into the • Partnering with other agencies for the fi rst clean up Macalister River Glenmaggie day • 100 kms of drain transfers in the MID, leading to better • Partnering with other agencies to address anti-social outcomes for farmers, Southern Rural Water and behaviour issues at our western storages the environment • Effective management of a drain contamination issue in Werribee preventing damage to Port Phillip Bay • Full compliance with the Safe Drinking Water Act
Challenges • Building our own, customers’ and stakeholders’ • Ensuring we have effective systems to meet our knowledge of the water cycle compliance and reporting obligations • Completing the next phases of Southern • Continuing to build positive relationships with Groundwater Futures key stakeholders • Increasing understanding of the groundwater • Shifting from a renewals to RAB capital works applications process funding model, and explaining this to customers and stakeholders • Improving the recreation and land management of our reservoirs and their surrounds
06 Southern Rural Water Annual Report 2011–12 www.srw.com.au Our year in summary in year Our
Customer service excellence Strengthening our business Learning and growth Objectives We strive for excellence in service Secure, strengthen and grow We sustain our ability to change and delivery to meet our obligations and our business and our people improve by developing our people, customer expectations for tomorrow aligning our culture and leveraging our information technology Activities • Managing three irrigation districts • Improving our investment capacity • Building our people competencies • Managing seven major dams • Developing new business • Providing a safe and healthy workplace • Delivering capital works • Reviewing our business model • Aligning staff to our • Strategic projects – MID2030 and business direction Western Irrigation Futures • Removing barriers to productivity • Enhancing fi eld operations Major achievements • Starting $8m of leading works for • Working closely with our Board, • Continuing our strong emphasis on the MID2030 project staff, stakeholders and customers the health and safety of our staff on Water Plan 3 • Continuing to negotiate new • Partnering with Chisholm Institute recycled water contracts • Cascading the balanced of TAFE to deliver training to a with our Werribee Irrigation scorecard into each part of the signifi cant proportion of our staff District customers corporation to develop individual • Developing our own in-house business strategies • Conducting our fi rst customer focus experts to deliver training to staff groups to explore expectations • Holding our third water auction from • Introducing a productivity ideas savings via channel automation and • Modernising the Melton program for all staff measurement work Reservoir Bulkhead • Strengthening the way we • Reviewing key aspects of our • Introducing Local Water Reports for manage training delivery from business model for Water Plan 3 groundwater and rivers customers our Performance Development Planning process • Completing the business cases for modernising the Werribee Irrigation District and for investment in the Macalister Irrigation District Challenges • Managing irrigation districts given • Effective consultation with • Continuing our efforts towards a uncertainties in climate customers and stakeholders before zero harm workplace releasing Water Plan 3 • Enhancing the value we add to • Continuing to work with our people customers’ businesses • Implementing the next generation to harness effort toward our vision of our Balanced Scorecard • Fine tuning the business cases • Improving skills and capability strategy map for modernising the Werribee and Macalister Irrigation Districts for • Further developing submission to future government and implementing new funding processes business opportunities • Identifying affordable alternative • Managing budgets against lower water sources for Bacchus Marsh revenue in wet and dry years
www.srw.com.au Southern Rural Water Annual Report 2011–12 07 Governance
Governance information • Directors are appointed on the The Remuneration and Corporate basis of their qualifi cations and Governance Committee oversees the ROLE OF THE BOARD experience; they do not represent any implementation of remuneration policy; particular constituency it monitors executive remuneration and In accordance with the Water Act 1989 the provides advice to the Board on corporate Board is responsible for: • Remuneration is set by the Minister governance matters. Committee members for Water • The strategic planning of the are Terry Burgi (Committee Chairperson), corporation; and BOARD COMMITTEES Suzanne Ewart, Andrea Killeen and Harry Peeters. • The management of the affairs of The Board committees are appointed, by the corporation the Board, to assist in detailed examination The Community and Customer In doing so the Board must be mindful of of matters, making recommendations to Engagement Committee provides advice the sustainable management principles the Board. to the Board on community, customer and stakeholder engagement strategies. for water corporations; it must also act The Audit and Risk Policy Committee Committee members are Clinton Rodda as effi ciently as possible consistent with oversees the internal and external audit (Committee Chairperson), Russell Napper commercial practice. program as well as Southern Rural Water’s and Naomi Pye. risk management program. MEMBERSHIP OF THE BOARD Committee members are Suzanne Ewart RISK MANAGEMENT • The Chairperson is appointed by the (Committee Chairperson), Andrea Killeen, Minister for Water in accordance with the • Risk management is recognised as a key Harry Peeters and Eric Sjerp. Trevor Water Act 1989 Board responsibility Tappenden served as an external member • Formal policy and risk assessment • Directors are similarly appointed by the for part of the year. All members of the processes, risk avoidance and Minister for Water committee are independent. management plans are in place • The Deputy Chairperson, being one of The Technical and Environmental • Regular and comprehensive reviews are the appointed directors, is appointed as Committee provides advice to the Board undertaken to ensure that the business Deputy Chairperson by the Board on technical and environmental activities risks of the corporation are properly and • The Managing Director is appointed by across SRW’s business. Committee effectively managed the Board members are Eric Sjerp (Committee Chairperson), Terry Burgi, Russell Napper • Contingency plans are in place for and Naomi Pye. signifi cant risks Organisational structure
Board Members Managing Director Water Supply East Terry Burgi Clinton Rodda Terry Clapham – Manager, Water Supply East (chairman) Andrea Killeen Strategic and Technical (deputy) Graham Hawke – General Manager, Strategic and Technical Eric Sjerp Suzanne Ewart Company Secretary Groundwater and Rivers Brian Carr Craig Parker – General Manager, Groundwater and Rivers Naomi Pye
Russell Napper People and Performance Harry Peeters Lincoln Eddy – Manager, People and Performance
Finance Stuart Wrigglesworth – Chief Financial Offi cer
Water Supply West Ed Smith – Manager, Water Supply West
08 Southern Rural Water Annual Report 2011–12 www.srw.com.au Governance
Board activities for The Board conducted its annual Board which it participated in an inspection tour this year performance review in August 2011, of Southern Rural Water’s Water Supply assisted by an external facilitator; East area The Board operated with a director vacancy review outcomes were subsequently • the Board hosted a meeting with the for the period 1 July 2011 to 30 September reported to both the Minister for Water Werribee Bacchus Marsh Customer 2011, at which time Ms Jan Greig and and to the Treasurer as required under Consultative Committee at Werribee in Messrs Terry Burgi and Alan Hawkes the Statement of Obligations. A Board association with the April 2012 Board completed their terms of appointment. performance improvement plan evolved meeting and then inspected project works from the review, providing a structure to Effective 1 October 2011 Mr Terry Burgi at Melton Reservoir and sites of interest in assist the Board in its aim of achieving was re-appointed to the Board, and was the Werribee Irrigation District, and also appointed as Chairman; Mr Russell continuous improvement. The performance • in association with the May 2012 Board Napper, Mr Harry Peeters APM and Ms improvement plan has been progressed, meeting the Board participated in an Naomi Pye were appointed as directors. with monitoring of achievements at inspection tour of the Mitchell River Valley From that date the Board has had its full subsequent Board meetings. following which it hosted a stakeholders’ complement of eight directors. We held our Board meetings at strategic meeting where a presentation was locations across southern Victoria, We farewelled retiring directors Jan Greig made on the Lindenow Valley Water providing the chance to meet with and Alan Hawkes with acknowledgement Security Project and appreciation of their services to customer and community stakeholders We held a public meeting of the Board at the corporation. to discuss water issues and to gain exposure to customer issues and Pakenham on 31 August 2011, meeting We conducted a comprehensive director industry developments: both the letter and the spirit of the Code induction program in October 2011, which of Practice for Water Corporation Boards • in association with our August 2011 was attended by the newly-appointed issued in October 2010 by the Minister Board meeting we held a meeting with directors, ongoing directors and senior for Water at that time. In line with that the Macalister Customer Consultative management, ensuring that information Code of Practice, we routinely meet the Committee at Maffra where the coming was shared by all. Importantly it provided requirements and timelines for publicising steps with the MID2030 strategy an environment for social interaction and the agenda for Board meetings and were discussed development of the collegiate team. reporting on matters covered at each Development opportunities undertaken • a stakeholders interaction was held in monthly Board meeting. conjunction with the September 2011 during the year included: The Board took a further step forward Board meeting at Pakenham, including • attendance by fi ve directors at the during the year in changing over to iPad a presentation on the Bunyip Food VicWater Annual conference at Creswick technology from notebook computers, Belt initiative on 8–9 September 2011 providing a more effi cient means of • a briefi ng on the MDBA Community accessing Board papers and other • participation by two directors at the Impact Assessment was provided Southern Rural Water documents, and VicWater director training program in to the Board on the evening prior to also addressing recommendation 25 of the Melbourne on 22–23 November 2011 the November 2011 Board meeting Ombudsman Victoria ‘Investigation into • completion of the AICD Company at Werribee the Foodbowl Modernisation Project and Directors Course by one director in related matters’ of November 2011 on the • the Board held a joint meeting with the March 2012 security of corporate information. Southern Groundwater and Rivers Forum • participation by the Chairman in a VFF member in association with its December Horticultural Group Study tour to British Board meeting Columbia, Canada, in May 2012, focusing • the Board hosted a meeting with the on agriculture in peri-urban areas Macalister Customer Consultative • attendance by three directors and a Committee at Maffra in association with senior manager at the 26–28 June 2012 the March 2012 Board meeting following Irrigation Australia Conference in Adelaide
www.srw.com.au Southern Rural Water Annual Report 2011–12 09 Governance
The following table details the number of meetings attended: Board Audit & Technical & Remuneration Community meetings Risk Policy Environmental & Corporate & Customer Committee Committee Governance Engagement Policy Committee Committee Jan Greig 3 of 3 1 of 1 1 of 1 Alan Hawkes 3 of 3 3 of 3 1 of 1 Terry Burgi 12 of 12 7 of 7 3 of 3 Suzanne Ewart 12 of 12 5 of 5 1 of 2 2 of 2 Andrea Killeen 12 of 12 5 of 5 2 of 2 1 of 1 Eric Sjerp 11 of 12 3 of 3 6 of 7 Clinton Rodda 12 of 12 3 of 3 Russell Napper 9 of 9 5 of 5 2 of 2 Harry Peeters 9 of 9 2 of 3 2 of 2 Naomi Pye 9 of 9 5 of 5 2 of 2 Trevor Tappenden attended 1 of 1 Audit and Risk Policy Committee meetings
Director Profi les MS ANDREA KILLEEN, Committee, and a member of Peter DEPUTY CHAIRPERSON Mac’s Audit and RSPCA Victoria’s Audit, MR TERRY BURGI, CHAIRMAN Ms Andrea Killeen is a dairy farmer in Budget & Finance and Strategy and Corporate Policy Committees. Ms Ewart Mr Burgi is a fruit grower in the Yarra the Macalister Irrigation District. She is a has a Bachelor of Economics Degree; Valley. He has over 30 years’ experience director of GippsDairy, a former member she is a CPA and a graduate of the in representing farmers in industry of Southern Rural Water’s Macalister Australian Institute of Company Directors. organisations at regional, state and Customer Consultative Committee Ms Ewart was appointed to the Board on federal levels and is a CFA volunteer and from 2007 has been a voluntary 1 July 2010; her current term expires on with over 40 years of active service. fl ood warden. She is a member of the 30 September 2012. Mr Burgi has a degree in engineering Australian Institute of Company Directors. Ms Killeen was appointed to the Board on (agricultural) from Melbourne University and MR ERIC SJERP, DIRECTOR previously worked in the water industry. 1 July 2010; her current term expires on Mr Eric Sjerp holds a Bachelor of Science He is a Fellow of the Australian Institute 30 September 2012. with over 20 years’ professional experience of Company Directors and a Member MS SUZANNE EWART, DIRECTOR in the environmental, geological, land use of the Institution of Engineers Australia. planning and natural resource management Mr Burgi was appointed to the Board on Ms Suzanne Ewart is the Principal for sectors. He is Managing Director and 1 July 2004 and was appointed Chairman in Suzanne Ewart and Associates providing principal consultant for Ethos NRM, a October 2011; his current term expires on strategic and fi nancial advice to the Director of East Gippsland Water and 30 September 2013. private and public sector. Previously, she was Vice President, Group Treasury, of a member of the Australian Institute of Foster Group and Chief Financial Offi cer, Company Directors. Previously Mr Sjerp O2e Ltd of National Australia Bank. Ms has held management roles for both Ewart is Deputy Chair of RSPCA Victoria, private and government organisations. Treasury Corporation Victoria (TCV) and Mr Sjerp was appointed to the Board on Peter MacCallum Cancer Centre. She is 1 July 2010; his current term expires on a member of TCV’s Audit, Remuneration 30 September 2012. and Occupation Health and Safety Committees, Chair of Peter Mac’s Finance
10 Southern Rural Water Annual Report 2011–12 www.srw.com.au Governance
MR RUSSELL NAPPER, DIRECTOR MS NAOMI PYE, DIRECTOR MR CLINTON RODDA, MANAGING DIRECTOR Mr Russell Napper is a dairy farmer at Ms Pye is a dairy farmer at Bessiebelle. Sale and holds a Trade Certifi cate in She was a Board member of the Glenelg Mr Rodda joined Southern Rural Water Fitting and Turning. He was a member Hopkins Catchment Management Authority in 2005 after spending 17 years in the of the committee implementing the Lake (2006–2011) and has previously held board utilities sector and 10 years in management Wellington Salinity Management Plan and committee roles with the Victorian consulting. He has previously held senior from 1995 to 2002 and became chair of Farmers Federation (1999–2007), management roles with Energy Brix that group from 1996 to 2002. He was WestVic Dairy Project Steering Committee and Eastern Area Power Grid, and has subsequently appointed Chair of the (2000–2006) and Australian Dairy worked nationally and internationally Wellington Community Salinity Group Federation (2005–2006). Prior to her as a consultant. He holds a Bachelor from 2003 until appointed to the Board appointment to the Board of Southern Rural of Business, a Master of Business of Southern Rural Water. Mr Napper was Water, she was a member of the Southern Administration, and a Diploma in a member of Southern Rural Water’s Groundwater & Rivers Forum, a customer Ontological Coaching and is a member Macalister Customer Consultative consultative committee of Southern Rural of the Australian Institute of Company Committee from 2002 to October 2011 and Water. Ms Pye has a Diploma of Teaching, Directors. Mr Rodda was appointed Treasurer of the Maffra & Districts Landcare Advanced Diploma of Agriculture, and a Managing Director on 4 July 2009. Network from 1998 to 2008. Mr Napper is Diploma from the Australian Institute of a member of the Maffra Lions Club, where Company Directors. Ms Pye was appointed has served as President and as Secretary. to the Board on 1 October 2011; her current Mr Napper was appointed to the Board on term expires on 30 September 2013. 1 October 2011; his current term expires on 30 September 2013.
MR HARRY PEETERS APM, DIRECTOR
Mr Peeters is the Chairman of VicWater and a member of the Fisheries Licensing Appeals Tribunal. He is the immediate past Chairman of Wannon Water. He retired from Victoria Police in 1997 as Commander of the Corio Police Station. Mr Peeters was a Corio Shire Councillor between 1986 and 1992, a Board Member of the Corangamite Catchment Management Authority from 1997 to 2000, a Director of Barwon Water from 1991 to 2004 and Deputy Chairman of Portland Coast Water from 2004 to 2005. Mr Peeters was a Director of GMHBA Health Fund from 1989 to 2004. He is a Fellow of the Australian Institute of Company Directors. He currently operates Southern Rural Water Board members at Lake Glenmaggie: from left, Harry Peeters, a management consultancy specialising Eric Sjerp, Naomi Pye, Terry Burgi, Clinton Rodda, Suzanne Ewart, Andrea Killeen and in the health care and fi shing industries. Russell Napper. Mr Peeters was appointed to the Board on 1 October 2011; his current term expires on 30 September 2013.
www.srw.com.au Southern Rural Water Annual Report 2011–12 11 Sustainable water cycle
We manage water Achievements for 2011–12 included: Headworks assets sustainably, recognising Capital works planning and At Melton Dam, a $2.7 million project is in scheduling progress, placing extra concrete to prevent social, economic and erosion of the side bank that could occur environmental demands. The group initiated and prepared new during extreme fl oods. capital works procedures. These included A new auxiliary supply system and valve preparing concise statements outlining the is being installed at Glenmaggie Dam. problem being solved, and key aspects Strategic and Technical These works are designed to make small including: formal obligations, impact on changes in releases at rapid intervals, to be The Strategic and Technical group provides customers, stakeholders, costs and price compatible with channel automation. The strategic thinking and technical services – reviewed and confi rmed by management. for Southern Rural Water. It develops project cost is estimated at $2.2 million. Candidate projects across the organisation strategies that set future business direction Remedial works worth over $2 million at were then prioritised, using a tool that and delivers major capital works to the downstream apron of Yallourn Weir are assessed each project by the value rehabilitate assets. nearing completion. This is a challenging gained or the reduction in risk against project due to fl oods and mine dewatering Our main strategies include: strategic business drivers. This simple interrupting works that span across • MID2030 – modernisation strategy for the but comprehensive tool enabled us to the river. Macalister Irrigation District rank projects, allowing each business unit to make reasoned trade-offs between • Western Irrigation Futures Distribution assets strategic value, risk, cost and price impact • Southern Groundwater Futures – – as well as rationing capital. In the Macalister Irrigation District, we Groundwater Atlases completed the last of $28 million of Finally, we undertook a detailed resource irrigation automation works funded by the The group also provides hydrogeological planning review for all engineering projects federal and state government. These works and environmental expertise to the to optimise the scheduling and identify improve the consistency of fl ow rates to organisation and contributes to government resource needs to provide confi dence that strategy and policy. projects could be delivered on time.
Modernising the Macalister
Southern Rural Water completed the MID and service benefi ts for our customers, out of the district, and a win for the 2030 strategy a few years ago, outlining with minimal price impact.” region – more water means more regional our plans for major modernisation of the economic benefi t,” said Clinton. The projects to be completed include Macalister Irrigation District. updating channels in parts of the The works will also include design of Since then, work has continued on Nambrok-Denison Supply Zone and the a proposed balancing storage for the engineering designs, detailed cost Eastern Supply Zone, so that they can Southern Cowwarr area, to allow more estimation and implementation plans. be operated automatically – with savings effective delivery of water downstream, estimated to be at least 1900 ML per year and a $2 million project to start Southern Rural Water has kicked off the rationalising outlets. fi rst works under the MID2030 program, “We are also starting a project to help worth approximately $8 million. irrigators modernise and reduce the number of outlets on their properties – “Our customers tell us that allowing them to improve the on farm modernisation of the district is critical for water use effi ciency. the future of the district, so we want to get going with some high value projects,” “This is a win for irrigators, with more said Managing Director Clinton Rodda. water available to use, a win for the “These projects offer good water savings environment, with less nutrients going
12 Southern Rural Water Annual Report 2011–12 www.srw.com.au Sustainable water cycle
farms and effi ciency, saving 14,280 ML of Staff managed the construction of 11 This will start in July 2012 and better water each year for environmental fl ows to new State Observation Bores located measure nutrient discharges from drains in the Macalister River. between Bairnsdale, Port Welshpool and the Macalister Irrigation District. Maffra, completing a $1 million upgrade – We completed business cases to modernise We combined our Safe Drinking Water Risk funded by the National Water Commission regulators in the Nambrok-Denison and the Management Plans with other plans to through the Department of Sustainability Eastern Supply Zones and have started create new Sustainability Plans at each of and Environment. works. We also prepared a business case our storages. An approved Department of and gained Board approval to rationalise Health auditor found Southern Rural Water Sustainability and upgrade meter outlets. to be fully compliant with our obligations We reviewed our Environmental under the Safe Drinking Water Act 2003. A detailed assessment of options to Management System (EMS) and upgrade the supply system was completed Our Environmental Team worked with developed new procedures for conducting for the Werribee Irrigation District. Options Chisholm Institute to deliver an intensive preliminary environmental reviews and risk included either lining channels or replacing two-day environmental training program to assessments. These procedures have given them with pipes, for the whole or parts of more than 40 staff undertaking a Certifi cate staff a greater understanding of potential the district. The Board approved channel III, IV or Diploma in Water Operations. environmental risks of activities and effi cient lining, combined with upgrading key The program covered obligations and ways to reduce these risks. regulators for measurement and control, procedures in our EMS, weed control, and installing more accurate metering. We maintained our ongoing water quality bio-security, erosion control and water quality. monitoring programs and established a new We prepared a Reconfi guration Study for See pages 14–17 for more information on river based monitoring system. Bacchus Marsh to identify the cost of works our sustainability activities. to replace the existing main channel with a pumped system. This reconfi guration would “Groundwater gold” result in releasing fl ows down the river Feedback was tremendous for Southern formats that can be easily understood and pumping them out where the current Rural Water’s fi rst groundwater atlas, by readers. channel crosses the river. launched in late 2011. “For instance, it tells us that groundwater An external ESC audit of our asset The south west atlas has been use in the region is much lower than the management practices across the described as “groundwater gold” and amount people are licensed to take. It organisation found us to be compliant, was developed in consultation with a tells us where groundwater is fresh, and but identifi ed room for improvement. wide range of people and groups from where it is too saline to be used. It paints We revised the asset management plan the region interested in groundwater a picture of groundwater that we have for the Western Irrigation business. with 114 people attending fi ve never seen before.” Hydrogeology public workshops. “It also leads to discussion about how we The atlas is a result of the $1 million manage groundwater and communicate We completed an innovative Groundwater Southern Groundwater Futures project information into the future.” Atlas for South-West Victoria, receiving run by Southern Rural Water, and widespread acclaim. The Gippsland Atlas is The National Water Commission provides comprehensive and easy- also progressing well, guided by an active contributed $250,000 to this project under to-understand information about Stakeholder Reference Group, with public its National Groundwater Action Plan. groundwater in south-west Victoria. workshops planned for July 2012. The atlas is one of three to be developed “Groundwater is very complex, often We managed the Groundwater Resource across Southern Rural Water’s region, described in unfamiliar technical Appraisal for the extensive Dilwyn and is available online at www.srw.com. language, and hard to understand,” aquifer, which extends from the South au. Work is underway on a Gippsland said General Manager Strategic and Australian border to the Otways. This study atlas with public forums scheduled for Technical, Graham Hawke. “This atlas recommended new zone boundaries and July 2012. makes use of the latest technology to identifi ed the potential for extra allocation. present groundwater information in
www.srw.com.au Southern Rural Water Annual Report 2011–12 13 Sustainable water cycle
Working in partnership Environmental We have developed a number of programs for sustainable water sustainability and activities designed to promote management sustainability within Southern Rural Water and across southern Victoria. Many of the We helped develop the Western and Our environmental programs are ongoing. Gippsland Sustainable Water Strategies performance through representation on Ministerial Southern Rural Water’s vision is to be an Sustainable water use Consultative Committees, making environmentally sustainable business. formal submissions and working Our Environmental Policy supports this THE EFFICIENCY OF with stakeholders. vision and outlines how we seek to meet IRRIGATION SYSTEMS We contributed to the Integrated Water our environmental responsibilities. We have completed a series of State and Management Strategy for Melbourne’s We: Federal Government funded projects to South East – led by South East reduce losses in the Macalister Irrigation • Know the environmental aspects of our Water – by participating in the regular District that commenced back in 2004. The operations and how they impact the stakeholder reference group and attending overall result of these investments was to natural environment and communities community forums. create 14,280 ML of savings mainly through we serve Together with South East Water and reduced outfalls. These investments have Melbourne Water, we contributed to the • Continually improve the way we operate provided an extensive water measurement pre-feasibility phase of the Bunyip Foodbelt to reduce these impacts network that assists on-going management project. This is exploring the potential to • Work towards achieving best practice and accountability for losses. use up to 26,000 ML/year of recycled environmental sustainability We are progressing modernisation plans for water from the Eastern Treatment Plant, to • Ensure that our staff are aware of their the MID to further reduce losses and increase develop an intensive agriculture zone from obligations through training and support service levels. The extent and timing of these the north east of Mornington Peninsula modernisation plans are under review. toward Kooweerup and Lang Lang. • Comply with all relevant legislation, policies and regulations The Western Irrigation Futures Strategic option Analysis has assessed the options to Emergency preparedness • Continually monitor our performance upgrade the supply systems in the Werribee Our emergency management capability against agreed objectives Irrigation District (WID) and Bacchus Marsh is developed through staff training, • Engage with customers and the wider Irrigation District (BMID) to improve effi ciency. maintaining and exercising of plans. In community to enhance their knowledge of May 2012 we ran an exercise to test the water cycle and water use effi ciency The fi rst investment following on from the responses to different dam safety and strategy is to install a measurement network To ensure these outcomes are achieved, security scenarios at Lake Glenmaggie. across the WID supply system. we maintain an Environmental Management This involved representatives from System (EMS) consistent with ISO 14001. Victoria Police, Wellington Shire and For BMID improvement in effi ciency requires the Department of Sustainability and To continue to improve the sustainability of upgrading the Main channel or replacing Environment. Participants came away with our operations, we also: it with a pipe. A recently completed study covered the works and costs to replace the a better understanding of our role and • Find ways to save water and improve channel with a pipe. responsibilities during an emergency. This water use effi ciency proved very timely with major fl oods on the • Minimise our impacts on the Macalister, Thomson and Latrobe Rivers, in natural environment the next week. • Improve resource effi ciency with a view to We also participate in state and national becoming carbon neutral security and business continuity networks to remain abreast of issues and • Reduce waste and improve recycling. good practice.
14 Southern Rural Water Annual Report 2011–12 www.srw.com.au Sustainable water cycle
Effi ciency performance relative to targets set in the 2011–12 Corporate Plan is as follows: Go forth and video conference 2011–12 2011–12 Southern Rural Water’s territory covers District Measure Target Actual Normalised1,2,3 Comment everything south of the Great Dividing MID Delivery effi ciency 70% 60.3% 72.9% Deliveries only Range. That’s 88,000 square kilometres, 55% of HRWS or 37% of Victoria. WID Delivery effi ciency 70% 62.8% 64.7% Deliveries only 78% of HRWS According to whereis.com.au, it would WID Outfall volume as <2% 1.0% NA take 10 hours and 19 minutes to drive % of infl ows from one end of our territory to the other BMID Delivery effi ciency 69.0% 64.1% NA Deliveries only – assuming you don’t hit Melbourne 51% of HRWS during peak hour. BMID Outfall volume as <2% 2.1% NA With senior staff scattered across the % of infl ows state, videoconferencing has become an Notes ordinary way of life for our organisation. 1. MID – The seasonal adjustment standardises the effi ciency calculation on a median delivery volume of 146,000 ML. This eliminates distortions due to the base losses being a smaller or In fact, it is so normal for us that we take larger proportion of the losses. The base losses include seepage, leakage and evaporation it for granted, and are often surprised at and are largely fi xed each season. the reaction of visitors who have never 2. WID – The normalised delivery effi ciency calculation removes performance variations that are used it before. due to seasonal differences in delivery volumes and days of system operation. The basis for the normalised effi ciency fi gures is deliveries of 10,200 ML and 230 supply days. Our environmental team recently 3. BMID – There is insuffi cient reliable historic data to establish the base losses for the BMID. analysed our videoconference bookings for a typical month at Southern Rural Water, and came up with the following: WATER RECYCLING SUSTAINABLE WATER STRATEGIES • Southern Rural Water held 35 staff meetings and two board meetings by The Werribee Irrigation District Recycled Southern Rural Water has actively videoconference during the month Water Scheme was established in 2005, contributed to the development of the (July 2011) and delivers Class A recycled water from Western and Gippsland Sustainable Water • It saved 575 hours of staff travel time, Melbourne Water’s Western Treatment Plant Strategies through representation on the and 24,312 km of driving to growers throughout the Werribee district. Consultative Committees, working groups, • Taking into account running and and by making formal submissions. Due to seasonal conditions and high river set-up costs, videoconferencing is water allocations, recycled water was not Southern Rural Water has also partnered still estimated to save the organisation supplied to the irrigation district. We are with water corporations and agencies to more than $550,000 each year in staff planning on recommencing deliveries in implement the actions of the strategies. and vehicle costs July 2012. Important outcomes have included: • Videoconferencing is estimated to prevent more than 94 tonnes of • Allocation limits confi rmed for water WATER CONSERVATION greenhouse gas emissions each year systems, with additional allocation Southern Rural Water has worked during available in parts of Gippsland and South Not quantifi able, but equally important to 2011–12 to strengthen groundwater West Victoria Southern Rural Water, is the reduction of management, improve the Environmental risk to personal safety that comes with • Every water system will have a Local Water Reserve and encourage driving long hours on the road. water trading. Management Plan detailing rules and principals for the management of water in If your organisation has offi ces in more that system than one location across the state – well, we’d suggest you take a very close look • Principals to improve water trading at videoconferencing if you don’t have • Improved management of groundwater, it already. We cannot imagine Southern including managing connected systems in Rural Water without it. an holistic way
www.srw.com.au Southern Rural Water Annual Report 2011–12 15 Sustainable water cycle
CORPORATE WATER CONSUMPTION We support each Regional Catchment • Contribution to implementing the Gippsland Southern Rural Water’s corporate Strategy through: Lakes Future Directions and Action Plan, particularly through the Macalister Land water consumption for 2011–12 was • Continued strengthening of the licensing and Water Management Plan 1880 kilolitres. Total consumption of of surface and groundwater, including 12 kilolitres per 155 full time equivalent further development of public processes • Support for Victoria’s Water Recycling employees located at all sites was based on and increasing rigour in the information Action Plan through the Werribee water used for amenities, lawns, gardens, provided in support of applications Irrigation District Recycled Water Scheme vehicle washing and miscellaneous uses as • Production of local management rules for • Contribution to managing irrigation- well as for capital projects and construction. groundwater and rivers induced salinity in the Macalister Irrigation District through the local Salinity Other statutory obligations • Continuing our program to meter all Management Plan and the installation and signifi cant water users, including reducing operation of groundwater control pumps REGIONAL CATCHMENT thresholds for when a meter will be fi tted MANAGEMENT STRATEGIES and metering water in dairy sheds using MACALISTER IRRIGATION DISTRICT 10 ML or more Southern Rural Water has fi ve Catchment (MID) SUSTAINABILITY GROUP Management Authority partners across • Contribution to river monitoring through Southern Rural Water is a member of its region: Glenelg Hopkins, Corangamite, regional monitoring partnerships, the MID Sustainability Group which is Port Phillip and Westernport, West such as the Gippsland Water coordinated by the West Gippsland Gippsland and East Gippsland. Each Monitoring Partnership Catchment Management Authority. Catchment Management Authority has a • Contribution to developing enhanced The purpose of the group is to address Regional Catchment Strategy to “act as a environmental fl ow regimes for key rivers, the overarching sustainability issues which roadmap to coordinate natural resource for example through the work of the currently face the MID. It aims to bring management into the future, and target Thomson Macalister Environmental Flows together stakeholders and technical expertise our investments to those areas that matter Task Force the most” (West Gippsland Catchment to adopt a holistic approach in ensuring a • Recovery of water to enhance environmental Management Authority). sustainable future for water in the MID. fl ows for the Thomson/Macalister Rivers Consequently, each Regional Catchment through channel automation in the WELLINGTON COMMUNITY Strategy sets directions, strategies and actions Macalister Irrigation District SALINITY GROUP to be pursued by all catchment partners. The Wellington Community Salinity Group, Drain transfer milestone a win for everyone established as a committee under the Water Act 1989, provides community Some quiet work by Southern Rural Water scheme and believes it has helped to representation in the implementation of and Macalister Irrigation District farmers almost drought-proof his farm. the Lake Wellington Catchment Salinity has hit a signifi cant milestone. “We can collect about 95% of our runoff Management Plan, the primary focus of More than 100 kilometres of drains have water,” he said. “It’s not until you start which, in SRW’s case, is the management now been legally transferred from SRW catching it that you realise how much has of irrigation induced salinity occurring in the back to our customers. been going to waste.” Macalister Irrigation District.
The project is part of our nutrient reduction For Southern Rural Water, the benefi t is VICTORIAN BIODIVERSITY STRATEGY plan. It enables farmers to keep runoff reduced maintenance time and costs, water on their farms, rather than letting it which in turn means more staff time can Southern Rural Water recognises the enter rivers and creeks – which means less be spent on other infrastructure projects. ecological linkages between different nutrients heading towards Gippsland Lakes. parts of the environment (eg streams, “The scheme really does benefi t everyone,” streamside vegetation, and the It also means the landowner can use that said Assets Offi cer John Monahan, who biodiversity they support), and is aware runoff water for irrigation at a drastically has managed the project. “The project that our actions and strategies infl uence reduced cost. Dairy farmer Robert Hornby, is a great example of cutting red tape to biodiversity conservation. of Newry, has taken advantage of the achieve positive outcomes.”
16 Southern Rural Water Annual Report 2011–12 www.srw.com.au Sustainable water cycle
Our aim is to work with other stakeholders The recycled water shandy rules in the REIP to work closely with our regional partners and to implement initiatives such as Regional have been updated to accommodate the local communities to understand the potential Catchment Strategies and resolve long-term implementation of the scheme. impacts of climate change on our water and regional biodiversity issues. As part of These updates have introduced a salinity drainage systems. threshold of 1,800 EC for shandied water with our commitment to the environment, We are focusing on using more fuel-effi cient the guaranteed allocation of potable water Southern Rural Water works closely with vehicles within our fl eet. We are in partnership from the State Government being available as the Department of Sustainability and with Greenfl eet to offset carbon emissions a control measure if this cap is reached. Environment to minimise the impacts of from our vehicle fl eet through the planting of projects. We are continually undertaking native forests. We also purchase green power SAFE DRINKING WATER replanting works on our own land and for the majority of our electricity needs. In assisting local Landcare groups. Southern Rural Water is designated as a addition, we have commercial contracts with water storage manager under the Safe energy suppliers to operate hydro-electric VICTORIA RIVER HEALTH STRATEGY Drinking Water Act 2003. We harvest and schemes at Blue Rock and Glenmaggie and The Victorian River Health Strategy provides store water for Gippsland Water and Western are currently looking at other opportunities in a framework to manage and restore our Water, which then treat and supply the water our network to generate renewable energy. rivers over the long term. Key elements to various urban communities. These initiatives, combined with the use of of the strategy relevant to Southern Rural We have developed Safe Drinking Water solar cells in the fi eld, signifi cantly reduce our Water are: Risk Management Plans in accordance with carbon footprint. • Facilitating the movement of water to its the requirements of the Act. The plans were The table on pages 18–19 provides a highest value use substantially reviewed in 2011 and combined summary of our greenhouse gas emissions with other plans to produce a more integrated • Providing and managing water for for 2011–12. approach to water quality protection in our the environment catchments. We were subsequently audited by ENVIRONMENTAL MANAGEMENT SYSTEM • Restoring fl ow-stressed river systems a Department of Health approved auditor and Southern Rural Water operates an found to be fully compliant with our obligations • Managing water quality Environmental Management System which under the Safe Drinking Water Act 2003. is compliant with ISO14001. The EMS was WERRIBEE IRRIGATION DISTRICT We constantly review the plans, and we share reviewed in 2011, resulting in the development RECYCLING SCHEME – REGIONAL information and meet regularly with Western of new procedures for undertaking preliminary ENVIRONMENT IMPROVEMENT PLAN Water and Gippsland Water to discuss water environmental reviews and environmental The Werribee irrigation District Recycled quality issues. We must notify urban water risk assessments, both of which will help us Water Scheme is regulated by a “Regional corporations and the Department of Health gain a greater understanding of the potential Environmental Improvement Plan” if contamination, such as a blue green algae environmental risks of our activities and (REIP) approved by the Environment bloom or high turbidity, occurs in a water effi cient ways to minimise these risks. Protection Authority. The REIP establishes body providing drinking water supply, where Our Environmental Team delivered an environmental requirements for Southern that contamination is likely to pose a health intensive two-day environmental training Rural Water, Melbourne Water and risk or cause widespread complaint. No program in August 2011 to more than 20 customers including measures to protect incidents were reported in 2011–12. staff undertaking a Certifi cate 3 Diploma in the soil, groundwater and receiving waters. An approved Department of Health auditor Water Operations. They then worked with Following the establishment of a new found Southern Rural Water to be fully Chisholm Institute to deliver a more intensive REIP, we have rolled out new and more compliant with our obligations under the Safe program to more than 40 staff in 2012 who detailed monitoring programs. We have Drinking Water Act 2003. were undertaking a Certifi cate 4 or Diploma also upgraded our internal processes in Water Operations. The programs were in accordance with the plan to ensure GREENHOUSE GAS EMISSIONS tailored to Southern Rural Water, with the compliance and data quality. As part of our Water will be a key area of vulnerability as fi rst day focussed on our obligations and the data quality commitment we have created a result of climate change, due to changes procedures in our EMS, and the second day a soils database, which is now complete to in rainfall, temperature, evaporation and targeted at weed control, bio-security, erosion the end of the 2010–11 season. humidity patterns. In 2011–12 we continued control and water quality.
www.srw.com.au Southern Rural Water Annual Report 2011–12 17 Sustainable water cycle
Reporting of Offi ce-based Environmental Data
Energy Use Energy Description Unit Amount E1 Total energy usage segmented by primary source Electricity Megajoules 0 (all renewable) Natural Gas 100,324 Renewable 1,535,958 Total 1,636,282
E2 Greenhouse Gas emissions associated with energy Electricity Tonnes CO2 0 use, segmented by primary source and offsets Natural Gas 5 Renewable n/a Total 5 E3 Percentage of electricity purchased as Green Power % Total energy 100 consumption E4 Units of offi ce energy used per Full Time Equivalent (FTE) Mj / FTE 10,291 E5 Units of offi ce energy used per unit of offi ce space Mj / m2 342
Waste Production Waste Description Unit Amount Ws1 Total units of waste disposed of by destination Landfi ll Tonnes 17 Recycle 13 Total 30 Ws2 Units of offi ce waste disposed of per FTE by destination Landfi ll Kg/FTE 106 Recycle 82 Total 189 Ws3 Recycling rate % Total waste 44
Ws4 Greenhouse Gas emissions associated with Tonnes CO2 42 waste disposal
Paper Use Paper Description Unit Amount P1 Total units of A4 paper equivalent used Reams 1,787 P2 Units of A4 paper equivalent used per FTE Reams/FTE 11 P3 Percentage of recycled content of paper purchased % 94
Water Consumption Water Description Unit Amount W1 Total units of metered water consumption by water source Kilolitres (Kl) 1,880 W2 Units of metered water consumed in offi ces per FTE by usage type Kl/FTE 12 W3 Units of metered water consumed in offi ces per unit of offi ce space Kl/m2 0.87
18 Southern Rural Water Annual Report 2011–12 www.srw.com.au Sustainable water cycle
Transportation Transport Description Unit Amount T1 Total energy consumption segmented by vehicle type Diesel Gigajoules 11,409 Biodiesel 0 L.P.G. 68 PULP / 4,351 ULP ULP E10 0 Total 15,828 T2 Total vehicle travel associated with entity operations Diesel Kilometre 2,962,802 segmented by vehicle type Biodiesel 0 L.P.G. 22,166 PULP / 1,304,706 ULP ULP E10 0 Total 4,289,674
T3 Total Greenhouse Gas emissions from vehicle fl eet Diesel Tonnes CO2 855 segmented by vehicle type Biodiesel 0 L.P.G. 4 PULP / 310 ULP ULP E10 0 Total 1,169
T4 Greenhouse Gas emissions from vehicle fl eet per Diesel Tonnes CO2 /1000 km 0.288 1000 km segmented by vehicle type Biodiesel 0.000 L.P.G. 0.199 PULP / 0.238 ULP ULP E10 0.000 Total 0.725 T5 Total distance travelled by air Kilometre 21,224 T6 Employees regularly using public transport, cycling, % of Total Employees 6 walking or carpooling to and from work or working from Metro 2 home by locality type Regional 8
GhGE Greenhouse Description Unit Amount Gas Emissions
G1 Total Greenhouse Gas emissions associated with energy use Tonnes CO2 5
G2 Total Greenhouse Gas emissions from vehicle fl eet Tonnes CO2 1,169
G3 Total Greenhouse Gas emissions from air travel Tonnes CO2 5.3
G4 Total Greenhouse Gas emissions associated with waste disposal Tonnes CO2 42
G5 Total Greenhouse Gas emissions offsets purchased Tonnes CO2 1,174
G6 Any other known Greenhouse Gas emissions associated with other activities Tonnes CO2 0
www.srw.com.au Southern Rural Water Annual Report 2011–12 19 Working with stakeholders
Protection Authority, Department of Health, Pykes Creek Reservoir and Merrimu We meet stakeholder Department of Primary Industries and the Reservoir; and Melton Shire Council for obligations and help them Essential Services Commission. the Melton Reservoir meet their objectives Some of the many other stakeholder groups • Melbourne Water, West Gippsland within policy. we work with include: Catchment Management Authority and Port Phillip and Westernport Catchment • The Minister for Water and his staff Management Authority, about land and Working with • Department of Treasury and Finance water resource management issues and stakeholders • The Minister for Environment and Climate initiatives, particularly for our irrigation Change and his staff districts and storages Building effective working relationships with • Primary industry groups such as the • Bulk Entitlement meetings for the Latrobe stakeholders is crucial to Southern Rural Victorian Farmers Federation and Werribee/Maribyrnong systems with Water – so much so that it forms one of the the entitlement holders themes in our current strategic plan. • Environment Victoria We rely on a less structured but close A primary aim is to meet defi ned • Federal government agencies such as the dialogue with other municipalities, water stakeholder obligations – on time and in full. Bureau of Meteorology corporations and catchment management We also seek to work with our stakeholders • The Energy and Water Ombudsman authorities across Southern Victoria. at a deeper level and work together where of Victoria We also contribute to development and we have common interests, to help them • Environmental and sustainability groups implementation of policy with the Department meet their objectives within relevant • Regional development organisations of Sustainability and Environment and the policy constraints. Environment Protection Authority. We welcome the challenge of maintaining Southern Rural Water’s region includes the close working relations with these entities. metropolitan wholesale water corporation, six metropolitan retail water corporations, We have developed a suite of approaches Involved in communities three retail urban corporations, fi ve to suit the different situations of each Catchment Management Authorities, more stakeholder. These include regular senior Sponsorship than 25 rural municipalities, and many more management meetings with: Southern Rural Water is committed councils in urban Melbourne. • Wellington Shire Council for the Macalister to growing its relationship with the We also work closely with other State Irrigation District and Lake Glenmaggie; communities we serve in southern government agencies – especially Wyndham City Council for the Werribee Victoria. One of the ways we do this is the Department of Sustainability and Irrigation District; Moorabool Shire Council through sponsorship. Environment – in our delegated licensing for Bacchus Marsh Irrigation District, Our sponsorship focuses on not-for-profi t functions, as well as the Environment activities which either:
Sustainable Water Strategies In November 2011, the Victorian water into the future, for all users Other staff assisted in working groups. Government released Sustainable Water and the environment, Southern Rural We considered the chance to help Strategies for both the Gippsland and Water has been heavily involved in develop the strategies and infl uence Western Regions. their development. policy and management of rural water These strategies outline the water Southern Rural Water staff to be one of our most important tasks in resources available in each region, and representatives were invited by the our work with stakeholders. tackle the challenges and opportunities Department of Sustainability and It also gave us a chance to highlight rural facing all water users into the future. Environment to sit on the consultative water issues to a wide range of partners committees in each region driving Because the strategies set out a range in the project, and in turn to understand the project. of measures to manage and protect water issues facing other sectors.
20 Southern Rural Water Annual Report 2011–12 www.srw.com.au Working with stakeholders with Working
• Strengthen local communities • DPI Newry Tinamba discussion group • Gippsland Water and Earth Resources Co-ordination Committee • Promote sustainable environmental • The MID Sustainability Group practice, or • Victorian Groundwater Working Group • The Gippsland Lakes Flood Warning • Educate, particularly on water-related topics System Steering Committee • State Licensing Steering Committee
We provide sponsorship to community • Committee for Wyndham • Werribee South Steering Committee groups and organisations, industry • Lake Glenmaggie Community • G21 events or activities and to staff involved in Representative Group charitable events or extraordinary not-for- Our staff also choose to be involved in a profi t personal endeavours. • Cowwarr Landcare Group number of community fundraising activities. During 2011–12, these have included the As an example, this year we provided • Melbourne Runabout and Speed Central Gippsland Health Service cycle sponsorship to the annual Bacchus Marsh Boat Club relay, Australia’s Biggest Morning Tea, Relay Harvest Festival, which encourages • Glenmaggie and District Boat Club for Life and our annual “Rusty Shovel Golf community and visitors to be aware of and • Otway Gas Project Community Day” raising funds for charity. celebrate the availability of fresh locally Reference Group grown produce direct from local farms. • Condah Groundwater Users Group Riding for health Community involvement • Don & Little Yarra Stream Flow It involved some early hours and some Management Plan Consultative Committee Our staff are involved in local communities sore muscles, but eight Southern Rural in many ways. • Woori Yallock Stream Flow Management Water staff, suppliers and friends took We attend numerous community events Plan Consultative Committee the road in November 2011 for the to promote rural water awareness. During • Wellington Shire Municipal Emergency annual Sale to Lake Tyers bike ride. 2011–12, we attended events such as the Management Planning Group The ride is all for a good cause – Maffra Show and we also worked with • Gippsland and Western Sustainable raising funds for the Central Gippsland other groups to organise the inaugural Water Strategy Consultative Committees Health Service. Glenmaggie Clean-Up Day. • Australian Drilling Industry Association Southern Rural Water team organiser We host numerous tours for local school, Peter Brough and his dedicated fellow • City of Greater Geelong Water community groups and international aid riders joined 70 other participants to ride Taskforce Committee groups, particularly in our irrigation districts in relay from the Sale Hospital to Lake and at our large dams. Under the auspices • City of Ballarat Water Tyers and back again all in one weekend, of Water Week, we host children from local Resources Committee a distance of around 360 kms. primary schools on specifi cally designed • Corangamite Regional Inland Acid Southern Rural Water provided tours in our irrigation districts. In 2011, Sulphate Soil Steering Committee sponsorship for the team, who for the fi rst time, we designed and gave contributed to the ride’s fundraising total a presentation to primary aged children • Yeodene Peat Fire – Colac Otway of nearly $12,000 for the health service. at Thorpdale on the local water cycle and Shire Municipal Fire Management Funds are used towards projects like water use within their catchment. Planning Committee purchasing much-needed portable beds • GHCMA Wetland and River Health We work with local community groups such for parents who need to stay overnight Advisory Committee as Landcare, and with community groups with their children. who wish to use our facilities, such as the • Clean Coal Victoria Advisory Committee “The ride took us through some great Melbourne Speedboat and Runabout Club • Latrobe Valley Mines Regional countryside, and all on sealed roads,” and sailing groups. Groundwater Committee said organiser Peter Brough. Our staff take on additional roles • Victorian Drillers Licensing Board “It’s also a chance for us to contribute to representing Southern Rural Water on or at a health service that is so important to groups such as: • Lindenow Valley Water Security Committee many of our staff and customers.” • Committee for Wellington • Victorian Dam Safety Advisory Committee
www.srw.com.au Southern Rural Water Annual Report 2011–12 21 Working with stakeholders
Freedom of information Reviewing How to make an application Southern Rural Water is considered to be Internal review 0 An application fee of $25.10 applies at the a Government Agency under the Freedom Appeal hearing 0 time of this report’s publication. of Information Act 1982 and is required to All Freedom of Information requests should Result comply with procedures that have been be sent to: prescribed, which allow members of the Information released in full 5 The Freedom of Information Offi cer, public to gain access to information held Information released in part 0 Southern Rural Water by agencies. Information not released 0 PO Box 153 A decision to release information is made No documents/cancelled request 1 Maffra, VIC, 3860 by Hayley Johnson, our Freedom of Response still required 0 For more information, please phone Information Offi cer. Southern Rural Water on 1300 139 510. During 2011–12, Southern Rural Water received four requests for information under the Act. During this period two outstanding requests from the 2010–11 year were fi nalised within the 45 day timeframe.
22 Southern Rural Water Annual Report 2011–12 www.srw.com.au Customer service excellence Customer excellence service
We strive for excellence The 2011–12 season has proven to be MAINTENANCE AND CAPITAL WORKS excellent for water availability from Lake This year we again closely monitored in service delivery to Glenmaggie; our seasonal allocation our critical assets, on mainly earthen meet our obligations and opened at 90% HRWS, with Lake sections of our main carriers susceptible customer expectations. Glenmaggie spilling. We were able to to failure during the irrigation season. The increase our allocation a further 5% surveillance program in the Macalister HRWS on 28 December 2011 to 95%. On Irrigation District covers 45 kilometres of Water Supply 7 February 2012 the allocation increased channel and 120 structures, and involves another 5% to 100% HRWS. Good rainfall seven formal surveillance checks. Water Supply is the largest component during February and early March enabled The fi ve year project to repair priority one of Southern Rural Water’s operations, us to increase the allocation to 100% carp damaged channels was completed accounting for 65% of our gross HRWS and 100% LRWS. Additionally, over this year. We have rebuilt 11.4 km of badly annual turnover. 15,885 ML of Spill Entitlement was delivered damaged channel on the Main Sale and from 1 July up to 12 December 2011. Southern Rural Water operates the Main Heart channels at a cost of $1.76 Macalister, Werribee and Bacchus Marsh Persistent rain during February and March million over the past fi ve years, which Irrigation Districts and is responsible for resulted in below average water deliveries, includes fencing, access tracks, paddocks seven storages in its region, together with with total deliveries for the season being and delver reinstatements. The assets have a number of smaller regulating structures. approximately 86,300 ML, well below been restored; extending their condition The storages consist of Blue Rock Lake, our delivery budget of 163,000 ML and, based remaining life by 30 years. Priority Lake Glenmaggie, Lake Narracan, Melton as detailed in the accompanying graph, 2 works have started with the fi rst section Reservoir, Merrimu Reservoir, Pykes Creek well below our past fi ve year average of from Myrtlebank Rd through to the Maffra Reservoir and Rosslynne Reservoir. 154,800 ML. Sale Rd completed. Work in 2012 is From these storages we harvest and Excellent infl ows into Lake Glenmaggie, beginning in the section from the Princes store water for irrigation customers, urban coupled with low irrigation demand, saw Highway through to Gibson Rd, a distance water corporations and the Latrobe Valley the capacity of the reservoir remaining of one kilometre, and we intend to bring in power generators in accordance with the at 137,596 ML or 77.5% at the end of the around 15,000 cubic metres of material. provisions of Bulk Entitlement Orders. irrigation season on 15 May, providing a During this process we will also remodel good potential start for the 2012–13 season. two existing outlets for OH&S reasons. Water Supply East
Eastern Irrigation Business Macalister Irrigation Area Our Eastern Irrigation Business manages 180,000 the delivery of water to customers in the 160,000 Macalister Irrigation District (MID) and on the Macalister and Thomson Rivers and 140,000 Rainbow Creek. 120,000 100,000 Our main storage, Lake Glenmaggie, 80,000 and diversion weirs on the Thomson and Macalister Rivers provide water for pasture, 60,000 horticulture and crop irrigation, as well as 40,000 Delivery to date stock and domestic purposes, to almost 20,000 Average 5 years 1,000 customers. The bulk of this water 0 2010–2011 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun is delivered via gravity irrigation from 15 August to 15 May. Our river diverters can order water 365 days a year.
www.srw.com.au Southern Rural Water Annual Report 2011–12 23 Customer service excellence
Our most prolifi c weed problems this year comply with AS1940–1933, in accordance Our Public Safety Program continued with were the emergent types such as Cumbungi with regulatory requirements. After losing 60 signs being erected and the last of the and Spike Rush. Using the chemical access to our previous storage, we 24 buoyancy gates fi tted. glysphosate, our staff carried out the constructed a purpose-built unit which will control of these outbreaks in channels when greatly reduce treatment costs and give us AUTOMATION weather conditions permitted. Contractors greater fl exibility in timing treatments. The Other works that have made up the again undertook weed control in drains. new facility is compliant not only with our winter program include annual fl ume gate Environmental Management System, but Acrolein (Magnacide H) is our most maintenance, including: also with Council, Environmental Protection effective method of submerged weed • Replacing reference sensors on Agency, Catchment Management Authority control in the MID. A facility is required Regulator 226 and 1053 Gate 3 and Country Fire Authority regulations. by law for the storage of chemicals that • Manufacturing the 100 battery looms are deemed Hazardous Goods and must required for battery replacement program
• Visiting sites and download eeproms not Managing Glenmaggie – and expectations previously saved (200 sites)
In the 12 months between July 2011 high. In late autumn and early winter, • Replacing gearbox Regulator 902 and June 2012, Southern Rural we have kept the storage at about 80% • Removing from site three knife edge Water managed eight fl oods through full. This gives us some airspace to help monitoring pedestals and sensors Lake Glenmaggie. with incoming fl oods. We also consider pre-releases whenever advice from • Assisting Rubicon contractors wherever Whilst none of them were near the size the Bureau of Meteorology predicts needed in the installations at new sites of the largest on record (June 2007), signifi cant rainfall is heading our way. they are all of concern to the local • Assisting in the waking up of all fl ume gates community. The fl ood during June saw An example of how we use this airspace • Completing all maintenance jobs arising our sixth largest fl ows into Glenmaggie. was the June 2012 fl ood that we passed from site self tests through the storage. Although the fl ows Glenmaggie is a small storage on a into Glenmaggie were the sixth largest very large catchment, and has limited Eastern Storages on record, it was our tenth largest on capacity to reduce downstream fl ooding. Headworks East manages three large dams record for fl ows out of Glenmaggie. It is an annual storage, which means and three diversion weirs on the Latrobe, Infl ows were reduced from 94,000 it is designed to fi ll and empty in any Tanjil, Thomson and Macalister Rivers. ML/day to under 60,000 ML/day one year. – a reduction of one third. Water is supplied to Victoria’s power However, in the last two wet years, generators, Macalister Irrigation District, We also are working hard to help our demand for irrigation water has been Gippsland Water and the environment. communities understand what we do down, and fl ows into Glenmaggie have and our constraints in managing major Storages have received signifi cant infl ows been up. The reservoir has been largely fl oods. We regularly explain our release during 2011–12 with several moderate full at the end of the irrigation season, strategy via media releases, and we and minor fl oods passing through Lake when it would normally be nearly empty. show what impact Glenmaggie has been Narracan, Lake Glenmaggie and Cowwarr This means we have had to adjust the able to have after any fl ood. Weir, including our fi fth largest for way we manage Glenmaggie during Glenmaggie in June. Infl ows have been as During a fl ood, we constantly update our the wetter winter months of the year to high as 14,000 ML/day on the Latrobe River website so people can see how much keep some capacity in reserve to reduce at Narracan. Lake Glenmaggie received water we are releasing, and what we are minor and moderate fl oods. infl ows as high as 94,000 ML/day, however planning to do. We have pictures that we were able to hold outfl ows to less than Southern Rural Water has a “Water Level show Glenmaggie’s size in comparison 60,000 ML/day by increasing airspace prior Management in Lake Glenmaggie” policy with its catchment and other storages, to the fl ood. An ongoing release strategy which guides our approach to managing and graphs to show how large fl oods are has been in place for Lake Glenmaggie to Lake Glenmaggie when water levels are in comparison with previous ones. manage the higher than normal lake level.
24 Southern Rural Water Annual Report 2011–12 www.srw.com.au Customer excellence service
Cowwarr Weir has also experienced high Eastern storage levels as at 30 June 2012 fl ows during the past 12 months with the 120.00% largest recorded at 54,600 ML/day. Staff were able to complete critical fl ood routing 100.00% during these times. 80.00% Water levels in Lake Glenmaggie and Blue Rock Lake have both been well above 60.00% average. Releases to create airspace in Glenmaggie began in April to assist in fl ood 40.00% management through the winter months 20.00% and have continued since. We review our 2011–2012 release strategy on a fortnightly basis. 0 2010–2011 Glenmaggie Blue Rock Narracan Dam safety continues to be a focus, particularly with staff training and Storage levels as at 30 June, 2012: implementing improved work practices. 2011–12 2010 –11 Focus has continued to be placed on Glenmaggie 158,245 ML 89% 146,264 ML 82% routine maintenance and surveillance Blue Rock 210,021 ML 100% 207,085 ML 99.55% to ensure we continue to comply with Narracan 2,968 ML 41% 5,514 ML 76% ANCOLD guidelines. Our structures are maintained to very high standards and all storages have performed well during fl oods without incident. Top 10 Glenmaggie floods (by outflow) Outstanding maintenance tasks have 250,000 been greatly reduced throughout 2011–12 as a result of increased resources and 200,000 staff skill sets, which has been a focus of recent recruitment. Retaining trained and 150,000 capable staff in fairly remote locations will
always be a challenge for Headworks East; ML/day 100,000 however we will continue to endeavour to fi nd the very best applicants that are Peak flow 50,000 into available when positions become vacant. Glenmaggie Our recent additions to staff have proven to Peak flow 0 June 1971 1978 1952 1935 1993 1995 1950 Nov June out of be excellent team members and this shows 2007 2007 2012 Glenmaggie in our OH&S hazard work, and also in the reduction of our maintenance backlog.
The Macalister catchment condition has continued to improve following the 2007 bushfi res and we are now seeing a return to relatively normal infl ows as a result, making infl ow predictions more reliable.
Headworks East has had no breaches of Bulk Entitlement requirements during 2011–12.
www.srw.com.au Southern Rural Water Annual Report 2011–12 25 Customer service excellence
Water Supply West MAJOR WORKS most of our Werribee customers in There have been no major works this year one-to-one meetings to discuss the Western Irrigation Business in the irrigation districts; however, we have contracts, and we expect that all of the contracts will be in place for the start of the The Western Irrigation Business manages had a number of pipe leaks in the BMID new season. the delivery of water to 230 customers in that have required signifi cant repairs, and the Werribee Irrigation District (WID), 133 we are currently working through our winter The new scheme will have a different customers in the Bacchus Marsh Irrigation maintenance period which includes channel mode of operation. To manage salinity, we District (BMID) and 75 customers on the de-silting and patching. will shandy the recycled water with river Werribee River. We have held discussions on implementing water so that the electrical conductivity does not exceed 1,800 as agreed with the Water is supplied for vegetable crops, fruit an individual carryover system with the Environment Protection Authority. In dry orchards, sand quarries, the Moorabool Werribee and Bacchus Marsh Customer conditions, if there is no river water available and Wyndham councils, and for stock Consultative Committee. We will further or if its salinity is too high, then potable and domestic purposes as well as to the consider this system for potential water will be used to maintain the EC levels Werribee Tourist Precinct consisting of the implementation in future seasons. below the 1,800 cap. Werribee Open Range Zoo, Equestrian WERRIBEE RECYCLED Centre, Werribee Mansion and the Werribee WATER SCHEME Western Storages Golf Club. Southern Rural Water supplies recycled Headworks West operates and maintains The 2011–12 season saw relatively low water from the Western Treatment Plant to four large dams in the western region demand from our irrigation customers with Werribee Irrigation District customers. – three in the Werribee basin and one 981 ML delivered to the BMID and 6,625 ML in the Maribyrnong basin – along with Only a small amount of recycled water was delivered to the WID. This, in combination the associated diversion structures and delivered via a direct supply pipeline to the with a mild summer and regular rainfall, tunnel systems. led to full reservoirs and a high opening National Equestrian Centre at the Werribee Western storages have continued to receive allocation for this year of 100% of High Tourist Precinct. This was for two reasons good infl ows throughout the 2011–12 Reliability Water Shares (HRWS) and 5% – fi rstly the wet seasonal conditions and season and the storages are practically full Low Reliability Water Share (LRWS). Also, high river water allocations, and secondly heading into the new season. in applying the new allocation procedure we Melbourne Water detected very small levels were able to hold 30% HRWS in storage for of herbicide in the recycled water as part MAJOR WORKS the 2012–13 season. of their Quality Assurance testing regime. As a result we took a conservative This year we have seen the start of the We have continued to have regular infl ows approach in not delivering recycled water Melton Reservoir right hand abutment into the reservoirs throughout the season, until we had greater certainty that it was fi t project (refer to our Strategic and Technical enabling us to progressively increase the for purpose. In conjunction with Melbourne report for more information). allocation. We are ending the season with Water we carried out further research and an allocation of 100% HRWS, 75% LRWS We are also undertaking design works for developed interim guidelines on acceptable and with 60% stored in the reservoirs for the replacement of the Melton Reservoir herbicide levels, and we are now in a 2012–13. In addition, recent rainfall has cast iron outlet conduit, with the work position to recommence supply of recycled resulted in near full storages which should scheduled to start in the next winter period. water in July. allow us to start the 2012–13 season with Other major works include the repair another high allocation. This is great for our In addition we have developed new long of erosion on the Merrimu Reservoir irrigation customers, providing security in term recycled water contracts for our embankment and to the downstream side water supply for the next few years. customers that should secure recycled of the Lerderderg Weir. Both sites were water for the Werribee Irrigation District Irrigation demand was a little higher than damaged during recent storms and have for the next 20 years. When drafting the in 2010–11 with approximately 2,000 ML required signifi cant correction. contracts, we engaged Blake Dawson delivered to the BMID and approximately Solicitors to address any concerns raised 8,000 ML delivered to the WID; however, by customers. In this process we met with this is still below the long term trend.
26 Southern Rural Water Annual Report 2011–12 www.srw.com.au Customer excellence service
RECREATIONAL FACILITIES Western storage levels as at 30 June 2012
We continue to maintain our recreational 120.00% parks at Pykes Creek, Melton and Merrimu Reservoirs. 100.00%
Ensuring that visitors to the parks comply 80.00% with our regulations continues to be a 60.00% challenge. With the drought breaking and the reservoirs near full we have seen 40.00% a large increase in numbers of water skiers and jet skis. To ensure safety for all 20.00% visitors, we have extended the activities of 2011–2012 0 2010–2011 our external compliance team. The team Merrimu Melton Pykes Creek Rosslynne has been present on the water at Pykes Creek Reservoir on weekends when the Storage levels as at 30 June, 2012: temperature exceeds 25 degrees, and on 30 June 2012 30 June 2011 public holidays. Merrimu 25,134 ML 77% 27,736 ML 85% We are now planning a community Melton 14,166 ML 99% 13,599 ML 95% consultation process to gauge public Pykes Creek 21,558 ML 97% 22,119 ML 100% expectations of the facilities, activities Rosslynne 18,436 ML 73% 16,715 ML 66% and the funding options for managing the facilities. From fi ve days to ten minutes BULK ENTITLEMENT MANAGEMENT During 2011–12, Southern Rural Water The new system was installed throughout We have implemented a new Bulk completed a $655,000 project which will last winter by G&G Engineering of Melton, Entitlement Management System for the save time and reduce safety risks. over several weeks. The combined trash screen and bulkhead was made from Werribee and Maribyrnong systems. This The project was to upgrade the bulkhead grad 306 stainless steel (for longevity), web based system is a water accounting at Melton Reservoir. system, and manages orders from the and the unit also includes three custom- Originally constructed in 1916, the Bulk Entitlement holders and releases for made hydraulic rams which operate the reservoir is used to supply water to the irrigators. Other stakeholders and Bulk bulkhead up and down, the bulkhead Werribee Irrigation District. Entitlement holders can access the system lock mechanism, and the refi lling valve. directly to review their current entitlement In 1988, we installed a high level inlet on The installation was challenging, not and usage volumes. the dam to replace an older, lower one least because we had to continue our that had silted up. During the year we have upgraded the environmental releases down the river. It fl ow monitoring sites at the Werribee and However, when we needed to do also required a six man dive team over Bacchus Marsh outfalls, Pyrites Creek maintenance and inspections on the outlet several days for the underwater works. and Ballan. works, we had to remove the trash screen The divers had to work in zero visibility, and place a steel bulkhead over the with only around 50 minutes of dive time inlet – a very complex task that required per diver. a barge, a dive team and up to a week in The unit was successfully commissioned time to complete. It also posed signifi cant on 7 September without any impact to occupational health and safety risks. supply to customers or the environment.
Recently we designed a new system Now, isolation of the outlet works is an where the bulkhead is included within the easy task that takes under ten minutes, trash screen, and hydraulically operated with no safety risks. from a control building nearby.
www.srw.com.au Southern Rural Water Annual Report 2011–12 27 Customer service excellence
committees. With the strategies approved Groundwater levels online Groundwater and Rivers in late 2011, we have started to implement Southern Rural Water has launched The Groundwater and Rivers business the actions that we are responsible a new service on its website manages our delegated licensing and for. Some are short term projects; showing groundwater levels across regulatory functions. others are longer term and will involve southern Victoria. The business consists of: interagency co-operation.
The service provides access to the latest • Assessment staff who process all The main projects are: readings from state observation bores – licence applications and perform • Licensing for Thorpdale dams simply by clicking on a map. administrative functions • Enhancing water trade “This is an exciting new development • Field operations and compliance, • Various arrangements for managing the in making groundwater information who undertake meter reading Latrobe River system available to everyone” said General and enforcement, support the Manager Strategic and Technical, application process and are our main • Allocating additional licences in systems Graham Hawke. customer contact that are not yet fully allocated
“Visitors to our website can select • The metering group, responsible for • Ensuring Local Management Plans are in an area, and then click on any of its meter installations, data management and place for all areas observation bores” he said. maintenance programs LOCAL MANAGEMENT PLANS “They can fi nd out not only what the Annual highlights bore’s latest readings are, but also see a Southern Rural Water is preparing Local hydrograph showing longer-term trends 2011–12 saw a number of highlights Management Plans for all areas within in groundwater levels. They can also see and challenges: our region. These will provide information a photograph of the area where the bore about how we manage licences and is located.” OUR VARIED CLIMATE water extraction in those areas, including allocation policies, trading rules, monitoring Website visitors can select areas where After a very wet season last year, the programs and any other information groundwater use is more intensive, climate has provided a real mixed bag licensees require. such as groundwater management across our region. Some areas, particularly areas or Water Supply Protection Areas. in South Gippsland, have experienced Existing surface water plans will also be Outside these areas, they can see any much wetter than average conditions, with updated and all plans will be published observation bores. long time locals saying they have never on our website. The plans will initially seen the ground as wet as this year. Other document our current rules and will not The new service can be found by parts of our area, including the south west have new rules or obligations for licensees. visiting www.srw.com.au and clicking corner, have been drier with longer dry Where it is identifi ed that current rules are on the “groundwater levels” link on the spells between decent rains. not adequate for a particular area, we will front page. This has seen very different operational work with licensees and the community needs across our region. Meter reads in before any changes are made. Gippsland were generally hard to do due to FACE TO FACE WITH CUSTOMERS access, and usage was very low anyway. In other parts, rosters and compliance had To understand customer needs, we meet a stronger focus as usage was closer to as many customers as we can face to long term averages. face. We have a number of active local area committees where members are able SUSTAINABLE WATER STRATEGIES to help us manage water in a way that Southern Rural Water contributed provides maximum benefi t while meeting extensively to the Western and Gippsland our obligations. These have led to closer Sustainable Water Strategies through working groups and the consultative
28 Southern Rural Water Annual Report 2011–12 www.srw.com.au Customer excellence service
relationships and a number of initiatives, Serving customers These committees are responsible for: including using text messaging for roster • Providing a customer’s view on key Southern Rural Water aims to be close to information, and our regional updates. business issues the many people and groups that we work Our regional updates in areas such as with. This includes our customers. • Building an understanding of issues facing Thorpdale and the Merri River have been customers, and identifying current and met with enthusiasm by customers. The Customer engagement future expectations updates provide information that will help We work and engage with customers in a customers plan for the season ahead • Working with our staff to develop wide variety of ways. and to be informed about licensing rules business plans that identify prices, and conditions. We will extend the areas This year they have included customer investment priorities and service/ covered by these updates over time and surveys, customer focus groups, district performance measures and standards soon every customer will receive at least an updates, local water reports, customer • Improving relationships with our annual update of water related conditions in meetings, newsletters, displays at fi eld customers through communication, their area. days, fact sheets and other publications problem solving and dispute written in Plain English, bill explanations, We have also run community information resolution, and and more. Our website is always updated sessions in previous years. They have been • Linking our business to the community with new information. semi-formal with presentations based on a The committees meet on a monthly set schedule. This year we have changed We also have a range of customer advisory or bi-monthly basis, and contribute to the format and adopted an “open house” and reference groups. developing plans and responses for both approach, where people can come at any Two main aims are that: immediate and longer-term issues relevant time that suits and talk to our staff one on • Customers believe we provide great to the district. one or just look at audio visual displays. service at a fair price This has been very successful, particularly We support these committees with working as people can talk about their specifi c • We add value to our customers, and they groups and other committees as required. queries and they can drop in when it value our relationship GROUNDWATER AND RIVERS suits them. Our customer committees play the crucial We consult with water users across role of providing us with customer views, CURRENT AND FUTURE CHALLENGES southern Victoria on the wide range which help us to pursue these aims. We of services we provide through our We are implementing new fi eld technologies value their input greatly. which will make data handling and Groundwater and Rivers business. availability much more effi cient than ever WATER SUPPLY (IRRIGATION) Our core committee is the Southern before. This will in turn lead to more timely We must understand our customers’ needs Groundwater and Rivers Forum and responsive management of water as and desires so we can provide water supply This committee provides: well as much faster and more accurate to our customers in the best possible way. information to customers and stakeholders. • A forum to help shape Southern Rural To complement our work with individual Water’s water approach to operations and The number of new licence applications customers, we have a formal consultation policy implementation we assess continues to be at historically process to ensure customer input into our • High-level input into plans for our low levels, with bore construction operations and long-term planning. licences, information statements and Groundwater and Rivers business Our core committees are: licence transfers being the most common • A strong communication link between applications received. With most areas • The Macalister Irrigation District Customer Southern Rural Water and our capped, our challenge is to sensibly and Consultative Committee licence holders responsibly enable trade so that businesses • The Werribee Bacchus Marsh Irrigation It meets on a quarterly basis. can continue to grow. District Customer Consultative Committee
www.srw.com.au Southern Rural Water Annual Report 2011–12 29 Customer service excellence
In our more intensive areas of groundwater Feedback During 2011–12, we continued to develop and surface water use, we maintain local our awareness of accessible information All feedback is valuable. area committees to review aquifer and river and place an emphasis on using Plain response, especially in times of drought. We seek feedback from our customers and English and information mapping. This These committees meet annually. stakeholders in many ways, including: has simplifi ed our communications with • Our customer committees customers, as well as our internal and HEADWORKS stakeholder communications. • Regular surveys of customers in Our headworks business has a small all businesses number of customers (generally bulk Indigenous affairs • Customer focus groups entitlement holders). We have processes Southern Rural Water seeks to advance in place to both meet the consultation • Feedback forms sent to all our understanding and recognition of requirements of the bulk entitlements and licence applicants indigenous social, spiritual and customary ensure regular engagement with these • Regular stakeholder meetings rights. Our actions have included: customers, including: • Board meetings being conducted across • Referring new licence applications to • Management and operational staff meet the state involving visits and meetings traditional landowner groups as part of with customers several times a year to with stakeholders our public processes share and discuss policy, strategic and • Staff talking with customers as they visit • Consulting indigenous groups operational matters their properties when planning for any major project • Bulk entitlement meetings, where on waterways • A customer feedback form available via bulk entitlement holders and resource our website • Working with the Gunditjmara people on managers meet to discuss storage the restoration of Lake Condah operator charges, forward capital Customers who feel that a complaint has estimates, environmental matters and not been satisfactorily resolved are able to • Supporting NAIDOC Week activities operational issues contact the Energy and Water Ombudsman Southern Rural Water’s policy on the Victoria (EWOV) on 1300 500 509. Involvement and Acknowledgement of Customer service During 2011–12, we continued with an Traditional Custodians requires that for improvements organisational-wide Customer Relationship ceremonial events, we will: Internally, we run a customer service forum Forum, which brings together a wide • Identify, and deal with, the relevant group where staff from many different parts of the range of staff to ensure a collaborative and of traditional owners organisation share information and ideas to organisational-wide approach to customer • Contact traditional custodians well improve customer service. matters. This forum has been responsible in advance of planned ceremonial for implementing many customer Some of the initiatives in customer service events and invite traditional service initiatives. this year include: custodian participation • Finalising our customer charter Cultural diversity • Invite an appropriate representative of the traditional custodians to make a welcome • Building our understanding of what Southern Rural Water recognises and to country statement, and good customer service looks like at supports cultural diversity. Southern Rural Water through training and • Formally acknowledge We have a culturally diverse customer case studies traditional custodians base, particularly in the intensive • Re-designing some forms and standard vegetable growing districts of Werribee letters to make them easier to understand and Bacchus Marsh and areas such as the Kooweerup Swamp, where a portion of our customers are from non-English speaking backgrounds.
30 Southern Rural Water Annual Report 2011–12 www.srw.com.au Customer excellence service
Customer focus groups Social sustainability This year, for the fi rst time, Southern Some of the fi ndings from the Hardship and drought Rural Water has conducted focus groups included: Even though we have had two years of groups with some of its customers. • The Werribee customers were good rains, it will take many years of generally very happy with service The two groups were carried out with good rainfall for customers to fully recover levels, particularly during the drought river/creek water customers in West fi nancially from the protracted drought. Gippsland, and irrigation customers in • Werribee customers would like access We know that many of our customers’ Werribee. to irrigation water on weekends • Price and timeliness are key priorities businesses have been impacted by a range We wanted to get more information from for irrigation customers of personal and external issues which our customers about their expectations • West Gippsland customers were include fl oods, seasonal conditions, market of service from Southern Rural Water. generally aware of the services that fl uctuations and personal hardship. “Although our regular customer Southern Rural Water offers and is We continue to operate our Customer surveys give us strong feedback on doing a satisfactory job Hardship Policy. This formalises our our customers’ levels of satisfaction, • They had noticed a signifi cant payment plan arrangements, where an they don’t give us a large amount of improvement in customer service in account service fee is levied for those detail about what customers expect recent years customers who opt for an individual from Southern Rural Water,” said Acting • There are still areas for improvement payment plan. Interest is not charged where Manager People and Performance, including accuracy of river data for an account service fee applies, which acts Craig Parker. basing rosters and restrictions, and to lower the cost to the customer whilst “We used these focus groups to have a administration prices and processes allowing us to recoup adequate charges to more in-depth conversation with some We are now considering changes to meet our cost of debt. of our customers about what sorts of some of our services as a consequence Our policy states that where customers services – and levels of service – they of the groups, such as how we would experience hardship, we seek to expect from us. make water available to Werribee understand our customer’s situation “We were also able to talk to them about customers on weekends, and how we and fi nd responses which are mutually our fi ve year plan, Water Plan 3, and can reduce red tape for customers acceptable. This may involve individual some of their ideas on future projects.” applying for take and use licences discussions with customers or customer or transfers. consultative committees. Solutions will be tailored that assist the customer and do not negatively impact on our fi nancial performance (such as waivers or rebates) or require cross subsidy from other customers. Solutions that are provided to groups of customers are applied consistently across that group.
Community service obligations During 2011–12, Southern Rural Water granted $ 9,507.81 in pensioner concessions. This compares with $7,121.04 in the previous year.
www.srw.com.au Southern Rural Water Annual Report 2011–12 31 Learning and growth
CRAIG PARKER – GENERAL MANAGER STUART WRIGGLESWORTH – CHIEF We sustain our ability GROUNDWATER AND RIVERS FINANCIAL OFFICER
to change and improve Craig started with Southern Rural Water Having grown up on a family farm supplied by developing our people, in 2000 as a fi eld offi cer in the Moe offi ce. from the Macalister system, Stuart joined aligning our culture He has worked in many roles within the Southern Rural Water as Finance Manager business and was appointed Manager in late 2005 and was appointed Chief and leveraging our Groundwater and Rivers in early 2008, Financial Offi cer in 2011. He has 6 years' information technology. and then General Manager Groundwater experience working in professional practice and Rivers in 2010. He is actively involved for PriceWaterhouseCoopers in Melbourne in customer committees to be able to and South Africa, as well as over 5 years in Leadership team understand the challenges faced by farmers the UK working in Finance and Accounting as water resources become scarcer. roles for a number of commercial and The Southern Rural Water leadership public sector businesses. Stuart holds a team includes: EDWARD SMITH – MANAGER WATER Bachelor of Commerce and is a member of SUPPLY WEST CLINTON RODDA the Institute of Chartered Accountants. – MANAGING DIRECTOR Edward was appointed as Manager for BRIAN CARR – COMPANY SECRETARY Water Supply West in mid 2011. He joined Clinton joined Southern Rural Water in Southern Rural Water in December 2006 as Brian joined Southern Rural Water in March 2005 after spending 17 years in the utilities the project manager for the unbundling of 2009 after having served as Corporate sector and 10 years in management water entitlements in our regulated systems, Secretary of Goulburn-Murray Water for consulting. Clinton has previously held which gave him a broad understanding 12 years. His earlier career included work senior management roles with Energy of how our irrigation districts work. He in insurance, investments, and property Brix and Eastern Area Power Grid, and has also been involved in the transfer of investment. He holds a Bachelor of has worked nationally and internationally our unregulated licence information to the Economics Degree and is a Fellow of the as a consultant. Clinton holds a Bachelor State Water Register. Before his current Institute of Chartered Secretaries. of Business, a Master of Business appointment, he worked on several Administration, a Diploma in Ontological strategic projects including the balanced LINCOLN EDDY – MANAGER PEOPLE Coaching and is a member of the Australian scorecard. Edward has also worked as a AND PERFORMANCE Institute of Company Directors. business analyst for an asset management Lincoln joined Southern Rural Water in GRAHAM HAWKE company maintaining and upgrading the 1997 as a Project Accountant and has – GENERAL MANAGER STRATEGIC London Underground rail system. held numerous positions. He was most AND TECHNICAL recently appointed Manager People and TERRY CLAPHAM – MANAGER WATER Performance in late 2009. He previously Graham joined Southern Rural Water in SUPPLY EAST worked in the education sector and has 1999 having held general management Terry was appointed to Manager Water experience running his own business. positions in joint ventures and an Supply East in November 2011. With a He has a Bachelor of Business. international company, local government, mechanical background in the automotive and consulting roles. He brings strong and offshore drilling industries, he joined strategic and analytical skills, with a the Rural Water Commission (now practical understanding of fi nance, Southern Rural Water) in 1987 to work in operations, maintenance and logistics. fi eld operations. Since then he has held Graham holds a Master of Business planning, co-ordination and supervisory Administration, Master of Engineering roles, and been instrumental in developing Science and Bachelor of Engineering and and implementing environmental and is a graduate of the Australian Institute of effi ciency projects in the Macalister Company Directors. Irrigation District.
32 Southern Rural Water Annual Report 2011–12 www.srw.com.au Learning and growth and Learning
Workforce data Tops in training As at 30 June 2012, there were 162 people employed at Southern Rural Water (155 FTE). In June 2012, Southern Rural Water By comparison, at the same time last year we also employed 163 people. was thrilled to be chosen as one of the top three Employers of the Year in the The following table shows the breakdown of staff by function Victorian Training Awards 2012. as at 30 June 2012. Over one third of our staff are currently Category 2011–12 2010 –11 involved in Certifi cate 3, 4 and Diploma Executive offi cers 2 1% 4 2% level training through our alliance with Senior management 8 5% 9 5% the Chisholm Institute. This training Administration staff 34 21% 38 23% includes both specialised nationally- Finance staff 8 5% 8 5% accredited water management and Operational staff 110 68% 104 63% general business management courses. Total 162 163 As part of this alliance, seven senior staff have been accredited as in-house The following table shows comparative staffi ng numbers by gender industry trainers by completing a and employment category for the past three years. Certifi cate 4 in Training and Assessment Category 2011–12 2010 –11 2009 –10 – a qualifi cation that allows them to Female teach at TAFE.
Permanent full time 21 13% 21 13% 23 14% Another major training focus for the Permanent part time 12 7% 13 8% 11 6.5% year has been Interaction Management Temporary full time 1 0.5% 0 0% 0 0% with DDI. Over 40 managers and Temporary part time 00%00%00%supervisors completed a series of 34 20.5% 34 21% 34 20.5% workshops on Interaction Management. Research has shown that this training Male has had a signifi cant impact on our Permanent full time 121 75% 123 75% 126 75.5% managers’ ability to provide feedback, Permanent part time 64%64%74% coaching and performance improvement Temporary full time 00%0%0%00%discussions to their staff. We still have Temporary part time 10.5%0%0%00%a way to go on this, but we believe this 128 79.5% 129 79% 133 79.5% training is a great start.
Total 162 163 167 Other companies including TMI Australia have been involved in delivering short Staff service in excess of 10 years Male Female course training to our staff during the 10 – 15 years 16 2 year. These have included frontline 15 – 20 years 13 4 management, project management, 20 – 25 years 3 0 360 degree leadership mirror 25 – 30 years 4 0 development, exceptional performers, Over 30 years 14 0 customer focus, time management and information mapping. Reason for cessation of employment 2011–12 The winner of Employer of the Year for % turnover of total staff 8% 2012 will be announced in August. Resignation 10 staff members Retirement 3 staff members Dismissed 0 staff member
www.srw.com.au Southern Rural Water Annual Report 2011–12 33 Learning and growth
Our people legal and government obligations. Training Occupational health in bullying and harassment topics was and safety Southern Rural Water employed 162 staff provided to staff during the year. across our 20 southern Victorian work We continued to manage our Occupational The Southern Rural Water Women’s sites. Our employees work within irrigation, Health and Safety (OH&S) responsibilities Network has been a self-managing team for headworks, groundwater and rivers, and in in accordance with legislation and our over ten years now. a suite of business, engineering, technical commitment for continuous OH&S and corporate functions. Performance Development Planning (PDP) improvement. We continued to use the continues to be a major focus. The PDP Position descriptions are in place for professional services of Keith Farfor & program, now in its third year, provides a each role. Associates to assist us in managing OH&S, forum for line managers and employees to Work Cover and providing training services. Our selection process assesses candidates discuss key job objectives, performance The OH&S and the welfare of our against advertised job prerequisites and plans and development. Training and employees, contractors and visitors is selection criteria, based on the employment development needs are assessed and a core value of our organisation and we principles established under the Public actions put in place for the year ahead. Administration Act 2004. All new employees maintain our objective on working towards a We continued a training alliance with the receive a formal induction. Pay and zero harm workplace. We have undertaken Chisholm Institute to deliver water and entitlements are administered in accordance a number of actions to enhance our safety business training for staff. Frontline leadership with signed employment contracts and performance over the past 12 months. and water industry operations courses approved industrial agreements. were also completed during the year. A high Our major occupational health The Southern Rural Water Enterprise number of our staff now possess a nationally and safety achievements Agreement 2010 (EBA) is the main industrial accredited Certifi cate 3 level qualifi cation. agreement that regulates employee pay and Over a third of our staff are currently involved OH&S STRATEGY DEVELOPMENTS conditions. The EBA was negotiated over in Certifi cate 3, 4 and Diploma level training Our OH&S strategy continues to assist four months in mid 2010 and approved by places. Another major supervisory training in enhancing the safety culture through Fair Work Australia in November 2010 for a program undertaken was Interaction the organisation and create common period of four years. Management. Over 40 managers and consistency. Our vision is for an incident An Employee Consultative and Productivity supervisors completed a series of workshops free and Zero Harm workplace within Committee (EC&PC) provides a forum on Interaction Management, presented by our organisation. to discuss and resolve industrial issues. DDI World. The workshops focus on: The OH&S strategy focuses delivering The EC&PC can also consider issues and • Essentials of leadership sustainable safety outcomes to continually redress claims of unfair or unreasonable • Setting performance expectations enhance and improve our management. treatment. It also oversees our The strategy has been developed by our productivity program. • Coaching for success people and is the foundation for achieving Executive remuneration is governed by • Coaching for improvement our vision. We will review progress with our the State Services Authority Government • Managing performance problems staff later in the 2012 year. Sector Executive Remuneration Panel. • Reviewing performance progress We have two employees, including the HEART TRACK 2012 Managing Director, in this group. The program included managers and In May 2012 our voluntary annual Heart leaders from all major work groups. We are an equal opportunity employer and Track health assessments were carried operate a smoke free work environment. DDI also conducted a 360 degree leadership out with 60% of staff taking part in the There is a range of measures in place to mirror development program for the senior program. The program is valued by ensure we provide equal employment management team, and a team member pilot these staff. opportunities including policies and program covering exceptional performers. Staff are referred to their own General procedures, four trained internal part-time TMI Australia also worked with us in the Practitioner for a further follow up if health Equal Opportunity Contact Offi cers and areas of improved customer service, issues are identifi ed. This year’s program regular reviews of our compliance with development of guiderails and in time once again consisted of: management programs.
34 Southern Rural Water Annual Report 2011–12 www.srw.com.au Learning and growth and Learning
• fl u vaccinations Whistleblowers Southern Rural Water’s • skin cancer assessment (introduced on Whistleblowers Policy The Whistleblowers Protection Act 2001 the recommendation of our Health and aims to encourage offi cers to disclose It is the policy of Southern Rural Water Safety Committee), and improper conduct by departments and that a published Whistleblower Protection • health check – blood pressure, public entities by giving clear contacts Procedure shall be made available to any height-to-weight ratio, cholesterol and for making disclosures, and making it person on request, and that the procedure sugar levels. an offence to expose the name of the will cover the following matters: whistleblower or subject them to any • Our support for whistleblowers HAZARD REPORTING AND detrimental action. • The reporting system including contact INSPECTION PROGRAM During 2011–12 no disclosures were made persons; and The hazard reporting and awareness to Southern Rural Water. • The process of investigations program continues to be effective with Disclosures can be made to: hundreds of hazards reported in the past The procedure is available on our website, 12 months. A high number have been Protected Disclosures Coordinator, upon request, or can be collected from our rectifi ed throughout the year, and the others Southern Rural Water corporate offi ce during normal offi ce hours. considered for future budgeting. Workplace PO Box 153 Maffra, VIC, 3860 inspections continue to maintain the focus Keeping healthy on hazards identifi cation, as do worksite Ph: (03) 5139 3100 Heart Track is a voluntary health toolbox meetings. Or can be made direct to: prevention program that has been running Ombudsman Victoria OTHER SIGNIFICANT ACHIEVEMENTS at Southern Rural Water for over ten years. 459 Collins Street In mid 2011 and again in May 2012, around We have continued to train staff members in Melbourne, 3000 60% of our staff participated in the program. statutory OH&S related and best practice to Ph: (toll free) 1800 806 314 enhance and promote safe work practices. They all received an appointment at one More information about the Whistleblowers of our work offi ces with a doctor. As We also continued to participate in the Protection Act 2001 is available from part of the program, they also receive Victorian Water Industry OH&S Network to the Victorian Ombudsman’s website comprehensive, individual health check discuss and share industry related issues www.ombudsman.vic.gov.au. and achievements. results and a confi dential health risk assessment. Staff can also opt for fl u shots and skin cancer assessments. The following table shows our OH&S performance during from 2007–08 to 2011–12 years Many of our staff have done Heart Track for several years, and have been able to 2011–2102 2010–11 2009–10 2008–09 2007–08 keep tabs on their health over this time. Number of lost time injuries 32031 for the year Several have changed their lifestyles as a result of the program, or have been able to Lost Time Injury frequency rate 9.6 6.4 0 9.6 3.4 (per million man hours worked) pick up health issues in their early stages. Number of days lost due to injuries This year, Southern Rural Water also 14 12 0 82 238 occurred during the year conducted a health education program Number of medical treatment injuries 22034supported by WorkHealth. for the year This included: Medical treatment frequency rate 6.4 6.4 0 9.6 13.8 (per million man hours worked) • seminars on health eating, quitting smoking and general wellbeing • a 10,000 steps a day exercise challenge
We are gradually working towards a healthier Southern Rural Water team!
www.srw.com.au Southern Rural Water Annual Report 2011–12 35 Strengthening our business
In late 2011, we began a review of the Over the past 12 months, we’ve been able Secure, strengthen and scorecard and its themes. We have to use the scorecard to see at a glance grow our business and our a new scorecard being introduced for where issues are emerging, and put into people for tomorrow. 2012–13, and have identifi ed changes in the place strategies or resources to deal scorecard to come in future years as our with them. strategic focus changes. At the same time, our strategy map has Strategic planning Our strategy map infl uences the production helped to shape and to provide context Our strategic and operational planning is of our Corporate Plan and has played a to a number of other strategic documents captured within a fi ve-year Water Plan and strong role in our planning and preparation and reports, including our draft Water Plan an annual Corporate Plan. for Water Plan 3. 3, our Corporate Plan, our Information Systems Plan, and our Annual Risk Review. The Water Plan describes our obligations and service outcomes, as well as providing Balanced Scorecard We have also started to cascade the use a basis for regulating our revenue and tariffs of balanced scorecard reporting into each 2011–12 saw the continuation of our – while the Corporate Plan translates this of our businesses, who are creating their monthly balanced scorecard reporting. In into operational plans and budgets for the own strategy maps and performance the prior year we launched our scorecard coming year. reporting structures. after renewing our long term vision and Most importantly, our use of the balanced 2011–12 was the fourth year of our current goals, and created a strategy map to scorecard has improved our focus and Water Plan (2008–13), and saw us both describe the objectives, outcomes and driven some real achievements. We have refl ect on our performance within the initiatives that we need to achieve our goals. Water Plan, and turn our energy towards pursued the following initiatives in direct The monthly balanced scorecard report preparing our next fi ve year plan. response to the objectives described in our completes this framework by providing strategy map: During the past 12 months, we have feedback to management and the Board on • Major initiatives such as MID2030, reported monthly against our main strategic how we are performing. Are we delivering Western Irrigation Futures and Southern tool, the balanced scorecard. the initiatives that we proposed? Are we Groundwater Futures Our balanced scorecard is a tool to help getting the outputs and performance that management and the Board of Southern we expected? Are we driving the outcomes • Tracking against individual training plans Rural Water to keep focus on the things that that we’d hoped? • A system to capture staff suggestions for really matter – the things that will help us Our monthly balanced scorecard productivity improvements achieve our vision. These are described in report includes: • A stakeholder pulse check, with very our strategy map, which defi nes our goals • Indicators – to show at a glance whether pleasing results in four areas: we are travelling okay, or whether we • Improving the way we do 1. Sustainable water cycle have an issue emerging that we need to asset inspections 2. Working with stakeholders respond to • A public education program in our 3. Customer service excellence • Trends – to show how we are moving over western irrigation district to educate time. Are we improving, or are we losing 4. Strengthening our business the community about its value to the focus on an important issue? local economy In each of these themes, the strategy map • Data – to provide rigour to the indicators identifi es our customer and stakeholder We look forward to continual improvement and trends, and to let us analyse in more outcomes, our fi nancial targets and our in our use of the balanced scorecard as a detail when issues emerge business process improvements, as well as tool to keep us focussed on the things that the skills, culture and systems necessary to • Analysis – to make sense of the really matter. deliver these. results in the context of our changing business environment, and to identify our responses
36 Southern Rural Water Annual Report 2011–12 www.srw.com.au Strengthening our business
Managing risk Attestation Southern Rural Water’s risk management I, Mr Terry Burgi, certify that Southern Rural process includes the following: Water has risk management processes in place consistent with the Australian/ • a risk management framework New Zealand Risk Management Standard • risk identifi cation and characterisation ISO 31000, and an internal control system • identifi cation and implementation of is in place that enables the executive to controls and treatments, and understand, manage and satisfactorily control risk exposures. • periodic review and evaluation The audit committee verifi es this assurance Our risk framework has been established and that the risk profi le of Southern Rural for several years. Material risks are Water has been critically reviewed within recorded in our risk register and assessed the last 12 months. in accordance with our risk framework using a likelihood and consequence table. This considers a range of factors (health and safety, environmental, governmental, fi nancial, legal, water quality and service). MR TERRY BURGI Both operational risks and broader strategic Board Chairman risks are recorded. Appropriate controls Southern Rural Water and treatments are established to manage 1 July 2012 each risk.
Risk management in Southern Rural Water is a continuous process, with new and modifi ed risk events being populated within our risk register. Most risks are now accepted with existing controls in place. Risks that occur or other signifi cant events are reviewed for learning, and regularly result in improvements to our risk register.
Individual risks are subject to Board Committee review on a regular basis, with a full risk review conducted by management and the Board on an annual basis.
www.srw.com.au Southern Rural Water Annual Report 2011–12 37 Strengthening our business
Legislative compliance The benefi ts to the Victorian economy • Details of assessments and measures in terms of skills and technology undertaken to improve the occupational Building Act 1993 transfer include: health and safety of employees Southern Rural Water complies with the • a continuation of locally developed TCC™ • A general statement on industrial relations building maintenance provisions of the technology to improve water savings within SRW and details of time lost Building Act 1993. The buildings we own or within irrigation distribution systems through industrial accidents and disputes lease comply with these requirements. Details of contracts completed to which the • A list of major committees sponsored by VIPP applied are as follows: SRW, the purposes of each committee National Competition Policy and the extent to which the purposes • No contracts completed during 2011–12 Competitive neutrality seeks to enable fair have been achieved competition between government and Major contracts • Details of all consultancies and private sector businesses. Any advantages No major contracts were entered into for contractors including: or disadvantages that government the 2011–12 year. – consultants/contractors engaged; businesses may experience, simply as a – services provided; and expenditure result of government ownership,should be Availability of committed to for each engagement neutralised. Southern Rural Water continues other information to implement and apply this principle in its The following information is available business undertakings. on request, subject to the Freedom of Implementation of Information Act 1982: the Victorian Industry • A statement that declarations of pecuniary Participation policy interests have been duly completed by all In October 2003, the Victorian Parliament relevant offi cers passed the Victorian Industry Participation • Details of shares held by a senior offi cer Policy Act 2003 which requires public as nominee or held benefi cially in a bodies and departments to report on the statutory authority or subsidiary implementation of the Victorian Industry • Details of publications produced by Participation Policy (VIPP). Departments Southern Rural Water (SRW) about SRW, and public bodies are required to apply and how these can be obtained VIPP in all tenders over $3 million in metropolitan Melbourne and $1 million in • Details of changes in prices, fees, regional Victoria. charges, rates and levies charged by SRW Details of the contracts commenced to which the VIPP applied are as follows: • Details of any major external reviews carried out on SRW • During 2011–12, Southern Rural Water commenced 2 contracts totalling • Details of major research and $2.8 million in value, both were in development activities undertaken regional Victoria by SRW
The commitments by contractors under • Details of overseas visits undertaken, VIPP include: including a summary of the objectives and outcomes of each visit • an overall level of local content of 95 per cent of the total value of the contracts; • Details of major promotional, public and relations and marketing activities undertaken by SRW to develop • No identifi ed new full time equivalent jobs community awareness of SRW and or apprentices its services
38 Southern Rural Water Annual Report 2011–12 www.srw.com.au Financial report Financial report
Financial report Financial management to these assets, revenue from our prices is approved at a rate insuffi cient to recoup Long term fi nancial viability is the key pillar the full cost of depreciation recorded in Economic regulation of our fi nancial management. Finances the operating statement. For the 2011–12 Economic regulation of Southern Rural are managed so that the organisation as and future fi nancial years, this situation has Water is guided by a range of legislation, a whole is economically sustainable and been compounded by the 2010–11 asset including the Essential Services that each business unit fully recovers its revaluation. This revaluation of $785m Commission Act 2001, the Water Industry own costs. The operations of Southern resulted in a further $6.5m of depreciation Act 1994 as amended by the Water Rural Water are separated into four discrete expense that is not funded by our regulated Legislation (Essential Services Commission business units: pricing model. The remaining deterioration and other Amendments Act 2003) and • Eastern Irrigation to budget of $2.2m comprises reduced other water industry legislation (including • Western Irrigation delivery revenue in the Macalister Irrigation the Water Act 1989, and the Environment District ($673k), no deliveries of recycled Protection Act 1970). More information on • Headworks water in the Werribee Irrigation District the regulatory framework is set out within • Groundwater and Rivers ($709k), and lower proceeds on the sale of the Water Industry Regulatory Order (WIRO) Each business unit maintains its own water entitlements ($1,685k). Recognising made by the Governor-in-Council. fi nancial records with an expectation that this lost revenue, the Corporation was Pricing principles revenues are suffi cient to cover direct able to offset some of this deterioration by costs and an equitable share of corporate reducing, as well as deferring, some items Southern Rural Water (SRW) operates on and other shared costs. This information of expenditure. a full cost recovery basis, ensuring pricing is provided in an open and transparent The fi ve year summary table on page 42 is suffi cient to cover annual costs and to manner to our customer committees for describes our fi nancial position once these provide for future investment needs. Pricing consultation, along with being available to non-regulatory charges are excluded, is founded upon the following principles: the broader customer base. which reports a $0.93m surplus for the year • SRW prices shall accord with Government 2011–12 fi nancial year. The result is a $250k and COAG policies, with particular Performance 2011–12 deterioration against the equivalent surplus reference to National Competition Policy Our operating loss before tax was $8.99m in 2010–11. While we experienced similar • Pricing shall meet the full cost of operation compared to a budgeted loss of $1.3m. poor revenue results from water usage and This major deterioration to budget occurred auction sales in 2010–11, these fi nancial • SRW shall set separate prices for each as the published 2011–12 Corporate Plan consequences were more signifi cant in specifi c service supplied did not take into account the revaluation of 2011–12. • SRW prices shall be equitable and avoid Infrastructure assets that took place late in From the perspective of our main operating cross subsidy 2010–11. $6.5m of the variance to budget business units, apart from lower revenue for • SRW will engage with customer is attributed to additional depreciation both the Macalister business (lower usage committees on pricing and take into charges that resulted from the revaluation. revenue) and Werribee Irrigation business (no account their recommendations in making Southern Rural Water prices are approved recycled water revenue), our fi nancial results pricing decisions by the Essential Services Commission to were broadly consistent to our Corporate • SRW prices shall be set so as to recover the full cost of operation. Whilst Plan, and prior year results. We expect contribute to the investment needs of the the full cost of operation includes funding this outcome given stable, predominantly business concerned for the future investment needs of the entitlement based revenue streams, and an business, our pricing is not designed to expenditure base that was not subject to any Our prices are submitted to the Essential reimburse depreciation and capital charges signifi cant unplanned cost pressures. Services Commission (ESC) for associated with water infrastructure assets determination on an annual basis. On acquired prior to 1 July 2004. completion of the ESC’s determination, SRW publishes prices in the Weekly Times, As a signifi cant proportion of the and communicates directly to customers depreciation charge included within the through newsletters and fact sheets. operating statement of the business relates
www.srw.com.au Southern Rural Water Annual Report 2011–12 39 Signifi cant changes in 5 year performance summary fi nancial position Performance Indicator 2011–12 2010–11 2009–10 2008–09 2007–08 Expenditure on capital projects reached $,000’s $,000’s $,000’s $,000’s $,000’s $9.89m for the fi nancial year. It was necessary Internal Financing Ratio 85.72% 96.02% 82.02% 18.35% 27.49% for Southern Rural Water to utilise our operating Gearing Ratio 0.57% 0.32% 1.41% 1.31% NA cash surplus and existing debt facilities to fund Interest Cover (EBIT) NA NA NA NA NA this activity, resulting in an increase to debt Interest Cover (Cash) NA NA 71.5 14.6 NA relative to 2010–11 of $3.02m Return on Assets -0.75% -0.34% -0.36% -0.69% -0.29% Major changes or factors Return on Equity -0.63% 0.88% -0.37% -0.71% -0.30% affecting performance Capital expenditure There were no major factors affecting Southern Rural Water has become an increasingly capital expenditure intensive business. performance other than those discussed in The major capital projects are listed in the table below. this report. Capital plan expenditure 2011–12 Subsequent events which will affect operations in Business 2011–12 Expenditure future years Eastern Irrigation MID2030 Nambrok – Denision Regulator Retrofi t 859,101 There were no subsequent events that will MID2030 Eastern Regulator retrofi t 1,137,438 affect operations in future years, other than Main Northern Channel Liner 263,665 those already discussed in this report. General projects 1,165,198 Western Irrigation General projects 69,804 Headworks Melton reservoir right abutment protection 1,087,432 Glenmaggie Southern Offtake Control valve project 1,579,154 Yallourn weir apron repairs 1,519,087 General projects 1,487,891 Groundwater & Rivers General projects 185,646 Other General projects 538,650 Total expenditure 9,893,066
40 Southern Rural Water Annual Report 2011–12 www.srw.com.au Financial report
Consultancies LESS THAN $10,000
Each year we engage consultants to During 2011–12 we contracted 11 provide expert analysis and advice, to consulting fi rms for operating contracts facilitate decision-making, and provide less than $10,000 to provide advice, skills skills not currently available within and services. The total cost of these our organisation. consultancies in 2011–12 was $58,507. For comparison, during 2010–11 we GREATER THAN $10,000 engaged 12 consulting fi rms at a total cost of $32,000. During 2011–12 we contracted 16 consulting fi rms for operating contracts greater than $10,000 to provide advice, skills and services. The total cost of these consultancies in 2011–12 was $365,771. Please refer to the table below for greater detail.
Consultant Purpose of consultancy Start End Total approved Expenditure Future date date project fee 2011–12 expenditure Alan Rae Consulting Pty Ltd Construction cost estimates for Werribee Nov–11 Feb–12 17,500 17,500 Nil irrigation modernisation Bartley Consulting Pty Ltd Co-facilitate customer focus groups Feb–12 Mar–12 10,400 10,400 Nil Continuum Consulting Pty Ltd Develop web based groundwater hydrographs May–11 Apr–12 14,400 14,400 Nil Eslink Services Facilitate Business Case development for Jun–11 Feb–12 25,110 25,110 Nil MID2030 Evans & Peck Pty. Ltd. Independent peer review of MID2030 cost Nov–11 Nov–11 13,650 13,650 Nil estimates Five Consulting (VIC) Pty Ltd Facilitate business case development for Oct–11 Jun–12 45,000 43,173 Nil Werribee irrigation modernisation Five Consulting (VIC) Pty Ltd Facilitate preparation of MID2030 cost / Feb–12 Jan–13 20,000 12,045 Nil benefi t analysis Marchment Hill Consulting Develop capital expenditure prioritisation Jan–12 Feb–12 35,000 33,137 Nil framework Moroka Pty Ltd Edit and review of Southern Groundwater May–11 Aug –11 20,000 18,290 Nil Futures South West atlas RM Consulting Group Affordability case studies and interviews Oct–11 Mar–12 50,000 49,061 Nil for MID2030 RM Consulting Group Economic benefi ts study of the MID2030 Jul–11 Mar–12 30,000 29,437 Nil project RM Consulting Group Productive value of Macalister Irrigation Feb–10 Mar–12 8,000 7,850 Nil District Spatial Vision Innovations Pty Ltd Develop mapping for Southern Groundwater Jun–12 Oct–12 60,000 47,351 10,000 Futures Atlas Underwood Management Group Facilitate Southern Groundwater Futures Jul–10 Oct–11 45,000 14,962 Nil South West forums Underwood Management Group Facilitate Southern Groundwater Futures Aug–11 Jun–12 30,000 17,306 5,000 Gippsland forums Wyndham City Council Werribee main channel reserve Feb–12 May–12 12,100 12,100 Nil feasibility study
www.srw.com.au Southern Rural Water Annual Report 2011–12 41 Financial report
5 year fi nancial summary Revenue 2011–12 2010–11 2009–10 2008–09 2007–08 $,000’s $,000’s $,000’s $,000’s $,000’s Fees and charges 21,985 21,322 23,810 22,567 21,351 Storage operator charges 3,541 3,642 3,341 3,176 2,718 Government grants 892 367 1,003 1,439 1,200 Other 2,404 2,197 3,266 1,550 1,297 Total revenue 28,822 27,528 31,420 28,732 26,566
Expenditure Operations and maintenance 19,018 17,919 21,596 20,648 17,451 Depreciation 13,179 6,766 6,336 6,095 5,706 Finance cost 263 417 463 134 0 Other 5,352 4,886 4,718 5,081 4,749 Total expenditure 37,812 29,988 33,113 31,958 27,906
Equity Net operating loss (8,990) (2,460) (1,693) (3,226) (1,340) Payment to government 0000 Movement in retained earnings (8,990) (2,460) (1,693) (3,226) (1,340)
Renewals reconciliation Add back non-regulatory depreciation 10,859 4,505 4,189 4,370 4,327 Less renewals charge (1,879) (1,878) (1,902) (1,805) (1,815) Renewals based results (10) 167 594 (661) 1,172 Add non-regulatory asset transfers and write-offs 411 221 488 941 983 Add major projects expensed 527 790 1,589 1,801 1,192 Funds based results 928 1,178 2,671 2,081 3,347
Balance Sheet Current assets 9,335 7,071 11,245 13,561 15,435 Non-current assets 1,232,046 1,237,794 453,672 453,788 444,415 Total assets 1,241,381 1,244,865 464,917 467,349 459,850
Current liabilities 9,091 7,178 8,559 14,485 7,716 Non-current liabilities 235,005 233,854 5,368 181 136 Total liabilities 244,096 241,032 13,927 14,666 7,852
Net cash fl ows from operations 6,022 6,918 6,913 2,547 3,937 Payments for property, plant and equipment 7,025 7,206 8,428 13,878 14,319
42 Southern Rural Water Annual Report 2011–12 www.srw.com.au Financial report
Comprehensive Operating Statement for the year ended 30 June 2012
2011–12 2010–11 Notes $’000’s $’000’s Revenue from operating activities Service charges 2(a) 25,526 24,964 Chargeable works 1(c) 1,573 577 Government contributions 1(c), 2(a) 662 367 Other revenue 2(a) 370 348 Revenue from non-operating activities Interest 289 422 Government contribution for capital purposes 1(c), 2(a) 230 0 Sale of created water entitlement 2(a) 65 841 Net gain on disposal of assets 1(e), 2(b) 107 9 Total revenue 28,822 27,528
Expenses from operating activities Bulk water 2(c) 0 270 Environmental contribution 1(r) 281 281 Employee benefi ts 1(o ), 2(c ) 13,129 12,136 Finance charges 263 417 Insurance 761 656 Motor vehicle operating costs 900 801 Professional services 1,879 2,293 Property and occupancy 467 467 Telecommunications 464 482 Suppliers & materials 4,453 4,534 Chargeable works expenditure 1,573 577 Depreciation 1(f), 2(c) 12,619 6,225 Amortisation 1(f), 2(c) 560 541 Impairment of assets 2(c) 0 123 Written down value of transferred assets 2(c) 365 183 Written down value of assets written off 2(c) 98 2 Total expenses 37,812 29,988 Net result before income tax expense (8,990) (2,460) Income tax revenue 1(s), 3 2,692 8,827 Net result for the year (6,298) 6,367
The Comprehensive Operating Statement should be read in conjunction with the accompanying notes.
www.srw.com.au Southern Rural Water Annual Report 2011–12 43 Financial report
Comprehensive Operating Statement continued for the year ended 30 June 2012 2011–12 2010–11 Notes $’000’s $’000’s Net result for the year (6,298) 6,367 Other comprehensive income Net gain on revaluation of property, plant and equipment 13 0 785,516 Income tax relating to net gain on revaluation of property, plant & equipment 3 0 (239,290) Other comprehensive income for the year, net of tax 0546,226 Total comprehensive income for the year (6,298) 552,593
The Comprehensive Operating Statement should be read in conjunction with the accompanying notes.
44 Southern Rural Water Annual Report 2011–12 www.srw.com.au Financial report
Balance Sheet as at 30 June 2012 2011–12 2010–11 Notes $’000’s $’000’s Assets Current assets Cash and cash equivalents 1(h), 4 4,569 1,719 Receivables 1(i), 5 3,968 4,378 Inventories 1(j), 6 142 131 Other current assets 656 843 Total current assets 9,335 7,071 Non-current assets Property, plant & equipment 1(e), 7.1 1,228,966 1,234,457 Intangible assets 8 3,080 3,337 Total non-current assets 1,232,046 1,237,794 Total assets 1,241,381 1,244,865
Liabilities Current liabilities Payables 1(l), 9 4,783 2,594 Interest bearing liabilities 10 230 1,008 Employee benefi ts 1(o), 11 4,078 3,576 Total current liabilities 9,091 7,178 Non-current liabilities Payables 14 15 Interest bearing liabilities 10 6,800 3,000 Employee benefi ts 1(o), 11 420 376 Deferred tax liabilities 1(s),3 227,771 230,463 Total non-current liabilities 235,005 233,854 Total liabilities 244,096 241,032 Net assets 997,285 1,003,833
Equity Contributed Capital 12 393,220 393,470 Asset revaluation reserve 13 558,344 558,344 Accumulated funds 14 45,721 52,019 Total equity 997,285 1,003,833
The Balance Sheet should be read in conjunction with the accompanying notes.
www.srw.com.au Southern Rural Water Annual Report 2011–12 45 Financial report
Statement of Changes in Equity for the year ended 30 June 2012
Contributed Accumulated Capital Reserves funds Total Notes $’000’s $’000’s $’000’s $’000’s Balance as at 1 July 2010 393,220 12,118 45,652 450,990 Net result for the year 0 0 6,367 6,367 Other comprehensive income 0 546,226 0 546,226 Total comprehensive income for the year 0 546,226 6,367 552,593 Transactions with the State in its capacity as owner 250 0 0 250
Balance as at 30 June 2011 393,470 558,344 52,019 1,003,833 Net result for the year 0 0 (6,298) (6,298) Other comprehensive income 0 0 0 0 Total comprehensive income for the year 0 0 (6,298) (6,298) Transactions with the State in its capacity as owner (250) 0 0 (250) Balance as at 30 June 2012 393,220 558,344 45,721 997,285
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
46 Southern Rural Water Annual Report 2011–12 www.srw.com.au Financial report
Cash Flow Statement for the year ended 30 June 2012 2011–12 2010–11 Notes $’000’s $’000’s Cash fl ows from operating activities Receipts from customers 28,636 29,783 Receipts from government 892 367 Payments to suppliers and employees (24,771) (24,683) Interest received 81 185 Interest paid (259) (51) Net GST received from ATO 1,443 1,317 Net cash infl ow from operating activities 21 6,022 6,918
Cash fl ows from investing activities Payments for property, plant & equipment (7,025) (7,206) Proceeds from sale of property, plant & equipment 830 1,108 Net cash (used in) investing activities (6,195) (6,098)
Cash fl ows from fi nancing activities Proceeds from borrowing 4,023 500 Repayment of borrowing (1,000) (3,451) Proceeds from contributed capital by State Government 0 250 Net cash provided by/(used in) fi nancing activities 3,023 (2,701)
Net increase/(decrease) in cash held 2,850 (1,881) Cash and cash equivalents at the beginning of the fi nancial year 1,719 3,600 Cash and cash equivalents at the end of the fi nancial year 4,569 1,719
The above Cash Flow Statement should be read in conjunction with the accompanying notes.
www.srw.com.au Southern Rural Water Annual Report 2011–12 47
48 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes Notes to the Financial Report for the year ended 30 June 2012
Note 1 Signifi cant and expenses are recognised in the ROUNDING accounting policies reporting period to which they relate Unless otherwise stated, amounts in the regardless of when cash is received or paid. report have been rounded to the nearest (a) Establishment The annual fi nancial statements were thousand dollar. of the Corporation authorised for issue by the Board of Directors on 13 August 2012. HISTORICAL COST CONVENTION Gippsland and Southern Rural Water These fi nancial statements have been Authority (SRW or the Corporation) was The principal address is: prepared under the historical cost established on 1 July 1995, by a Ministerial Gippsland and Southern Rural Water Corporation convention, as modifi ed by the revaluation Order under section 98 of the Water Act 88 Johnson Street of fi nancial assets, and certain classes of 1989, dated 30 June 1995. The Authority’s Maffra VIC 3860 property, plant and equipment. name was changed on 1 July 2007 to Gippsland and Southern Rural Water ACCOUNTING POLICIES ACCOUNTING ESTIMATES Corporation under Section 85(1) of the Unless otherwise stated, all accounting The preparation of fi nancial statements in Water Act, inserted by Section 54 of the policies applied are consistent with those conformity with AAS requires the use of Water Governance Act 2006. The business of the prior year. Where appropriate, certain accounting estimates that affect name of the Corporation is Southern Rural comparative fi gures have been amended the application of accounting policies and Water (SRW). to accord with current presentation the reported amounts of assets, liabilities, The Corporation is a not for profi t entity and disclosure. income and expenses. Actual results may owned by the State Government of Victoria. differ from these estimates. It also requires FUNCTIONAL AND management to exercise its judgement in (b) Basis of Accounting PRESENTATION CURRENCY the process of applying the Corporation’s accounting policies. Items included in this fi nancial report GENERAL are measured using the currency FINANCIAL STATEMENT The fi nancial report includes separate of the primary economic environment PRESENTATION fi nancial statements for SRW as an in which SRW operates (‘the functional individual reporting entity. This fi nancial currency’). The fi nancial statements are The Corporation has applied the revised report is a general purpose fi nancial presented in Australian dollars, which AASB 101 Presentation of Financial report that consists of an Comprehensive is the Corporation’s functional and Statements which became effective for reporting periods on or after 1 July 2011, Operating Statement, Balance Sheet, presentation currency. and AASB 1054 Australian Addition Statement of Changes in Equity, Cash CLASSIFICATION BETWEEN Disclosures which became effective for Flow Statement and notes accompanying CURRENT AND NON-CURRENT reporting periods beginning in or after these statements. The general purpose 1 July 2011. fi nancial report has been prepared in In the determination of whether an asset or liability is current or non-current, accordance with Australian Accounting (c) Revenue Recognition consideration is given to the time when Standards (AAS), Interpretations and each asset or liability is expected to be other authoritative pronouncements of the WATER CHARGES realised or paid. The asset or liability is Australian Accounting Standards Board, classifi ed as current if it is expected to be Fixed water and service charges are and the requirements of the Financial turned over within the next 12 months, recognised as revenue when levied. Management Act 1994 and applicable being the Corporation's operational cycle Variable water charges are recognised as Ministerial Directions. The Corporation is – see 1(o) for a variation in relation to revenue when the meters are read. Meter a not for profi t entity for the purposes of employee benefi ts. readings are undertaken progressively preparing the fi nancial statements. during the year and at the end of each This fi nancial report has been prepared respective season, which aligns with the on an accrual and going concern basis end of the fi nancial year. whereby assets, liabilities, equity, revenue
www.srw.com.au Southern Rural Water Annual Report 2011–12 49 Notes to the Financial Report for the year ended 30 June 2012
SALE OF CREATED LEASE OR RENTAL INCOME MEASUREMENT OF WATER ENTITLEMENT NON-CURRENT PHYSICAL ASSETS Income from operating leases (i.e. rentals) Where the Minister of Water approves an is recognised in income on a straight-line All non-current physical assets amendment to a Bulk Entitlement order, basis over the lease term. are recognised initially at cost and as well as the sale of resulting new water subsequently revalued at fair value less entitlements, the Corporation recognises (d) Borrowing Costs accumulated depreciation and impairment this revenue at the time these entitlements in accordance with the requirements of Borrowing costs are recognised as are sold. Total proceeds are recorded in Financial Reporting Direction (FRD) 103D. expenses in the period in which they the comprehensive operating statement as are incurred. Borrowing costs include Revaluations are conducted in accordance revenue from non-operating activities. interest on bank overdrafts and short-term with FRD 103D. Scheduled revaluation is undertaken every fi ve years with an annual LICENCE APPLICATION FEE CHARGES and long-term borrowings, amortisation of discounts or premiums relating to assessment of fair value to determine if it is Licensing application revenue is borrowings, and amortisation of ancillary materially different to carrying value. If the recognised as the work is performed by the costs incurred in connection with the difference to carrying value is greater than Corporation, rather than on receipt of the arrangement of borrowings. 10 per cent, a management revaluation application fee. is undertaken while a movement greater (e) Recognition and than 40 per cent will normally involve an CHARGEABLE WORKS Measurement of Assets Approved Valuer (usually the Valuer General From time to time the Corporation of Victoria) to perform detailed assessment undertakes capital works for its customers. Property, plant and equipment represent of the fair value. If the movement in fair The cost of these works is included as a non-current physical assets comprising value since the last revaluation is less than separate line of expenditure and revenue in land, buildings, water, and drainage or equal to 10 per cent, then no change is the comprehensive operating statement. infrastructure, plant, equipment and motor made to carrying amounts. vehicles, used by the Corporation in its Land and buildings are measured at fair operations. Items with a cost or value in GOVERNMENT GRANTS value, and a fair value assessment was excess of $1,000 and a useful life of more AND CONTRIBUTIONS undertaken in 2010–11 with involvement than one year are recognised as an asset. Government grants and contributions are from the Valuer-General Victoria (VGV) and All other assets acquired are expensed. recognised as operating revenue on receipt under the instructions of the Department of or when the Corporation obtains control Where assets are constructed by the Treasury and Finance (DTF). Further details of the contribution and meets certain Corporation, the cost at which they are of the valuation exercise are provided in other criteria as outlined by AASB 1004, recorded includes an appropriate share of Note 7. fi xed and variable overheads. whichever is the sooner, and disclosed in Plant, equipment and motor vehicles the comprehensive operating statement Assets acquired at no cost or for nominal are measured at fair value. For the plant, as government contributions. However, consideration by the Corporation are equipment and vehicles asset class, where grants and contributions received from the recognised at fair value at the date the Corporation is able to demonstrate Victorian State Government, which were of acquisition. that there is no evidence that a reliable originally appropriated by the Parliament market-based fair value (or other fair as additions to net assets or where the REPAIRS AND MAINTENANCE value indicators) exist for these assets, Minister for Finance and the Minister for Routine maintenance, repair costs and depreciated replacement cost is used to Water have indicated are in the nature of minor renewal costs are expensed as determine a reasonable approximation of owners’ contributions, are accounted for as incurred. Where the repair relates to the fair value. Equity – Contributions by Owners. replacement of a component of an asset Water infrastructure assets, at both and the cost exceeds the capitalisation INTEREST the entity reporting level and whole of threshold, the cost is capitalised government reporting level, are measured Interest income is recognised when earned and depreciated. at fair value less accumulated depreciation using the effective interest rate method. and impairment in accordance with
50 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
FRD 103D. These assets comprise IMPAIRMENT OF ASSETS (f) Depreciation of substructures or underlying systems held to Intangible assets with indefi nite useful lives Non-current Assets facilitate harvesting, storage, treatment and are tested annually as to whether their All non-current physical assets that have a transfer of water to meet customer needs. carrying value exceeds their recoverable fi nite useful life are depreciated. Where assets The initial fair value assessment for water amount. All other assets are assessed have separate identifi able components that infrastructure in the prior period was annually for indicators of impairment, have distinct useful lives and/or residual undertaken with involvement from Valuer except for: values, a separate depreciation rate is General of Victoria (VGV) and under the • inventories, and determined for each component. instructions of Department of Treasury • fi nancial instrument assets Land and Land Improvements are and Finance (DTF). The assessment was not depreciated. performed on a portfolio basis for various If there is an indication of impairment, categories of water infrastructures. the assets concerned are tested as to Motor vehicles are depreciated on a whether their carrying value exceeds their diminishing balance basis, over their Further details of the valuation exercise are recoverable amount. Where an asset’s estimated useful life, commencing from the provided in Note 7. carrying amount exceeds its recoverable time the asset is held ready for use. Revaluation increments are credited amount, the difference is written-off by a Depreciation of other assets is calculated directly to equity in the revaluation reserve, charge to the comprehensive operating using the straight line method to allocate except that, to the extent that an increment statement except to the extent that the their cost or revalued amounts, net of their reverses a revaluation decrement in respect write-down can be debited to an asset residual values, over their estimated useful of that class of asset previously recognised revaluation reserve amount applicable to lives, commencing from the time the asset as expense in determining the net result, that class of asset. is held ready for use. The assets residual the increment is recognised as revenue in The recoverable amount for most assets is values and useful lives are reviewed, determining the net result. measured at depreciated replacement cost. and adjusted if appropriate, at each Revaluation decrements are recognised balance date. It is deemed that, in the event of the loss of immediately as an expense in the net result, an asset, the asset will be replaced unless Intangible assets with fi nite useful lives are except that, to the extent that a credit a specifi c decision to the contrary has amortised as an expense on a systematic balance exists in the revaluation reserve in been made. basis (typically straight-line), commencing respect of the same class of assets, they from the time the asset is available for use. are debited to the revaluation reserve. A reversal of an impairment loss on a The amortisation periods are reviewed and revalued asset is credited directly to equity Revaluation increases and revaluation adjusted if appropriate at each balance under the heading revaluation reserve. decreases relating to individual assets date. Intangible assets with indefi nite However, to the extent that an impairment within a class of property, plant and useful lives are not amortised. However, loss on the same class of asset was equipment are offset against one another all intangible assets are assessed annually previously recognised in the comprehensive within that class but are not offset in for impairment. operating statement, a reversal of that respect of assets in different classes. impairment loss is also recognised in the Revaluation reserves are not transferred to comprehensive operating statement. accumulated funds on derecognition of the relevant asset. GAINS AND LOSSES ON DISPOSAL
Gains and losses on disposal are determined by comparing proceeds with carrying amount. These are included in the comprehensive operating statement.
www.srw.com.au Southern Rural Water Annual Report 2011–12 51 Notes to the Financial Report for the year ended 30 June 2012
Following the revaluation of water (g) Leased assets (h) Cash and Cash infrastructure assets at 30 June 2011, the Equivalents Corporation has revised the useful life FINANCE LEASES estimates used for water infrastructure Cash and cash equivalents include cash Leases of property, plant and equipment assets. These life estimates are consistent on hand, deposits held at call with fi nancial where the Corporation has substantially with the revaluation report provided by the institutions, other short-term, highly liquid all the risks and rewards incidental to VGV, as follows: investments with original maturities of three ownership are classifi ed as fi nance leases. months or less that are readily convertible Class of Asset Period Finance leases are capitalised at the lease’s to known amounts of cash and which are Water 2011–12 2010 –11 inception at the lower of the fair value infrastructure subject to an insignifi cant risk of change in of the leased property and the present Storage 350 years 50 to 400 value, and bank overdrafts. Bank overdrafts value of the minimum lease payments. embankments years are shown within interest bearing liabilities The corresponding rental obligations, Storage spillways 100 years 50 to 400 on the balance sheet, but are included net of fi nance charges, are included in years within cash and cash equivalents for cash payables. Each lease payment is allocated Irrigation & drain 60 years 50 to 200 fl ow statement presentation purposes. structures years between the liability and fi nance charges so as to achieve a constant rate on the Irrigation channels 100 years 20 to 100 (i) Receivables years fi nance balance outstanding. The interest element of the fi nance cost is charged to Trade receivables are recognised initially As it is impractical to determine the effect the comprehensive operating statement at fair value and subsequently measured of this change in useful life estimates, the over the lease period so as to produce a at amortised cost, less an allowance for amount of this change to current and future constant periodic rate of interest on the impaired receivables. Trade receivables are periods is not quantifi ed in Note 7. remaining balance of the liability for each due for settlement no more than 30 days from the date of recognition for water utility The typical range of useful life for assets period. The property, plant and equipment debtors, and no more than 30 days for and asset components for other asset acquired under a fi nance lease are other debtors. types is consistent with the prior year, depreciated over the shorter of the asset’s as follows: useful life and the lease term. Collectability of trade receivables is Class of Asset Periods reviewed on an ongoing basis. Debts which OPERATING LEASES are known to be uncollectible are written Land & buildings off. An allowance for impaired receivables Buildings 10 to 40 years Leases in which a signifi cant portion of the risks and rewards of ownership are is established when there is objective Land NA retained by the lessor are classifi ed as evidence that the Corporation will not be Other assets operating leases. Payments made under able to collect all amounts due according Plant & Equipment 4 to 25 years operating leases (net of any incentives to the original terms of receivables. Furniture & computers 2 to 15 years received from the (lessor) are charged to The amounts credited to the allowance Motor Vehicles 2 to 4 years the comprehensive operating statement are recognised as an expense in the on a straight-line basis over the period of comprehensive operating statement. The the lease, in the periods in which they are amount of the allowance is the difference incurred, as this represents the pattern of between the assets carrying amount and benefi ts derived from the leased assets. the present value of estimated future cash fl ows, discounted at the original effective LEASEHOLD IMPROVEMENTS interest rate.
Leasehold improvements are recognised at (j) Inventories cost and are amortised over the unexpired period of the lease or the estimated useful Inventories comprise stores and materials life of the improvement, whichever is used in the construction of new works and the shorter. At balance date, leasehold for the repair and maintenance of existing improvements are amortised over a 10 year assets. All inventories are measured at period (2011: 10 years).
52 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
the lower of cost and net realisable value. (m) Interest Bearing Liabilities 12 months after the reporting date which Costs are assigned to inventory quantities are classifi ed as non-current assets. Loans Borrowings are initially recognised at fair on hand at balance date on a weighted and receivables are included in trade and value, net of transaction costs incurred. average cost (WAC) basis. other receivables in the balance sheet. Borrowings are subsequently measured at Loans and receivables are recorded at amortised cost. Any difference between the (k) Intangibles amortised cost less impairment. initial amount recognised (net of transaction costs) and the redemption amount is Intangible assets represent identifi able FAIR VALUE non-monetary assets without physical recognised in the operating statement over Fair value is determined based on current substance. Intangible assets are recognised the period of the borrowings, using the bid prices for all quoted investments. at cost. Costs incurred subsequent to effective interest method. Valuation techniques are applied to initial acquisition are capitalised when it is Borrowings are classifi ed as current determine the fair value for all unlisted expected that additional future economic liabilities unless the Corporation has an securities, including recent arm’s benefi ts will fl ow to the Corporation. The unconditional right to defer settlement of length transactions, reference to similar amortisation periods are reviewed and the liability for at least 12 months after the instruments and option pricing models. adjusted if appropriate at each balance balance date. date. Intangible assets with indefi nite IMPAIRMENT OF FINANCIAL ASSETS useful lives are not amortised. However, (n) Financial Instruments all intangible assets are assessed for At each reporting date, the Corporation impairment annually as outlined in RECOGNITION assesses whether there is objective Note 1(e). evidence that a fi nancial instrument has Financial instruments are initially measured been impaired. In the case of available- at fair value, plus in the case of a fi nancial A summary of the policies applied to for-sale equity investment, a signifi cant or asset or fi nancial liability not at fair value the Corporation’s intangible assets is prolonged decline in value of the instrument through profi t and loss, transaction as follows: below its cost is considered as an indicator costs that are directly attributable to the Software that the investment is impaired. If any acquisition or the issue of the fi nancial asset Useful lives Finite such evidence exists for available for or liability. Subsequent to initial recognition, sale fi nancial assets, the cumulative loss Amortisation 3 to 10 years the fi nancial instruments are measured as method used straight line measured as the difference between the set out below: Internally generated/ Acquired acquisition cost and the current fair value, acquired less any impairment loss on that fi nancial FINANCIAL ASSETS AT FAIR VALUE Impairment test/ Annually and where asset previously recognised in profi t or loss THROUGH PROFIT OR LOSS Recoverable an indicator of is removed from equity and recognised in amount testing impairment exists Financial assets at fair value through the comprehensive operating statement. profi t or loss are fi nancial assets held for Impairment losses are recognised in (l) Payables trading. A fi nancial asset is classifi ed in the profi t and loss. Impairment losses this category if acquired principally for the recognised in the comprehensive Payables consist predominantly of trade purpose of selling in the short term. Assets operating statement on equity instruments and sundry creditors. These amounts in this category are classifi ed as current classifi ed as available for sale are not represent liabilities for goods and services assets. Gains and losses arising from reversed through the comprehensive provided to the Corporation prior to the changes in fair value are recognised in the operating statement. end of the fi nancial year, which are unpaid comprehensive operating statement. at fi nancial year end. The amounts are unsecured and are usually paid within 30 LOANS AND RECEIVABLES days of recognition. Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than
www.srw.com.au Southern Rural Water Annual Report 2011–12 53 Notes to the Financial Report for the year ended 30 June 2012
(o) Employee Benefi ts Non-Current Liability – conditional long The amount recognised as a provision service leave (representing less than six is the best estimate of the consideration WAGES AND SALARIES, ANNUAL years of continuous service) is disclosed required to settle the present obligation LEAVE AND SICK LEAVE as a non-current liability. There is an at the end of the reporting period, taking unconditional right to defer the settlement into account the risks and uncertainties Liabilities for wages and salaries, annual of the entitlement until the employee has surrounding the obligation. leave and accumulating sick leave completed the requisite years of service. expected to be settled within 12 months Conditional long service leave is required to (q) Contributions by Owners of the reporting date are recognised in be measured at present value. employee benefi t liabilities in respect of Additions to net assets which have been employees’ services up to the reporting In calculating present value, consideration designated as contributions by owners are date and are measured at the amounts is given to expected future wage and recognised as contributed capital. Transfers expected to be paid when the liabilities salary levels, experience of employee of net assets arising from administrative are settled, at their nominal values plus departures and periods of service. restructuring are treated as distributions to on-costs. Employee benefi ts which are not Expected future payments are discounted or contributions by owners. expected to be settled within 12 months using market yields at the reporting date are measured as the present value of on national government bonds with terms (r) Environmental the estimated future cash outfl ows to to maturity and currency that match, as Contributions be made by the Corporation, in respect closely as possible, the estimated future The Water Industry (Environmental of services rendered by employees up cash outfl ows. Contributions) Act 2004 (the Act) amended to the reporting date. Regardless of the the Water Industry Act 1994 to make expected timing of settlements, liabilities in SUPERANNUATION provision for environmental contributions respect of employee benefi ts are classifi ed The amount charged to the comprehensive to be paid by water supply authorities. as a current liability, unless there is an operating statement in respect of The Act establishes an obligation for unconditional right to defer the settlement superannuation represents SRW’s authorities to pay into the consolidated fund of the liability for at least 12 months after contributions made by the Corporation annual contributions for the fi rst period, the reporting date, in which case it would to the superannuation plan in respect from 1 October 2004 to 30 June 2008 be classifi ed as a non-current liability. to the current services of entity staff. in accordance with the pre-established Superannuation contributions are made schedule of payments, which sets out the LONG SERVICE LEAVE to the plans based on the relevant rules of amounts payable by each corporation. The Current Liability – unconditional long each plan. contribution period has been extended service leave (representing six or more to cover the period 1 July 2008 until 30 EMPLOYEE BENEFIT ON-COSTS years of continuous service) is disclosed June 2013. as a current liability even where the Employee benefi t on-costs, including The purpose of the environmental Corporation does not expect to settle the superannuation, payroll tax and Workcover contribution is set out in the Act, and the liability within 12 months because it will are recognised and included in employee funding may be used for the purpose of not have the unconditional right to defer benefi t liabilities and costs when the funding initiatives that seek to promote the settlement of the entitlement should an employee benefi ts to which they relate are the sustainable management of water or employee take leave within 12 months. recognised as liabilities. address water-related initiatives. The components of the current long service The environmental contributions are leave liability are measured at: (p) Provisions disclosed separately within expenses. • Present value – component that the Provisions are recognised when the Corporation does not expect to settle Corporation, as a result of a past event, (s) Taxation within 12 months; and has a legal or constructive obligation that can be estimated reliably, and it is probable The Corporation is subject to the • Nominal value – component that the that an outfl ow of economic benefi ts will be National Tax Equivalent Regime (NTER), Corporation expects to settle within required to settle the obligation. which is administered by the Australian 12 months. Taxation Offi ce.
54 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
The income tax expense or revenue for (t) Dividend Policy (v) Commitments the period is the expected tax payable or receivable on the current period’s The Corporation is required to pay Commitments for future expenditure include taxable income based on the national a dividend in accordance with a operating and capital commitments arising corporate income tax rate of 30%, determination of the Treasurer of Victoria from contracts. These commitments are adjusted by changes in deferred tax assets under the Public Authorities (Dividend) Act disclosed by way of a note (refer to Note and liabilities attributable to temporary 1983, based on a prescribed percentage of 16) at their nominal value and exclusive differences between the tax bases of the previous year’s adjusted net profi t. An of the goods and services tax (GST) assets and liabilities and their carrying obligation to pay a dividend only arises after payable. In addition, where it is considered amounts in the fi nancial statements, and to consultation with the portfolio Minister and appropriate and provides additional relevant unused tax losses. the Treasurer and a formal determination is information to users, the net present made by the Treasurer. At the date of this values of signifi cant individual projects are Deferred tax assets and liabilities are report, the Corporation does not expect to stated. These future expenditures cease recognised for temporary differences pay a dividend in respect of the 2011–12 to be disclosed as commitments once at the tax rates expected to apply when fi nancial year. the related liabilities are recognised in the the assets are recovered or liabilities are balance sheet. settled, based on those tax rates which (u) Goods and Services Tax are enacted or substantially enacted. Revenues, expenses and assets are (w) Contingent assets and The relevant tax rates are applied to the contingent liabilities cumulative amounts of deductible and recognised net of Goods and Services Tax (GST), except where the amount of taxable temporary differences to measure Contingent assets and contingent liabilities GST incurred is not recoverable from the the deferred tax asset or liability. No are not recognised in the balance sheet, Australian Taxation Offi ce (ATO). In these deferred tax asset or liability is recognised but are disclosed by way of a note (refer to circumstances, the GST is recognised as in relation to these temporary differences Note 17) and, if quantifi able, are measured part of the cost of acquisition of the asset if they arose in a transaction that at the at nominal value. Contingent assets and or as part of an item of expense. time of the transaction did not affect either liabilities are presented exclusive of GST accounting profi t or taxable profi t or loss. Receivables and payables are stated receivable or payable respectively. Deferred tax assets are recognised for inclusive of GST. The net amount of GST deductible temporary differences and recoverable from, or payable to, the ATO (x) New Accounting unused tax losses only if it is probable that is included as a current asset or liability in Standards and Interpretations future taxable amounts will be available the Balance Sheet. Cash fl ows arising from Certain new accounting standards and to utilise those temporary differences operating activities are disclosed in the interpretations have been published that and losses. Cash Flow Statement on a gross basis – are not mandatory for the 30 June 2012 i.e. inclusive of GST. The GST component Current and deferred tax is recognised reporting period. As at 30 June 2012, the of cashfl ows arising from investing and in profi t or loss, except to the extent that following standards and interpretations had fi nancing activities which is recoverable or it relates to items recognised in other been issued but were not mandatory for payable to the taxation authority is classifi ed comprehensive income or directly in equity. fi nancial year ended 30 June 2012. as operating cash fl ows. In this case, the tax is also recognised in The Corporation has not and does not other comprehensive income or directly in intend to adopt these standards early. equity, respectively. New requirements that may alter disclosure The Corporation's deferred tax liabilities within the fi nancial statements. exceed the level of deferred tax assets and therefore a net deferred tax liability has been disclosed in the balance sheet.
www.srw.com.au Southern Rural Water Annual Report 2011–12 55 Notes to the Financial Report for the year ended 30 June 2012
Standard/interpretation Summary Applicable for Impact on the corporation's annual reporting fi nancial statements periods beginning on AASB 2010–8 Amendments to This amendment provides a practical Beginning This amendment provides additional Australian Accounting Standards – approach for measuring deferred tax 1 Jan 2012 clarifi cation through practical guidance. Deferred Tax: Recovery of Underlying assets and deferred tax liabilities when Assets (AASB 112) measuring investment property by using the fair value model in AASB 140 Investment Property. AASB 13 Fair Value Measurement This Standard outlines the requirements 1 Jan 2013 Disclosure for fair value measurements for measuring the fair value of assets using unobservable inputs are relatively and liabilities and replaces the existing onerous compared to disclosure fair value defi nition and guidance for fair value measurements using in other AASs. AASB 13 includes a observable inputs. Consequently, the ‘fair value hierarchy’ which ranks the Standard may increase the disclosures valuation technique inputs into three for public sector entities that have levels using unadjusted quoted prices assets measured using depreciated in active markets for identical assets or replacement cost. liabilities; other observable inputs; and unobservable inputs. AASB 2011–8 This amending Standard makes 1 Jan 2013 Disclosures for fair value measurements consequential changes to a range of using unobservable inputs is potentially Amendments to Australian Standards and Interpretations arising from onerous, and may increase disclosures Accounting Standards arising from the issuance of AASB 13. In particular, this for assets measured using depreciated AASB 13 (AASB 1, 2, 3, 4, 5, 7, 9, Standard replaces the existing defi nition replacement cost. 2009–11, 2010–7, 101, 102, 108, 110, and guidance of fair value measurements 116, 117, 118, 119, 120, 121, 128, in other Australian Accounting Standards 131, 132, 133, 134, 136, 138, 139, and Interpretations. 140, 141, 1004, 1023 & 1038 and Interpretations 2, 4, 12, 13, 14, 17, 19, 131 & 132) AASB 2011–9 The main change resulting from this 1 July 2012 This amending Standard could change Standard is a requirement for entities the current presentation of ‘Other Amendments to Australian to group items presented in other economic fl ows – other movements Accounting Standards – Presentation comprehensive income (OCI) on the in equity’ that will be grouped on the of Items of Other Comprehensive basis of whether they are potentially basis of whether they are potentially Income (AASB 1, 5, 7, 101, 112, 120, reclassifi able to profi t or loss subsequently reclassifi able to profi t or loss 121, 132, 133, 134, 1039 & 1049) (reclassifi cation adjustments). These subsequently. amendments do not remove the option No other signifi cant impact will be to present profi t or loss and other expected. comprehensive income in two statements, nor change the option to present items of OCI either before tax or net of tax. AASB 2010–7 Financial instruments This standard simplifi es requirements for 1 Jan 2013 Detail of impact is still being assessed. the classifi cation and measurement of fi nancial assets resulting from Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement). AASB 2009–11 Amendments to This Standard gives effect to 1 Jan 2013 No signifi cant impact is expected from Australian Accounting Standards consequential changes arising from the these consequential amendments on arising from AASB 9 (AASB 1, 3, 4, 5, issuance of AASB 9. entity reporting. 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 and 1038 and Interpretations 10 and 12)
56 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
The following new requirements relate to Reduced Disclosure Requirements (RDRs) and are all expected to begin on 1 July 2013. The Victorian Government is currently considering the impacts of RDRs for certain public sector entities and has not decided if RDRs will be implemented in the Victorian public sector. Adoption of RDRs is unlikely to change disclosure of the Corporations fi nancial statements. Standard/interpretation Summary AASB 1053 Application of Tiers of Australian This Standard establishes a differential fi nancial reporting framework consisting of two tiers of Accounting Standards reporting requirements for preparing general purpose fi nancial statements. AASB 2010–2 Amendments to Australian This Standard makes amendments to many Australian Accounting Standards, including Accounting Standards arising from Reduced Interpretations, to introduce reduced disclosure requirements to the pronouncements for Disclosure Requirements application by certain types of entities. AASB 2011–2 Amendments to Australian The objective of this amendment is to include some additional disclosure from the Accounting Standards arising from the Trans- Trans-Tasman Convergence Project and to reduce disclosure requirements for entities Tasman Convergence Project – Reduced preparing general purpose fi nancial statements under Australian Accounting Standards Disclosure Requirements – Reduced Disclosure Requirements. (AASB 101 & AASB 1054) AASB 2011–6 The objective of this Standard is to make amendments to AASB 127 Consolidated and Separate Financial Statements, AASB 128 Investments in Associates and AASB 131 Interests Amendments to Australian Accounting in Joint Ventures to extend the circumstances in which an entity can obtain relief from Standards – Extending Relief from consolidation, the equity method or proportionate consolidation. Consolidation, the Equity Method and Proportionate Consolidation – Reduced Disclosure Requirements (AASB 127, AASB 128 & AASB 131) AASB 2011–11 This Standard makes amendments to AASB 119 Employee Benefi ts (September 2011), to incorporate reduced disclosure requirements into the Standard for entities applying Tier 2 Amendments to AASB 119 (September 2011) requirements in preparing general purpose fi nancial statements. arising from Reduced Disclosure Requirements
www.srw.com.au Southern Rural Water Annual Report 2011–12 57 Notes to the Financial Report for the year ended 30 June 2012
No signifi cant impact is expected from the following new requirements: Standard/Interpretation AASB 10 Consolidated Financial Statements AASB 11 Joint Arrangements AASB 12 Disclosure of Interests in Other Entities AASB 119 Employee Benefi ts AASB 127 Separate Financial Statements AASB 128 Investments in Associates and Joint Ventures AASB 2010–7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127) AASB 2010–10 Further Amendments to Australian Accounting Standards – Removal of Fixed Dates for First-time Adopters (AASB 2009–11 & AASB 2010–7) AASB 2011–3 Amendments to Australian Accounting Standards – Orderly Adoption of Changes to the ABS GFS Manual and Related Amendments (AASB 1049) AASB 2011–4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (AASB 124) AASB 2011–7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards (AASB 1, 2, 3, 5, 7, 9, 2009–11, 101, 107, 112, 118, 121, 124, 132, 133, 136, 138, 139, 1023 & 1038 and Interpretations 5, 9, 16 & 17) AASB 2011–10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) (AASB 1, AASB 8, AASB 101, AASB 124, AASB 134, AASB 1049 & AASB 2011-8 and Interpretation 14) AASB 2011-12 Amendments to Australian Accounting Standards arising from Interpretation 20 (AASB 1) 2011–13 Amendments to Australian Accounting Standard – Improvements to AASB 1049 2012–1 Amendments to Australian Accounting Standards – Fair Value Measurement - Reduced Disclosure Requirements (AASB 3, AASB 7, AASB 13, AASB 140 & AASB 141) AASB Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine
58 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
2011–12 2010–11 $’000’s $’000’s 2 Operating statement – disclosures 2(a) Revenues Service charges Fixed charges Water service charges Irrigation, diversion and groundwater 19,681 18,970 Storage operator charges 3,541 3,642
Other charges Bore construction, application fees, transfer fees & information statements 1,536 1,398 24,758 24,010
Variable usage charges Irrigation, diversion and groundwater 766 894 Recycled water 245 Western Irrigation alternative water supplies 015 768 954 25,526 24,964
Government contributions Operating State Government of Victoria Youth employment scheme 06 Enhancing and improving safety awareness (Glenmaggie weir) 0 2 State observation bore network 250 18 Groundwater appraisals 13 216 Smart Water Fund Project Werribee 55 0 Dairy Shed Metering Program 219 0 Commonwealth Government Southern groundwater futures 125 125 662 367
Non-operating Commonwealth Government Data warehouse 230 0 230 0 892 367
www.srw.com.au Southern Rural Water Annual Report 2011–12 59 Notes to the Financial Report for the year ended 30 June 2012
2011–12 2010–11 $’000’s $’000’s 2 Operating statement – disclosures continued 2(a) Revenues continued Other revenue Royalties 58 66 Building rentals 15 12 Occupational licences 86 78 Other rentals, leases or agistments 71 51 Contributions 139 125 Other 116 370 348
Sale of created water entitlement 65 841 In 2006, the Corporation completed a water saving project on the main Eastern Channel in the Macalister Irrigation District. Water saving studies confi rmed that the project had saved 2,733 ML of water each year. In May 2010 the Minister for Water approved the amendment of the Macalister/ Thomson bulk water entitlement and the creation, then sale by auction, of these new water entitlements. The third tranche of these entitlements, 35 ML of high reliability shares and 0 ML of low reliability shares, was sold by auction on 22 March 2012. The proceeds raised of $0.065m have been recorded in the operating statement as revenue.
2(b) Net gain on disposal of non-current assets The surplus from ordinary activities includes the following specifi c net gains and expenses Proceeds from sale of assets 830 1,108 Written down value of disposed assets (723) (1,099) Net gain on disposal 107 9
2(c) Expenses Depreciation – Infrastructure 11,414 4,910 – Buildings 153 114 – Furniture & fi ttings 58 51 – Plant and machinery 116 156 – Motor vehicles 725 835 – Computer equipment 153 159 12,619 6,225 Amortisation – Software 560 541
Impairment of assets – Infrastructure 0123
60 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
2011–12 2010–11 $’000’s $’000’s 2 Operating statement – disclosures continued 2(c) Expenses continued Assets transferred/written off Written down value of transferred assets 365 183 Written down value of transferred assets represents the transfer of ownership of irrigation drains to landholders as part of Corporation's nutrient reduction activities. Drains were transferred to landholders at no cost under this program. Written down value of assets written off 98 2 As assets, or components of assets are replaced, the Corporation charges the written down value of the replaced or scrapped asset to the operating statement within this category.
Bulk Water – Recycled water 0237 – Alternative supply water conveyance 033 0270
Recycled water is supplied by Melbourne Water to the Corporation for distribution to customers in the Werribee Irrigation District. For the fi nancial year ended 30 June 2012, no deliveries of recycled water took place, thus no revenue is recorded. In 2011 $0.60m of recycled water entitlement and usage revenue was recorded.
Rental expenses 185 175 Employee benefi ts Aggregate amount paid and accrued 13,475 12,558 Less capitalised employee benefi t costs (892) (962) Movement to: – Annual leave provision 156 288 – Long service leave provision 390 252 13,129 12,136 Auditors remuneration – Auditor-General for audit of fi nancial statements 37 34
Bad and doubtful debts 00
www.srw.com.au Southern Rural Water Annual Report 2011–12 61 Notes to the Financial Report for the year ended 30 June 2012
2011–12 2010–11 $’000’s $’000’s 3 Income tax expense (revenue) Balances for the year ended 30 June 2011 have been restated to refl ect values included within the 2011 Taxation return. 3(a) Income tax expense (revenue) Current tax 00 Movement in deferred tax (2,692) (8,827) (2,692) (8,827)
3(b) Reconciliation of income tax revenue to prima facie tax payable Net loss before income tax expense (8,990) (2,460) Tax at the Australian tax rate of 30% (2011: 30%) (2,697) (738) Tax effect of amounts which are not deductible in calculating taxable income Sponsorships & entertainment 54 Recognition of tax losses related to non-temporary differences not previously recognised 0 (8,093) Income tax expense (revenue) (2,692) (8,827)
3(c) Income tax recognised in Other Comprehensive Income Net gain on revaluation of property, plant & equipment 0 785,516 Tax at the Australian tax rate of 30% (2011: 30%) 0235,655 Tax relating to prior land and building revaluation not previously recognised 0 3,635 Total income tax recognised in other comprehensive income 0239,290
3(d) Deferred tax assets The balance comprises temporary differences attributable to: Employee entitlement provision 1,349 1,186 Revenue in advance 039 Benefi t of carry forward tax losses 95,327 84,596 96,676 85,821 Offset against deferred tax liabilities (96,676) (85,821) 00
3(e) Deferred tax liabilities The balance comprises temporary differences attributable to: Cumulative depreciation & amortisation 84,624 76,307 Revenue in advance 76 0 Accrued revenue 457 687 Net gain on revaluation of property, plant & equipment 239,290 239,290 Offset from deferred tax assets (96,676) (85,821) 227,771 230,463
62 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
2011–12 2010–11 $’000’s $’000’s 3 Income tax expense (revenue) continued 3(e) Deferred tax liabilities continued Movement in deferred tax liabilities Carrying amount 1 July 230,463 0 Charged to comprehensive income statement 0239,290 Credited to operating statement (2,692) (8,827) 227,771 230,463
4 Cash and cash equivalents Cash on hand 33 Cash at bank 4,094 839 Deposits at call 472 877 4,569 1,719
4(a) Cash on hand These are non-interest bearing 33
4(b) Cash at bank The account is subject to fl oating interest rates which in 2011-12 varied between 1.40% and 4.25% 4,094 839 (2011: 1.30% and 4.25%)
4(c) Deposits at call The deposits at call are subject to a fl oating interest rate of 3.45% at 30 June 2012 (30 June 2011: 4.70%) 472 877
5 Receivables
Trade receivables 2,476 2,848 Accrued income 1,522 1,560 Provision for impaired receivables (30) (30) 3,968 4,378
5(a) Provision for impaired receivables As of 30 June 2012, trade receivables of $2.286m (2011: $2.525m) were past due but not impaired. These relate to a number of independent water customers. Excluding a small number of recycled water charges, the Corporation's credit risk for water customers is mitigated by the Water Act (1989), where outstanding trade receivables are secured by a charge against the associated land or water share. The Corporation considers that underlying land and water share assets within each irrigation district provide adequate market value to support our trade receivable balance. The ageing analysis of these past due but not impaired receivables is as follows: 0 to 60 days 877 831 Over 60 days 1,409 1,694 2,286 2,525 The other amounts within receivables do not contain impaired assets and are not past due. Based on credit history, it is expected that these amounts will be received when due. The Corporation has not utilised the provision for doubtful debts balance during the 2011–12 fi nancial year. Any revenue written back was immediately charged to the operating statement.
www.srw.com.au Southern Rural Water Annual Report 2011–12 63 Notes to the Financial Report for the year ended 30 June 2012
5(b) Foreign exchange and interest rate risk for trade and other receivables All the Corporation's current and non-current receivables are denominated in Australian dollars and accordingly, the Corporation does not have any foreign exchange rate risk against these balances. A summarised analysis of the sensitivity of receivables to interest rate risk can be found in note 20.
5(c) Fair value and credit risk Due to the short-term nature of the current receivables, carrying value approximates fair value. The maximum exposure to credit risk at the reporting date is the higher of the carrying value and fair value of each class of receivables mentioned above. As these receivables share the security described by note 5(a), for the 2011–12 fi nancial year the Corporation considered that this provided adequate collateral and the receivable value was not impaired. Refer to note 20 for more information of the fi nancial risk management policy of the Corporation.
2011–12 2010–11 Notes $’000’s $’000’s 6 Inventories Current Stores and consumables – at cost 142 131
7.1 Property, plant & equipment Note 1(f) Classes of property, plant & equipment Land At fair value * 19,918 19,919
Buildings At fair value * 2,893 2,865 Less: accumulated depreciation (150) (3) 2,743 2,862
Water infrastructure At fair value * 1,205,932 1,204,292 Less: accumulated depreciation and impairment (11,406) 1,194,526 1,204,292
Furniture and fi ttings At fair value 917 897 Less: accumulated depreciation (575) (516) 342 381
Plant and machinery At fair value 2,210 2,096 Less: accumulated depreciation (1,677) (1,561) 533 535
Computer equipment At fair value 1,358 1,382 Less: accumulated depreciation (1,087) (1,022) 271 360
64 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
Motor vehicles At fair value 4,063 4,205 Less: accumulated depreciation (1,357) (1,173) 2,706 3,032 1,221,039 1,231,381
Capital works in progress Buildings 188 115 Water infrastructure 7,616 2,8 9 5 Furniture and fi ttings 45 Plant and machinery 119 61 7,927 3,076 Total property, plant & equipment 1,228,966 1,234,457 * A revaluation of Land, Buildings and Water Infrastructure was undertaken by the Valuer-General Victoria as at 30 June 2011.
Land values have taken into account the planning restrictions applying to their use, as well as the restrictions and impacts of the existence of water infrastructure assets (drains, channels and reservoirs), but not the value of those assets (which are separately recorded as infrastructure assets). In the case of land used for reservoirs, the valuation performed by VGV recognises the associated community service obligation. Land above the full supply level is valued by VGV at 80% of surrounding land values, and below the full supply level at 10% of adjacent land value.
Water Infrastructure assets are valued by VGV at fair value. As the Corporation is categorised as not-for-profi t, fair value is assessed as depreciated replacement cost. Important aspects to this valuation approach are:
* Replacement cost is determined on an "Optimum Modern Equivalent" basis. This assessment calculates replacement cost by reference to the lowest cost at which the gross future economic benefi ts of that asset could currently be obtained. In this way, value is not attributed to excess capacity, over-design or redundancy.
* Depreciation is calculated using a straight line methodology, and in order to determine the depreciated value, condition assessments are used to calculate the remaining useful life.
www.srw.com.au Southern Rural Water Annual Report 2011–12 65 Notes to the Financial Report for the year ended 30 June 2012
7.2 Movements in fi xed assets ttings
Year ended 30 June 2012 Land Water Infrastructure Furniture & fi Plant & machinery vehicles Motor Buildings Computer equipment Capital works progressin Total At 1 July 2011, net of accumulated depreciation 19,919 1,204,292 381 535 3,032 2,862 360 3,076 1,234,457 Additions 00001,120007,1928,312 Transfers 0 2,104 19 114 0 34 70 (2,341) 0 Disposals (1)(456)00(721)0(6)0(1,184) Depreciation expense 0 (11,414) (58) (116) (725) (153) (153) 0 (12,619) At 30 June 2012, net of accumulated depreciation 19,918 1,194,526 342 533 2,706 2,743 271 7,927 1,228,966
At 1 July 2011 Cost (gross carrying amount) 19,919 1,204,292 897 2,096 4,205 2,865 1,382 3,076 1,238,732 Accumulated amortisation 0 0 (516) (1,561) (1,173) (3) (1,022) 0 (4,275) Net carrying amount 19,919 1,204,292 381 535 3,032 2,862 360 3,076 1,234,457
At 30 June 2012 Cost (gross carrying amount) 19,918 1,205,932 917 2,210 4,063 2,893 1,358 7,927 1,245,218 Accumulated amortisation 0 (11,406) (575) (1,677) ( 1,357) (150) ( 1,087) 0 (16,252) Net carrying amount 19,918 1,194,526 342 533 2,706 2,743 271 7,927 1,228,966
Year ended 30 June 2011 At 1 July 2010, net of accumulated depreciation 14,355 422,509 321 626 3,170 2,853 438 5,733 450,005 Additions 00001,751004,8186,569 Transfers 0 6,941 111 65 0 277 81 (7,475) 0 Disposals 0(231)00(1,054)000(1,285) Revaluation 5,564780,106000(154)00785,516 Impairment 0(123)000000(123) Depreciation expense 0 (4,910) (51) (156) (835) (114) (159) 0 (6,225) At 30 June 2011, net of accumulated depreciation 19,919 1,204,292 381 535 3,032 2,862 360 3,076 1,234,457
At 1 July 2010 Cost (gross carrying amount) 14,355 464,049 784 2,031 4 ,469 2,963 1 ,301 5 ,733 4 95,685 Accumulated amortisation 0 (41,540) (463) (1,405) ( 1,299) (110) (863) 0 (45,680) Net carrying amount 14,355 422,509 321 626 3,170 2,853 438 5,733 450,005
At 30 June 2011 Cost (gross carrying amount) 19,919 1,204,292 897 2,096 4 ,205 2,865 1,382 3,076 1,238,732 Accumulated amortisation 0 0 (516) (1,561) (1,173) (3) (1,022) 0 (4,275) Net carrying amount 19,919 1,204,292 381 535 3,032 2,862 360 3,076 1,234,457
66 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
8 Intangible assets Implementation Software Software in progress Total
Year ended 30 June 2012 At 1 July 2011, net of accumulated amortisation 3,236 101 3,337 Additions 0303303 Transfer 33 (33) 0 Amortisation (560) 0 (560) At 30 June 2012, net of accumulated amortisation 2,709 371 3,080
At 1 July 2011 Cost (gross carrying amount) 6,773 101 6,874 Accumulated amortisation (3,537) 0 (3,537) Net carrying amount 3,236 101 3,337
At 30 June 2012 Cost (gross carrying amount) 6,557 371 6,928 Accumulated amortisation (3,848) 0 (3,848) Net carrying amount 2,709 371 3,080
Year ended 30 June 2011 At 1 July 2010, net of accumulated amortisation 3,567 100 3,667 Additions 24 187 211 Transfer 186 (186) 0 Amortisation (541) 0 (541) At 30 June 2011, net of accumulated amortisation 3,236 101 3,337
At 1 July 2010 Cost (gross carrying amount) 6,562 100 6,662 Accumulated amortisation (2,995) 0 (2,995) Net carrying amount 3,567 100 3,667
At 30 June 2011 Cost (gross carrying amount) 6,773 101 6,874 Accumulated amortisation (3,537) 0 (3,537) Net carrying amount 3,236 101 3,337
www.srw.com.au Southern Rural Water Annual Report 2011–12 67 Notes to the Financial Report for the year ended 30 June 2012
2011–12 2010–11 $’000’s $’000’s 9 Payables Current Trade creditors 2,173 1,260 Accrued expenses 1,893 866 Deferred revenue* 255 129 Advances for capital and other works 461 339 4,782 2,594 * Deferred revenue balance represents our estimate of unearned cash receipts from our Licensing Applications business, which will be recognised as income as applications complete.
Foreign exchange and interest rate risk for trade and other payables All the Corporation's current payables are denominated in Australian dollars and accordingly the Corporation does not face a foreign exchange rate risk against these balances. A summarised analysis of the sensitivity of payables to interest rate risk can be found in note 20.
10 Interest bearing liabilities Current Treasury Corporation of Victoria (TCV) 230 1,008 Non-current Treasury Corporation of Victoria (TCV) 6,800 3,000 Total interest bearing liabilities 7,030 4,008 Current Interest bearing liabilities are held with TCV either as: • An "11am" at call debt facility which has no fi xed term to maturity; • Fixed – Semi Annual Credit Foncier facilities with repayments of interest and principal ($100k) twice annually Non-current interest bearing liabilities are all held with TCV, either as: • Fixed – Semi Annual Rate facilities of which $2.5m matures June 2014 and $0.5m matures June 2016; • Fixed – Semi Annual Credit Foncier facilities with repayments of interest and principal ($100k) twice annually and a fi nal $3.0m maturity in June 2017 These debt facilities are provided by TCV consistent with the Financial Accommodation issued by the Treasurer of Victoria to Gippsland and Southern Rural Water, in accordance with section 8 of the Borrowing and Investment Powers Act 1987. The borrowings are not directly secured by assets of the Corporation but have the benefi t of the Treasurer's guarantee to TCV dated 25 April 2002. The borrowings are in Australian dollars and accordingly the Corporation does not face a foreign exchange risk in relation to these balances. Loan facilities Total facilities 16,000 16,000 Used at balance date 7,0 3 0 4,0 0 8 Unused at balance date 8,970 11,992 Fair value Non-traded fi nancial liabilities Treasury Corporation of Victoria (TCV) 7,0 3 0 4,0 0 8 7,030 4,008 None of the facilities are readily traded on organised markets in standardised form. The fair value of current borrowings equals their carrying amount, as the impact of discounting is not signifi cant. The fair values of non-current liabilities are based on borrowing rates varying from 3.656% to 5.31%, depending on the type of the borrowing (2011 5.015% to 5.31%).
68 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
2011–12 2010–11 $’000’s $’000’s 10 Interest bearing liabilities continued The Corporation's fi nancial liability maturities are as follows: 6 – 12 months 230 1,008 1 – 5 years 6,800 3,000 Over fi ve years 00 Total interest bearing liabilities 7,030 4,008 The carrying amounts of the Corporation's borrowings are denominated in the following currencies: Australian dollar 7,0 3 0 4,0 0 8 For an analysis of the sensitivity of borrowings to interest rate risk and foreign exchange risk refer to Note 20(b).
11 Current and non-current liabilities – employee benefi ts Current All annual leave and unconditional long service leave entitlements representing 6 or more years of continuous service Long service leave 2,097 1,751 Annual leave 1,981 1,825 4,078 3,576 Non-current Long service leave representing less than 6 years of continuous service measured at present value 420 376
Aggregate carrying amounts Current 4,078 3,576 Non-current 420 376 Total employee benefi ts 4,498 3,952
Number of employees at year end 162 161 The following assumptions were adopted in measuring the present value of long service leave: Weighted average increase in employee costs 4.31% 4.60% Weighted average discount rates 2.78% 4.99% Weighted average settlement period 13 years 13 years
12 Contributed Capital Balance at beginning of reporting period 393,470 393,220 Capital transactions with the State in its capacity as owner arising from: Contribution/(return of) State Observation Bore Network* (250) 250 Closing balance 393,220 393,470 * The treatment of capital contributions is as agreed with the Department of Sustainability and Environment and in accordance with FRD119 Contributions by Owners.
www.srw.com.au Southern Rural Water Annual Report 2011–12 69 Notes to the Financial Report for the year ended 30 June 2012
13 Asset revaluation reserve 2011–12 2010 –11 Land Buildings Water Total Land Buildings Water Total $’000’s $’000’s Infrastructure $’000’s $’000’s $’000’s Infrastructure $’000’s $’000’s $’000’s Asset revaluation reserve 10,609 1,662 546,073 558,344 9,590 2,528 0 12,118 Revaluation increment, 00001,019 (866)546,073546,226 net of tax effect Closing balance 10,609 1,662 546,073 558,344 10,609 1,662 546,073 558,344 The asset revaluation reserve is used to record revaluation increments and decrements in the value of non-current physical assets.
2011–12 2010–11 $’000’s $’000’s 14 Accumulated funds Accumulated surplus at beginning of reporting period 52,019 45,652 Net result for the period (6,298) 6,367 Accumulated surplus at end of reporting period 45,721 52,019
15 Lease commitments The following commitments are exclusive of GST. The Corporation leases a number of premises using operating leases under various terms and conditions, ranging from 1 to 4.50 years. Monthly rental payments are made, with these building lease commitments due for payment as follows: – Within one year 193 199 – One to fi ve years 416 249 – Over fi ve years 00 609 448
16 Commitments for expenditure Capital At the 30 June 2012, the Corporation had the following other signifi cant capital commitments Outstanding capital commitments are likely to be exercised as follows: – Within one year 2,676 1,416 – One to fi ve years 00 – Over fi ve years 00 2,676 1,416
Environmental Outstanding environmental contribution commitments are likely to be exercised as follows: – Within one year 281 281 – One to fi ve years 1,320 281 – Over fi ve years 00 1601 562
70 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
2011–12 2010–11 $’000 $’000 16 Commitments for expenditure continued Operating At the 30 June 2012, the Corporation had the following other signifi cant operating commitments Outstanding operating commitments are likely to be exercised as follows: – Within one year 762 834 – One to fi ve years 1,166 1,598 – Over fi ve years 00 1,928 2,432
17 Contingent Liabilities Werribee drainage In February 2011, the Werribee South irrigation district experienced signifi cant rainfall in the space of 12 hours. This caused fl ooding to a number of properties in the district. The Corporation has investigated the issue internally, and commissioned an independent report to further review the matter. This work has concluded that drainage infrastructure within the District operated to design. Since this time, the Corporation has responded to a claim for damages lodged by a customer. This claim is being adjudicated by VCAT (Victorian Civil and Administrative Tribunal). While the Corporation is unable to reliably estimate the fi nancial effect, if any, which may arise from this matter, should action be successful against the Corporation, fi nancial loss is limited by an insurance deductible of $100,000. Bacchus Marsh seepage SRW has received a claim for property damage allegedly caused by seepage from an irrigation channel in the Bacchus Marsh Irrigation District. The claim is being adjudicated by VCAT. While it is unclear at this stage what the particulars of the claim are, or what the fi nancial effect may be for SRW, should action be successful against the Corporation, fi nancial loss is limited by an insurance deductible of $100,000.
18 Superannuation The Corporation contributes in respect of its employees to superannuation schemes. Contributions are shown in the following table: Defi ned benefi t schemes: (a) Government Superannuation Offi ce – New Scheme Employer contribution 127 123 Contribution rate 8.7% – 10.3% 8.7% – 10.3% (b) Government Superannuation Offi ce – Revised Scheme Employer contribution 12 22 Contribution rate 17.60% 17.60% (c) SAFE – State Employees Retirement Benefi ts Fund Employer contribution 26 25 Contribution rate 13.30% 13.30% (d) Vision Super Employer contribution 60 0 Contribution rate 9.25% 9.25% Accumulation schemes (e) Vision Super Employer contribution 622 623 Contribution rate 9.00% 9.00% (f) Other superannuation schemes Employer contribution 640 590 Contribution rate 9.00% 9.00% Total employer contribution 1,487 1,382 As at 30 June 2012, the Corporation has an outstanding liability estimated to be $60,000, to Vision Super for the Local Authorities Superannuation Fund. This outstanding contribution is described at Note 18(a). In 2011, there were no outstanding contributions payable to the above funds. As at 30 June 2012 and 30 June 2011, there were no loans to or from the Corporation with any of the above funds. Obligations for contributions are recognised as an expense in the Comprehensive Operating Statement when they are due.
www.srw.com.au Southern Rural Water Annual Report 2011–12 71 Notes to the Financial Report for the year ended 30 June 2012
18(a) Unfunded superannuation liabilities – defi ned benefi t schemes Unfunded liabilities are defi ned as the difference between the present value of members' accrued benefi ts and the net market value of a superannuation scheme's assets at the reporting date. The Corporation is responsible for any unfunded liabilities arising from 1 July 1992 on defi ned benefi ts superannuation schemes which it sponsors in respect of its employees.
State Superannuation Funds (items a, b & c) The Corporation has no unfunded liability in respect of its employees who are members of schemes in this fund. This liability has been assumed by the State Government and is disclosed in its fi nancial statements.
Vision Super – Defi ned Benefi ts Scheme Past Services Liability (item d) The Fund's Defi ned Benefi t Plan is a multi-employer sponsored plan. As the Plan's assets and liabilities are pooled and are not allocated by employer, the actuary is unable to reliably allocate benefi t liabilities, assets and costs between employers. As provided under Paragraph 32 (b) of AASB 119, SRW does not use defi ned benefi t accounting for these contributions. The Corporation makes employer contributions to the defi ned benefi t category of the Fund at rates determined by the Trustee on the advice of the Fund's actuary. On the basis of the results of the most recent full actuarial investigation conducted by the Fund's actuary as at 31 December 2011, the Corporation makes the following contributions:- – 9.25% of members’ salaries (same as previous year); – the difference between resignation and retrenchment benefi ts paid to any retrenched employees, plus contribution tax (same as previous year); The Fund surplus or defi cit (i.e. the difference between fund assets and liabilities) is calculated differently for funding purposes (i.e. calculating required contributions) and for the calculation of accrued benefi ts as required in AAS 25 to provide the values needed for the AASB 119 disclosure in the council's fi nancial statements. AAS 25 requires that the present value of the defi ned benefi t liability be calculated based on benefi ts that have accrued in respect of membership of the plan up to the measurement date, with no allowance for future benefi ts that may accrue. Following an actuarial review conducted by the Trustee as at 31 December 2011, a funding shortfall of $453 million for the Fund was determined. A call to employers was made for the fi nancial year 30 June 2012. SRW's contribution to the funding shortfall is expected to be $60,000 and is payable by 1 July 2013. The outstanding amount has been recognised as an expense in the comprehensive operating statement and the corporation expects to pay this amount by 30 June 2013.
Accounting standard disclosure The Fund's liability for accrued benefi ts was determined by the actuary at 31 December 2011 pursuant to the requirements of Australian Accounting Standard AAS25 as follows: 31 Dec 11 $’000’s Net market value of assets 4,315,324 Accrued benefi ts (per accounting standards) 4,642,133 Difference between assets and accrued benefi ts (326,809) Vested benefi ts 4,838,503 The fi nancial assumptions used to calculate the accrued benefi ts for the defi ned benefi t category of the Fund were: Net investment return 7.50 % p.a. Salary infl ation 4.25% p.a. Price infl ation 2.75% p.a.
18(b) Accumulation schemes (items e & f) The Corporation makes payments to accumulation schemes for both employer and employee contributions on a progressive basis. Employer contributions are based on a fi xed percentage of employee earnings (9% required under Superannuation Guarantee Legislation). No further liability accrues to the employer as the superannuation benefi ts accruing to the employees are represented by their share of the net assets of the Fund.
72 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
19 Responsible persons and executive offi cer disclosures 19(a) Responsible persons The names of the Responsible persons of Gippsland and Southern Rural Water Corporation during the fi nancial year were: The Hon Peter Walsh MLA, Minister for Water (1/7/2011 – 30/6/2012)
Members of Corporation Board: Mr. T Burgi (Chairperson)* (1/7/2011 – 30/6/2012) Mrs. A Killeen (Deputy Chairperson)* (1/7/2011 – 30/6/2012) Ms. J Greig (Chairperson)* (1/7/2011 – 30/9/2011) Mr. A Hawkes (Director) (1/7/2011 – 30/9/2011) Ms. S Ewart (Director) (1/7/2011 – 30/6/2012) Mr. E Sjerp (Director) (1/7/2011 – 30/6/2012) Mr. R Napper (Director) (1/10/2011 – 30/6/2012) Ms. N Pye (Director) (1/10/2011 – 30/6/2012) Ms. H Peeters (Director) (1/10/2011 – 30/6/2012) Mr. C Rodda (Managing Director) (Accountable Offi cer) (1/7/2011 – 30/6/2012)
* Ms. J Greig was Chairperson 1/7/2011 – 30/9/2011 * Mr. T Burgi was Deputy Chairperson 1/7/2011 – 30/9/2011, and appointed to Chairperson 1/10/2011 * Mrs. A Killeen was appointed Deputy Chairperson 1/10/2011
Mr G Hawke (General Manager Strategic & Technical) acted in the position of Managing Director and Accountable Offi cer from 9 April 2012 – 13 April 2012. Mr C Parker (General Manager Groundwater & Rivers) acted in the position of Managing Director and Accountable Offi cer from 26 September 2011 – 7 October 2011, and also 12 October 2011 – 14 October 2011.
Remuneration of responsible persons Remuneration paid to Ministers is reported in the Annual Report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members' Interests which each member of the Parliament completes.
2011–12 2010 –11 Remuneration received, or due and receivable from the Corporation in connection with the management of the Corporation (includes termination payments and bonuses paid at the end of contracts). 476,211 421,344 The number of responsible persons whose remuneration from the Corporation was within the specifi ed bands was as follows: Number Number $0 – $9,999 10 $10,000 – $19,999 10 $20,000 – $29,999 65 $30,000 – $39,999 00 $40,000 – $49,999 10 $50,000 – $59,999 01 $230,000 – $249,999 01 $250,000 – $259,999 10
www.srw.com.au Southern Rural Water Annual Report 2011–12 73 Notes to the Financial Report for the year ended 30 June 2012
19(b) Executive offi cers’ remuneration The numbers of executive offi cers, other than responsible persons, and their total remuneration during the reporting period are shown in the fi rst two columns in the table below in their relevant income bands. The base remuneration of executive offi cers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long-service leave payments, redundancy payments and retirement benefi ts. The total annualised employee equivalent represents the equivalent to all executive offi cers working 38 ordinary hours per week for the reporting period.
Total remuneration Base remuneration 2012 2011 2012 2011 $60,000 – $69,999 1 0 1 0 $150,000 – $159,999 0 1 0 1 $170,000 – $179,999 0 0 1 1 $180,000 – $189,999 0 1 0 0 $190,000 – $199,999 1 0 0 0 Total number of executives 2 2 2 2 Total annualised employee equivalent 2 2 2 2 Total amount* 251,379 339,981 239,954 328,888 * As an executive offi cer resigned 17 November 2011, only part year remuneration has been reported for 2011–12 fi nancial year.
19(c) Other related party transactions There were no retirement benefi ts paid in conjunction with the retirement of responsible persons, nor were there any transactions between the Corporation and any responsible Person other than those which occurred within the normal arms length transaction between the Corporation and its customers.
20 Financial instruments 20(a) Financial risk management objectives and policies The Corporation's activities expose it to a variety of fi nancial risks: market risk, credit risk and liquidity risk. This note presents information about the Corporation’s exposure to each of these risks, and the objectives, policies and processes for measuring and managing risk. The Corporation’s Board has the overall responsibility for the establishment and oversight of the Corporation’s risk management framework. The Corporation's overall risk management program focuses on the unpredictability of fi nancial markets and seeks to minimise potential adverse effects on the fi nancial performance of the Corporation. The Corporation uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, and other price risks and ageing analysis for credit risk. Risk management is monitored by the Audit and Risk Policy Committee under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as policies covering specifi c areas, such as credit risk, use of fi nancial instruments, and investment of excess liquidity. Specifi cally, the Corporation manages fi nancial risk by adoption of State Government Treasury Management Guidelines, as well as the Financial Risk Management Policy. The Treasury Management Guidelines conform with the Borrowing and Investment Powers Act (BIP Act), which provides statutory corporations their authority to borrow and invest. Department of Treasury and Finance (DTF) guidelines direct water corporations to articulate a Treasury policy, and SRW has adopted practices consistent with this guidance. DTF requirements dictate that all new borrowings must be approved by the Treasurer of Victoria. Annually, a Financial Accommodation approval is provided by the Treasurer which is consistent with the Corporation's budget planning, and cash requirements. At 1 July 2011, the Corporation held a Financial Accommodation approval for $16.0m of borrowings (2011 $15.0m of borrowings). In accordance with DTF guidance, in order to minimise credit risk exposure to the Corporation, the Treasury Management Guidelines limit investment of surplus funds to fi nancial institutions approved by DTF. During the 2012 fi nancial year surplus funds were invested with the National Australia Bank and the Treasury Corporation of Victoria only.
74 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
20(b) Risk exposures The main risks the Corporation is exposed to through its fi nancial instruments are market, credit and liquidity risks, as described below: 20(b)(i) Market risk Market risk is the risk that changes in market prices will affect the fair value or future cash fl ows of the Corporation’s fi nancial instruments. Market risk comprises of foreign exchange risk, interest rate risk and other price risk. The Corporation’s exposure to market risk is primarily through interest rate risk. There is no exposure to foreign exchange risk and insignifi cant level of exposure to other price risks. Objectives, policies and processes used to manage these risks are disclosed in the paragraphs below:
Interest rate risk The Corporation’s exposure to market interest rates relates primarily to the Corporation’s funds invested, and borrowed, with the Treasury Corporation of Victoria. Both investment of funds and short-term borrowings are held at variable market rates. The Corporation's non-current borrowings are at fi xed interest rates. The Corporation has minimal exposure to interest rate risk through its holding of cash assets and other fi nancial assets. The Corporation manages this risk by maintaining a conservative investment portfolio whereby investment of surplus funds is restricted to DTF approved fi nancial instruments that offer fi xed or fl oating interest rates tied to prevailing market rates. Interest rate risk on borrowed funds is managed by entering into debt facilities with a balanced term profi le to avoid a concentration of maturities. In this way, the Corporation’s aggregate interest rate is an average of recent market rates, which limits exposure to interest re-pricing in any one period.
Foreign exchange risk The Corporation has no exposure to changes in the foreign exchange rate.
Other price risk The Corporation has no signifi cant exposure to other price risk.
Market risk sensitivity analysis The sensitivity analysis below has taken into consideration past performance, future expectations, economic forecasts and management’s knowledge and experience of the fi nancial markets. The Corporation believes that a movement of 1% in interest rates is reasonable over the next 12 months.
Carrying amount Interest rate risk Floating Fixed Non-interest interest rate interest rate bearing +1% Result +1% Equity –1% Result –1% Equity 30 June 2012 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial Assets Cash assets and deposits at call 4,566 0 3 46 46 (46) (46) Receivables 003,9680000 4,56603,9714646(46)(46) Financial Liabilities Payables, accruals 004,0670000 and provisions Interest bearing liabilities307,000022(2)(2) Advances for capital & 004610000 other works Deferred revenue 002550000 230 6,800 4,782 2 2 (2) (2) Total 4,336 (6,800) (811) 44 44 (44) (44)
www.srw.com.au Southern Rural Water Annual Report 2011–12 75 Notes to the Financial Report for the year ended 30 June 2012
20(b) Risk exposures continued 20(b)(i) Market risk continued Carrying amount Interest rate risk Floating Fixed Non-interest interest rate interest rate bearing +1% Result +1% Equity –1% Result –1% Equity 30 June 2011 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial Assets Cash assets and deposits at call 1,716 0 3 17 17 (17) (17) Receivables 231 0 4,147 2 2 (2) (2) 1,947 0 4,150 19 19 (19) (19) Financial Liabilities Payables, accruals 002,1260000 and provisions Interest bearing liabilities 1,088 3,000 0 10 10 (10) (10) Advances for capital & 003390000 other works Deferred revenue 001290000 1,008 3,000 2,594 10 10 (10) (10) Total 939 (3,000) 1,556 9 9 (9) (9)
Balance sheet notes Nature of balance Terms and conditions Financial Assets Cash assets and 4(a),4(b) Cash is stated at its nominal amount. Surplus funds are held The Bank account attracted an average 4.57% deposits at call & 4(c) in the bank account with excess requirements placed on (2011: 4.12% ) interest rate for the year and term deposit. funds retained in cash management accounts an average 4.10% (2011:4.57%). Receivables 5 Receivables are stated at amortised cost due less any Normal terms are 30 days from date of invoice. provision for doubtful debts. The interest rate applied against overdue accounts is 12.25%, and from time to time, this rate is reviewed for consistency with market interest rates. As interest is derived from overdue accounts only, price sensitivity for interest rate risk is considered insignifi cant and not separately calculated.
Financial Liabilities Payables, accruals 9 Creditors and accruals are recognised for future amounts to Terms for the payment of creditors are and provisions be paid in respect of goods and services received, whether negotiated with the supplier and as the or not billed to the Corporation. Corporation makes payment within these terms, interest charges are not incurred by the Corporation. Interest 10 Short and long term interest bearing liabilities must be Short term borrowings at a variable rate of bearing liabilities borrowed from Treasury Corporation of Victoria. 3.665% at 30 June 2012 (2011: 4.915%). Term borrowings: $2.5m at 5.310% maturing June 2014 $0.5m at 5.255% maturing June 2016 $4.0m at 3.656% maturing June 2017
76 Southern Rural Water Annual Report 2011–12 www.srw.com.au Notes
20(b) Risk exposures continued 20(b)(i) Market risk continued Financial Liabilities continued Advances for capital 9 Advances for capital & other works are recognised for Advances and security deposits are refunded & other works amounts received in advance for recoverable works, as well upon successful completion of works, or as security deposits held in respect of works programs. otherwise brought to account as revenue where required to undertake completion or remediation of works. Interest is not payable by the Corporation on these balances. Deferred revenue 9 Deferred revenue represents our estimate of unearned cash Application receipts will only be returned if the receipts from our Licensing Applications business, which will license application is cancelled. These returns be recognised as income as applications are completed. are not subject to interest.
The exposure of the Corporation's borrowings to interest rate changes and the contractual repricing dates are disclosed at Note 20(b)(iii)
20(b)(ii) Credit risk Credit risk is the risk of fi nancial loss to the Corporation as a result of a customer or counterparty to a fi nancial instrument failing to meet its contractual obligations. Credit risk arises principally from the Corporation’s receivables. The Corporation’s exposure to credit risk is infl uenced by the individual characteristics of each customer. The receivable balance consists principally of irrigation customers, large commercial and public sector enterprises supplied under a bulk entitlement order, as well as State Government departments. Notwithstanding the ongoing monitoring of these debts, the Corporation considers recoverability as virtually certain given covenants established by the Water Act, 1989, and the credit worthiness of the State Government. An analysis of the ageing of the Corporation’s receivables at the reporting date has been provided in Note 5.
20(b)(iii) Liquidity risk Liquidity Risk is the risk that the Corporation will not be able to meet its fi nancial obligations as they fall due. The Corporation’s policy is to settle fi nancial obligations within 30 days and in the event of dispute make payments within 30 days from the date of resolution. The Corporation manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities and by continuously monitoring forecasts and actual cash fl ows, and matching the maturity profi les of fi nancial assets and fi nancial liabilities. Annually, the Corporation completes a Corporate Plan which includes fi nancial estimates for a fi ve year period. This plan incorporates a cashfl ow forecast that then facilitates application to DTF for any necessary Financial Accommodation. Financial Accommodation establishes the Corporation's approval to establish borrowing facilities. At 30 June 2012, the Corporation had not accessed $8.97m (2011: $11.99m) of this Financial Accommodation. In light of the Corporation's planned Capital expenditure program, and our ongoing need for debt funding to support this program, the Corporation's ability to meet liabilities as they fall due is reliant upon DTF approval of both the Corporate Plan, and the accompanying annual Financial Accommodation. The Corporation's fi nancial liability maturities have been disclosed in Note 10.
20(c) Fair valuation The fair value of fi nancial assets and fi nancial liabilities must be estimated for recognition, measurement and for disclosure purposes. As of 1 July 2009, the Corporation has adopted the amendment to AASB 7 Financial Instruments: Disclosures. This requires disclosure of fair value measurements by level, using the following fair value measurement hierarchy: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). All Corporation fi nancial assets and liabilities are categorised as level 1.
www.srw.com.au Southern Rural Water Annual Report 2011–12 77 Notes to the Financial Report for the year ended 30 June 2012
21(c) Fair valuation continued The following table presents the Corporation's fi nancial assets and liabilities measured and recognised at fair value:
2012 2011 Carrying Carrying amount Fair value amount Fair value $’000 $’000 $’000 $’000 Financial Assets Cash assets and deposits at call 4,569 4,569 1,719 1,719 Receivables 3,968 3,968 4,378 4,378 8,537 8,537 6,097 6,097
Financial Liabilities Payables, accruals and provisions 4,066 4,066 2,126 2,126 Interest bearing liabilities 7,030 7,176 4,008 4,018 Advances for capital & other works 461 461 339 339 11,557 11,557 6,473 6,473
Cash, cash equivalents and non-interest bearing fi nancial assets and fi nancial liabilities are carried at cost which approximates their fair value. The fair value of other fi nancial assets and fi nancial liabilities is based upon market prices, where a market exists or by discounting the expected future cash fl ows at current interest rates. For interest bearing liabilities, fair value is calculated as if the instrument was settled at 30 June given current interest rates. 2011–12 2010–11 $’000’s $’000’s 21 Reconciliation of the net result for the period to net cash fl ows from operating activities Net loss for the period before income tax (8,990) (2,460) Add/(less) non-cash fl ows in the net result for the period Depreciation and amortisation 13,179 6,766 Impairment 0123 Gain on sale of fi xed assets (107) (9) Written down value of transferred assets 365 183 Written down value of destroyed, lost or de-commissioned assets 98 2 Interest expense not paid 44 406 Change in assets and liabilities: Increase in inventories (11) (2) Decrease in current and non-current receivables 353 2,577 Decrease/(Increase) in other assets 259 (282) Increase in provision for employee benefi ts 623 540 Increase/(Decrease) in payables 209 (926) Net cash fl ows from operating activities 6,022 6,918
78 Southern Rural Water Annual Report 2011–12 www.srw.com.au Independent auditor’s report — report —Financial report auditor’s Independent Financial report
www.srw.com.au Southern Rural Water Annual Report 2011–12 79 Independent auditor’s report — Financial report
80 Southern Rural Water Annual Report 2011–12 www.srw.com.au Compliance certifi cate — certifi report Compliance — Financial cate Financial report
Gippsland and Southern Rural Water Corporation Statutory Certifi cation We certify the attached fi nancial statements for Gippsland and Southern Rural Water Corporation have been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994, applicable 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 notes to and forming part of the fi nancial statements, presents fairly the fi nancial transactions during the year ended 30 June 2012 and the fi nancial position of the Corporation as at 30 June 2012.
As at the date of signing, we are not aware of any circumstances which would render any particulars in the statements to be misleading or inaccurate.
TERRY BURGI Chairperson Gippsland and Southern Rural Water Corporation Dated on 24 August 2012
CLINTON RODDA Managing Director Gippsland and Southern Rural Water Corporation Dated on 24 August 2012
STUART WRIGGLESWORTH Chief Financial Offi cer Gippsland and Southern Rural Water Corporation Dated on 24 August 2012
www.srw.com.au Southern Rural Water Annual Report 2011–12 81 Performance report
Performance indicators 2010–11 2011–12 2011–12 FINANCIAL PERFORMANCE INDICATORS Result Result Target % Variance Notes Internal Financing Ratio Net Operating Cash Flow 96.02% 85.72% 28.9% 172% 1 Capital Expenditure
Gearing Ratio Total Debt including Finance Leases 0.32% 0.57% 1.24% 54% 2 Total Assets
Interest Cover (EBIT) Earnings before Net Interest and Tax OBIT) NA NA -1.1 NA 3 Net Interest Expense
Interest Cover (Cash) Cash Flow From Operations Before Net Interest and Tax NA NA 11.3 NA 3 Net Interest Payments
Notes The 2011–12 target is derived from the 2011–12 Corporate Plan of the Corporation. Deferral of some components of the capital expenditure program resulted in: 1. a greater proportion of capital expenditure funded by operating cashfl ows 2. less requirement for debt funding and a better than forecast gearing ratio 3. avoiding both a net interest expense and net interest payment which prevents calculation of EBIT and Cash interest cover indicators
82 Southern Rural Water Annual Report 2011–12 www.srw.com.au Compliance certifi cate — report certifi Compliance — Performance cate Performance report
Gippsland and Southern Rural Water Corporation Certifi cation In our opinion, we certify that the accompanying Statement of Performance of Gippsland and Southern Rural Water Corporation, in respect of 2011–12 fi nancial year, is presented fairly in accordance with the Financial Management Act 1994.
The Statement outlines the relevant performance indicators as determined by the responsible Minister, the actual results achieved for the fi nancial year against predetermined performance targets for these indicators, and an explanation of any signifi cant variances between the actual result and the performance target.
As at the date of signing, we are not aware of any circumstances which would render any particulars in the Statement of Performance to be misleading or inaccurate.
TERRY BURGI Chairperson Gippsland and Southern Rural Water Corporation Dated on 24 August 2012
CLINTON RODDA Managing Director Gippsland and Southern Rural Water Corporation Dated on 24 August 2012
STUART WRIGGLESWORTH Chief Financial Offi cer Gippsland and Southern Rural Water Corporation Dated on 24 August 2012
www.srw.com.au Southern Rural Water Annual Report 2011–12 83 Independent auditor’s report — Performance report
84 Southern Rural Water Annual Report 2011–12 www.srw.com.au Independent auditor’s report — report —Performance report auditor’s Independent Performance report
www.srw.com.au Southern Rural Water Annual Report 2011–12 85 Appendices
Appendix 1 – Regulated systems water data
Regulated Systems Allocation Balance Sheet Infl ows Volume (ML) Outfl ows Volume (ML) Seasonal allocation 250,346 Water usage (109,370) Spill allocation 15,855 Write-off allocation (156,840) Trade – buyers 7,5 47 Trade – sellers (7,547) Extraordinary items 9 Total outfl ows (272,757) Total infl ows 273,757
Closing balance 0 1. This table provides a summary of allocations made, trade in, trade out, usage, overuse, and write-off to ABAs during 2011–12. 2. The table shows statistics for ABAs with regulated trading zone sources only. This includes allocations made to all water shares and also bundled entitlements, such as supply by agreements and urban bulk entitlements. Unregulated and groundwater entitlements are excluded because some are not metered and usage is not fully available. 3. Write-off volume is any unused water as there is no ability to carryover in either the Thomson/Macalister or the Werribee systems.
Regulated Systems Allocation Trade (ML) Buyer
Total SOLD Number Net sold
31AD Bacchus31AD District Marsh Upper31AR Werribee Diverters Werribee31BD District Lower31BR Werribee Diverters Macalister 41 Mid-Thomson 42B of trades 31AD Bacchus Marsh District 65 0 30 52 0 0 147 8 82 31AR Upper Werribee Diverters 000000 0 0 0 31BD Werribee District 001,43036001,466 81 (94)
Seller 31BR Lower Werribee Diverters 001002200 122 5 12 41 Macalister 0 0 0 0 5,121 0 5,121 56 0 42B Mid-Thomson 00000691 691 2 0 Total PURCHASED 65 0 1,560 110 5,121 691 7,547 0 Number of Trades 50818562 152
86 Southern Rural Water Annual Report 2011–12 www.srw.com.au Appendices
Usage in Regulated Trading Zone Sources Per Delivery System Delivery System Volume (ML) Macalister Irrigation Area Macalister Irrigation District 76,757.0 Macalister River 16,034.3 Thomson River 6,554.9 Subtotal – Macalister Irrigation Area 99,346.2 Werribee Irrigation Area Werribee Irrigation District 7,8 46.4 Bacchus Marsh Irrigation District 1,730.7 Werribee River 446.2 Subtotal – Macalister Irrigation Area 10,023.3 Grand Total 109,369.5 1. This table shows usage per delivery system for ABAs with regulated trading zone sources. 2. Delivery systems are grouped to reduce the complexity caused by small delivery systems. 3. Approximately 14 GL of use in the Macalister River delivery system was used by the Macalister Environmental Entitlement.
Water Entitlements in Regulated Systems Entitlement type Water Shares – Water Shares – Bulk Take and use High Reliability Low Reliability Entitlements licences Water System Delivery system (grouped) Volume Number Volume Number Volume Number Volume Number Source (ML) (ML) (ML) (ML) Bunyip Desalination (Bunyip) – 1
Desalination Plant Desalination Plant – Wonthaggi – 4 – Wonthaggi Maribynong River – 3 Latrobe River 30,430.2 91 Latrobe Tanjil River 548.9 27 Macalister Irrigation District 125,334.4 1,256 59,476.0 1,009
Thomson/ Macalister River 3,709.6 76 1,818.8 51 21,025.4 3 Macalister SRW – NWU 633.9 13 324.6 9 Thomson River 16,689.6 177 8,089.7 138 Bacchus Marsh Irrigation District 3,880.4 129 1,814.8 121 Werribee Werribee Irrigation District 10,039.7 240 4,776.7 238 Werribee River 1,096.5 75 434.7 29 58.0 1 Regulated Total 2011–12 161,384.1 1,966 76,735.3 1,595 21,083.4 12 30,979.1 118 Regulated Total 2010–11 161,349.1 1,937 76,735.3 1,572 6,320.0 15 31,131.1 118 1. This table shows the number and volume of active entitlements in regulated water systems as at 30 June 2012. 2. In contrast to the presentation in previous years where entitlement types were lumped together, to provide clearer entitlement information this table now displays a breakdown of the number and volume of entitlements by entitlement type. 3. Delivery systems are grouped to reduce the complexity caused by small delivery systems. 4. The volume of bulk entitlements recorded in the Water Register increased by 14,762 ML from 2010–11 due to an increase in the Macalister Environmental Entitlement.
www.srw.com.au Southern Rural Water Annual Report 2011–12 87 Appendices to the Annual Report for the year ended 30 June 2012
Regulated Systems Transfer and Variation of High Reliability Water Shares (Volume (ML)) Destination
Total Trades Number Net Out
Bacchus MarshBacchus District Irrigation River Macalister Macalister District Irrigation SRW – NWU River Thomson Werribee River Werribee District Irrigation (ML) of Trades (ML) Bacchus Marsh Irrigation District 163000000163 5 0 Macalister River 026900000269 4 0 Macalister Irrigation District 009,838510009,889105 11 SRW – NWU 00400100050 3 (1)
Source Source Thomson River 000092800928 8 (10) Werribee River 00000120 12 2 0 Werribee Irrigation District 00000034434415 0 Total Trades (ML) 163 269 9,878 51 938 12 344 11,655 0 Number of Trades 5 4 103 3 10 2 15 142 1. This table summarises all recorded water entitlement transfer, divide and transfer and variation applications for high reliability water shares. Some other trades were still in progress at year end and will be fi nalised in 2012–13. 2. Transfer applications result in a change of ownership. In some cases, the change of ownership occurs with a transfer of land. Transfers of ownership that are part of a water/land sale are not separated out. 3. A variation application occurs without a change in ownership. 4. Delivery systems are grouped to reduce complexity caused by small delivery systems.
Regulated Systems Transfer of High Reliability Water Shares (Volume (ML)) Destination
Number of
Bacchus MarshBacchus District Irrigation River Macalister Macalister District Irrigation SRW – NWU River Thomson Werribee River Werribee District Irrigation Total Sales (ML) Sales Bacchus Marsh Irrigation 143000000143 4 District Macalister River 014600000 146 3 Macalister Irrigation District 006,34100006,34163 SRW – NWU 0040000040 1 Source Source Thomson River 00007200 72 1 Werribee River 0000020 2 1 Werribee Irrigation District 000000265265 11 Total Purchases (ML) 143 146 6,381 0 72 2 265 7,009 0 Number of Purchases 436401111 84 1. This table summarises all recorded water entitlement transfer and divide and transfer applications for high reliability water shares. Some other trades were still in progress at year end and will be fi nalised in 2012–13. 2. Transfer applications result in a change of ownership. In some cases, the change of ownership occurs with a transfer of land. Transfers of ownership that are part of a water/land sale are not separated out. 3. Delivery systems are grouped to reduce complexity caused by small delivery systems.
88 Southern Rural Water Annual Report 2011–12 www.srw.com.au Appendices
Regulated Systems Transfer and Variation of Low Reliability Water Shares (Volume (ML)) Destination
Total Trades Number Net Out
Bacchus MarshBacchus District Irrigation River Macalister Macalister District Irrigation SRW – NWU River Thomson Werribee River Werribee District Irrigation (ML) of Trades (ML) Bacchus Marsh 76000000 76 5 0 Irrigation District Macalister River 012600000126 3 0 Macalister Irrigation District 004,631190004,65086 0 SRW – NWU 0019020021 2 2 Source Source Thomson River 000046300463 7 (2) Werribee River 0000050 5 1 0 Werribee Irrigation District 00000016216215 0 Total Trades (ML) 76 126 4,650 19 465 5 162 5,503 0 Number of Trades 5 3 86 1 8 1 15 0 119 1. This table summarises all recorded water entitlement transfer, divide and transfer and variation applications for low and spill reliability water shares. Some other trades were still in progress at year end and will be fi nalised in 2012–13. 2. Transfer applications result in a change of ownership. In some cases, the change of ownership occurs with a transfer of land. Transfers of ownership that are part of a water/land sale are not separated out. 3. A variation application occurs without a change in ownership. 4. Delivery systems are grouped to reduce complexity caused by small delivery systems.
Regulated Systems Transfer of Low Reliability Water Shares (Volume (ML)) Destination
Total Number of
Bacchus MarshBacchus District Irrigation River Macalister Macalister District Irrigation SRW – NWU River Thomson Werribee River Werribee District Irrigation Sales (ML) Sales Bacchus Marsh 67000000 67 4 Irrigation District Macalister River 0680000068 2 Macalister Irrigation District 002,98300002,983 54 SRW – NWU 0000000 0 0 Source Source Thomson River 00003600 36 1 Werribee River 0000000 0 0 Werribee Irrigation District 000000125125 11 Total Purchases (ML) 67 68 2,983 0 36 0 125 3,279 Number of Purchases 4 2 54 0 1 0 11 72 1. This table summarises all recorded water entitlement transfer and divide and transfer applications for low and spill reliability water shares. Some other trades were still in progress at year end and will be fi nalised in 2012–13. 2. Transfer applications result in a change of ownership. In some cases, the change of ownership occurs with a transfer of land. Transfers of ownership that are part of a water/land sale are not separated out. 3. Delivery systems are grouped to reduce complexity caused by small delivery systems.
www.srw.com.au Southern Rural Water Annual Report 2011–12 89 Appendices
Appendix 2 – Unregulated systems water data
Trade of Groundwater Take and Use Licences 2011–12 Permanent trade Temporary trade Trade as part of land transfer Water System Source Number Volume (ML) Number Volume (ML) Number Volume (ML) Bungaree (GMU) – – 3 39.0 3 226.5 Cardigan (GMU) 1 8.5 1 3.0 – – Colongulac (GMU) – – – – 1 12.0 Condah (GMU) – – – – 3 343.0 Cut Paw Paw (GMU) – – – – 1 0.5 Denison (GMU) – – 1 176.0 9 942.9 Deutgam (GMU) 1 7.8 3 187.5 4 113.0 Giffard (GMU) 1 900.0 1 50.0 1 720.0 Glenelg (GMU) – – 1 50.0 2 35.0 Glenormiston (GMU) – – – – 1 62.0 Hawkesdale (GMU) 2 40.0 4 530.0 2 245.9 Heywood (GMU) – - – – 6 422.8 Koo Wee Rup (GMU) 9 209.3 4 79.5 12 475.3 Merrimu (GMU) 1 65.0 1 18.0 1 61.0 Moe (GMU) – – 2 6.0 1 164.6 Moorabbin (GMU) 1 2.0 – – – – Nepean (GMU) 2 95.0 7 452.3 3 36.9 Nullawarre (GMU) 3 29.5 3 254.0 4 350.2 Rosedale (GMU) 3 70.0 1 40.0 2 222.0 Sale (GMU) 8 1,208.8 3 54.5 6 1,814.9 Unincorporated (GMU) 2 67.0 1 25.0 26 1,775.6 Wa De Lock (GMU) 1 30.0 – – 7 636.7 Wandin Yallock (GMU) – – 2 10.0 3 58.0 Warrion (GMU) 3 63.0 – – 4 574.4 Wy Yung (GMU) – – – – 2 154.2 Yangery (GMU) – – 2 19.0 6 689.1 Yarram (GMU) – – 2 258.0 4 38.1 Total 38 2,795.9 42 2,251.8 114 10,174.6 1. This table shows the number and volume (ML) of trades of groundwater take and use licences. Temporary and permanent volume trades indicate the trade of water across different locations, as distinct from ownership changes that are part of land transfers.
90 Southern Rural Water Annual Report 2011–12 www.srw.com.au Appendices
Trade of Surface Water Take and Use Licences 2011–12 Permanent trade Temporary trade Trade as part of land transfer Water System Source Number Volume (ML) Number Volume (ML) Number Volume (ML) Barwon – – 7 136.3 9 127.3 Bunyip 2 46.0 6 97.4 18 378.1 East Gippsland – – – – 1 12.0 Glenelg 1 5.0 1 2.5 3 8.8 Hopkins 2 76.0 4 251.5 1 48.0 Latrobe 4 132.7 6 229.0 28 1,319.6 Maribyrnong – – – – 4 57.1 Mitchell 2 30.0 2 50.0 10 489.9 Moorabool 1 7.0 – – 10 509.4 Otway Coast – – 1 20.0 5 217.2 Portland Coast – – – – 3 122.2 Snowy – – 2 59.0 1 2.2 South Gippsland 2 8.5 – – 24 299.0 Tambo – – – – 2 32.2 Thomson/Macalister – – 5 154.5 11 580.1 Werribee – – – – 1 2.2 Total 14 305.2 34 1,000.2 131 4,205.3 1. This table shows the number and volume (ML) of trades of surface water take and use licences. Temporary and permanent volume trades indicate the trade of water across different locations, as distinct from ownership changes that are part of land transfers.
www.srw.com.au Southern Rural Water Annual Report 2011–12 91 Appendices to the Annual Report for the year ended 30 June 2012
Unregulated Surface Water Entitlements Irrigation Domestic Commercial / Other Total Metered and stock Industrial purposes usage (ML) PCV License Volume No. of Volume No. of Volume No. of Volume No. of Volume No. of Volume Basin (ML) Type (ML) licences (ML) licences (ML) licences (ML) licences (ML) licences (ML) Registration licence 8,626.6 261 228.6 14 134.2 18 8,989.4 293 Barwon 60,791 Take and use licence 5,226.9 130 127.6 55 250.0 15 74.9 13 5,679.4 213 1,326.2 Bulk Entitlement 55,733.0 3 70,401.8 509 Registration licence 19,114.6 565 2,010.5 71 929.5 124 22,054.6 760 Bunyip 45,549 Take and use licence 17,501.6 431 644.6 277 468.4 35 589.4 120 19,204.0 863 2,379.2 Bulk Entitlement 5 41,258.6 1,628 Registration licence 168.4 4 2.0 1 5.7 1 176.1 6 East Take and use licence 615.0 13 33.8 11 5.4 3 5.6 2 659.8 29 53.9 Gippsland Bulk Entitlement 622.0 3 1,457.9 38 Registration licence 1,586.2 40 52.9 4 17.8 4 1,656.9 48 Glenelg Take and use licence 883.2 20 107.0 37 13.7 3 39.8 8 1,043.7 68 94.6 Bulk Entitlement 4,554.0 4 7,254.6 120 Registration licence 5,891.7 110 23.0 4 33.0 7 5,947.7 121 Hopkins Take and use licence 11,096.8 127 79.3 33 47.0 4 29.7 7 11,252.8 171 2,536.6 Bulk Entitlement 629.0 2 17,829.5 294
Lake Registration licence 3,443.1 86 87.0 2 152.8 13 3,682.9 101 Corangamite Take and use licence 1,018.7 24 6.6 3 77.4 4 99.2 9 1,201.9 40 52.3 4,884.8 141 Registration licence 4,785.4 167 258.9 10 242.0 41 5,286.3 218 Latrobe 275,193 Take and use licence 17,786.9 469 318.3 134 659.0 17 5,648.3 125 24,412.5 745 3,410.4 Bulk Entitlement 183,442.0 14 213,140.8 977 Registration licence 1,571.5 68 41.2 3 15.0 2 1,627.7 73 Maribyrnong 10,765 Take and use licence 1,671.0 59 304.6 72 17.4 5 0.0 0 1,993.0 136 121.4 Bulk Entitlement 8,633.0 8 12,253.7 217 Registration licence 2,694.5 103 0.0 0 2,694.5 103 Mitchell Take and use licence 16,058.4 187 194.6 73 77.8 8 60.2 12 16,391.0 280 4,727.3 Bulk Entitlement 5,902.0 1 24,987.5 384 Registration licence 5,650.6 154 180.2 4 0.0 0 5,830.8 158 Moorabool 46,427 Take and use licence 3,459.7 126 63.4 27 93.0 7 0.0 0 3,616.1 160 1,100.4 Bulk Entitlement 43,100.0 7 52,546.9 325
92 Southern Rural Water Annual Report 2011–12 www.srw.com.au Appendices
Unregulated Surface Water Entitlements continued Irrigation Domestic Commercial / Other Total Metered and stock Industrial purposes usage (ML) PCV License Volume No. of Volume No. of Volume No. of Volume No. of Volume No. of Volume Basin (ML) Type (ML) licences (ML) licences (ML) licences (ML) licences (ML) licences (ML) Registration licence 5,702.9 190 101.1 8 1,977.7 182 7,781.7 380 Otway 59,000 Take and use licence 5,031.6 107 143.2 65 159.4 19 1,391.6 113 6,725.8 304 998.9 Coast Bulk Entitlement 19,667.0 6 34,174.5 690
Portland Registration licence 424.4 21 5.0 1 429.4 22 Coast Take and use licence 1,106.3 25 52.0 21 14.4 4 4.4 1 1,177.1 51 53.7 1,606.5 73 Registration licence 1,503.6 34 15.7 1 5.0 1 1,524.3 36 Snowy Take and use licence 3,882.3 54 52.8 23 36.6 3 26.5 6 3,998.2 86 280.4 Bulk Entitlement 2,201.0 2 7,723.5 124 Registration licence 8,178.9 240 152.7 29 2,257.3 335 10,588.9 604 South Take and use licence 10,787.0 227 564.8 246 101.6 18 1,562.2 284 13,015.6 775 1,199.6 Gippsland Bulk Entitlement 17,087.0 13 40,691.5 1,392 Registration licence 1,244.0 51 5.4 1 0.0 0 1,249.4 52 Tambo Take and use licence 3,838.2 79 252.9 108 94.1 6 10.1 5 4,195.3 198 172.1 Bulk Entitlement 3,648.0 4 9,092.7 254 Registration licence 3,107.0 111 38.2 1 0.0 0 3,145.2 112 Thomson/ 460,430 Take and use licence 13,705.8 169 112.2 51 3,419.1 11 8.8 2 17,245.9 233 3,552.3 Macalister Bulk Entitlement 5 20,391.1 350 Registration licence 725.7 42 19.1 2 0.0 0 744.8 44 Werribee 28,552 Take and use licence 823.2 27 24.2 11 250.7 6 0.0 0 1,098.1 44 0.0 Bulk Entitlement 10,577.0 5 12,419.9 93 Registration licence 74,419.1 2,247 0.0 0 3,216.5 155 5,775.0 729 83,410.6 3,131 Total Take and use licence 114,492.6 2,274 3,081.9 1,247 5,785.0 168 9,550.7 707 132,910.2 4,396 22,059.3 Bulk Entitlement 355,795.0 82 Grand Total 188,911.7 4,521 3,081.9 1,247 9,001.5 323 15,325.7 1,436 572,115.8 7,527 Entitlements in Latrobe include those both unregulated and partially regulated. The partially regulated entitlements are shown in the Regulated table. The bulk entitlement information has been captured from the State Water Register
www.srw.com.au Southern Rural Water Annual Report 2011–12 93 Appendices to the Annual Report for the year ended 30 June 2012
Groundwater Take and Use Entitlements 2011–2012 Irrigation Industrial or Other Total Domestic Usage Commercial Purposes and Stock* D&S No. Metered Water System PCV Volume No. of Volume No. of Volume No. of Volume No. of D&S estimated metered usage Source (BEE) (ML) (ML) licences (ML) licences (ML) licences (ML) licences bores use (ML) bores (ML) Bungaree (GMU) 5,321 4,928.4 95 183.5 6 151.2 3 5,263.1 104 252 378.0 143 1,968.2 Cardigan (GMU) 3,967 831.5 18 53.6 5 3,002.0 2 3,887.1 25 92 138.0 23 293.6 Colongulac (GMU) 4,695 3,833.5 24 24.1 3 328.9 42 4,186.5 69 125 187.5 22 1,060.0 Condah (GMU) 7,437 7,359.2 36 175.5 5 7,534.7 41 48 72.0 41 2,358.0 Corinella (GMU) 2,550 99.0 3 39.0 2 524.1 9 662.1 14 88 132.0 9 19.7 Cut Paw Paw (GMU) 3,650 169.0 2 344.5 2 1.6 1 515.1 5 - 0.0 4 83.9 Denison (GMU) 17,743 13,382.0 66 5,119.4 61 18,501.4 127 225 337.5 101 2,571.4 Deutgam (GMU) 5,100 5,004.1 144 26.0 3 52.0 1 5,082.1 148 180 18.0 193 978.5 Frankston (GMU) 3,200 771.9 20 894.5 9 19.0 1 1,685.4 30 138 207.0 26 119.3 Gellibrand (GMU) - 0.0 2 3.0 Gerangamete (GMU) 20,000 8,000.0 1 8,000.0 1 2 3.0 6 0.0 Giffard (GMU) 5,670 5,631.5 13 54.0 3 3.0 1 5,688.5 17 70 105.0 17 845.0 Glenelg (GMU) 32,660 31,988.1 75 123.0 5 548.0 4 32,659.1 84 1,183 1,774.5 98 7,004.4 Glenormiston (GMU) 2,565 2,523.0 12 168.4 29 2,691.4 41 85 127.5 14 1,261.3 Hawkesdale (GMU) 16,161 12,034.1 57 35.4 4 385.1 57 12,454.6 118 1,186 1,779.0 65 5,630.0 Heywood (GMU) 8,500 6,735.8 59 68.3 8 116.1 23 6,920.2 90 1,275 1,912.5 54 1,749.1 Jan Juc (GMU) 11,250 4,250.0 2 7,000.0 1 11,250.0 3 5 8.0 7 3,787.0 Koo Wee Rup (GMU) 12,915 9,681.0 241 2,196.3 34 458.9 108 12,336.2 383 1,299 1,948.5 251 1,924.3 Lancefi eld (GMU) 1,485 1,083.9 13 293.6 1 1,377.5 14 76 114.0 20 105.5 Leongatha (GMU) 6,500 952.8 11 103.0 2 784.9 21 1,840.7 34 92 138.0 14 72.4 Merrimu (GMU) 451 428.1 12 12.0 2 0.0 0 440.1 14 14 21.0 19 145.1 Moe (GMU) 8,200 3,566.1 28 23.6 5 403.2 64 3,992.9 97 134 201.0 29 330.1 Moorabbin (GMU) 2,700 2,444.0 46 172.8 11 0.0 1 2,616.8 58 370 555.0 68 873.1 Nepean (GMU) 6,013 6,084.0 68 25.5 5 0.0 0 6,109.5 73 2,155 2,155.0 77 3,152.0 Newlingrook (GMU) 1,977 121.0 1 25.0 2 1,811.5 3 1,957.5 6 4 6.0 5 23.6 Nullawarre (GMU) 21,280 21,804.9 106 149.0 2 786.9 126 22,740.8 234 959 1,438.5 165 10,630.0 Orbost (GMU) 1,201 1,200.0 3 16.5 1 1,216.5 4 7 10.5 4 0.3 Paaratte (GMU) 4,606 13.0 1 3,198.9 5 3,211.9 6 4 6.0 1 321.5 Portland (GMU) 7,795 174.0 3 15.0 1 7,605.3 4 7,794.3 8 5 7.5 7 2,638.5 Rosedale (GMU) 22,313 12,869.5 56 172.0 3 9330.5** 5 22,372.0 64 178 267.0 51 3,537.5 Sale (GMU) 21,212 17,424.5 98 174.0 7 3,639.2 8 21,237.7 113 383 574.5 114 6,323.6 Stratford (GMU) 27,645 836.0 7 26809.0*** 1 27,645.0 8 3 4.5 7 1.2 Tarwin (GMU) 1,300 2.0 1 35.0 1 1.2 1 38.2 3 700 1,050.0 1 15.1 Wa De Lock (GMU) 30,172 25,760.1 141 62.2 5 3,318.6 107 29,140.9 253 408 612.0 139 3,239.5 Wandin Yallock (GMU) 2,924 2,918.9 186 14.0 2 0.0 0 2,932.9 188 82 123.0 208 285.1 Warrion (GMU) 13,836 13,906.0 110 70.0 1 110.0 31 14,086.0 142 357 535.5 131 3,497.1 Wy Yung (GMU) 7,463 7,462.0 60 0.0 0 7,462.0 60 32 48.0 70 346.6
94 Southern Rural Water Annual Report 2011–12 www.srw.com.au Appendices
Groundwater Take and Use Entitlements 2011–2012 continued Irrigation Industrial or Other Total Domestic Usage Commercial Purposes and Stock* D&S No. Metered Water System PCV Volume No. of Volume No. of Volume No. of Volume No. of D&S estimated metered usage Source (BEE) (ML) (ML) licences (ML) licences (ML) licences (ML) licences bores use (ML) bores (ML) Yangery (GMU) 14,103 11,442.1 113 1,451.6 10 1,457.7 34 14,351.4 157 888 1,332.0 179 3,006.1 Yarram (GMU) 25,317 21,138.0 57 2,760.0 5 1,797.0 30 25,695.0 92 324 486.0 83 6,739.9 Unincorporated (GMU) 46,208.0 821 8,716.6 214 16,437.4 512 71,362.0 1,547 9,394 14,091.0 740 9,485.1 Total 302,798.0 2806 22,286.5 365 103,854.6 1,304 428,939.1 4,475 22,824.0 32,907.0 3,206 86,422.6 *As reported in Water Accounts 2011 **Includes 9,304 ML power generation licences not recorded in Water Register ***Includes 26,809 ML power generation licences not recorded in Water Register Domestic and Stock bore numbers and use (ML) as reported in State Water Accounts 2011 Notes Bungaree (GMU). Goulburn Murray Water hold 2 mineral water licences totalling 70 ML. (Not included in totals above.) During 2011–2012, SRW increased licence entitlements by approx 5000 ML as a result of the State Dairy Shed amnesty. The following GMUs are now subject to PCV review. Bungaree, Condah, Denison, Giffard, Glenormiston, Nullawarre, Orbost, Rosedale, Sale, Wa De Lock Z1, Warrion, Yangery and Yarram.
www.srw.com.au Southern Rural Water Annual Report 2011–12 95 96 Southern Rural Water Annual Report 2011–12 www.srw.com.au Appendices
Appendix 3 – Bulk entitlements
Tarago River Thomson/Macalister • There are no amendments to this Bulk Entitlement Order. There have been no The following information is provided in The following information is provided new bulk entitlements granted. There accordance with section 15.3 of the Bulk in accordance with Section 20.3 has been no program approved under Entitlement Order 2009: of the Thomson/Macalister Bulk sub-clause 18.2 to date. There has been Entitlement Order: • No releases were made from the Tarago no program approved under sub-clause Reservoir to supply primary entitlements • At 30 June 2012, Southern Rural Water’s 19.3 to date (SRW’s) entitlement in the Thomson • Southern Rural Water (SRW) submitted • SRW is not aware of any failure to comply Reservoir was 40,729 ML a Bulk Entitlement Metering Program for with the provision of the bulk entitlement. the Tarago in January 2012 in accordance • Releases from the Thomson Reservoir To minimise the potential for breaching with the Ministerial Guidelines for the to supply primary entitlements were compliance with environmental fl ows, Development of Bulk Entitlement Metering 9,771 ML we have developed a Risk Management Programs. The Minister for Water • 0.0 ML was transferred to the Strategy and Action plans approved the updated metering program Bacchus Marsh Irrigation District for • 2011–12 diversion limits are currently for all bulk entitlements held by SRW. emergency supplies being fi nalised. Results of the modelled • SRW has complied with the • Volume of SRW’s share of storage and observed data for the 2011–12 bulk entitlement capacity as at 1 July 2012 under clause season indicated that the cumulative • SRW is not aware of any failure to comply 9 was 30,992 ML. The volume of infl ows departure (percentage of estimated long with the provisions of the bulk entitlement attributed to SRW under clauses 10.1 and term average diversion) was –52% with 10.2 was 17,507 ML a compliance trigger of +20%. No report • SRW has not experienced any diffi culty was required by the Minister in complying with the bulk entitlement; • The annual amounts of water taken therefore no remedial action has been by Southern Rural Water from the • SRW has not experienced any diffi culty taken or is proposed waterway were: in complying with the bulk entitlement, – Southern Channel – 58,321 ML therefore no remedial action has – Northern Channel – 27,109 ML been taken – Eastern Channel – 19,799 ML • SRW has recorded daily volumes and – Cowwarr Channel – 18,180 ML can provide these on request. These • The volume of water held at Lake were recorded at Lake Glenmaggie, Glenmaggie as at 30 June 2012 was Cowwarr Weir, Wandocka (environmental 158,245 ML fl ow), Maffra Weir (environmental fl ow), Main Northern Channel, Main Eastern • The annual amount of water taken by the Channel, Main Southern Channel and primary entitlement holders under this Cowwarr Channel Order was 86,205 ML • SRW has submitted a metering plan in • There were no credits granted under line with the Department of Sustainability clause 17 of the Order and Environment’s Bulk Entitlement • There were no temporary or permanent guidelines. The Minister for Water transfers of a bulk entitlement or any other approved the updated metering program entitlement to SRW for all bulk entitlements held by SRW • There were no alterations made to Schedules 1 or 2 under sub-clause 8.1 of the Order
• Allocation share transfers: refer to Appendix 1
www.srw.com.au Southern Rural Water Annual Report 2011–12 97 Appendices to the Annual Report for the year ended 30 June 2012
Werribee River • As at 30 June 2011, shares of passing • There have been no permanent transfers fl ows from Lake Merrimu were: this season to or from either irrigation The following information is provided – Western Water 235.9 ML district or the licensed river diverters in accordance with Section 18.1 of the – SRW 39.3 ML Werribee Bulk Entitlement Order: • There have been no changes to this – Unallocated 39.3 ML bulk entitlement • Water taken from: • SRW has not received any credits. For – Bacchus Marsh Diversion Weir was • There have been no new bulk the year 2011–12 a total of 77.2 ML was 3,036.8 ML entitlements granted returned to the system waterway via the – Werribee Diversion Weir was Bacchus Marsh main channel outfall. • Allocation share transfers: refer to 12,523.0 ML Appendix 1 – Maddingley Pumps was 0.0 ML • Southern Rural Water did not release water under subclause 13(b) • There are no amendments to this Bulk • Water taken by Southern Rural Water Entitlement Order. SRW complied with all (SRW) from the system waterway at each • One temporary transfer from this BE has provisions of this bulk entitlement of the diversion weirs: taken place. SRW transferred 2,000 ML • SRW complied with all provisions of this – Lerderderg Weir to Goodmans Creek, to Western Water’s share of Merrimu bulk entitlement a total of 3,600 ML was diverted (SRW’s as a form of payback from Werribee share 360 ML) and Bacchus Marsh District transfer • SRW did not experience any diffi culties in – From Goodmans Creek to Merrimu from the SRW Drought Reserve in complying with this bulk entitlement Thomson Reservoir Reservoir, a total of 5,151 ML was • SRW has previously submitted an diverted (SRW’s share 515.1 ML) • No permanent transfer of bulk environmental management plan – Werribee Upper Diversion Weir to Pykes entitlements were undertaken in 2011–12 to Department of Sustainability and Creek, a total of 1,091 ML was diverted • SRW applied the following restrictions Environment. Southern Rural water • Volume of water taken by primary to primary entitlement holders in the has submitted a metering plan for entitlement holders including outfalls: Werribee and Bacchus Marsh Irrigation the Werribee system in line with the – Bacchus Marsh 1,952.3 ML Districts and licensed diverters on the Department of Sustainability and – River Diverters 378.5 ML Werribee River: Environment’s Bulk Entitlement guidelines. – Myrniong 39.21 ML The Minister for Water approved the – Werribee 7846.4 ML updated metering program for all bulk entitlements held by SRW
Allocation announcements for Werribee and Bacchus Marsh • SRW has recorded daily volumes and can provide this on request. These Irrigation Districts 2011–12 include the daily fl ow passing each of the Month HRWS LRWS Date Confi rmed storages including Pykes Creek Reservoir, July–11 100% 5% 07/07/2011 Melton Reservoir and Lake Merrimu. If July–11 100% 15% 15/07/2010 required SRW will also report on the daily August–11 100% 15% 09/08/2011 passing fl ow on each of the following September–11 100% 20% 06/09/2011 diversion structures including Upper October–11 100% 20% 04/10/2011 Werribee Diversion Weir, Bacchus Marsh Diversion Weir, Lerderderg Diversion Weir, October–11 100% 25% 18/10/2011 Goodmans Creek Diversion Weir and November–11 100% 25% 15/11/2011 Werribee Diversion Weir December–11 100% 30% 01/12/2011 January–12 100% 35% 10/12/2012 March–12 100% 45% 06/03/2012 May–12 100% 50% 30/05/2012 June–12 100% 75% 12/06/2012
98 Southern Rural Water Annual Report 2011–12 www.srw.com.au Appendices
Maribyrnong River • 0 ML was taken from the waterway by • SRW failed to meet the passing fl ow primary entitlement holders this season requirement of 1 ML/d at the Sunbury The following information is provided gauging station between 10–12 in accordance with Section 19.1 of the • There have been no temporary January 2012 Maribyrnong Bulk Entitlement Order: or permanent transfers from this Bulk Entitlement • SRW experienced diffi culties in complying • No water was released this year to supply with this bulk entitlement's passing fl ow licence entitlements • A total of 0.0 ML has been transferred requirement at the Sunbury gauging from Western Water’s Macedon or • Southern Rural Water’s share of station due to the distance between Sunbury system into the Maribyrnong Rosslynne Reservoir at 30 June 2012 the release point and the gauging site system this season was 849 ML and the varying system losses during • There are no alterations to Schedule 1 • Taking into account evaporation and summer. SRW is looking to apply for or 2 of this Bulk Entitlement measurement discrepancies, Southern a minor amendment to the BE to allow Rural Water (SRW) had infl ows of • There have been no temporary transfers for some fl exibility in the passing fl ow at 159.3 ML within the system the Sunbury gauging site and has also undertaken further upstream streamfl ow • No allowances for transfer and operating • There have been no amendments to this monitoring to better predict possible losses were made this year as no fl ows bulk entitlement passing fl ow shortfalls were provided for irrigation • There have been no new bulk • SRW has had 67.5 ML deducted for entitlements granted passing fl ow requirements • SRW has previously submitted an • SRW had one minor breach of its passing environmental management plan fl ow requirement, where we failed to meet to Department of Sustainability and the 1 ML/d passing fl ow for a period two Environment. SRW has submitted a days. The shortfall over this period was metering plan for the Maribyrnong 0.6 ML. The breach occurred during very system in line with the Department of hot weather. Stream fl ow did not drop Sustainability and Environment’s Bulk below 0.6 ML/d Entitlement guidelines. The Minister for Water approved the updated metering program for all bulk entitlements held by SRW
www.srw.com.au Southern Rural Water Annual Report 2011–12 99 Appendices to the Annual Report for the year ended 30 June 2012
Latrobe River • No diffi culties were experienced in Yallourn Energy complying with this bulk entitlement The following information is provided The following information is provided in in accordance with Section 16.3 of the • SRW has recorded daily volumes and can accordance with Section 12.3 and 12.1 Bulk Entitlement Order 1996: provide those on request. These include: of the Bulk Entitlement Order 1996: – Daily passing fl ows at Blue Rock • At 1 July 2011, Blue Rock Reservoir • The annual amount of water designated Reservoir, Lake Narracan and contained 206,928 ML, 99.4% of capacity as taken by Southern Rural Water (SRW) Yallourn Weir from the waterway at its pumping station • At 30 June 2011, Lake Narracan – Daily passing fl ows at the Tanjil South, was 14,285 ML contained 5,353 ML, 74.3% of capacity Thoms Bridge and Rosedale gauging • In accordance with Clause 11.4, SRW • At 30 June 2012, Blue Rock Reservoir stations, and the estimated fl ow at has a network of meters installed within contained 21,0021 ML, 100% of capacity Swing Bridge gauging station – The estimated daily amount of water its low quality water system that enables • At 30 June 2012, Lake Narracan taken by licence holders from the it to determine the low quality water contained 2,970 ML, 41.2% of capacity waterway upstream and downstream of usage by both the Loy Yang A and Loy • At 30 June 2012, the amount of water in Yallourn Weir Yang B power stations. This equipment is Southern Rural Water’s (SRW’s) share – The daily fl ow into Blue Rock Reservoir checked monthly for validity and annually of Blue Rock Reservoir was 4,200 ML or and Lake Narracan for signal integrity 2.0% of the total capacity • SRW has not yet submitted an • There were no temporary and no • The annual amount of water taken environmental effects program. Southern permanent transfers of all or part of the by licence holders from the system Rural Water has submitted a metering bulk entitlement waterway was: plan in accordance with the Department • There are no existing or anticipated – 0.0 ML upstream of Yallourn Weir of Sustainability and Environment’s bulk diffi culties by SRW in complying with the – 1,622 ML downstream of Yallourn Weir entitlements guidelines. The Minister for bulk entitlement Water approved the updated metering • The amount of annual losses debited to • SRW has recorded daily volumes and can program for all bulk entitlements held SRW’s share of Blue Rock Reservoir was provide those on request. These include: by SRW 123.8 ML – Daily amount of water taken by • Internal spills into SRW’s share of storage SRW from the waterway at the in Blue Rock was 36.2 ML pumping station – Daily amount of water returned to the • There were no periods of rationing or system waterway or tributary streams restrictions imposed for licence holders from the works of SRW during 2011–12 – The estimated daily amount of water • SRW has provided for passing fl ow taken by licence holders from the requirements as specifi ed in the Bulk waterway upstream and downstream Entitlement Order for the complete year of Yallourn Weir • There were no temporary transfers and no permanent transfers of all or part of the bulk entitlement
• There were no bulk entitlement or licences transferred temporarily or permanently to SRW
• There were no amendments to this bulk entitlement
• There were no amounts supplied to any licence holders other than those specifi ed in Schedule 1 of the Order
100 Southern Rural Water Annual Report 2011–12 www.srw.com.au Appendices
Appendix 4 – Annual reporting of major non-residential water users
Number of customers Southern Rural Water mostly supplies water to customers for purposes that are farming or domestic, which are excluded from this report. Our only water supply is through irrigation districts; across the rest of our coverage area, we issue licences for water but do not directly supply water.
Table 1: Customer by volume range Volumetric Range – ML per year No. customers Equal to or greater than 200 ML and less than 300 ML 1 Equal to or greater than 300 ML and less than 400 ML 0 Equal to or greater than 400 ML and less than 500 ML 1 Equal to or greater than 500 ML and less than 750 ML 2 Equal to or greater than 750 ML and less than 1,000 ML 0 Greater than 1,000 ML 1 Total no. customers 5
Names of major customers and their participation in water conservation programs Southern Rural Water is not aware of any major customers participating in water conservation programs.
www.srw.com.au Southern Rural Water Annual Report 2011–12 101 Disclosure index The Annual Report of Southern Rural Water is prepared in accordance with all relevant Victorian legislations. This index helps to identify our compliance with statutory disclosure requirements.
Legislation Disclosure required Page reference
Report of operations
Charter and purpose FRD 22C Manner of establishment and the relevant Ministers 2 FRD 22C Objectives, functions, powers and duties 2,3,6–7 FRD 22C Nature and range of services provided 3
Management and structure FRD 22C Organisational structure 8 FRD 22C Directors of the Board 10–11
Financial and other information FRD 10 Disclosure Index 102–103 FRD 12A Disclosure of major contracts 38 FRD 22C Five-year summary of fi nancial results 42 FRD 22C Statement of workforce data, and merit and equity 33–34 FRD 22C Summary of fi nancial results for the year 43 FRD 22C Signifi cant changes in fi nancial position during the year 40 FRD 22C Operational and budgetary objectives, and performance against objectives 6–7 FRD 22C Major changes or factors affecting performance 40 FRD 22C Employment and conduct principles 34 FRD 22C Occupational health and safety 34–35 FRD 22C Subsequent events 40 FRD 22C Application and operation of Freedom of Information Act 1982 22 FRD 22C Application and operation of Whistleblowers Protection Act 2001 35 FRD 22C Statement of National Competition Policy 38 FRD 22C Statement of availability of other information 38 FRD 22C Environmental performance 14–19 FRD 22C Building and maintenance provisions of the Building Act 1993 38 FRD 22C Details of consultancies over $10,000 41 FRD 22C Details of consultancies under $10,000 41 FRD 25 Victorian Industry Participation Policy disclosures 38 FRD 27B Presentation and reporting of performance information 82 FRD 29 Workforce Data disclosures 33 FRD 121 Infrastructure Assets (Water/Rail) 64–65 SD 4.5.5 Risk management compliance attestation 37 SD 4.2(g) General information requirements 2, 43 SD 4.2 (j) Sign-off requirements 5
Ministerial Reporting Directions MRD 01 Performance Reporting 82 MRD 03 Environmental and social sustainability reporting 14–19, 30 MRD 04 Disclosure of information on bulk entitlements, transfers of water entitlements, allocations and 86–100 licences, irrigation water usage and licence requirements MRD 05 Annual reporting of non-residential major water users 101
102 Southern Rural Water Annual Report 2011–12 www.srw.com.au Disclosure index Disclosure index
Legislation Disclosure required Page reference
Financial statements 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) Comprehensive Operating Statement 43–44 SD 4.2(b) Balance Sheet 45 SD 4.2(b) Cash Flow Statement 47 SD 4.2(b) Notes to the fi nancial statements 49–78 SD 4.2(c) Compliance with applicable Australian accounting standards and other 49 authoritative pronouncements SD 4.2(c) Compliance with Ministerial Directions 5 SD 4.2(c) Accountable Offi cer’s declaration 81, 83 SD 4.2(d) Rounding of amounts 49 SD 4.2(f) Compliance with Model Financial Report 39–85
Other disclosures in notes to the fi nancial statements FRD 17A Long service leave, wage infl ation and discount rates 69 FRD 21A Responsible person and executive offi cer disclosures 73–74 FRD 102 Inventories 52–53, 64 FRD 103D Non current physical assets 64–66 FRD 104 Foreign currency 64 FRD 105A Borrowing costs 50 FRD 106 Impairment of assets 60 FRD 109 Intangible assets 67 FRD 112C Defi ned benefi t superannuation obligations 71–72 FRD 114A Financial instruments — general government entities and public non fi nancial corporations 74–78 FRD 119 Contributions by owners 54, 69 FRD 120 Accounting and reporting pronouncements applicable from 2011–12 reporting period 56–58 FRD 112B Employee superannuation funds 71–73
Legislation Freedom of Information Act 1982 22 Building Act 1983 38 Whistleblowers Protection Act 2001 35 Victorian Industry Participation Policy Act 2003 38
Bulk Entitlements Thomson Macalister 97 Werribee 98 Maribyrnong 99 Latrobe 100 Yallourn Energy 100 Tarago 97
www.srw.com.au Southern Rural Water Annual Report 2011–12 103 104 Southern Rural Water Annual Report 2011–12 www.srw.com.au Contact details: About this report Southern Rural Water This Annual Report has been prepared for the fi nancial year 1 July 2011 to 30 June 2012. 88 Johnson Street This report is printed on Revive Laser paper. This paper is: Maffra, VIC, 3860 • Manufactured in Australia from 100% recycled fi bre 1 Tower Road Werribee, VIC, 3030 • FSC Recycled Certifi ed
132 Fairy Street • Certifi ed carbon neutral under Depart of Climate Change & Energy Effi ciency’s National Warrnambool, VIC, 3280 Carbon Offset Standard (NCOS), an Australian Government initiative
Suite 1, 307 Maroondah Highway Through the Spicers ‘Recreate’ programme, sales of Revive Laser support Landcare Ringwood, VIC, 3134 Australia and the restoration and replanting of landfi ll sites throughout Australia.
Phone: (03) 5139 3100 © State of Victoria, Southern Rural Water 2012. This publication is copyright. No part may 1300 139 510 be reproduced by any process except in accordance with the provisions of the Copyright Act 1968. Fax: (03) 5139 3150 ISSN 1837–1992 Email: [email protected]
Website: www.srw.com.au