vision service success

2008-2009 annual report Contents

2 Corporate profile 4 Highlights 6 Chairman’s review 8 CEO’s report 10 Performance summary 11 Financial summary 14 Operational performance 20 Community and environment 24 Asset sustainability 30 Our customers 34 Our people 40 Business management 44 Organisational structure 45 SunWater executive 46 SunWater board 48 Corporate governance 54 Annual financial report 76 Statement of corporate intent summary 81 Key statistics 87 SunWater water supply schemes map 2009 IBC Glossary

This Annual Report is a summary of programs and activities undertaken in meeting key performance indicators as set out in SunWater’s 2008-09 Statement of Corporate Intent and summarised on page 76-80 of this report. The report outlines the vision, service and success of the organisation. It describes the initiatives and achievements of the past financial year, and details the organisation’s future plans and prospects as a leader in water infrastructure development and management. Also contained in this report are those events, which have occurred after the reporting period, that have a significant impact on the organisation. SunWater is committed to open and accountable governance and, through this Annual Report, aims to meet the needs of all SunWater stakeholders in providing comprehensive and accurate information. SunWater welcomes your feedback on this report. The Annual Report can be accessed on SunWater’s website: www..com.au Hard copies are also available on request: SunWater Limited Level 10, 179 Turbot Street PO Box 15536 City East Brisbane QLD 4002 Phone (07) 3120 0000 Fax (07) 3120 0260 Customer Information Line 131589 SunWater Limited is a registered water service provider under the Water Act 2000. www.sunwater.com.au 1 SunWater Limited annual report 2008–2009 Operational Performance vision service success

Our vision Our mission Our values To be leaders in water To enhance the value of the Delivering results service delivery providing corporation by providing Providing outstanding outstanding solutions cost-effective and commercial service for our customers and water services that add value Working together the community. for our customers. Taking responsibility These services include: Respecting others, and Bulk water storage and Being open to change. distribution Water treatment, reticulation and drainage Water infrastructure development Water facilities management, and Specialist consultancy and services.

www.sunwater.com.au SunWater Limited annual report 2008–2009 Operational Performance 1 corporate profile.

SunWater is ’s largest Heritage bulk water service provider, For more than 80 years, SunWater (in its present and previous forms) has built a owning and managing around regional network of water supply infrastructure throughout Queensland. It owns and manages this network of infrastructure, which underpins a diverse range of $7 billion in water infrastructure sectors including mining, power generation, industrial, urban communities and assets and supplying 40% of irrigated agriculture. all water used commercially Core capabilities in Queensland. SunWater’s industry expertise and experience are unmatched in developing and managing water infrastructure by providing tailor-made solutions for industry, mining and government. The organisation focuses on meeting its clients’ needs, whether they are for new commercial water assets, efficient management of existing infrastructure, or the provision of expert advice in water management. SunWater works with its customers, business partners and suppliers in a fair, open and commercial manner to achieve mutually beneficial and cost-effective outcomes. SunWater’s expertise is in developing and managing: and weirs Major pumping stations Bulk water pipelines Irrigation channels and drainage systems, and Water treatment facilities. SunWater also provides a range of infrastructure management and consulting services including: Design and design review services Asset management, planning and review Flood hydrology, hydraulics and flood management Infrastructure operations and management Customer water account management and billing, and Water management and policy strategy advice. SunWater actively pursues developments that span this range of water solutions and remains flexible around delivery options to provide high-quality water supply and infrastructure outcomes for its customers and clients. Shareholders SunWater Limited is a Company Government Owned Corporation (GOC), and its shares are held by its shareholding Ministers on behalf of the State of Queensland. SunWater’s shareholding Ministers were, at the time of preparing this report, the Honourable Andrew Fraser, Treasurer and Minister for Employment and Economic Development and the Honourable Stephen Robertson, Minister for Natural Resources, Mines and Energy and Minister for Trade.

2 SunWater Limited annual report 2008-2009 Corporate Profile Regions Customers SunWater’s business activities and interests SunWater’s customer base has diversified as the business has grown. Queensland- are spread throughout Queensland from based irrigators have historically comprised the majority of SunWater’s customers as far north as Bamaga, west to Mount Isa, and still represent a significant portion of its customer base of almost 5,000. and south to St George. SunWater maintains In the 2008-09 financial year, water infrastructure consulting and facilities services to a network of offices and depots across industrial enterprises represented approximately 65.8% of total revenue. Queensland, enabling it to provide services to a range of asset owners in regional areas. SunWater’s commercial customers include mines, power generators, local governments, and other water infrastructure owners and developers to whom The majority of the business operations are SunWater provides knowledge-based services. in Queensland, but SunWater also operates and maintains water infrastructure in other Water sources states of . SunWater’s expertise Approximately 40% of the water used commercially in Queensland is managed by in developing tailored water solutions is SunWater via 23 water supply schemes and three subsidiary companies - North recognised throughout Australia. West Queensland Water Pipeline Pty Ltd, Eungella Water Pipeline Pty Ltd and National policy agenda Burnett Water Pty Ltd. SunWater is actively involved in national SunWater’s water storage and distribution infrastructure has a replacement value of and state water policy agendas through $7 billion and includes: key advisory groups including the national 19 major dams Water Accounting Standards Board (WASB), 63 weirs and barrages the Australian Water Resource Information 80 major pumping stations System (AWRIS) Steering Committee and the 2,500 km of pipelines and open channels, and National Program for Sustainable Irrigation 730 km of drains. (NPSI) Program Management Committee. SunWater’s expertise is valued, in that it Under the Resource Operations Licences and interim Resource Operations brings a water service provider’s and water Licences issued by the Department of Environment and Resource industry practitioner’s perspective to National Management (DERM), SunWater manages a total water allocation of 2.82 million Water Initiative related programs and projects. megalitres (ML). This includes 1.92 million ML of customer-owned allocations and a 0.54 million ML allowance for distribution losses within pipeline and open channel distribution systems.

Pictured above: Colin Bendal inspecting Emerald’s Fairbairn , which provides water supply to one of Queensland’s largest cotton growing regions. SunWater Limited annual report 2008-2009 Corporate Profile 3 highlights.

Consolidated financial Operational performance performance Water deliveries across all schemes totalled 1.05 million ML, a slight increase on Total revenue (excluding the the 1.02 million ML delivered in 2007-08, despite being hampered by drought and transaction and the proceeds from bank then flood. guarantees), exceeded 2007-08 by $8.8m. Business cases and investigations for proposed water infrastructure development Expenses excluding impairment were projects and upgrades to existing assets were progressed. These included the $2.3m lower than 2007-08. Labour cost Dam and Pipelines project, the Nathan Dam and Pipelines project, savings resulting from the Seqwater the Glebe Weir Raising and Pipeline project, the Lower Fitzroy River Infrastructure transaction of $6.0m, were offset by higher project, Burdekin Falls Dam Raising project, and the Water for Bowen project. depreciation expense of $1.7m and higher Approval for the construction of the $42.5m, 38 km Cloncurry Pipeline was legal fees of $1.7m, mostly associated with obtained in the second quarter of the financial year, with work due to be the Paradise Dam legal action. completed in early 2010. The pipeline will provide a more reliable water supply to Return on assets (excluding the Seqwater Cloncurry from SunWater’s existing North West Queensland Water Pipeline. It will transaction) was 4.5%, up from 2.3% service future population and industrial growth in the township. in 2007-08. Water supply for mining and energy operations around Queensland is an Income tax was $6.9m, down from $8.0m important business development area, with several major projects under in 2007-08. This was due to prior year discussion with mining companies. adjustments made following a ruling by the Community and environment Australian Tax Office (ATO) in September 2008 which allowed SunWater, as an SunWater provided individual sponsorship for 60 community events across irrigation water provider, to write-off regional Queensland. These sponsorships reflect SunWater’s strong ties with eligible capital expenditure incurred after the communities in which it operates and where its employees and their families 1 July 2004 over three years. It also live. Involvement in local shows, fundraisers, sporting events and other activities reflects a favourable ruling by the ATO also provided the opportunity to promote SunWater’s water safety campaign to in August 2009 that treats the Seqwater recreational users of lakes and dams. transaction as tax neutral. The Environmental Impact Statement (EIS) for the Water for Bowen project is near completion and is planned for submission to the Co-ordinator General for review in late 2009. A draft Cultural Heritage Management Plan has also been negotiated with the traditional owners.

EISs are being conducted on several other key projects including the Connors River Dam and Pipelines and the Nathan Dam and Pipelines. The Community Liaison Groups for those projects continued to meet to allow local views to be included as part of the environmental impact assessment process.

The Weir fishway is scheduled to be operational by March 2010. This follows completion of design work during the year, and the subsequent start of construction in July 2009.

4 SunWater Limited annual report 2008-2009 Highlights Asset sustainability Our people SunWater responded to flooding and asset SunWater continued to develop flexible work arrangements to offer employees a damage during Queensland’s natural healthy work/life balance and to retain valuable skills and expertise. disaster emergency in early 2009, with the emergency requiring diversion of resources SunWater continued its commitment to ongoing development of learning and from other projects. development programs to maintain organisational capability.

The majority of over 500 refurbishment and Workplace Health and Safety continued to be a critical focus with emphasis enhancement projects were completed on a No-Harm goal. A revised Workplace Health and Safety policy was approved during the year, at a cost of $11.0m. and a Safety Leadership training program was introduced for managers This annual program includes projects and supervisors. aimed at refurbishing aging assets, The Lost Time Injury Frequency Rate (LTIFR) for 2008-09 was 8.7, which is reducing service risk, and improving significantly lower than the previous year and marginally lower than medium-term Workplace Health and Safety. averages. Following an injury to an employee in an electrical accident, SunWater A $2.5m design and relocation of a undertook an internal electrical safety audit and introduced changes to address significant portion of SunWater’s Collinsville the issues identified. Pipeline was completed during the year. Business management The relocation makes way for an expansion of mining operations, and was funded by SunWater progressed the integration of its two separate quality management the mining company utilising the pipeline. systems into a whole-of-organisation quality management system.

In close consultation with customers, The Incident, Emergency Response, Crisis and Business Continuity Management draft plans for modernisation of irrigation documentation was revised in December 2008 and an internal audit of Business channel distribution systems to improve Continuity and Crisis Management processes was undertaken in March 2009. cost-effectiveness and water efficiency SunWater’s Information and Communication Technology strategic plan includes were developed during the year. the redesign of current water information management systems. During the year, a The plans, which identify a number of study was conducted to assess the cost-effectiveness of the existing system and potential initiatives for SunWater, were its ability to meet evolving needs. Replacement plans will be considered under the submitted to the Australian Government auspices of the National Water Market System. for consideration. Project management capabilities continue to be upgraded with SunWater’s Asset Our customers Solutions group receiving accreditation as a ‘Project Managed Organisation’ and 21 of SunWater’s water schemes have professional accreditation of project directors and managers from the Australian service targets that define expected Institute of Project Management. Standard project management tools and shutdown parameters, maximum numbers process will be introduced. of interruptions to supply, and response times to customer complaints. SunWater A new ‘Stop, Look, Assess, Manage’ (SLAM) process was introduced for all achieved these customer satisfaction work tasks across the organisation and training workshops were conducted to service targets in most regions during educate staff in the new SLAM process. This initiative targets risk management 2008-09. from a safety perspective, and contributes to the achievement of ‘No-Harm’ within SunWater. Diversifying the business by offering SunWater’s consulting and facilities As part of its Brisbane office tenancy relocation during the year, SunWater has services to non-irrigation customers has implemented a full disaster recovery capability for its production systems at a third opened up new opportunities and made party remote site. a significant contribution to SunWater’s annual revenue.

SunWater continued to meet regularly with Irrigator Advisory Committees (IAC) and introduced a dedicated web area for IAC information and meeting documentation.

SunWater Limited annual report 2008-2009 Highlights 5 chairman’s review.

The slowing of the economic boom that followed the Global Financial Crisis has reduced the urgency of demand for new water infrastructure and supply. This has resulted in changes to the timelines and priority for many of SunWater’s regional water projects. In coal mining regions, a number of previously anticipated developments have been deferred and the increased demand for water is likely to be delayed for a few years beyond original projections. Mining activity is vital to the health of the Queensland economy and SunWater continues to work very closely with companies active in this sector to ensure their needs are met economically and at the optimum time. The widespread flooding, which resulted in large regions of Queensland being declared natural disaster areas, brought much-needed relief from the drought but also caused damage to SunWater infrastructure. Repairs became a high priority and added to SunWater’s costs for the year. I am pleased to report that SunWater’s dedicated teams have enabled SunWater to meet the challenges of this fast-changing environment, whilst ensuring a continued focus on the needs of our customers and the community. Financial performance SunWater’s adaptability also meant that in 2008-09 it achieved improvements in almost all its financial key performance indicators. These improvements were achieved in the areas of revenue, profit, liquidity and return on assets. Five-year results in these areas can be found in the financial performance section of this The 2008-09 year will be report on pages 11 to 13. remembered for the Global Revenue for the year was increased by $8.8m. This result excludes the proceeds Financial Crisis and, in many from the sale of certain assets to Seqwater of $48.9m and the proceeds from bank parts of Queensland, for the guarantees of $11.5m. The revenue increase was mainly attributable to the full year operation of the Burdekin-Moranbah Pipeline. widespread floods that affected a number of regions for an Better utilisation of assets has contributed to SunWater’s net profit before tax (excluding the Seqwater transaction) result of $44.0m in 2008-09 compared to extended time. Both of these $25.9m in 2007-08. Cashflows from operating activities for the year remained strong factors had an impact on at $8.2m (after excluding proceeds from the bank guarantees). SunWater’s operations during Corporate governance the year. The 2008-09 financial year was SunWater’s first year of operating as a Company Government Owned Corporation following the transition to this structure on 1 July 2008. This transition has been smooth with no impact on the performance of the business. Coupled with this transition, during 2008-09 SunWater reviewed its corporate planning framework and corporate risk processes to improve the focus of the business on creating shareholder value, as well as improving the identification, assessment and monitoring of strategic issues and corporate risks. The process of integration of quality, safety and environmental management systems within the organisation into a single system continued, and the integration of risk management into all business processes has strengthened the consistency and resilience of all operations.

6 SunWater Limited annual report 2008-2009 Chairman’s Review New reporting and legal requirements were The Board continues to encourage and support the organisation’s investment in integrated into SunWater’s operations. These an ongoing program of employee development initiatives and succession planning. included the changes associated with the Employee knowledge and capability are the foundation of excellence in everything Right to Information Act 2009, new reporting SunWater achieves. required from 1 July 2008 under the National Greenhouse and Energy Reporting Act Safety 2007 and the second year of participation in SunWater has an uncompromising commitment to safety - for staff and the the National Water Commission’s National community. This is demonstrated through our continuing efforts to reduce safety Performance Reporting for Rural Water risks, improve hazard awareness, and educate the community. As part of this Service Providers. SunWater was also one of commitment, SunWater continued to undertake a mass media-based water safety the first water agencies in Australia to meet advertising campaign targeting those who use our dams and lakes for recreation. the new water data reporting requirements for The campaign message encourages people to enjoy the facilities, but to do so in the Bureau of Meteorology. a safe manner. Community and Looking forward environmental responsibility The year ahead will be focused on more efficient operations - to achieve business productivity targets, to meet our customer commitments and to capture employee Community consultation and support suggestions for business improvements. Many of the changes will be identified and remained integral to SunWater’s positive implemented through the ‘Smarter, Lighter, Faster’ initiative, which will scrutinise all relationship with the people of Queensland. operations to streamline processes and workflows. Community liaison groups continued to meet and provide valuable input as an integral part The Board and executive team will also continue to closely monitor the economic of the Environmental Impact Assessment environment and work closely with customers in mining, agriculture and other pivotal processes for Nathan Dam and Pipelines industries throughout Queensland to ensure water infrastructure projects and water and the Connors River Dam and Pipelines supply continue to meet current and emerging needs. project investigations. A large proportion of SunWater’s operations and employees are based in regional areas of Queensland and the company continued to take an active role in the communities Phil Hennessy in which it operates, through its support and sponsorship of local events and Chair industry forums. Board of SunWater Limited Acknowledging an outstanding team On behalf of the Board, I would like to thank the SunWater executive team for their commitment to meeting a wide range of challenges to achieve the SunWater mission in 2008-09. I also thank all of our people for their individual contributions to the year’s outcomes and for their responsiveness in adapting to the changing priorities of this unusual year. I thank my fellow Board members for their support and contribution during the year and welcome two new Board members - Kirstin Ferguson and Neil Turner - who bring valuable skills and experience to the Board. I would also like to extend my appreciation to former Directors Julie Boyd and Alan Millhouse, both of whom retired as Board members during the year, and thank them for their valuable contribution throughout their terms.

SunWater Limited annual report 2008-2009 Chairman’s Review 7 ceo’s report.

SunWater’s mission is to provide cost-effective and commercial water services that add value to our customers. This remains a fundamental touchstone against which all decisions are tested. Similarly our vision ‘to be a leader in water service delivery and providing outstanding solutions for customers and the community’ continued to provide an inspirational position that guides the executive team and employees to continue to upgrade processes and to embrace positive initiatives. Ensuring Queensland’s future water supply The availability of secure and reliable water supplies is critical to the future economic prosperity of Queensland. As Queensland’s leading commercial water provider, supporting the ’s Statewide Water Policy remains one of SunWater’s most important ongoing activities. The implementation of the Statewide Water Policy, which is designed to complement the water grid and to improve water supplies in regional Queensland, remained a key business focus during 2008-09. During the year, SunWater continued development of an integrated implementation plan known as ‘Regional Water Solutions’. While the global financial crisis changed the priority of some elements in this plan, major work continued with investigations and planning for Connors River Dam and Pipelines, Nathan Dam and Pipelines, Lower Fitzroy River Infrastructure projects and Water for Bowen projects. SunWater also commenced investigations on the Burdekin Falls Dam raising, Glebe Weir raising and the Bowen Basin Water One of my priorities in 2008-09, Service Framework. in the midst of the changing Delivering new water infrastructure is a complex process governed by planning external circumstances has been and environmental legislation at the local, state and federal levels, aside from other to ensure SunWater’s underlying community, commercial and engineering considerations. focus on its service to customers As a responsible water provider, SunWater takes its obligations to the environment and operational efficiency. seriously, and as such will continue to work closely with the relevant authorities to ensure the impacts on the environment from these developments are identified and managed. For some projects, this may result in a delay, whilst mitigation plans are developed, tested and then implemented. Asset management for sustainable, cost-effective solutions The long-term sustainability and cost-effectiveness of water supplies in 23 water schemes, which serve around 5,000 customers, depends on comprehensive asset planning, incorporating new and emerging requirements for safety, environment, and water efficiency. SunWater has continued to improve its asset strategies to balance service requirements with an overall reduction in life-cycle costs. SunWater undertook ongoing works as part of its maintenance and refurbishment program during the year, thus ensuring effective operation of 19 major dams, 63 weirs and barrages, 80 pumping stations and 2,500 kilometres of pipelines and channels. The severe weather and flooding in many areas of Queensland damaged some key SunWater infrastructure and increased maintenance needs for the year to higher than normal levels. Importantly, this damage was able to be repaired with no impact on customer service levels. Improving customer service SunWater has a wide range of stakeholders and clients - those who rely on the performance of its water infrastructure, and a range of other businesses and authorities that use SunWater’s consulting and specialist services for major projects and specific technical solutions. SunWater has continued to set its customer service sights high and introduced a number of initiatives to monitor and improve its operations and to give customers more responsive solutions.

8 SunWater Limited annual report 2008-2009 CEO’s Report Customer service targets were set and Safety remains paramount measured for 21 water schemes. These SunWater’s goal for safety performance is ‘No-Harm’, and whilst the organisation targets cover factors such as notifications, continues to improve its performance, our result for 2008-09 was below our planned and unplanned outages, and expectations. There were two regrettable incidents during the year, which SunWater maximum levels of outages and response has taken very seriously. times. Targets were achieved in the majority of schemes with three areas narrowly missing A workplace injury at Biloela involving an electrical switchboard resulted in a fine for their targets, and one area falling short by SunWater. To improve employee protection and to ensure that the risk of recurrence a significant margin due to infrastructure of this type of event is minimised, SunWater undertook an audit of all electrical and resourcing limitations. Details of our switchboards and engaged an independent expert to review the findings and performance against service targets are develop a program of improvements. outlined in the Our Customers section of The second incident involved the rapid uncontrolled deflation of one of the rubber this report. bags at Bedford Weir. The investigation of this event is still continuing and SunWater A prime example of where SunWater is cooperating fully with Workplace Health and Safety Queensland. In the meantime, has taken measures to introduce better three other rubber dams were deflated under controlled conditions. systems for its customers can be seen in An ongoing program of safety reviews and upgrades continues and substantial the Macintyre Brook Water Supply Scheme investments are planned for the year ahead to reduce safety risks and to progress in Inglewood. In this area SunWater staff further dam safety upgrades. worked closely with customers and the State Government to introduce an improved water Embracing tomorrow’s challenges sharing and accounting system known as SunWater is a proactive participant in national water industry developments and also Continuous Sharing. The new system allows works closely with state and local governments on Queensland initiatives. customers to individually manage their water In the year ahead and beyond, SunWater will continue to adapt to meet emerging account balance independent of other requirements and to ensure best-practice in its operations. An important element of users in the system, thereby enabling better this will be metering upgrades for 11,000 water meters over the next 10 years as part planning for future water needs. of the National Framework for Non-Urban Water Metering. SunWater’s participation for the second In 2009-10, SunWater will also commence discussions with key stakeholders year in the National Water Commission’s in industry and government about the review of rural water charges. New water performance reporting initiative provided legislation at the federal level, has introduced new requirements and challenges improved transparency of the overall that will need to be carefully assessed well before the requirement to introduce new performance of individual areas under a tariffs in July 2011. nationally consistent approach. New productivity targets and a difficult economic environment will challenge Contributing to better water SunWater to find further ways to streamline activities without compromising solutions service to customers. SunWater’s ‘Smarter, Lighter, Faster’ initiative will be integral During the year, SunWater continued to to achieving the increased efficiencies, and delivering on our commitments provide an important consulting role in to customers. contributing to cost-effective water solutions In the same way that SunWater has effectively met the planned and unplanned in Queensland. Major projects supported with challenges of 2008-09, it will embrace the demands of 2009-10 to continue to SunWater knowledge and expertise during provide exceptional water solutions to the people and industries of Queensland. the year included: Involvement as a sub-alliance partner providing design services to the Western Corridor Recycled Water project Peer reviewer to the Stage 3 raising, and Peter Boettcher Consultant to Anglo Coal on a 20-year Chief Executive dam safety review for Bundoora Dam. SunWater Limited

SunWater Limited annual report 2008-2009 CEO’s Report 9 performance summary.

PERFORMANCE MEASURES/OUTCOMES KEY RESULT AREA OBJECTIVES/OUTCOMES TARGETED DURING 2008-09

Financial To increase profitability of existing Achievement of water pricing targets performance service commitments SunWater’s achievements against these targeted areas of improvement are To realise the value of SunWater’s water allocations Achievement of allocation sales targeted in the Marketing Strategy for detailed on pages 11 to 13 Burnett Water P/L 2006-10 of this report.

Operational performance To increase the value of the corporation through Number of water infrastructure developments under investigation by SunWater’s achievements business growth SunWater that are acknowledged by the Queensland Government as against these targeted key components areas of improvement are detailed on pages 14 to 19 of this report.

Community and To achieve a high level of environmental Extent of weed and pest animal management strategies implemented environment performance in schemes and projects SunWater’s achievements Implementation of dividend reinvestment projects against these targeted To contribute to the well-being of Investment in community-based initiatives, e.g. Burdekin Water areas of improvement are regional Queensland communities Festival which engages SunWater with local communities detailed on pages 20 to 23 of this report. To minimise community risk from catastrophic events Emergency action plans reviewed and exercised to program

Asset sustainability To ensure continuing asset serviceability Delivery of the asset refurbishment and enhancement program SunWater’s achievements including water pricing team savings forecasts against these targeted areas of improvement are To ensure asset integrity is safeguarded Number of five-year comprehensive inspections completed detailed on pages 24 to 29 of this report.

Our customers To upgrade the products and services offered Continuous sharing (CS) arrangements implemented under new SunWater’s achievements ROPs where customers support its introduction against these targeted areas of improvement are To improve the level of customer Achievement of scheme service targets for planned and detailed on pages 30 to 33 satisfaction with SunWater services unplanned shutdowns of this report. To build improved customer relationships Customer representative support for key activities as demonstrated by committees operating in accordance with framework

Our people To have a motivated, empowered and Collective Agreement initiatives implemented and SunWater’s achievements well-skilled workforce with a commercial culture performance monitored against these targeted areas of improvement are Positive acceptance and engagement in organisational change detailed on pages 34 to 39 of this report.

Business To ensure compliance with legislative requirements Compliance monitoring and action system in place and management operating effectively SunWater’s achievements against these targeted To ensure risks are identified and managed Effective risk management systems incorporated into areas of improvement are business processes detailed on pages 40 to 43 of this report. To ensure that SunWater’s ICT systems and Progress with implementation of ICT strategic plan architectures are efficient and provide appropriate business solutions Reliability of core IT business systems

10 SunWater Limited annual report 2008-2009 Performance Summary financial summary.

SunWater consolidated results summary 2004-05 to 2008-09 $m $m $m $m $m

ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL 2004-05 2005-06 2006-07 2007-08 2008-09 Revenue 116.7 129.7 142.8 190.6 259.7 Excess of fair value over cost upon acquisition of subsidiary 7.9 Gain on sale of assets to Seqwater 48.9 Proceeds from Bank Guarantees 11.5 Revenue (excluding excess of fair value, Seqwater transaction 116.7 121.7 142.8 190.6 199.3 and Bank Guarantees) Net Profit (after tax) -11.6 1.3 28.2 17.9 37.1* Net Profit (after tax) (excluding excess of fair value) -11.6 -6.6 28.2 17.9 37.1* Dividends declared 3.2 - 6.2 5.9 7.6 EBIT (earnings before interest and tax) -18.1 - 5.4 24.9 40.7 60.4* Impairment 32.3 29.6 5.8 16.3 19.0 EBITDA (EBIT before depreciation, amortisation and impairment) 26.7 36.4 45.4 79.6 103.8* Total assets 424.5 577.0 788.8 795.5 863.8 Total liabilities 56.3 157.3 347.2 335.7 325.7 Net assets 368.2 419.6 441.6 459.8 538.1 Cash balance 44.3 25.6 22.3 40.1 135.1 Borrowings 7.5 92.5 272.9 265.6 248.9 Contributed Equity 229.4 282.5 282.5 288.7 288.7 Cashflows from operating activities 27.0 31.0 57.9 86.6 94.3 Refurbishment and backlog expenditure 16.1 11.2 9.8 9.7 11.0 Total water deliveries (million megalitres) 1.5 1.3 1.2 1.0 1.1 Full time equivalents 534.0 561.0 569.0 573.0 562.0

* Figure excludes gain on sale of assets to Seqwater of $48.9m

Revenue Net Profit (after tax Water Deliveries Water Revenue and excluding excess by Sector by Sector of fair value) 199 37 191 Industrial 15.2% 28 143 Urban Irrigation 18 122 117 3.7% (including CSO) 29.8% $ million $ million Industrial Irrigation 66.0% 81.1% Urban 4.2% -7 -12 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

Revenue for 2008-09 exceeded SunWater’s net profit for Industrial water deliveries Industrial water revenue 2007-08 by $8.8m and excludes 2008-09 less Seqwater ($48.9m) increased from 4.5% in increased from 61.4% in the proceeds from the Seqwater increased by $19.3m compared 2007-08 to 15.2% in 2008-09. This 2007-08 to 66.0% in 2008-09. transaction and bank guarantees. with 2007-08 results. includes one-off water deliveries in the Nogoa Mackenzie.

Revenue Breakdown

2004–05 99 2005–06

2006–07 84 2007–08 2008–09 50 46 45 45 45 41 39 36 31 $ million 24 23 18 16 15 14 13 11 9 10 8 8 8 7 6 6 6 5 3

Irrigation Industrial water Urban bulk water External consultancies/contracts Water allocation sales Other revenues SunWater’s revenue for 2008-09 exceeded 2007-08 results by $8.8m, excluding the proceeds from the Seqwater transaction and bank guarantees. SunWater Limited annual report 2008-2009 Financial Summary 11 financial summary.

Consolidated performance Income Tax Income tax was $6.9m, down from $8.0m in 2007-08. This was due to prior year The net profit before tax for 2008-09 of adjustments made following a ruling by the Australian Tax Office (ATO) in September $92.8m is $66.9m higher than the 2008 which allowed SunWater, as an irrigation water provider, to write-off eligible 2007-08 result of $25.9m. Proceeds from capital expenditure incurred after 1 July 2004 over three years. It also reflects a the Seqwater transaction contributed $48.9m favourable ruling by the ATO in August 2009 that treats the Seqwater transaction to the net profit before tax. as tax neutral. Revenue from ordinary activities was $9.7m higher in 2008-09 than in 2007-08. The main Asset performance increases were industrial revenue of $15.4m, As part of the regulated water price, funds are set aside to meet future asset water allocations of $2.2m, irrigation revenue refurbishment requirements. SunWater spent $11.0m on asset refurbishments in of $2.8m and interest revenue of $4.6m. 2008-09 compared to $9.7m in 2007-08. This was offset by lower Community Service The majority of the refurbishment and enhancement program for the year was Obligations (CSOs) of $7.2m and lower completed. It was necessary however to divert resources to flood repairs ($3.9m) consulting revenue of $6.1m and lower urban during the year. This was the main contributor to delays experienced on a small water charges of $1.7m. number of projects. The projects that are ongoing are scheduled to be concluded Industrial revenue increased because of early in 2009-10. increased capacity and increased usage SunWater continued with the dam safety upgrade program during the financial year, charges attributable to new infrastructure completing the safety upgrade project after ownership of the dam mainly in the Bowen Basin. was transferred to Seqwater on 1 July 2008. Irrigation revenue increased due to higher The detailed design and investigation stages were completed and construction recognition of refurbishment annuity commenced on the $21.1m Dam safety upgrade. The total spend on revenue as a result of higher refurbishment this project to 30 June 2009 was $2.6m. expenditure, increases to water charges under the price path and small increases in Funds management water deliveries in some schemes. SunWater’s consolidated cash position at 30 June 2009 was $135.1m (2007-08 $40.0m). The $95.1m increase reflects proceeds of $77.7m from the sale of assets CSO payments from the Queensland transferred to Seqwater, the $11.5m proceeds from bank guarantees, and the Government decreased by 69% to $3.2m as full-year operation of the Burdekin-Moranbah Pipeline. During the year SunWater a result of changes in government funding repaid $16.4m of debt to the Queensland Treasury Corporation. arrangements in relation to dam safety upgrades. In 2008 spillway funding was made Dividends available by way of CSOs but in 2009 funding In accordance with SunWater’s established dividend process, dividends are was provided by way of equity injection. based on profits but recognise the need to provide cash for the investigation Expenses (excluding finance costs) for and development of various water projects, asset refurbishment and other future 2008-09 were $150.0m, compared to commitments. A dividend of $7.6m, based upon the agreed methodology, was $149.5m in 2007-08. There were savings declared for the 2008-09 financial year. in labour due to the Seqwater transaction ($6.0m) which were offset by higher depreciation of $1.7m, higher impairment of $2.7m and higher legal fees of $1.7m, the bulk of which are associated with legal expenses for the Paradise Dam legal action. Finance costs expensed were higher in 2008-09 due to lower capitalisation of interest expense. During 2007-08, $3.6m was capitalised during the construction of the Burdekin-Moranbah Pipeline.

12 SunWater Limited annual report 2008-2009 Financial Summary Profitability indicators

Return on Equity (%) Return on Total Return on Total Assets EBITDA & EBIT Assets (%) replacement value (%)

EBIT EBITDA 7.4

4.5 120 6.5 0.7 4.1 103.8

0.5 100 4.0 79.6

2.3 80 0.3 60.4 60 45.4 $‘000 0.3 40.7 0.0 0.3 40 36.4 26.7 24.9

20 -18.1 -5.4 0 -3.1 -20 -0.4 -2.7 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 SunWater’s return on equity Higher earnings in 2008-09 Return on the replacement The EBIT for 2008-09 (less Seqwater transaction of (excluding proceeds from the resulted in an increase in value of assets (excluding $48.9m) increased by almost 50% over 2007-08, whilst Seqwater transaction) was 7.4%, SunWater’s return on assets proceeds from the Seqwater EBITDA increased by approximately 30%. an increase of 3.5% largely from 2.3% in 2007-08 transaction) in 2008-09 increased attributable to higher earnings to 4.5% in 2008-09. to 0.53%. in 2008-09.

Financial leverage indicators

Market Gearing (%) EBITDA Interest Operating Cash Flow Funds from Funds from Cover (Times) to Earnings (%) (EBITDA) Operations to Operations Interest Total Debt (%) Cover (Times) 50.0 49.9 349.0 38.2 36.6 127.6 31.6 108.7 101.2 90.8 85.0 18.1 12.3 12.3 6.2 5.5 36.3 30.5 4.3 4.4 3.6 23.1 3.6 2.0 12.0

2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –206 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 Market gearing improved Higher earnings in 2008-09 Earnings and operating Increased earnings Higher earnings, resulting during the year as no new were largely contributed to cashflow during the year in 2008-09 led to in increased funds from borrowings were required. improved debt cover. remained strong. increased cashflows operations, and lower to debt. interest costs in 2008-09 contributed to improved interest cover.

SunWater Limited annual report 2008-2009 Financial Summary 13 operational performance

14 SunWater Limited annual report 2008–2009 Operational Performance At a glance

Water deliveries across all As a leading water supply solutions provider, SunWater is schemes totalled 1.05 million investigating and delivering short and long-term strategic water ML, a slight increase on the infrastructure developments that will enable future growth of 1.02 million ML delivered its customers within the mining, industrial, commercial and in 2007-08, despite being agribusiness sector. hampered by drought and then flood. Infrastructure management services SunWater continued to provide infrastructure management services during the Approval for the construction financial year to ensure existing assets remain in good condition so that their service of the $42.5m, 38 km potential is available for our customers now and for future generations, in line with Cloncurry Pipeline was SunWater’s service ethos. obtained in the second The Water Services group is responsible for this and, throughout the year in review, quarter of the financial year, continued to assess and monitor the condition of assets, review maintenance with work commencing in strategies, develop long-term asset plans, undertake major infrastructure refurbishment projects and review the environmental performance July 2009. of those assets. Business cases and The organisation’s expertise in infrastructure management is also utilised by other investigations for proposed asset owners who outsource management of their water infrastructure assets water infrastructure to SunWater. The organisation provides the same high level of customer care irrespective of asset ownership thereby helping others achieve success. SunWater’s development projects and vision means that it applies continuous improvement measures in managing these upgrades to existing assets assets and aims for best-practice in operational efficiencies. were progressed. SunWater’s infrastructure management service contracts are tabled below: Water supply for mining and CONTRACT ORGANISATIONS SERVICE energy operations around BHP Mitsubishi Alliance (BMA) Operate and maintain six major pipelines, pump stations Queensland is an important and storage facilities for BMA’s coal mines in the business development area, Bowen Basin. with several major projects Department of Local Operate and maintain the water supply for five Government, Sport & communities located at the northern tip of Cape York. under discussion. Recreation

 Temporary transfer water Department of Infrastructure Reading and maintenance of 4,122 water meters in sales were up 30% on the and Planning 11 groundwater areas and one industrial pipeline. Control and distribute water to irrigators in the area. previous financial year. National Capital Authority Operate and maintain Scrivener Dam in Canberra, ACT.

Border Rivers Commission Operate and maintain works under the control of Border Rivers Commission including and Boggabilla Weir.

Seqwater Provide maintenance and collate data from the Stream Gauging stations and dam surveillance instrumentation.

Water availability Storage levels and announced allocations remained relatively stable throughout the reporting period, with the exception of two major storages - Paradise Dam that increased by 28% and that decreased by 31%. The available water held in storage at SunWater dams and weirs, as at 30 June 2009, was 5.25 million ML#. This represents approximately 73% supply capacity. Across all schemes, SunWater delivered 1.05 million ML to customers, representing 48% of the available water. Due to climatic conditions, this is slightly higher than the previous reporting period (2007-08: 1.02 million ML and 46% of available water). # Please note statistics in 2007-08 included storages that transitioned to Seqwater. Therefore no relationship can be derived between the 2007-08 and the 2008-09 statistics.

Pictured: David Harrigan carrying out testing of the Burdekin Falls Dam outlet works model at our Rocklea Hydraulics Laboratory. SunWater Limited annual report 2008–2009 Operational Performance 15 operational performance.

Water allocation trading Water infrastructure developments In July 2007, SunWater received formal notification from the Department of Water allocation trading (sales, leases, and Infrastructure and Planning (DIP) of its nomination as proponent for the development temporary trading) for the financial year was of business cases for seven major regional water supply projects. Progress on lower than for 2007-08. This was primarily these projects is summarised on the following pages. SunWater will investigate due to the deferral of allocation sales prudent funding options that may include additional debt and equity to maintain associated with the channel lining project an appropriate capital structure, in the event that any or all of the infrastructure in Emerald (which should be realised next development projects currently undergoing feasibility or business case development financial year). proceed to construction. Marketing activities continued in several Connors River Dam and Pipelines regional areas in Queensland and interstate. Proposed Location: Connors River Advertisements featuring the ‘Water for Growth’ slogan appeared in strategic The proposed dam is located on the Connors River near Mount Bridget in the Isaac regional and national publications, from Region, about 235 km north-west of Rockhampton and 100 km south of Mackay. December through to February, to target A bulk water supply pipeline is proposed to run from the dam west to Moranbah in potential customers in the agricultural, the northern Bowen Basin, servicing areas of highest demand. This will help meet industrial and urban markets. Specific focus the future water demands of industries and communities throughout the region. was on the water allocations available in the Bundaberg and Upper Burnett regions, with The project team continued to work on preparation of an EIS. The EIS is nearing allocations available in other schemes also completion and is scheduled to be submitted to the Coordinator-General for review being promoted. in late 2009. The public release of the EIS will follow that submission. SunWater’s independent water trader, Psi One voluntary property acquisition was completed by DERM for a large landholding Delta-Elders Ltd, continued to provide a water directly affected by the proposed dam inundation during the financial year. brokerage service for SunWater-owned water Negotiations (in conjunction with DERM) are progressing on the acquisition of allocations, actively marketing and trading the further properties affected by the proposed inundation. water available for temporary transfer. The project has been declared a significant project under the State Development The 2008-09 water year saw strong volumes and Public Works Organisation Act 1971. of temporary transfer water sold throughout Nathan Dam and Pipelines Queensland. In total 7,910 ML of temporary Proposed Location: Dawson River water were traded throughout the state, an increase of 30% on 2007-08 by the The proposed dam would be located approximately 2 km upstream of the Nathan water trader. Gorge on the Dawson River, which is about 75 km downstream of Taroom and 315 km upstream from the Dawson River’s junction with the Fitzroy River. Legacy water contracts Water from the proposed dam would be transported via a new pipeline to mines SunWater is required under its charter to and power stations in the Surat Coal Basin. This could potentially extend as far review non-commercial local government as Dalby. Water would also be released downstream to mines in the Southern and industrial water supply contracts with a Bowen Coal Basin, to the Dawson Valley Water Supply Scheme, and as required view to moving these to commercial terms. to meet critical urban supply needs in the Lower Fitzroy region and other parts of This is an ongoing obligation and is actioned . as each contract expires. The majority of existing non-commercial contracts were Early studies undertaken as part of the environmental impact assessment process agreed to in an environment where there for the dam highlighted the potential to impact the critically endangered Boggomoss was no consideration of the true cost of snail through the inundation of an isolated section of habitat located within the providing water. proposed dam footprint. During 2008-09, one such contract was In response to this issue SunWater commissioned extensive field surveys to renegotiated to align with commercial determine the distribution and abundance of the snail throughout the region. These arrangements. Negotiations continue on a studies located a significant amount of additional habitat throughout the Dawson further two expired legacy contracts with a region, and increased the known population of the species from the previous view to finalisation in the first quarter of estimate of 600 individuals to a revised estimate of 18,000. SunWater is currently 2009-10. discussing these findings and their implications for the project with the DEWHA. SunWater maintains another seven The project has been declared a significant project under the State Development non-commercial supply agreements set to and Public Works Organisation Act 1971. expire between July 2009 and 30 June 2019 and these will be renegotiated progressively.

16 SunWater Limited annual report 2008–2009 Operational Performance Nullinga Dam Proposed Location: , All investigations are complete and a preliminary business case report was prepared and submitted to the Queensland Government in May 2009. The report recommended that no further work be carried out until there is a clarification on the required environmental flows for the system. raising Location: Pioneer Valley near Mackay The proposed raising of Kinchant Dam was identified as a possible source for creating additional water supplies to support existing and future demand in the area. Following the completion of geotechnical investigations, SunWater submitted a preliminary business case report to government in May 2009. The Case study: Physical hydraulic modelling report recommended that no further work be carried out on the proposal due to the high SunWater’s hydraulics laboratory Projects have included the Cedar Grove costs associated with the project. models key water infrastructure projects, Weir, Burdekin Falls Dam Raising, allowing internal and external clients Borumba Dam Safety Upgrade, Tinaroo Lower Fitzroy River to test scale models before full scale Falls Dam Safety Upgrade, Bjelke- Infrastructure Projects construction. Petersen Dam Safety Upgrade, Hinze Location: Fitzroy River near Rockhampton Situated at Rocklea, Brisbane, the Dam Stage 3 and . SunWater is working with the Gladstone Area laboratory forms an integral part of The Wyaralong Dam models are an Water Board to investigate the feasibility of SunWater’s project management example of the scale of the projects for developing water supply infrastructure in service. which the laboratory can cater. the Fitzroy River in order to meet the short SunWater’s hydraulics laboratory is Construction of the $348m Wyaralong to medium-term water supply needs of the well equipped to meet a wide range Dam project is scheduled for completion of modelling requirements and allows by the end of 2010. Rockhampton and Gladstone regions. The testing of hydraulic structures under the The Wyaralong Dam has required project is focused on assessing the feasibility close control of design personnel. two models, the larger of which of constructing a new weir located near Laboratory staff specialise in testing demonstrates the dam’s ability to safely Rookwood Crossing, and the raising of hydraulic structures such as spillways, pass flows up to the probable maximum Eden Bann Weir, an existing SunWater asset energy dissipaters, tidal barrages flood at a scale of 1:80. The smaller located closer to Rockhampton. These assets and weirs, storm drainage structures, model, at a scale of 1:30, provides would be developed progressively over time pump station intakes, irrigation control crucial information related to the to meet new water demands as they transpire, structures and conduits. hydraulic conditions at the dam’s outlet. with the exact timeframes for development The laboratory has, over the past year, Hydraulic modelling of projects has to be explored through the project business played a key role in the design and proven valuable for projects such as testing of new and significant water the Wyaralong Dam and has enabled case, which is scheduled for completion in resource infrastructure developments considerable cost savings through June 2010. and dam safety upgrades for SunWater design optimisation. Water for Proserpine and external clients. Location: Proserpine David Pokarier and Amanda Butler collect velocity data The proposed Water for Proserpine project during testing at our Rocklea Hydraulics Laboratory. aims to improve the reliability of urban water supplies in the Proserpine and Whitsunday region. Work on this project was placed on Water for Bowen hold pending the outcome of the Water for Location: Bowen Bowen project. The Water for Bowen project will supply water for industrial, urban and high-value agricultural use via a new channel and pipeline system extending 150 km from the south to Bowen and surrounding areas. The EIS is nearing completion and is scheduled to be submitted to the Coordinator- General for review in late 2009. Public release of the EIS will then follow. A draft Cultural Heritage Management Plan (CHMP) was negotiated with the traditional owners and the final CHMP should be executed in late 2009.

SunWater Limited annual report 2008–2009 Operational Performance 17 operational performance.

Other development proposals Glebe Weir Raising and Pipeline that progressed during the Location: Dawson River, near Taroom During the reporting year, SunWater completed the EIS for the Glebe Weir raising year include: and the pipeline for the Wandoan Coal project, for which the Glebe Weir raising is Cloncurry Pipeline one water supply option under consideration. Due to recent economic conditions Location: Cloncurry the Wandoan project has been delayed. Feasibility and engineering investigations SunWater was requested by the Queensland are expected to recommence later in 2009. Government in mid 2008 to prepare a business case for providing a water pipeline Consultancy services SunWater is continuing to provide consulting services to the market when it fits from SunWater’s existing North West with the organisation’s strategic direction. Some of the major consulting projects, Queensland Water Pipeline to the township including engineering studies, which were undertaken during the period, are of Cloncurry. At the time the town and outlined below: surrounding region was in severe drought with water supplies transported to the town Western Corridor Recycled Water Project - Eastern Pipeline Alliance by rail. Since October 2006, SunWater has been a sub-alliance partner providing design The business case was completed and services to the Eastern Pipeline Alliance. The alliance includes AJ Lucas, Transfield submitted to the Queensland Government Services, GHD Pty Ltd, McCall’s, and the Queensland Coordinator-General. in November 2008. In December 2008, Stages 1A and 1B of the Eastern Pipeline were completed. Water delivery SunWater was named proponent and commenced on 31 August 2007 and 31 March 2008 respectively, providing up to the project received Queensland 66 ML of purified recycled water to Swanbank and Tarong power stations. Government approval. Stage 2A was completed in October 2008, providing a further 116 ML a day of Pipeline construction started in July 2009 purified recycled water to the South East Queensland Water Grid. and is scheduled for completion in December Stage 2B, which augments Stage 2A, will add a further 50 ML of purified water to 2009, with first water planned for March the overall system. This stage involves the duplication of the crossing 2010. (Refer also to case study on page 19.) linking Luggage Point advanced wastewater treatment plant to Gibson Island, Burdekin Falls Dam raising together with another two booster pump stations. Work is expected to conclude on Location: Burdekin River, near this stage in the fourth quarter of 2009. Ravenswood Seqwater - Hinze Dam Stage 3 (HDS3) raising A proposed two metre raising of the SunWater continues to act as the peer reviewer for Seqwater and the HDS3 Alliance Burdekin Falls Dam has been identified by team. The raising is to satisfy dam safety requirements, enhance the dam’s flood SunWater to provide water supply certainty mitigation benefits, and to provide more water security for the region by increasing for the Burdekin region. The raising would the capacity of the Hinze Dam. The project is currently in the works delivery phase increase the storage capacity of the dam and SunWater is involved in reviewing detailed designs and providing technical by 590,000 ML to a total of 2,446,000 ML. advice to Seqwater. SunWater anticipates its role will continue throughout the design An additional 150,000 ML of yield will and construction phase of the project, which is expected to be completed by 2011. provide for water demand for future economic development. Stage One of the Queensland Water Infrastructure - Wyaralong Dam investigation was completed at the end of Queensland Water Infrastructure (QWI) has appointed a principal contractor to 2008 and included a pre-feasibility study deliver Wyaralong Dam, with construction anticipated to be completed by the end and preliminary business case. Stage Two of of 2010. SunWater continued in its role as Owner’s Engineer for QWI and provided the project includes preliminary design and technical support during the delivery of the project. This engagement has included environmental investigations. Stage Two of building and testing physical models of the dam at SunWater’s hydraulics laboratory. the project was placed on hold in June 2009 (Refer to case study on page 17.) pending the commercial viability of the Water for Bowen project being established, or other significant demand emerging. An application for a Declaration of Significant Project was also lodged with Queensland’s Department of Infrastructure and Planning in early 2009.

18 SunWater Limited annual report 2008–2009 Operational Performance Dam Safety Reviews - Bundoora Dam SunWater was engaged by Anglo Coal to undertake the 20-year dam safety review for Bundoora Dam and prepare the dam safety documentation. All remaining work on the dam safety review including the comprehensive inspection, stability analyses, design checks and the preparation of the final report were completed during the year. Business development outlook During the financial year, SunWater continued to progress other new business opportunities as listed below: Water supply for potential mines in the North West Mineral Province SunWater continued to undertake pre- feasibility analysis of water transportation options for companies investigating the Case study: Cloncurry pipeline project feasibility of developing new mines in the province, which centres on the Mount Isa/ reveals Mitakoodi history Cloncurry region. SunWater has, during project Scar trees and numerous quarries Coal seam gas water investigations, earned a solid reputation containing quartz remnants used by amongst the indigenous groups it has earlier generations of Mitakoodi SunWater signed a memorandum of worked with, for its understanding of the people were revealed and preserved understanding with one of the four major importance of preserving and protecting for the future. gas producers in the Surat Basin to provide our nation’s cultural heritage. Indigenous artefacts were either moved them with potential market identification and The Cloncurry Pipeline project is an off the immediate pipeline route to water transportation services for treated example of mutually beneficial outcomes a protected site nearby, given GPS water. SunWater is in similar discussions resulting from open and fair consultation coordinates to record their locations with the other three major gas producers. with the region’s traditional owners - the or the actual pipeline was realigned so SunWater is also investigating the feasibility Mitakoodi people. as not to interfere with cultural sites of significance. of developing a water grid to transport water Cultural heritage surveys for the aggregated from various producers to various Cloncurry Pipeline project were carried A lot of positives came out of the out for three months. In that time some cultural heritage survey, not just with market sectors. of the region’s indigenous youth had the the identification of artefacts, but also Water supply for proposed coal mines opportunity to get a closer look at their that the younger generation had the in the Bowen Basin indigenous history. chance to walk the country with their elders to learn more about the land and SunWater is undertaking pre-feasibility Mitakoodi Elders and some of the clan’s youngest members worked side their culture. studies for water supply and water by side surveying the 38 km water transportation options for two proposed coal pipeline route, and together discovered mines in the Bowen Basin. Water demand numerous indigenous artefacts and assessments for all proposed mines in the sites of significance. Bowen and Surat Basins have also been reviewed to incorporate the effects of the Pearl Connelly and her granddaughter Lareese Ah-One discuss some of the quartz global financial crisis. While some projects remnants left by their Mitakoodi ancestors. have been deferred for two to three years pending economic recovery, others are progressing as planned.

SunWater Limited annual report 2008–2009 Operational Performance 19 community and environment

20 SunWater Limited annual report 2008–2009 Operational Performance At a glance

Sponsorship of regional SunWater is proud of its strong sense of community and its community events promoted commitment to responsible environmental management - SunWater and its water safety an overarching philosophy reinforced by staff participation in campaign. The sponsorships local events and projects and programs designed to benefit were supported through the the community and environment. involvement and commitment of local SunWater employees. Sponsorships With more than half of SunWater’s employees living, working and raising their The EIS for the Water for families in regional Queensland, it is no surprise the organisation has a strong sense Bowen and Connors River of community. Dam projects progressed SunWater and its employees aim to make a lasting contribution to the success of well and will be submitted these communities of which they are a part, not only through financial support in the to the Coordinator-General areas of youth, arts, environment, safety and education, but also through active in late 2009. This effort will community participation. ensure environmental and SunWater’s annual sponsorship program reveals the organisation’s continued social impacts of the involvement with the Southern Cross Soloists Regional Music Schools and as a major sponsor of the SunWater Burdekin Water Festival. SunWater also regularly projects are managed in a provides financial support for local shows, sports, fundraisers and sustainable way. industry forums. Community Liaison Groups It is this kind of regionalised corporate philosophy and ongoing employee met for the Nathan Dam and involvement that ensures small and large events right across regional Queensland are possible. (See also case study on page 23.) Connors River Dam projects to allow local impacts to be Public Safety considered as part of the Equally important to SunWater is community awareness of water safety hazards in EIS process. and around its dams, weirs and water channels throughout regional Queensland. Each year SunWater delivers a mass media-based water safety advertising Design work for the Bowen campaign targeting those who use our dams and lakes for recreation. The campaign River Weir fishway was message encourages people to enjoy the facilities, but to do so in a safe manner. completed. Construction This campaign is in addition to an annual program of regional community event commenced in July 2009 and visits by SunWater’s water safety mascot which aims to educate primary is scheduled for completion school-aged children regarding water safety. by March 2010. Involvement SunWater is actively investigating strategic water infrastructure projects right across regional Queensland. As part of its commitment to positive community relations, SunWater has established Community Liaison Groups (CLG) for two of its major projects, Nathan Dam and Pipelines and Connors River Dam and Pipelines. Members have the opportunity to bring forward community input and opinion for discussion, at each CLG meeting and are provided with details of the project and potential local impacts. In addition to CLG meetings, SunWater also regularly holds locally-based public information sessions to give the broader community the opportunity to access available project information and discuss this with project team representatives.

Pictured: Simon Dalip and John Beattie (left) inspect the pest fish exclusion screens installed on the Mareeba Dimbulah Water Supply Scheme channel system. SunWater Limited annual report 2008-2009 Community and Environment 21 community and environment.

Emergency Action Plans National Greenhouse and Energy Reporting (NGER) SunWater’s Emergency Action Plans (EAPs) The National Greenhouse and Energy Reporting Act 2007 (the Act) was passed on for each of its dams are reviewed on an 29 September 2007, establishing a mandatory reporting system for corporations annual basis to ensure that emergency that meet certain thresholds of greenhouse gas emissions and energy production contact details and procedures are up to and consumption. The first reporting period under the Act commenced on date. SunWater completed a review of all 1 July 2008. EAPs associated with its major dams during Key features of the Act are: the year. Reporting of greenhouse gas emissions, energy consumption and production The review of the Boondooma, Burdekin Public disclosure of corporate-level greenhouse gas emissions and energy Falls and Cania dams’ EAPs also served as a information, and simulation exercise to train staff and to review Consistent and comparable data available for decision making, in particular, the the adequacy of the plans. The exercises development of the Carbon Pollution Reduction Scheme. identified some opportunities for improvement which are now being implemented. SunWater meets the greenhouse gas emissions and energy consumption thresholds and has registered for NGER reporting. The following table summarises Weed and pest animal the greenhouse gas emissions and energy information reported for the 2008-09 management strategies financial year. The reduction of the amount of chemicals used in weed control is important to ENERGY SCOPE 1 SCOPE 2 GREENHOUSE GAS EMISSIONS AND SunWater. During the year, a successful CONTENT EMISSIONS EMISSIONS ENERGY CONSUMPTION trial of equipment fabricated to allow more (GJ) (TCO2-E) (TCO2-E) accurate dosing of copper sulphate (used Fuel Combustion/Energy (Transport) 39,932 2,785 in irrigation channels to control filamentous algae) was conducted. Without the chemical Other Fuel Consumption (Energy commodities) 510,633 128,889 treatments, the algae prohibit water delivery Total 550,565 by forming nets which block and damage Scope 1 The release of greenhouse gas into the atmosphere as a direct result of an activity, or SunWater and customer infrastructure. By series of activities (including ancillary activities) that constitute a facility (i.e. petrol use in cars). applying more accurate dosing, the amount of copper sulphate being used and entering the Scope 2 The release of greenhouse gas as a result of one or more activities that generate electricity, heating, cooling or steam that is consumed by the facility but that do not form part of natural system is greatly reduced. the facility (i.e. electricity used by a water pump).

SunWater’s Bundaberg operations also ENERGY PRODUCTION ENERGY CONTENT (GJ) undertook a major review of their aquatic Electricity (water generation) 25,864 weed treatment operations in water distribution channels to reduce the potential impact of herbicides on the receiving waters. Contaminated Land Previously water treated with the herbicide SunWater is progressively investigating all SunWater land historically used for fuel Acrolein was able to be held for only 48 hours storage, abrasive blasting operations and landfills (during dam construction). In before being provided to irrigators. 2008-09 SunWater investigated a number of sites around the St George area used By purchasing additional equipment and for these purposes. These sites were found to have only low level contamination redesigning treatment operations, the (below contaminated land guidelines). Bundaberg team were able to increase this withholding time to 72 hours, ensuring that any water which reaches a water course after this time is free of Acrolein. This was also achieved with minimal extension of the channel shutdown time in most systems.

22 SunWater Limited annual report 2008-2009 Community and Environment Environmental collaboration/ fishways management SunWater has been collaborating with the QPIF to identify a suitable prioritisation matrix for fishway modification and construction in Queensland. QPIF developed a draft methodology for use on SunWater storages which takes into account a number of criteria including the location of the fish barrier such as a weir, barrage or dam, with respect to the ocean and/or other barriers. The process will provide a scientific basis for future fishway planning to be applied to highest priority barriers for maximum ecological benefit. Paradise Dam In March 2008, the DEWHA released its findings of an audit carried out at Paradise Dam in June 2007. Case study: Making water work Paradise Dam was one of a number of projects randomly selected to be audited and making music play under the federal Environment Protection and As part of its ongoing commitment SunWater’s sponsorship of the music Biodiversity Conservation Act 1999. to education and the arts throughout workshops enabled students to enjoy SunWater is continuing to work with the Queensland, SunWater once again the benefits of one-on-one mentoring DEWHA to address the outcomes of the sponsored a regional visit by the by some of Queensland’s leading acclaimed Southern Cross Soloists musicians and culminate in a free compliance audit. musical ensemble. concert to showcase their burgeoning Dividend reinvestment projects SunWater’s annual sponsorship talents to the community. enables this Brisbane-based The Southern Cross Soloists visited Online climate tools for irrigators professional group of musicians to Emerald in 2008 and since the Development of a working version of visit different regional towns to run program’s inception more than five online climate tools for irrigators ceased intensive workshops for up and years ago, have worked with more as the outcomes for this project are now coming young high school musicians. than 300 students from across regional Queensland. considered likely to be more efficiently and SunWater research within regional effectively delivered as a part of the Australian schools found that music students were more than willing to learn new Government’s Australian Water Resource skills and train with skilled professionals Information System (AWRIS). SunWater has but travelling to Brisbane to do so was been an active participant in and a contributor often time and cost-prohibitive. of technical expertise to the AWRIS program. Students from across Central Queensland gained valuable hands on experience Mareeba Channel fluming study during the Southern Cross Soloists Music Workshop in Emerald, which was This project is now complete, with the report sponsored by SunWater. documenting the design, installation rationale and operability also finalised. The flume is operating as intended with minimal ongoing Bowen River Weir Fishway issues to date. The outcomes of this research Design of the new fishway was completed in the reporting year and construction and development project demonstrate commenced in July 2009 with a scheduled completion date of March 2010. The there is merit in the concept of the fluming, installation of this new advanced fishway will help to ensure that fish can migrate but practical implementation on an existing and breed, thereby maintaining an important balance to the river’s eco-system. This channel system with multiple structures to infrastructure will allow fish species around 100 km of extra upstream river habitat adapt is more expensive than traditional for migration from as far downstream as the mouth of the Burdekin River. channel lining with further limitations on site selection. The concept has merit in certain Kinchant Dam Wetland Reserve Planning brownfield site situations as a quick, cheap This project has been deferred since the announced proposal to raise the dam. solution to convey a large volume of water. Plans for a wetland reserve will not be prepared until the future operational use of the area is determined.

SunWater Limited annual report 2008-2009 Community and Environment 23 asset sustainability

24 SunWater Limited annual report 2008–2009 Operational Performance At a glance

Refurbishment and To ensure the ongoing growth and development of enhancement projects Queensland’s industrial, commercial and agribusiness sectors, aimed at securing reliable SunWater’s portfolio of water infrastructure assets undergoes infrastructure, minimising the highest level of asset management and maintenance. risk, and improving Workplace SunWater has established a refurbishment and enhancement program focused on Health and Safety continued, ensuring the integrity of its water infrastructure including 19 major dams, 63 weirs with more than 500 individual and barrages, 80 major pumping stations, over 2,500 km of pipelines and open projects on the 2008-09 channels and more than 730 km of drains. schedule. SunWater has continued to improve its asset management approach. This includes SunWater teams responded active participation in several research projects for the eWater Cooperative Research Centre (eWater CRC) and for the Centre of Integrated Engineering Asset quickly to flooding and asset Management (CIEAM). damage during Queensland’s Some of these projects are yielding benefits and are being incorporated into natural disaster emergency. SunWater’s asset management approach. Improvements have been targeted at Completion of a $2.5m overall reduction in life-cycle costs without reducing service capability and reliability to customers. SunWater’s approach includes comprehensive long-term asset plans design and relocation of a for each of the water supply schemes which integrate customer service needs with significant part of SunWater’s compliance drivers, risk management and financial imperatives. Collinsville Pipeline. These plans are formally reviewed and updated annually by regionally-based asset Draft plans for modernisation managers who also develop and implement detailed works programs covering of irrigation channel maintenance and refurbishment of the asset base. distribution systems Refurbishment and enhancement program were developed in close The majority of SunWater’s planned refurbishment and enhancement program was consultation with customers, completed during 2008-09 with an expenditure of $11.0m. and submitted to the The 2008-09 refurbishment and enhancement program included more than Australian Government. 500 individual projects, most of which were targeted at securing the reliability of infrastructure so that SunWater can continue to provide a high standard of service  Dam safety projects continued to customers. Examples include the refurbishment of the Monduran pump station during the year with the at Bundaberg at a cost of $0.3m and the upgrade of the Beardmore pump station commencement of the at St George with the purchase of three new motors at a cost of $0.2m. safety During the year, SunWater completed the design and relocation of a significant upgrade project. proportion of the Collinsville Pipeline. The $2.5m relocation was necessary to make room for an extension to mining operations. The cost of the project was met by the mining company utilising the pipeline. The SunWater asset portfolio is aging and some assets require significant work to ensure customer supplies can be maintained. An example is the refurbishment of Whetstone Weir on the Macintyre Brook near Inglewood. During the year the structure was strengthened with steel sheet piling to replace the old timber sheeting and to install concrete facing. This project will be completed in the next year with further concrete work and the installation of new outlet works. In early 2009 some of SunWater’s infrastructure was damaged during the rainfall and flooding that resulted in much of Queensland being declared a natural disaster area. The weather events required diversion of SunWater resources to repair flood damage, and were also the main contributor to delays in a small number of ongoing projects. (See case study on page 26.) These projects are now scheduled to be concluded in 2009-10 with no additional risks identified as a result of the delays.

Pictured: Adam Chappell and Ian Grayson (right) installing solar powered technology at an automated channel gate in Emerald. SunWater Limited annual report 2008-2009 Asset Sustainability 25 asset sustainability.

The refurbishment and enhancement program for the year also saw a number of Workplace Health and Safety improvements, including the installation of barriers and hand rails, delivered in response to SunWater’s risk assessment program. Comprehensive inspections The five-yearly comprehensive inspection program for SunWater’s dams is on track with five inspections (Peter Faust, Leslie, Boondooma, Bjelke-Petersen and Tinaroo Falls) completed during the reporting year. All inspections have concluded that the dams Case study: Flood damage are in a safe and satisfactory condition. puts team to the test

Borumba Dam safety upgrade Northern Queensland experienced First priority was ensuring the safety Following the transfer of this asset to extensive flooding for more than two of our operations and maintenance Seqwater on 1 July 2008, a commercial months during 2009. staff while they attempted to reinstate arrangement was made to ensure SunWater The deluge provided a challenge for the pump stations to deliver water to continued with the upgrade uninterrupted. service delivery crews to maintain customers. Pressure to restore water The upgrade was completed in early 2009 normal water delivery to customers, supply before crops started to fail was also crucial. and the site was handed back to Seqwater especially in the Burdekin Water Supply in March 2009. Scheme where rainfall was heaviest. Tasks included removing more than two A large-scale landslide beside one of Olympic pools of sand at one end of Tinaroo Falls Dam safety the water supply scheme’s major water the river and filling in a landslide hole at pump stations and a massive build up of the other end that could accommodate upgrade silt in the Burdekin River rendered most three semi-trailers. Construction of the fourth spillway in of the scheme inoperable immediately Crews worked around the clock with SunWater’s dam safety upgrade program following the floods. a fleet of excavators and machinery to started in March 2009 and is due for Hundreds of tonnes of debris was bring water back on line within three completion by October 2010. Refer to case dumped into pump inlet works and days. Strategies are now in place to study on page 27 for details. massive river flows deposited large mitigate these types of flood impacts quantities of sediment and vegetation should they occur again. Additionally, Note 31 to the financial into other pumps further upstream. statements (Dam safety upgrade program) on page 73 includes a table that summarises A specially-designed excavator with a 60 foot arm was called SunWater’s prioritisation and estimate of in to remove silt at the foot of the Millaroo A Pump Station. upgrade costs in the Dam Safety Program. These preliminary estimates are subject to further investigation in conjunction with the approval of the Queensland Government with respect to prioritisation and timing of necessary works and funding support.

26 SunWater Limited annual report 2008-2009 Asset Sustainability Case study: Tinaroo Falls Dam safety upgrade

SunWater is investing $21m to improve the Whilst the probability of such an event Filter zones, designed to minimise damage safety of Tinaroo Falls Dam as part of its occurring is very low, SunWater, as a caused by seepage during a flood event, will ongoing dam safety upgrade program. responsible dam owner, is taking proactive be placed on the downstream face. Commissioned in 1959, Tinaroo Falls Dam measures to ensure its assets are capable of Once the spillway capacity upgrade is is located on the Barron River about 100 km withstanding an extreme rainfall event. complete, Tinaroo Falls Dam will be better upstream from where the river discharges The Tinaroo Falls Dam safety upgrade able to manage the flows of an extreme into the near Cairns. Tinaroo Falls commenced in March 2009 and involves rainfall event by ensuring that any excess Dam supplies water via 390 km of pipelines work on both the main dam wall and the water can pass downstream safely. and channels to the various sections of the nearby saddle dam. The Tinaroo Falls Dam safety upgrade is Mareeba-Dimbulah Water Supply Scheme. The project involves the insertion of steel expected to be completed by October 2010. SunWater’s dam safety upgrade program is cable anchors into the main dam wall and part of an on-going dam safety program, and strengthening the dam by further securing will ensure that SunWater’s dams continue the wall to the foundation bedrock. In to be safe in light of evolving standards, new addition to work on the main dam wall, climate data and in the event of much larger the height of the saddle dam will be extreme rainfall events. increased by 30cm.

Phil Webber (right) and Errol Wright discuss progress on the Tinaroo Falls Dam safety upgrade on the Atherton Tablelands.

Healthy Headwaters program Irrigation Distribution Modernisation Planning project The Australian Government undertook a During the reporting year, SunWater continued to investigate ways to modernise its due diligence review of the business plan for irrigation channel distribution systems, making them more cost-effective and water- a $44.0m project to modernise SunWater efficient. The 14-month investigation, managed at scheme level in close consultation infrastructure in the Murray Darling Basin with the irrigation advisory committees and customers, is nearing completion. as part of a state priority project in the Draft modernisation plans for each of the eight irrigation distribution schemes were Healthy Headwaters program. The project, submitted to the Australian Government for review and subsequently provided to if approved, would involve Australian stakeholder groups for final feedback. The draft plans are strategic in nature and Government investment in the automation map out a number of potential initiatives to be considered by SunWater. These plans and upgrading of SunWater’s water will be finalised in the next financial year pending feedback on the drafts. management and distribution infrastructure in exchange for water entitlements being granted to the Commonwealth Water Holder.

SunWater Limited annual report 2008-2009 Asset Sustainability 27 asset sustainability.

Irrigation scheme annuities SUNWATER BURDEKIN HAUGHTON ETON MAREEBA DIMBULAH ST GEORGE The level of expenditure required to 15,000 2500 500 3500 1500 2000 400 3000 maintain the serviceability and integrity of 12,000 1200 1500 300 2500 the asset portfolio can vary significantly 1000 200 9,000 2000 900 from year to year. To even out expenditure 500 100 1500 $‘000 peaks and troughs, SunWater utilises $‘000 6,000 0 0 600 1000 -500 -100 an annuity funding approach for all 3,000 300 -1000 -200 500 schemes. This ensures that existing 0 -1500 -300 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 and future customers contribute fairly, –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 taking into account the long-term asset BARKER BARAMBAH CALLIDE VALLEY JULIUS DAM THREE MOON CREEK refurbishments and augmentation * 200 500 250 1000 400 requirements. 400 200 100 300 300 500 150 200 0 200 100 0 The following graphs show the actual 100 100 50 -100 0 -500 0 refurbishment and augmentation spend 0 $‘000 $‘000 -100 -100 -200 -50 -1000 -200 over the past five years for each scheme. -200 -300 -300 -100 -1500 -300 They also show the annuity collected as -400 -150 -400 -2000 a component of water charges and the -500 -200 -400 -500 -600 -250 -2500 -500 annuity balance available for future work. 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

BOWEN BROKEN RIVERS CHINCHILLA WEIR LOWER FITZROY NOGOA MACKENZIE UPPER BURNETT 800 100 600 1500 400 Annuity collected 600 400 350 80 1200 400 200 300 Renewals spend 0 200 60 900 250 -200 Annuity balance 0 200 $‘000 $‘000 -400 40 -200 600 150 -600 -400 100 20 -800 300 -600 -1000 50 -800 0 -1200 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

BOYNE RIVER AND TARONG CUNNAMULLA MACINTYRE BROOK UPPER CONDAMINE 1500 30 1000 800 500 20 800 700 400 1200 600 600 300 10 400 500 200 0 400 900 200 100 300 -10 0 0 $‘000 $‘000 200 600 -200 -100 -20 100 -400 -200 -30 0 300 -600 -100 -300 -40 -800 -200 -400 0 -50 -1000 -300 -500 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

BUNDABERG DAWSON VALLEY 2500 3000 25 150 20 2500 15 120 2000 10 90 2000 5 0 1500 60 1500 -5 $‘000 $‘000 -10 30 1000 -15 1000 -20 0 -25 500 500 -30 -30 -35 0 0 -40 -60 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

28 SunWater Limited annual report 2008-2009 Asset Sustainability SUNWATER BURDEKIN HAUGHTON ETON MAREEBA DIMBULAH ST GEORGE 15,000 2500 500 3500 1500

2000 400 3000 12,000 1200 1500 300 2500 1000 200 9,000 2000 900 500 100 1500 $‘000 $‘000 6,000 0 0 600 1000 -500 -100 3,000 300 -1000 -200 500 0 -1500 -300 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

BARKER BARAMBAH CALLIDE VALLEY JULIUS DAM MARY RIVER* THREE MOON CREEK 200 500 250 1000 400 400 200 100 300 300 500 150 200 0 200 100 0 100 100 50 -100 0 -500 0 0 $‘000 $‘000 -100 -100 -200 -50 -1000 -200 -200 -300 -300 -100 -1500 -300 -400 -150 -400 -2000 -500 -200 -400 -500 -600 -250 -2500 -500 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

BOWEN BROKEN RIVERS CHINCHILLA WEIR LOWER FITZROY NOGOA MACKENZIE UPPER BURNETT 800 100 600 1500 400 600 400 350 80 1200 400 200 300 0 200 60 900 250 -200 0 200 $‘000 $‘000 -400 40 -200 600 150 -600 -400 100 20 -800 300 -600 -1000 50 -800 0 -1200 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

BOYNE RIVER AND TARONG CUNNAMULLA MACINTYRE BROOK PIONEER RIVER UPPER CONDAMINE 1500 30 1000 800 500 20 800 700 400 1200 600 600 300 10 400 500 200 0 400 900 200 100 300 -10 0 0 $‘000 $‘000 200 600 -200 -100 -20 100 -400 -200 -30 0 300 -600 -100 -300 -40 -800 -200 -400 0 -50 -1000 -300 -500 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

BUNDABERG DAWSON VALLEY MARANOA RIVER PROSERPINE RIVER 2500 3000 25 150 * 2008-09 amounts exclude the Upper Mary Scheme 20 component. The Upper Mary Scheme was transferred 2500 15 120 2000 10 to Seqwater at 1 July 2008. 90 2000 5 0 1500 60 1500 -5 $‘000 $‘000 -10 30 1000 -15 1000 -20 0 -25 500 500 -30 -30 -35 0 0 -40 -60 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09 –05 –06 –07 –08 –09

SunWater Limited annual report 2008-2009 Asset Sustainability 29 our customers

30 SunWater Limited annual report 2008–2009 Operational Performance At a glance

 Scheme service targets were SunWater understands its customers’ need for cost-effective achieved for most regions, and reliable water services and tailors its water supply with more appropriate solutions to ensure sustainable growth can be successfully future targets introduced achieved for mutual benefit. for Bundaberg. Irrigator Advisory Committees (IACs) The Macintyre Brook CS SunWater continued to meet regularly with members of its 18 IACs to discuss system is making usage operational matters. monitoring and future An IAC page is now available on SunWater’s website, publishing information and planning easier for customers. meeting outcomes to all interested customers. Committee members and other irrigators are able to view current and previous minutes, storage reports, committee New web-based information member details, and news and events for each scheme. was introduced for Irrigator Effort continues to be directed towards conducting one-on-one meetings with Advisory Committees. SunWater’s commercial and industry-based customers to ensure issues are Diversifying the business identified and appropriately addressed and to maintain existing strong relationships. through growth of facilities Achievement of scheme service targets management services to SunWater set scheme service targets for 21 of its water schemes. The targets commercial customers made specific to each scheme cover: a significant contribution to Timing and duration of planned and unplanned shutdowns SunWater’s annual revenue. Length of notice given to customers for planned and unplanned shutdowns Time to repair meters causing restrictions to supply Number of interruptions to supply, and Response time to customer complaints. Across all SunWater schemes, 153 exceptions to the achievement of service targets were reported during the year. SunWater achieved its customer service targets for all regions except: Mareeba, with three exceptions reported regarding complaints that were not actioned within the agreed timeframes Burdekin, with three exceptions on the number of customers exceeding greater than six interruptions Mary River, with one exception on the number of customers exceeding greater than six interruptions, and Bundaberg, where 146 exceptions were reported, largely as a result of unplanned shutdowns which caused customers to exceed greater than six interruptions. These exceptions related to: - 1 notification exception on planned event - 2 duration exceptions on planned event - 20 duration exceptions on unplanned shutdowns - 121 exceptions on the number of customers exceeding greater than six interruptions, and - 2 complaints not responded to within the agreed 21-day period. The performance monitoring of the Bundaberg scheme was based on a cumulative annual target of six exceptions before a notification exception is triggered. Following consultation with the Bundaberg Irrigator Advisory Committee, more appropriate service targets were set. Changes include increasing the maximum number of interruptions (planned/unplanned events) to 10 per customer per water year, and increasing the unplanned shutdown duration to 72 hours. Similar infrastructure maintenance regimes are in place elsewhere in Queensland (Ayr and Mareeba) and are based on a trigger of 10 exceptions. These new service targets take effect from 1 July 2009. (See also case study on page 32.)

Pictured: Mark Goos from Mulgowie Farming in the Burdekin is one of many irrigators utilising the benefits of SunWater’s online technology to make more informed business decisions. SunWater Limited annual report 2008-2009 Our Customers 31 our customers.

National Performance Reporting SunWater participated in the National Water Commission’s National Performance Reporting for Rural Water Service Providers for the second consecutive year. The report provides the NWI with information about the performance of SunWater’s irrigation water supply schemes compared to similar services provided in other areas. Information about the physical and financial performance of irrigation services at the bulk water and distribution Case study: SunWater provides system level is included. The report is available to the public and can be accessed secure and reliable service on the National Water Commission’s website With a portfolio of around 5,000 Stanwell engaged SunWater in 1992 www.nwc.gov.au. customers from the commercial, and since then SunWater has continued industrial, mining and agricultural to provide a secure and reliable service Continuous Sharing sectors, SunWater needs to be focused through SunWater’s 28 km water The Continuous Sharing (CS) system on providing the most effective and pipeline and pumping network. provides customers with a more efficient way efficient water supply solutions available. SunWater achieved its agreed to manage their water accounts. Under this Customers like Stanwell Corporation infrastructure outage targets for the system, individual customers can monitor rely on SunWater staff to deliver Stanwell for the year, and manage their water account balance. essential water supplies which are further cementing their professional It eliminates the need for water accounts to required for the power company’s steam relationship. turbine operation to meet Queensland’s be reset at the start of each water year, and SunWater ensured all planned or ongoing demand for electricity. unplanned outages on the pumps and customers are able to plan further ahead with pipeline needed to transport the power greater confidence. company’s 24,000 ML allocation, did not Throughout the reporting period, further impact Stanwell’s ability to deliver on its own customer commitments. progress was made on the development of new modelling techniques to assess CS Scott Funch and Stanwell Corporation’s Scott McGraw (right) discuss proposals against Water Resource Plan pump maintenance at the Stanwell Pump Station in Rockhampton. objectives. SunWater used new hydrologic modelling techniques in the Macintyre Brook system to assess and develop a proposal to allow carryover of cap under CS. With the Part A tariff rebate scheme support of scheme customers, a submission The Queensland Government’s Irrigators Fixed Water Charges Rebate Scheme has been made to the DERM to amend the continued this year, giving irrigators the ability to claim up to $10,000 per Border Rivers ROP. SunWater and the DERM annum towards their fixed water charges in recognition of the continuing tough are now working through issues arising from environmental conditions. the submission. At the start of 2008-09, irrigators in four SunWater supply schemes were eligible for Since the start of the new CS water some relief from Part A charges as a result of the government’s rebate scheme. As a accounting system in Macintyre Brook in result of solid inflows to a number of schemes during the second and third quarters July 2008, customers have been able to of the year, the number of schemes eligible for the rebate reduced to one by the end access a detailed daily inventory of their water of the financial year. account balances and better plan their future The Queensland Government will not be extending the rebate scheme beyond the water needs. eligibility deadline of 30 June 2009.

32 SunWater Limited annual report 2008-2009 Our Customers Case study: Water futures

SunWater is continuing to play a key role in The group, which was set up in 2006, brings The group’s primary aim is to encourage the long-term strategic management of water together a cross-section of organisations that long-term strategic thinking about water through its involvement in a number of key have a direct interest in the management management and to deliver economic, social water advisory and research groups. of water, such as irrigators, researchers, and environmental outcomes that ensure the In the Burdekin, SunWater is one of the water boards, councils and varied region’s sustainability. founding members of the Lower Burdekin government agencies. The group addresses a number of key Water Futures Group (LBWF). The formation of the group ensures greater water issues such as drainage and run-off coordination and better alignment of and water and land manager coordination stakeholder efforts and enables members to but also looks at the integration of interests have a holistic focus on water management. between science, policy, management and the community.

Looking to the future - (from left) Lower Burdekin Water Futures farmer Michael Hoey, Burdekin Shire Mayor Lyn McLaughlin, CSIRO’s Dr Keith Bristow and SunWater Resource Compliance Officer Fiona Christie.

Collaborative investment National Program for Sustainable Irrigation (NPSI), which seeks improved skills, SunWater continued in its partnership with knowledge and decision making of end users to enable practice change and research and development corporations, more efficient and sustainable use and management of water. governments, commodities groups and Irrigation Futures, which delivers irrigation research, education and training to water providers to invest in research that growers, industry, governments and the communities to enable the investment provides useful information to a wide range of into better irrigation methods and practice. agricultural stakeholders. The Cotton CRC, an industry program that supports the production of competitive cotton farming systems, high quality consumer-preferred cotton and increases the This collaborative investment enables skills and knowledge of people in the cotton industry. SunWater and its customers to benefit The Burdekin Water Futures Group. Refer to case study above. from a greater investment than what could be achieved individually and includes organisations such as:

SunWater Limited annual report 2008-2009 Our Customers 33 our people

34 SunWater Limited annual report 2008–2009 Operational Performance At a glance

Collective Agreement Ongoing skills development through staff training in initiatives were implemented management and operations is the cornerstone of providing and performance monitored. the best possible services to our customers and will ensure Flexible work arrangements SunWater is the leader in water infrastructure management. offer part-time roles, purchase SunWater had 562 employees as at 30 June 2009, many of whom work and of additional leave, banked live in the regional communities in which the organisation operates. These highly time arrangements and time skilled professionals are the backbone of the organisation and their expertise, professionalism and focus on customer service allows SunWater to continue to lead off in lieu. the way in water solutions in Queensland. SunWater encourages During the financial year, SunWater reinforced its commitment to its employees its people to maintain through a range of initiatives. These were aimed at improving the way it memberships of work-related communicates with its people by effectively managing the skills and expertise professional associations within the Company and ensuring it continues to offer work/life balance and an environment that supports professional growth. through an annual membership fee refund Collective Agreement implementation scheme. Under the SunWater Collective Agreement 2006-09, a number of initiatives were developed or progressed throughout the financial year, including: 360 degree assessment to Increased salary rates by 4% for all employees from 1 July 2008 identify senior management Confirmed localised agreements during the year for the Tinaroo Falls Dam development opportunities upgrade project, Cloncurry Pipeline project, and the Bowen River Weir Fishway has been introduced. project. A number of localised agreements terminated during the year following successful conclusion of construction projects. Workplace Health and Safety Staff Development Steering Committee continued to be a critical The SDSC was established to provide SunWater with a company-wide oversight focus, with an internal safety for developing and advancing employee development opportunities. During the review and upgrades to financial year, the Committee continued to monitor a number of initiatives, including: infrastructure and procedures An entry-level recruitment program including the graduate engineers and technical following an injury to an cadetship programs. Four graduates and three technical cadets were inducted employee in an electrical into these programs. The introduction of vacation employment and participation in project accident. placements for student engineers. Four undergraduates were placed during the vacation periods. The extension of the successful Frontline Leader Program to regional centres resulted in two new programs at Mackay and Bundaberg. Access to continuous learning events that were promoted through the training calendar. A review of compliance training requirements and their impact on time availability.

Pictured: Work on the $21m safety upgrade project at Tinaroo Falls Dam on the Atherton Tablelands is on track for completion in late 2010. SunWater Limited annual report 2008-2009 Our People 35 our people.

Staffing strategy Training and graduate programs SunWater has developed a high-level SunWater’s people management practices are designed to facilitate performance Staffing Strategy which is designed to help improvement and a sustainable competitive advantage. New employees are trained the organisation attract, develop and retain through its apprentice, cadet, and graduate programs, which are part of an ongoing staff to achieve business outcomes and commitment to ensure the availability of core capabilities to meet SunWater’s future maximise competitive advantage over the staffing needs. next five years. Supervisor induction program During the year, a formal program A Supervisor Induction program was developed and will commence in July 2009. that includes SunWater’s Succession Running over two days, it is designed to address the specific needs of employees Management and Development initiatives who are promoted to a supervisory role for the first time. Elements of the was introduced. The succession planning program include: work seeks to identify critical and key roles Recruitment and selection in SunWater and potential successors within Employee and industrial relations the organisation. Performance management Development plans will continue to be Finance actioned during 2009-10 for all employees Workplace Health and Safety of SunWater and at the senior management Information Communication Technology level will include a 360 degree assessment to target development activities. This process Managing risk and fraud is under way and will be completed for the Code of Conduct Senior Management group by the end of Environment, and September 2009. The Collective Agreement. SunWater’s Human Resources team is Frontline Leader Program partnering with individual business groups SunWater’s Frontline Leader program is firmly established and has been well to deliver the Staffing Strategy, with the received. A 12-month voluntary Frontline Leader Extension program will be launched Staff Development Steering Committee in September 2009 to provide an action learning component and to ensure the (SDSC) holding responsibility for overseeing, teachings are translated to the workplace. One of the key elements of the program monitoring and reporting on progress. is that participants undertake organisational improvement projects that have been approved by the CEO. Successful completion of this program may lead to nomination for the Leadership Development program. Workplace Harassment Referral Officers During 2008-09, twelve employees representing all regions were trained to assist employees and supervisors to manage any issues of harassment through the Workplace Harassment Referral Officers’ network.

36 SunWater Limited annual report 2008-2009 Our People Water Industry Training (WIT) NO. OF Forty-eight SunWater employees graduated PROGRAM GRADUATIONS PARTICIPANTS from the WIT program and received their Certificate III in Water Operations. Of the Graduate program(1) 20 2 remaining 24 who were enrolled, 16 have Apprentice and Technical Cadets program(2) 23 3 either resigned or withdrawn from the program while eight are continuing with Water Industry Training program(3) 72 48 their studies. The next intake will begin as Frontline Leader program(4) 46 20 soon as the WIT program review has been completed by the provider, Wide Bay TAFE Students Vacation Employment 2008-09(5) 4 and SunWater. (See case study on page 39.) The following table provides a snapshot of the (1) The Graduate program is a three-year program. In 2008-09, two people graduated. Of the remaining 20 participants, six are currently into their third year. results from the key programs: (2) The Cadet program is a four-year program. The first intake commenced in early 2008. The first cadets are therefore expected to graduate by the end of 2011. The Apprentice program is a three to four-year program. In Employee demographics 2008-09, three apprentices graduated. The following graphs illustrate the breakdown (3) The Water Industry Training program is a three-year program that can be accelerated. The inaugural group of employees by gender, age and started in 2005, with progressive groups enrolling up until 2007. 72 participants have now commenced the employment status. program, 16 have resigned or withdrawn and 40 have graduated in the 2007-09 period, with 16 continuing their studies.

(4) Over the 2008-09 period four groups (46 people) were enrolled in the Frontline Leader Program. Two groups EMPLOYEE BY GENDER graduated in 2008 (13 from the Bundaberg Program and seven from the Ayr program) and the remaining 600 two groups (14 in the Brisbane program and 12 in the Mackay program) are due to graduate before the end of 2009. 550 500 (5) Student vacation employment was extended to two Geology, one Human Resources, and one Hydrology 450 undergraduates. 400 350 300 OCCUPATIONAL GROUP BY EMPLOYMENT STATUS AND GENDER 250 220 200 200 150 180 100 160 50 140 0 2004 2005 2006 2007 2008 120 –05 –06 –07 –08 –09 100

MALE 80 FEMALE TOTAL 60 40 20

EMPLOYEE AVERAGE AGE 0 50 MALE FEMALE MALE FEMALE MALE FEMALE MALE FEMALE MALE FEMALE

MANAGEMENT PROFESSIONAL TECHNICAL ADMIN OPERATIONS 40 CASUAL PART TIME PERMANENT TEMPORARY TOTAL

30

20

10

0 2004 2005 2006 2007 2008 –05 –06 –07 –08 –09 MALE AV. AGE FEMALE AV. AGE TOTAL AV. AGE

SunWater Limited annual report 2008-2009 Our People 37 our people.

Workplace Health and Safety PREVIOUS YEARS 3 YEAR CURRENT 4 YEAR SunWater’s safety goal is ‘No-Harm’ in all AVERAGE YEAR AVERAGE of its operations. The 2008-09 year saw a further increase in organisational commitment 2005-06 2006-07 2007-08 2005-08 2008-09 2005-09 to the achievement of this goal. A Workplace LTIFR 11.3 6.0 14.9 10.7 8.7 10.2 Health and Safety Management System, which is third-party certified under the AS/ LTIDR 10.1 7.3 16.3 11.2 23.4 14.3 NZS Standard 4801:2001 Occupational 10.6^ Health and Safety Management Systems, is No. of LTIs 11 6 16 11 9 11 well established. Regular inspections, internal audits and external surveillance audits are No. of Days 111 44 261 139 211 157 undertaken to ensure that the system is Lost 95^ effectively maintained across the business and that SunWater is meeting its obligations. ^ Excludes lost time due to incidents occurring during 2007-08 LTIFR = Lost Time Injury Frequency Rate The highlights in this area for the financial year LTIDR = Lost Time Injury Duration Rate include the: Approval of a Workplace Health and Safety LOST TIME INJURY FREQUENCY RATE policy, which applies to SunWater and its 16 subsidiary companies and is relevant to 14 management, employees, consultants, contractors and suppliers. 12

Completion of the rollout of the Safety 10 Leadership training program to managers and supervisors to implement SunWater’s 8 target of ‘No-Harm’. 6

Introduction of the ‘Stop, Look, Assess, 4 Manage’ (SLAM) process, to ensure that risks are identified and controlled for all 2

work tasks. 0 NUMBER OF LOST TIME INJURIES PER MILLION HOURS NUMBER OF LOST Introduction of a fatigue management policy 2005–06 2005–06 2005–06 2005–06 and procedure, and LTIFR Completion of crisis management plans by all business units in relation to the threat posed by the pandemic influenza LOST TIME INJURY DURATION RATE virus (H1N1). 25 The Lost Time Injury Frequency Rate (LTIFR) 20 and number of Lost Time Injuries (LTIs) 15 for 2008-09 were significantly lower than 2007-08 and were marginally lower than the 10 three-year and four-year averages. In contrast however, the Lost Time Injury Duration Rate 5

(LTIDR) and number of LTI days for 2008-09 0 AVERAGE LOST TIME PER INJURY (DAYS) TIME PER INJURY LOST AVERAGE were significantly higher than the 2007-08 2005–06 2005–06 2005–06 2005–06 figures and the three-year and four-year LTIDR LTIDR^ averages. This indicates an increase in the severity of LTIs. The high LTIDR and number ^ Excludes lost time injury days resulting from incidents occurring during of LTI days for 2008-09 were due primarily previous financial years to one serious incident that occurred during the 2007-08 financial year which resulted in significant lost time during the 2008-09 financial year.

38 SunWater Limited annual report 2008-2009 Our People Safety The risks present in the workplace and the vigilance that must be maintained at all times to ensure safety in the workplace for SunWater employees and the public, have been highlighted by two incidents during the year. Electrical switchboards have been the focus of an internal safety audit in 2008-09 following a workplace injury in Biloela that involved a SunWater electrician working on a switchboard. Case study: Water industry training SunWater has taken the employee’s injury very seriously. The incident prompted SunWater recognises that its water With these limitations in mind, SunWater short and long-term upgrades to electrical officers are at the forefront of the ever- developed a partnership with the Wide infrastructure and improvements to the changing quest for more efficient and Bay Institute of TAFE to deliver staff organisation’s asset management program. effective water resource management. training via an e-learning platform. Increased regulation in water resource The program enables staff to gain To minimise the risk of recurrence of this management, particularly in relation invaluable skills through self-paced type of event, SunWater undertook an audit to the environment, has increased the training out in the field and at the desk of all electrical switchboards and engaged need for skill development programs to and does not require long-distance travel an independent expert to review the findings ensure staff are able to perform the best to training institutes. job possible. and help develop a program to eliminate Since SunWater’s e-learning program significant safety risks in the workplace. The challenge for SunWater was to was established, 48 staff have now source an effective training solution successfully completed the Water In November 2008 an incident occurred that was accessible to all water Industry Training Package (NWP01) when an inflatable rubber bag on Bedford officers, given the organisation’s to Certificate III. Weir deflated unexpectedly thereby releasing geographically dispersed workforce across regional Queensland and a large volume of water downstream of the the nature of its operations. weir. Tragically a fatality occurred. As the cause of the incident is unknown, three other (From left) Theodore water officers Peter Tweed, Adam Goebel and Tim Stevens inflatable rubber bags at SunWater weirs were were one of 48 staff who successfully completed water industry training. safely deflated under controlled conditions as a precautionary measure. SunWater immediately provided its support to the Queensland Government’s Workplace Health and Safety investigation, which is ongoing. Chemical management During the year SunWater undertook a review of chemicals used and stored for SunWater operations. The database ChemAlert II was purchased to enable the central storage of a complete inventory of all chemicals stored at all sites (offices, workshops, depots, chemical storage sheds) across SunWater. The database provides for timely access to Material Safety Data Sheets for each chemical, and information on which items can or cannot be stored together for safety reasons.

SunWater Limited annual report 2008-2009 Our People 39 business management

40 SunWater Limited annual report 2008–2009 Operational Performance At a glance

The certification of Efficient outcomes are highly regarded at SunWater and Quality, Environment and inherent within our operating philosophy. SunWater’s systems, Workplace Health and Safety strategic risk assessment programs, and controls enable the Management Systems provision of effective customer services and contribute to continued. business success. Risk management systems Quality Management System were integral to business The integration of SunWater’s two separate Quality Management Systems used for processes. operations and maintenance and for engineering and project development was well progressed, with completion scheduled for June 2010. All employees were trained in the new SLAM process The ultimate long-term goal is the incorporation of all critical business processes under the quality management umbrella. which highlights workplace risk assessment and SAI Global conducted surveillance audits of the Water Services Quality management. Management System and the Asset Solutions Quality Management System in September 2008 and February 2009. No non-conformances were raised and both Compliance monitoring and certifications to AS/NZS ISO9001:2008 were renewed. action systems continued to Environmental Management System operate effectively. SunWater undertook continued maintenance and improvement of the SunWater Environmental Management System, which has certification under AS/NZS ISO14001:2004. The review and development of processes and schedules, as well as increased communication through meetings, forums and workshops, provided practical support to enable regional centres to meet operational requirements. Workplace Health and Safety Management System Risk Management - ‘Stop, Look, Assess, Manage’ (SLAM) process The SLAM risk management process was developed to ensure that risks are considered and managed for all work, whether or not more formal risk documentation already exists. The process involves the completion of a SLAM record and a list of controls in a pocket-sized booklet. Training workshops were conducted for all employees in Brisbane and the regions over the period from late February to June 2009. The need to identify hazards and near-misses as a preventive measure was also introduced to enhance the SLAM training process. SAI Global Surveillance Audit An external surveillance audit of the Workplace Health and Safety Management System was conducted at Ayr and Bundaberg in November 2008 and at Borumba Dam upgrade project in December 2008. No major issues were raised during these audits and SunWater’s certification was accordingly renewed. Driver safety The Fatigue Management procedure was revised and reissued during November 2008. It addresses the legislative requirements for heavy vehicle fatigue management and includes a Working Hours Policy. Pandemic flu kits In response to the H1N1 influenza threat, new policies and documentation were prepared. In April 2009 an information kit on pandemic flu was made available to employees, and supplemented by a managers’ kit published in May 2009. Draft policies relating to pandemic flu (including hygiene, PPE&C, leave, social distancing etc.) were also developed.

Pictured: Karen Quagliata (left) and Debra Gottardi reviewing SunWater’s systems for effective customer service. SunWater Limited annual report 2008-2009 Business Management 41 business management.

Corrective Action Tracking System the Crime and Misconduct Act 1991 and the Whistleblowers Protection Act 1994. The Corrective Action Tracking System This work was undertaken in preparation for SunWater’s conversion to public (CATS) was introduced in SunWater in company status. June 2008. It is a web-based application The new Committee will advise the CEO on any official misconduct matters utilising the Lawlex system and is designed where an existing policy is not pertinent. The Committee will also assist the CEO to centralise the reporting and management in appointing appropriate experts or independent parties to investigate and action of corrective actions no matter where they any misconduct matters. originate. The system sends out email warnings to owners so that corrective Right to Information actions can be followed up. SunWater produced its publication scheme in accordance with the Queensland Government’s Government Owned Corporations (GOCs) Release of Information Regular CATS Continual Improvement Guidelines and is continuing to develop and implement changes associated with its meetings were held from early 2009 to the obligations under the Right to Information Act 2009. end of the financial year to address any issues with the system. An internal audit of A new website page is being prepared which will specifically address SunWater’s the corrective action process and CATS was governance obligations under the GOC Act, the OGOC Governance Guidelines, completed during May 2009. This included the Corporations Act 2001 and the relevant Australian Stock Exchange Guidelines a major review of CATS involving a cross- on Governance and the AS 4360 Risk Management. section of users. The final report identified Information Communication Technology (ICT) Business Systems several business improvement opportunities A critical element of the ICT Strategic Plan is the planned redesign of SunWater’s that will be actioned in 2009-10. current water information management systems. During the year, a study was Incident, Emergency Response, conducted into the cost-effectiveness of the existing system and its ability to Crisis and Business Continuity meet SunWater’s evolving needs. This study highlighted a number of areas for Management Manual potential improvement. To reflect organisational and roster changes, The utilisation of the corporate Enterprise Resource Planning System, SAP, the Incident, Emergency Response, Crisis continues to increase, with greater online procurement functionality now available and Business Continuity Management with an improvement in the speed and consistency of purchasing. documentation was revised and re-issued in December 2008. An internal audit of the Increased reporting requirements to the Bureau of Meteorology required the Business Continuity and Crisis Management development of a new water reporting system during the course of the year. processes undertaken in March and SunWater sought and obtained federal funding for the majority of this project and April 2009, identified a number of areas delivered the water information required within the specified timeframes. SunWater for potential improvement and provided was recognised by the Bureau as being among the first water agencies in Australia recommendations. to meet this requirement. Compliance System With the increased pace of operations within SunWater and greater dependency SunWater has implemented a compliance on ICT systems, improvements in SunWater’s ICT Disaster Recovery capability program aimed at achieving better were identified as desirable and were addressed during the year. These changes compliance management, monitoring and culminated in a full ICT Disaster Recovery test in March 2009 with resulting data reporting. The program includes an annual loss and data recovery times well within SunWater’s requirements. (See case study compliance plan, a compliance action system on page 43.) to alert employees to new legal obligations, Project Managed Organisation regular compliance reporting to the Board’s SunWater’s Asset Solutions group received its Project Managed Organisation Audit and Corporate Governance Committee, certificate during the year. This followed the successful completion of a project strategic monitoring of complaints management audit by the Australian Institute of Project Management. Throughout handling, and monitoring the effectiveness the year, SunWater employees were also professionally accredited as certified of management systems in achieving practising project directors and project managers. compliance objectives. The program is reviewed twice a year, with any changes This means that SunWater will introduce and use a standard process and tools being approved by the Audit and Corporate across the organisation in the areas of: Governance Committee. Project management documentation Scope, estimation and cost management tools The Board approved the establishment of an Accountability Referrals Committee Planning and scheduling during the reporting period. The Committee’s Risk and issues management function is to respond to the governance gap Contractor management created by the removal of the application of Accreditation and training for project managers, and Project reporting (earned value methodology).

42 SunWater Limited annual report 2008-2009 Business Management Internal Audit Internal Audit is a key component of SunWater’s corporate governance. It operates under a Charter approved by the Audit and Corporate Governance Committee of SunWater’s Board. Case study: ICT Disaster Recovery The internal audit capability is governed by a three-year strategic audit plan, which SunWater’s business critical systems between head office and the DR is approved by the Audit and Corporate are more secure than ever following facility and implementation of network Governance Committee. The function is completion of a comprehensive disaster technology to support connectivity with recovery (DR) project by SunWater’s the DR facility. performed independently using an objective, ICT team. Using virtualisation technologies systematic, disciplined and proactive In July 2008 ICT commenced the has reduced costs in DR strategy approach and in conformance with the task of implementing an improved DR implementation and has simplified DR International Standards of Professional strategy designed to meet the recovery processes by removing server hardware Practice in Auditing. The audit programs objectives of identified critical business dependencies; providing greater have a strong focus on areas of high risks, systems and infrastructure applications flexibility and agility in server deployment in the event of a complete loss of and management; and ensuring better critical controls, compliance and governance SunWater’s Brisbane data centre. use of physical server resources through processes with consideration of industry The DR project involved establishment server consolidation. trends and other external factors affecting of an alternative data centre, the Implementation of the updated DR the business. utilisation of server virtualisation strategy now means that during a technology to convert Brisbane’s disaster event SunWater will experience Monitoring activities and evaluating existing physical servers to virtual reduced downtime and costs. performance machines, synchronisation of data The Audit and Corporate Governance Committee regularly monitors the status Matt Davis and Danny Leong (right) from our Brisbane office of internal audit projects and management discussing our information disaster recovery capabilities. actions on previous audit recommendations. The Quality Improvement and Assurance Program for internal auditing was established Business Activity SunWater Deloitte Total % in 2006 and includes a periodic external No. of Man- No. of Man- No. of Man- assessment by a qualified assessor and Projects days Projects days Projects days continuous internal quality reviews. Corporate Governance and 9 129 1 12 10 141 61 A feedback mechanism provides the CEO Business Management with the auditees’ evaluation of every engagement and these outcomes are Financial Reporting 1 30 1 30 13 discussed with the Manager Internal Audit. Information and 2 25 2 25 11 Resourcing Technology During the financial year, Internal Audit set Risk Management 1.5 27 0.5 8 2 35 15 up an internal co-sourcing arrangement for rotational site visits across its operations * Tabulated figures are exclusive of: in Queensland and outsourced technical - internal and external reviews undertaken by SunWater under Business Performance Systems projects to an external third party. to maintain certification of WHS, EMS and QMS, and - significant ad hoc projects undertaken by SunWater Internal Audit such as audit planning Completed audits in perspective and monitoring. SunWater is particularly aware that it has to demonstrate to industry and the public that Internal customer survey outcomes good governance processes are in place and During the reporting period, an internal survey of the internal audit performance was that they operate within a transparent and undertaken to rate the internal audit function over six categories with a scale of 1-4 robust framework. Internal Audit therefore (1-poor, 2-fair, 3-good, 4-excellent). dedicates more attention to corporate The categories were: governance, business management and 1. Relationship with management risk management. This year, SunWater has 2. Audit staff expanded its technical capability in reviewing 3. Scope of work commercial risks associated with dealing 4. Audit process and report with external counterparties and with its 5. Management of the internal audit activity, and ability to address risks pertaining to crisis 6. Value added. management, business continuity planning and disaster recovery planning. Internal audit achieved a ‘Good’ rating across all categories.

SunWater Limited annual report 2008-2009 Business Management 43 organisational structure.

Shareholding Ministers

Board

Executive Assistant Chief Executive Manager CEO Internal Audit

General Manager General Manager General Manager Water Services Asset Solutions Corporate

Manager Manager Corporate Strategy Public Affairs

The water industry continues to change Water Services (WS) manages SunWater’s water infrastructure assets and provides nationally and regionally, with substantial facility management services to other asset owners. This group is focused on new infrastructure developments necessary service delivery, and provides services ranging from asset management to water to meet the needs of the community delivery, customer water accounting and billing, as well as ensuring compliance and industry. with relevant legislation. The Water Services team provides the same high levels of service to customers irrespective of asset or water entitlement ownership. These developments are being progressed within a competitive environment, with a Asset Solutions (AS) investigates and delivers new commercial business for number of local, national and international SunWater, including acquisition of existing assets, development of new assets and water companies actively participating in the negotiation of new facility management contracts. AS also includes the Business market. SunWater has aligned its business Development unit whose primary role is to seek out new business opportunities with structure to maximise identification and new and existing customers. uptake of market opportunities, gain internal Corporate supports the organisation in the areas of finance, legal, human efficiencies and improve customer service. resources, information and communication technology, and a range of other The Board of SunWater sets strategic administrative and support functions. direction, and is answerable to the Corporate Strategy (CS) is responsible for all policy and reform matters in relation shareholding Ministers for the performance of to water resource management and planning, water products and allocations, water the business. pricing and economic regulation, water legislation, national water policy initiatives The Chief Executive (CEO) is responsible and compliance with operating licences. for overall management and performance of SunWater and directly manages the internal audit, public affairs and media functions.

44 SunWater Limited annual report 2008-2009 Organisational Structure SunWater Executive.

Peter Boettcher Mark Browne Geoff White BE(Agric), MBA BBus(BusMgt), DipEng(Elec), BCom, FCA MBA, Dip PM, MAICD

Chief Executive General Manager General Manager As CEO, Peter is charged with Asset Solutions Corporate and providing leadership and overall Mark Browne commenced in Company Secretary business management to the role as General Manager Geoff White’s primary focus at SunWater. Peter is recognised Asset Solutions in September SunWater is to refine systems as a leading authority on water 2007 and is responsible for and processes, and ensure infrastructure management in the delivery of SunWater’s that best-practice corporate Queensland. Throughout his project portfolio and business support is provided to the career, he has gained extensive development activities. He has operational business units to experience in senior management more than 20 years’ experience assist them in achieving roles at a strategic and in project management, business effective customer service. operational level. development and business Geoff has substantial management in the infrastructure Peter believes that the industry commercial experience in construction and defence is now moving to a more all aspects of business and industries. competitive and commercial financial management, as model where water and water Prior to joining SunWater, Mark well as audit and corporate infrastructure services are held senior positions in large governance. He was a partner recognised as being critical infrastructure construction in a leading accounting firm for enablers to economic growth. companies and delivered 14 years. In addition, he has This emerging environment multimillion-dollar projects significant practical experience provides exciting opportunities for throughout Queensland in the management of client SunWater in the areas of business under a variety of contracting relationships, human resources, growth, improvements to water arrangements including information technology and infrastructure management, alliances and traditional delivery financial administration. improved service levels that mechanisms. His strategy Geoff, who joined SunWater enable customers to reach their and business development in 2001, has previously been business goals, and the provision experience includes his role as involved with a wide range of of key infrastructure for the benefit Chief Strategist and Manager organisations including public of future generations. As a of Business Development for and private companies, joint respected industry professional, Boeing Australia’s systems group ventures and not-for-profit Peter is experienced in all aspects and Business Development organisations. of commercial water business Manager for ABB Engineering management. He is focused on Construction. ensuring that SunWater delivers Mark will use his broad industry dependable and reliable experience to focus on ensuring infrastructure services to all its that SunWater continues to customers, whether they are local deliver project services to its governments, commercial entire customer bases, existing industries, or irrigation water users. and newly developed. Peter commenced his role as CEO SunWater in April 2008, having held previous positions in the organisation including COO and General Manager of the Water Supply Services Division.

SunWater Limited annual report 2008-2009 SunWater Board 45 SunWater Board.

The Board of SunWater Phil Hennessy Jane Bertelsen Tom Connor AO BBus (Accountancy), FCA BSc, MSBA BE(Civil), MEngSc, PhD, Hon comprises seven Fellow IEAust, MASCE, FTSE, directors selected for their CPEng(Civil), RPEQ individual and combined Chair Deputy Chair Director expertise to overview and Phil is Queensland Chairman of Jane is an experienced public Tom is the Director of KPMG and practises in the area sector manager. For over a Engineering Technology and direct the corporation. of corporate reconstruction. decade she was Manager of Sustainability of the Government He has experience across a Intergovernmental Relations and Infrastructure Division of wide range of market sectors in the Brisbane City Council the Asia Pacific operations of and has undertaken numerous and Secretary of the South Kellogg Brown and Root Pty insolvency-related assignments East Queensland Regional Ltd, a global engineering and and viability reviews for lenders, Organisation of Councils, construction firm. He has over creditors and other stakeholders. which focused on the strategic 30 years’ experience in goals of the region. She holds engineering and project Phil is responsible for the a Bachelor of Science and a management in the water sector operations of the Queensland Master of Science in Business in Australia and internationally. practice of KPMG. His role Administration from Boston focuses on the firm’s people, Tom is Chair of the Queensland University and is a graduate clients and its connection with Sustainable Energy Advisory of the National Institute of the community. Council and has undertaken Dramatic Art. that role since its inception. He is also National Leader for Jane gained extensive The Council advises the the Korean Business Practice, experience in project analysis, Queensland Government on Australia which includes policy development and innovation fund applications responsibility for the relationship economic research while in energy and water. He is a with the KPMG practice in working in Rome for the United past National President of the the Republic of Korea and for Nations’ Food and Agriculture Institution of Engineers Australia facilitating client opportunities Organization (FAO) and World (now Engineers Australia) and between Australia and the Food Council (WFC). She has past Chair of the Australian Republic of Korea. participated in international Council of Building Design Phil is Queensland President United Nations’ missions and Professions. of the Starlight Children’s conferences in Africa, Asia and Foundation, Chair of the Mater Europe. Jane is a member of the Hospital Foundation, Chair of the Board of Trustees of Queensland Premier of Queensland’s Export Performing Arts Council and is Awards Committee and Member Chair of the State Library of the Infrastructure Australia of Queensland. Advisory Council.

Pictured above: Seated left to right - Jane Bertelsen, Phil Hennessy. Standing left to right - Neil Turner, Tom Connor, Kirstin Ferguson, 46 SunWater Limited annual report 2008-2009 SunWater Board John Gibson, Greg Moynihan. Kirstin Ferguson John Gibson Greg Moynihan Neil Turner BA (Hon), LLB (Hon), FAIM, BCom, MBA(Melb), FCPA, BCom, GradDipSIA, ASA, MAICD FAIM, FAICD Fellow FINSIA, MAICD

Director Director Director Director Kirstin is the Chief Executive John is an experienced While spending most of his Neil is a former Speaker of Officer of Sentis, a global safety company director who has career within the broad finance the Legislative Assembly consultancy providing the been involved in a wide range sector, Greg has enjoyed (Queensland) and the former Zero Incident Process (ZIP) of Australian agribusiness. general management roles in Minister for Transport and cognitive-based safety training In horticulture, he has been a wide range of disciplines. Primary Industries. Prior to to the utilities, mining and Chairman, Queensland Market These include responsibilities his Parliamentary roles Neil resources industries. Corporation, Deputy Chairman, for financial and capital was a primary producer, Shire Australian Horticultural Councillor and member of UGA. Kirstin was previously the management, investment Corporation; Chairman, COO & Director of Corporate management, corporate strategy Neil is a Justice of the Peace Queensland Horticulture Services at the national law firm, and marketing, as well as having and a holder of the Centenary of Institute; and Member, Deacons, and has also worked primary accountability for Federation Medal. Queensland Horticulture Industry as an Administration Manager in business operations covering Development Council. London with the law firm Ashurst general insurance, business Morris Crisp. Other previous positions banking, retail banking and include Managing Director, wealth management. Kirstin’s initial career was as an Australian Dairy Corporation; Chief Executive officer in the Royal Australian Greg is a former Chief Managing Director, Austdairy Ltd; Air Force and she graduated Executive Officer of Metway Peter Boettcher Member, Biosecurity Council of with the Air Force Prize from Bank Limited and has held BE(Agric), MBA Queensland, Director, Thai Dairy the Australian Defence Force senior executive positions in See page 48 for profile. Industry Co Ltd; and Deputy Academy. Citibank Australia, Metway Secretary, Commonwealth Bank and Suncorp Metway Kirstin has previously been Department of Primary Limited. Since 2003 he has Company Secretaries named Brisbane Young Manager Industries. pursued a number of business of the Year by the Australian Geoff White For a number of years he interests in the investment Institute of Management and BCom, FCA has also been Chairman of management and private equity she was awarded a Churchill See page 48 for profile. community care services sectors, as well as undertaking Fellowship in 2003. Kirstin organisation Newlife Care Inc. professional company director is admitted as a solicitor in responsibilities. Renee Butterfield Queensland and NSW. LLB, BA Greg has held directorships with Cashcard Australia Ltd, Corporate Counsel LJ Hooker Ltd, RACQ Insurance Renee Butterfield joined Ltd, Hedge Funds of Australia SunWater in December 2008 Ltd (Chair), Suncorp Metway Ltd as the Corporate Counsel (various subsidiaries), and First and was appointed Alternate Base Pooled Development Fund. Company Secretary in May He is currently a Director of 2009. Renee is responsible Ausenco Limited, Calbridge Ltd, for legal compliance and the UAP Holdings Pty. Ltd., GRG provision of legal services for Residential Pty Ltd and a number all areas of the business by of private investment companies. SunWater’s in-house legal team. Prior to joining SunWater, Renee worked both as a private practitioner and in corporate roles for ASX listed companies.

SunWater Limited annual report 2008-2009 SunWater Executive 47 corporate governance.

SunWater was established as a A performance evaluation for the CEO and Senior Executives took place as part of statutory Government Owned SunWater’s annual achievement development system. The evaluation process and results are overseen by the Remuneration Committee. Corporation (GOC) on 1 October 2000 under the Government Principle 2 Structure the Board to add value There is a range of procedures and controls in place to ensure that the interests of Owned Corporations Act 1993. shareholding Ministers and the public are properly protected: On 1 July 2008, SunWater transitioned to a The Board is appointed by the Governor-in-Council in accordance with the Company GOC under the Corporations Act Government Owned Corporations Act 1993. 2001 and is registered as SunWater Limited The Board comprises seven non-executive Directors, all of whom are considered ACN 131 034 985. SunWater is wholly owned to be independent and have no business or other relationships that could by the Queensland Government. compromise their ability to exercise unfettered and independent judgement. SunWater’s corporate governance practices The skills, experience and expertise of each Director are set out on pages 46 and frameworks have been established to 47 of this report. in compliance with the governance Work undertaken for SunWater by any business in which a Director has an interest requirements in legislation, including the is recorded and assessed against materiality thresholds to ensure ongoing Government Owned Corporations Act director independence. Depending on the nature and amount of work undertaken, 1993 and the Financial Accountability Act SunWater has defined the materiality threshold for a supplier of SunWater at 2009, and have regard to the Queensland 40% or more of the total in the relevant expenditure category or categories in any Government’s Corporate Governance rolling 12-month period. Amounts paid by SunWater to professional advisory firms Guidelines for GOCs. of which Directors are principals are reported to the Board on a quarterly basis as they occur. SunWater has implemented significant Directors declare their business interests and any business or other relationships processes to ensure its internal policies, annually and must notify the Board of changes to business interests and guidelines and practices remain aligned appointments. with the wider legislative and GOC policy The Board generally reviews all Director independence information on a framework relevant to the Company and its monthly basis. subsidiaries. Through regular monitoring, reporting and disclosure, SunWater is able to The Board and Committees regularly review their information needs to ensure the demonstrate that its corporate governance information received is appropriate for the effective discharge of their charters. practices are adequate and appropriate. While the Chair continuously monitors the performance of individual Directors, the Board and Committees, a formal self-evaluation process is undertaken Principle 1 Foundations of every 18 months. The last self-evaluation process was completed in 2008 and management and oversight communicated to the Shareholding Ministers. The next review is scheduled in To ensure that the Board is able to effectively the first quarter of 2010 and will involve individual and collective performance fulfil the requirements of section 88 of the assessments overseen by the Chair. Evaluations will include assessment of GOC Act and relevant provisions of the whether the objectives of the Board (and Committees) were met in a cost- Corporations Act: effective manner and an assessment of SunWater’s overall compliance with the Queensland Government’s broader GOC policy framework. The results of these The Board Handbook defines the roles and assessments will be communicated to shareholding Ministers in writing. responsibilities of the Board and individual directors and matters which are delegated The Board has established and administers an ongoing performance evaluation to management. and reporting process. As part of the process, training and development requirements are identified to ensure that Directors have appropriate skills and The Audit and Corporate Governance knowledge of water industry and corporate governance issues. Committee, Regulatory and Environment Committee and Remuneration Committee Directors may seek independent professional advice at the Company’s expense. have specific committee charters. Principle 3 Promote ethical and responsible A register of committees and their functions is maintained by SunWater. decision making The Board Handbook is available to SunWater holds all Directors and employees to the highest standards of ethical facilitate board operations and induction behaviour. SunWater is committed to corporate practices which recognise the and self-evaluation processes. interests of employees, clients and the community as a whole and obligations of corporate social responsibility: Management’s responsibilities are defined and documented in formal position SunWater has implemented a Code of Conduct outlining practices necessary descriptions and performance plans. to maintain confidence in SunWater’s integrity which applies to all employees and Directors. SunWater has established a trading in securities policy which applies to regulate any situation where Directors, officers or employees may in the course of their duties have access to inside information about any securities or where dealings in securities may create a conflict of interest.

48 SunWater Limited annual report 2008-2009 Corporate Governance SunWater has established an Accountability SunWater adopts a broad approach to disclosure by regularly providing Referrals Committee (ARC) to respond submissions and briefing notes to shareholding Ministers on specific matters. to any allegations of misconduct To ensure that SunWater meets its disclosure requirements, SunWater regularly against SunWater officers. The ARC assesses the key information needs of stakeholders. advises the CEO on how to deal with misconduct matters and also assists the Principle 6 Respect the rights of shareholders CEO in appointing appropriate experts SunWater is committed to providing balanced and comprehensive information to or independent parties to investigate shareholding Ministers to ensure that the requirements of open and accountable misconduct matters. Any allegations of government are met: misconduct against the CEO or a Director Shareholding Ministers are advised in a timely manner of all issues that have a are referred by the ARC directly to the Chair. significant financial, operational, employee, community or environmental impact. SunWater engages with stakeholders through a range of communication Principle 4 Safeguard integrity strategies to ensure effective and active consultation. in financial reporting SunWater seeks to actively engage with shareholding Ministers to meet legislative SunWater has appropriate structures and and regulatory requirements and promote integrity and confidence. rigorous procedures and controls in place to ensure complete and accurate reporting of its Principle 7 Recognise and manage risk financial position: SunWater has in place a comprehensive framework and procedures for the SunWater has established an Audit and identification, monitoring and management of key risks associated with its Corporate Governance Committee to business activities: oversee preparation of financial statements The Board and its Committees monitor management’s performance in identifying and to confirm that accounting methods areas of risk and implementing effective strategies to manage and mitigate applied are consistent and comply with identified risks. applicable accounting standards and A risk management methodology and process based on AS/NZS ISO concepts. The Committee also advises the 4360:2004 is being used across SunWater. The Corporation maintains a number Board on the efficacy of the internal and of specific project and operational risk management registers which use (as external audit functions, the adequacy of much as practicable) common processes, categories and assessment criteria. accounting procedures and system controls Management of SunWater’s business risks includes the use of a hierarchy (including delegations), and budget and of registers which elevate risks of higher importance to management team, financial forecasts. committee and Board consideration as required. The Audit and Corporate Governance SunWater has implemented and maintains systems, policies and procedures Committee comprises four independent which ensure: non-executive Director members who have - Integration and alignment of risk management systems with corporate and appropriate financial experience. The Audit operational objectives and Corporate Governance Committee - Clear communication throughout SunWater of the Board and Senior ensures that strategic and operational Management’s position on risk risks of significance are subject to review - Common risk management terminology across the Company by independent management and makes - Risk management forms part of normal business practice and is not undertaken recommendations to the Board about as a separate task at set times, and policy, risk management and compliance improvements. - Information systems for reporting on risk are integrated to enable aggregation and reporting at a corporate level. The CEO, General Manager Corporate and Manager Finance have confirmed in writing SunWater has implemented policies and procedures which include: that the 2008-09 financial statements - Staff responsibilities in relation to fraud prevention and identification present a true and fair view and are in - Responsibility for fraud investigation once a fraud has been identified accordance with accounting standards. - Processes for reporting on fraud-related matters to management - Reporting and recording processes to be followed to manage and finalise Principle 5 Make timely and allegations of fraud balanced disclosures - Requirements for staff training to be conducted on fraud prevention As a GOC, SunWater is accountable to and identification its shareholding Ministers who are in turn - A reference to the Code of Conduct for ethical behaviour, and accountable to Parliament. SunWater is - A fraud control plan for ongoing monitoring and coordination of fraud control committed to maintaining a level of disclosure activities which sets out responsibilities and accountabilities for fraud control at all that provides shareholding Ministers with levels of the Company. timely and complete access to information: SunWater submits detailed quarterly reports to its shareholding Ministers on its performance against the annual SCI.

SunWater Limited annual report 2008-2009 Corporate Governance 49 corporate governance.

The CEO, General Manager Corporate, Principle 8 Remunerate fairly and responsibly and Manager Finance confirm to the SunWater has established a Remuneration Committee which meets at least Board that the statement given under four times each year and assists the Board in discharging its duties in regard to recommendations applying to Principle executive appointments, executive performance, staff remuneration and industrial 4 is founded on a sound system of risk relations matters. It considers and recommends to the Board the remuneration management and internal compliance and terms of employment for the CEO and senior executives and is directly and control which implements Board involved in the associated performance planning and review processes. It also policies, and that the risk management and oversees the Collective Agreement renewal process. control system is operating efficiently and The members of the Remuneration Committee and their attendance is detailed on effectively in all material respects. page 51 of this report. At the highest level of risk consideration, The appropriateness of SunWater’s remuneration strategy is assessed utilising SunWater has established a strategic community and industry standards and other external information. issues log and corporate risk register which are regularly reported to the Board The Board of SunWater (monthly) and Committees (every two The Board of SunWater Limited is responsible for providing effective governance, months). Risks are assigned by the leadership and management oversight. Board to the Committees based on their impact on the business and their external The Board’s functions include: consequences. The Audit and Corporate Ensuring that SunWater acts in accordance with its SCI Governance Committee oversees general Approving major projects, policies, plans, budgets and performance targets risk management issues and the Regulatory Ensuring that appropriate policies, procedures and systems are implemented and Environment Committee oversees risks to manage risk, improve business performance and ensure compliance with in the water, regulatory and environmental applicable legal and statutory obligations management areas. Evaluating new business opportunities, and Higher risks are aligned with established Assessing performance of the management and operations of SunWater. business priorities and assessed against a comprehensive risk intelligence framework During 2008-09, the Board of SunWater comprised: developed by an external advisor. Identified Phil Hennessy (Chair) risks are typically categorised under the Jane Bertelsen (Deputy Chair) areas of governance, strategy and planning, Julie Boyd AM operations and infrastructure, compliance Tom Connor AO and reporting. John Gibson Internally, SunWater has dedicated internal Alan Millhouse audit, legal and governance resources to Greg Moynihan oversee management of risk identification, Kirstin Ferguson, and planning, mitigation and review processes and, additionally, sources external advice Neil Turner as required.

Schedule of current director terms

NAME POSITION INITIAL CURRENT TERM APPOINTMENT

Philip Arthur Hennessy Director and Chair 1 October 2000 1 July 2008 to 30 September 2011* (Appointed Chair 15 December 2005)

(Margaret) Jane Bertelsen Director and Deputy Chair 1 October 2000 1 July 2008 to 30 September 2011 (Appointed Deputy Chair 15 December 2005)

Thomas Blair Connor Director 1 August 2003 1 July 2007 to 30 September 2010 John Lewis Gibson Director 1 August 2003 1 July 2007 to 30 September 2010 Gregory John Moynihan Director 9 August 2007 9 August 2007 to 30 September 2010 Kirstin Ferguson Director 1 October 2008 1 October 2008 to 30 September 2011 Neil John Turner Director 1 October 2008 1 October 2008 to 30 September 2011

* On 25 September 2009, the Queensland Government announced new board appointments that saw Phil Hennessy complete his term at SunWater on 30 September 2009 to take up the chair at another State Government enterprise. Scott Spencer was appointed Chair of SunWater effective 1 October 2009.

50 SunWater Limited annual report 2008-2009 Corporate Governance Board Committees impacting these areas are subject to oversight independent of management, To increase its effectiveness, the Board has and where necessary, makes recommendations to the Board about policy, risk three committees. Charters approved by the management and compliance improvements. Board set out the roles and terms of reference Members during 2008-09: John Gibson (Chair), Jane Bertelsen, Phil Hennessy, for these committees. SunWater’s Board Greg Moynihan and Kirstin Ferguson. and committee charters are available at www.sunwater.com.au. Regulatory and Environment Committee The Committee meets at least four times a year and assists the Board in carrying out Audit and Corporate its duties in accordance with the Water Act 2000 (Qld), the Environmental Protection Governance Committee and Biodiversity Conservation Act 1991 (Cth) and related legal compliance Committee members have been chosen for requirements. The Committee serves as an independent and objective party to their financial and water industry expertise. review regulatory information presented by management to shareholders, regulators, The Committee meets at least four times a other key stakeholders and the community. year and assists the Board in overseeing SunWater’s financial management and In addition, through scheduled and regular reporting, the Committee ensures external reporting. that strategic and operational risks of significance impacting these areas are subject to oversight independent of management, and where necessary, makes The Committee ensures that financial reports recommendations to the Board about policy, risk management and compliance are prepared in accordance with Australian improvements. Accounting Standards (including Australian equivalents to International Financial Members during 2008-09: Tom Connor (Chair), Jane Bertelsen, Greg Moynihan Reporting Standards) and other prescribed and Neil Turner. statutory requirements. The Committee Remuneration Committee also advises the Board on the efficacy of The Committee meets at least four times a year and assists the Board in discharging the internal and external audit functions, the its duties in regard to executive appointments, staff remuneration and industrial adequacy of accounting procedures and relations matters. It considers and recommends to the Board the remuneration system controls including delegations, and of the CEO and senior executives and is directly involved in the associated budget and financial forecasts. performance planning and review processes. The appropriateness of SunWater’s In addition, through scheduled and regular remuneration strategy is assessed utilising community and industry standards and reporting, the Committee ensures that other external information. strategic and operational risks of significance Members during 2008-09: Jane Bertelsen, John Gibson, Greg Moynihan (Chair) and Kirstin Ferguson.

Meetings attended by directors COMMITTEES

BOARD OF SUNWATER AUDIT AND CORPORATE REGULATORY AND REMUNERATION GOVERNANCE ENVIRONMENT

Total Meetings 14 7 5 8

Phil Hennessy 13 6 Jane Bertelsen* 14 3/3** 3/3 2/2** Tom Connor 14 5 John Gibson 12 7 8 Greg Moynihan* 14 4/4 2/2** 6/6 Kirstin Ferguson* 9/10 4/4 5/6 Neil Turner* 9/10 3/3 Julie Boyd# 3/4 1/2

* After the appointments of Ms Ferguson and Mr Turner on 1 October 2008, the Board reviewed and reallocated committee responsibilities. ** Retired from Committees during the year. # Ms Boyd retired at the completion of her term on 30 September 2008.

SunWater Limited annual report 2008-2009 Corporate Governance 51 corporate governance.

Subsidiary Companies Compliance in key areas Each subsidiary company has a Board of Directors drawn from the SunWater Board, Dam safety and meets on average three times per year SunWater has in place a comprehensive dam safety program that meets or exceeds to overview the management, operations, dam safety guidelines set by the dam safety regulator (DERM), and monitors dam performance and financial reporting activities safety as required by the Water Supply (Safety and Reliability) Act 2008 and in of that company. accordance with the Australian National Committee on Large Dams (ANCOLD) guidelines. Annual updates are provided to SunWater’s insurance broker to comply Remuneration of Directors with insurance policy disclosure requirements. In recognition of revised maximum Remuneration of Directors is determined by probable flood estimates and relevant ANCOLD and Queensland Government the Governor-in-Council. Total remuneration regulatory Guidelines on Acceptable Flood Capacity for Dams, SunWater has levels for individual Directors are reported on established and is implementing a program of dam safety upgrades. page 71. Quality management Dividend Policy The Quality Management Systems for operations and maintenance and project SunWater’s dividend policy, as stated in the development are certified under ISO9001:2008 and ensure that best-practice 2008-09 SCI, takes into account the return quality management and compliance is achieved across the business. its shareholders expect on their investment. SunWater’s Board recommended a Environmental management 2008-09 dividend amount of $7.6m based The SunWater Environmental Management System is certified under AS/NZS on a dividend payout ratio of 60% of the ISO14001:2004 and ensures that best-practice environmental management and corporation’s adjusted consolidated operating compliance is achieved across the business. profit after tax for the 2008-09 financial year. Workplace Health and Safety Management Senior executive and staff remuneration The SunWater Workplace Health and Safety Management System is certified under The Remuneration Committee of the Board AS/NZS 4801:2001 and ensures that best-practice WH&S management and oversees all employee remuneration. compliance are achieved across the business. SunWater remuneration policies for all Financial management staff, excluding senior managers, are SunWater complied with the requirements of the Financial Accountability Act 2009. determined by a Union Collective Agreement in accordance with the Queensland Local industry policy Government approved negotiating SunWater complies with the Queensland Government’s Local Industry Policy framework. SunWater does not have a and supports competitive local industry access to tender for work on relevant performance payment scheme for employees infrastructure and resource based projects and major procurements in Queensland. covered by the Union Collective Agreement. SunWater’s commitment includes, but is not limited to, ensuring work packages Senior executive remuneration is set by are presented so as to offer maximum opportunities for capable local suppliers and the Board in accordance with Queensland ensuring that information about opportunities for suppliers is communicated through Government policy for the Governance local and regional newspapers prior to the commencement of the development and Arrangements for Chief and Senior construction stages of projects. Executives. Their remuneration is based on SunWater reports on local industry involvement in these projects as required by external independent advice on position submitting local industry participation plans and outcome reports to the Department evaluation and having regard for Queensland of Employment, Economic Development and Innovation in line with the Queensland Government policy. Remuneration levels are Government’s policy and guidelines. set on the basis of Total Fixed Remuneration (TFR), which are inclusive of all payments and Statement of Affairs benefits. Senior executive remuneration and In compliance with the Freedom of Information Act 1992, SunWater publishes on conditions for new appointments are based its website and annually updates a Statement of Affairs, which includes a on Queensland Government’s preferred outer description of the corporation’s structure and functions, the impacts of these limit employment agreements. Existing senior functions on the community, the kinds of documents held, and literature available positions are based on a mix of outer limit and for general distribution. tenured employee arrangements. Sunwater Compliance Program A Performance Pay Scheme for chief and SunWater has implemented a compliance program aimed at achieving best-practice senior executives based on agreed targets compliance management, monitoring and reporting. The program includes a set by the Board and CEO was in place compliance action system to alert staff to new legal obligations and monitors the during 2008-09. The scheme was reviewed effectiveness of management systems in achieving compliance objectives. in accordance with Queensland Government guidelines.

52 SunWater Limited annual report 2008-2009 Corporate Governance Internal audit review Subsidiary businesses SunWater’s internal audit capability is governed by a three-year strategic audit plan, North West Queensland Water Pipeline Pty Ltd which is approved by the Audit and Corporate North West Queensland Water Pipeline Pty Ltd (NWQWP) is a wholly owned Governance Committee. The function is subsidiary of SunWater. Its primary assets include low-lift and high-lift pump stations, performed independently using an objective, 113 km of pipeline and control systems. It was designed as a multi-user pipeline systematic, disciplined and proactive deriving raw water from and transporting it to the Ernest Henry Mine approach and in conformance with legislative and a number of minor rural users along the route. The existing stage 1 is standards and the International Standards designed to deliver 7000 ML per annum − sufficient to supply additional users in the for the Professional Practice of Internal future. The pipeline design allows for a future upgrade depending on user demand. Auditing. The audit programs have a strong In December, the Queensland Government approved the design and construction focus on corporate risk management of a 38 km extension pipeline from the NWQWP to the township of Cloncurry for frameworks, compliance, control and domestic and industrial supply. This was in response to the township’s primary governance processes, and use internal storage at Chinaman Creek Dam running dry throughout the year and forcing the and external expertise. Cloncurry Shire Council to rail water from Mt Isa to Cloncurry as an emergency Corporate planning and reporting measure. The pipeline extension is currently being constructed and will provide water security for the region. This is a Queensland Government funded project that SunWater produces a corporate plan with is planned to be completed by March 2010. a five-year outlook, and an SCI that is the annual performance agreement between the Eungella Water Pipeline Pty Ltd Board and shareholding Ministers. Quarterly Eungella Water Pipeline Pty Ltd (EWP) is a wholly owned subsidiary of SunWater. reports provide shareholding Ministers with The company’s original assets comprise 123 km of pipeline and associated details of SunWater’s progress towards key pumping equipment with the capacity to deliver up to 15,000 ML per annum of undertakings and financial performance water from to the Goonyella Balancing Storage and 10,000 ML per against targets and budgets documented in annum to the Moranbah Terminal Storage. the SCI. Consolidated business and group The 116 km of Eastern and Southern Spur pipelines that take water from the performance reports are provided to the Eungella Water Pipeline and the new Burdekin-Moranbah Pipeline to coal mines Board on a monthly basis. and related users in the northern Bowen Basin were finalised and commenced Directions and notifications from delivering water in the first quarter of 2008-09. Shareholding Ministers Burnett Water Pty Ltd SunWater received no directions or Burnett Water Pty Ltd (BW) is a wholly owned subsidiary of SunWater. The notifications from shareholders during the company’s assets comprise Paradise Dam and Kirar Weir on the 2008-09 financial year. and the unsold portion of the 184,000 ML of water allocations made available for Subsidiary reporting sale/lease as a result of these new storages. These allocations can be utilised in SunWater’s subsidiaries - North West the Bundaberg and Upper Burnett Water Supply Schemes. The mini hydro power Queensland Water Pipeline Pty Ltd, Eungella station at Paradise Weir has been commissioned but low release levels restrict Water Pipeline Pty Ltd and Burnett Water periods when power can be generated. Pty Ltd - prepare separate special purpose Transitional issues for management and operation of the new infrastructure have financial accounts; however, for public been addressed and the company has been fully integrated with SunWater. In reporting purposes, the subsidiaries are addition, SunWater has developed a comprehensive marketing strategy to realise consolidated into SunWater’s financial report. the commercial value of the company’s water allocations in the marketplace. Going concern declaration Uptake of the new allocations has been slow partly due to low storage levels and In the Directors’ opinion, at the date of this subsequent low Announced Allocations, although the ability to source high priority declaration, there are reasonable grounds water has been well received. to believe that SunWater will be able to pay On 7 October 2008 the Wide Bay Burnett Conservation Council commenced its debts as and when they become due action in the Federal Court against BW seeking orders in relation to the fishways and payable. at Paradise Dam. BW and SunWater are committed to building and operating their Further information regarding SunWater’s dams in an environmentally sustainable manner. It is anticipated that this matter will Corporate Governance can be found at be resolved in 2009-10. www.sunwater.com.au

SunWater Limited annual report 2008-2009 Corporate Governance 53 financial report

54 SunWater Limited annual report 2008-2009 Financial Report Contents

56 Directors’ report General information 57 Auditor’s independence This financial report covers both SunWater Limited as the parent entity and the declaration consolidated entity consisting of SunWater Limited and its subsidiaries. 58 Income statements On 1 July 2008, SunWater transitioned to a Company Government Owned Corporation (GOC). 58 Balance sheets SunWater’s head office and principal place of business is: 59 Statements of changes Level 10, 179 Turbot Street in equity BRISBANE QLD 4000 59 Statements of cash flows SunWater owns and operates bulk water supply and distribution infrastructure 60 Notes to the located throughout regional Queensland and provides water-related engineering and facilities management services. Water is supplied to mining companies, financial statements industrial companies, power stations, manufacturing companies, irrigators, water 60 Note 1 Summary of significant boards and local governments. accounting policies 63 Note 2 Financial risk management 65 Note 3 Critical accounting estimates and judgements 65 Note 4 Revenue 65 Note 5 Expenses excluding finance costs 66 Note 6 Finance costs 66 Note 7 Income tax and income tax equivalents 66 Note 8 Cash and cash equivalents 66 Note 9 Receivables 66 Note 10 Inventories 67 Note 11 Other current assets 67 Note 12 Non-current assets classified as held for sale 67 Note 13 Other financial assets 67 Note 14 Property, plant and equipment 69 Note 15 Intangible assets 69 Note 16 Deferred tax assets 69 Note 17 Payables 69 Note 18 Provisions 70 Note 19 Borrowings 70 Note 20 Other liabilities 70 Note 21 Deferred tax liabilities 70 Note 22 Employee benefits 70 Note 23 Contributed equity 70 Note 24 Retained profits 71 Note 25 Dividends 71 Note 26 Reconciliation of profit after income tax equivalents to net cash inflow from operating activities 71 Note 27 Commitments for expenditure 71 Note 28 Related parties disclosures 73 Note 29 Contingencies 73 Note 30 Segment information 73 Note 31 Dam safety upgrade program 73 Note 32 Subsequent events 74 Directors’ declaration 75 Independent auditor’s report

Pictured: Phil Kemp and Jasmina Moktan reviewing dam safety upgrade plans for Tinaroo Falls Dam on the Atherton Tablelands. SunWater Limited annual report 2008-2009 Financial Report 55 directors’ report

Your directors present their report together with the financial report of System, consistent with the requirements of AS/NZS ISO14001:2004 and SunWater Limited and its controlled entities (“SunWater”) for the financial year which is third party certified, across all levels and functions of the organisation. ended 30 June 2009 and the auditor’s report thereon. The SunWater Environmental Management System covers the following: Directors Development and ongoing management of SunWater’s existing and future water supply schemes, The following persons were directors of SunWater Limited during the whole of the financial year and up to the date of this report: Provision of strategic and routine operations and maintenance services to both internal SunWater clients and external water infrastructure owners, Mr P Hennessy Planning and design of water distribution and supply infrastructure – this Ms J Bertelsen includes project planning, feasibility studies, geotechnical investigations, Mr T Connor site surveys, facility design, development of project specifications and Mr J Gibson performance criteria, and project management, Mr G Moynihan Refurbishment and construction of water distribution and supply Ms J Boyd was a director from the beginning of the financial year until her infrastructure. resignation on 30 September 2008. Further information about environmental issues is disclosed in the “Community Ms K Ferguson was appointed a director on 1 October 2008. and Environment” section and in note 29 to the financial statements. Mr N Turner was appointed a director on 1 October 2008. Further information about the qualifications, experience, term of appointment Safety and attendance at meetings are detailed in the “SunWater Board” and SunWater’s water infrastructure assets are located throughout Queensland. The “Corporate Governance” sections of the Annual Report (Information about the increasing age profile of the assets continues to focus attention on the safety of qualifications and experience of the company secretaries of SunWater Limited SunWater’s employees, customers and the public. During the year, SunWater’s is detailed in the “SunWater Executive Managers” section of the Annual Report.) ongoing safety program included the commencement of construction of the Tinaroo Falls Dam upgrade, the development of a wide-ranging upgrade Principal activity program for the safe operation of the assets and the continuation of a media SunWater’s principal activity is the provision of water supply services to campaign to encourage positive safety behaviours on and around SunWater’s customers throughout Queensland including irrigators, mines, power infrastructure by members of the public. generators and local governments. Insurance of officers Financial performance During the financial year, SunWater paid a premium of $72,265 (exclusive of The consolidated after tax profit for the financial year amounted to GST) to insure the directors and secretaries of SunWater Limited and its wholly $85.979 million (2008: $17.848 million profit). Further details of SunWater’s owned subsidiary companies, and the executive officers of SunWater. financial performance are provided in the “Financial Summary” section of the The liabilities insured are legal costs that may be incurred in defending civil or Annual Report. criminal proceedings that may be brought against the directors and officers in their capacity as officers of entities in SunWater, and any other payments arising Dividends from liabilities incurred by the officers in connection with such proceedings. In respect of the financial year ending 30 June 2009, a dividend of This does not include such liabilities that arise from conduct involving a wilful $7.625 million was declared to the holders of fully paid ordinary shares breach of duty by the officers or the improper use by the officers of their (2008: $5.897 million declared for the full reporting period ending 30 June position or of information to gain advantage for themselves or someone else 2008 and paid in December 2008). or to cause detriment to SunWater. It is not possible to apportion the premium Review of operations between amounts relating to the insurance against legal costs and those relating to other liabilities. Information on the operations of SunWater and the results of such operations are detailed in the “Operational Performance” section of the Annual Report. Auditor’s independence declaration Significant changes in the state of affairs A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out following this Directors’ Report. On 1 July 2008, SunWater Limited was registered with the Australian Securities and Investments Commission as a public company. SunWater Limited is also Rounding of amounts a government owned corporation in accordance with section 24(b) of the The Corporation is of a kind referred to in Class Order 98/100, issued by the Government Owned Corporations Act 1993. Australian Securities and Investments Commission, relating to the “rounding Matters subsequent to the end of the financial year off’’ of amounts in the directors’ report. Amounts in the directors’ report have been rounded off in accordance with that Class Order to the nearest thousand No matter or circumstance has arisen since 30 June 2009 that has significantly dollars, or in certain cases, to the nearest dollar. affected, or may significantly affect: (a) SunWater’s operations in future financial years, Auditor (b) the results of those operations in future financial years, or (c) SunWater’s state of affairs in future financial years; The Auditor-General of Queensland continues in office in accordance with except as set out elsewhere in this report and the financial statements. section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of directors. Likely developments An outline of the likely developments in SunWater’s operations is included in the “Operational Performance” section of the Annual Report. Environmental regulation PA Hennessy JL Gibson SunWater’s operations are subject to significant environmental regulation Chairman Director under both Commonwealth and State legislation. SunWater aims to achieve a high standard of care for the natural environment in all its activities. In order to Brisbane, Qld achieve this goal, SunWater has implemented an Environmental Management 26 August 2009

56 SunWater Limited annual report 2008-2009 Financial Report auditor’s independence declaration

To the Directors of SunWater Limited This audit independence declaration has been provided pursuant to s.307C of the Corporations Act 2001. Independence Declaration As lead auditor for the audit of SunWater Limited for the year ended 30 June 2009, I declare that, to the best of my knowledge and belief, there have been – a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) no contraventions of any applicable code of professional conduct in relation to the audit.

Megan Maybury CA Queensland Audit Office As Delegate of the Auditor-General of Queensland Brisbane 25 August 2009

SunWater Limited annual report 2008-2009 Financial Report 57 income statements For the year ended 30 June 2009

Consolidated Parent 2009 2008 2009 2008 Notes $’000 $’000 $’000 $’000 Revenue 4 259,724 190,575 259,341 183,147 Expenses excluding finance costs 5 (149,969) (149,517) (147,754) (143,351) Finance costs 6 (16,911) (15,169) (15,114) (13,611) Profit/(Loss) before income tax equivalents expense 92,844 25,889 96,473 26,185 Income tax equivalents expense/(income) 7 6,865 8,041 3,715 4,830 Profit/(loss) for the year 85,979 17,848 92,758 21,355

The above income statements should be read in conjunction with the accompanying notes. balance sheets Consolidated Parent As at 30 June 2009 2009 2008 2009 2008 Notes $’000 $’000 $’000 $’000 ASSETS Current assets Cash 8 135,101 40,049 120,316 24,575 Receivables 9 8,646 11,294 9,439 11,524 Inventories 10 2,639 2,444 2,639 2,444 Other current assets 11 19,252 17,805 19,104 11,991 165,638 71,592 151,498 50,534 Non-current assets classified as held for sale 12 1,916 29,877 1,916 29,877 Total current assets 167,554 101,469 153,414 80,411

Non-current assets Receivables 9 110 214 2,666 214 Other financial assets 13 - - 72,668 72,668 Property, plant and equipment 14 621,418 615,387 522,752 518,554 Intangible assets 15 56,772 56,229 7,085 5,680 Deferred tax assets 16 17,920 22,194 15,419 19,217 Total non-current assets 696,220 694,024 620,590 616,333 Total assets 863,774 795,493 774,004 696,744 LIABILITIES Current liabilities Payables 17 22,390 18,545 19,813 18,485 Provisions 18 12,513 11,517 12,513 11,517 Borrowings 19 3,557 1,420 11,003 8,087 Other 20 9,523 10,309 9,523 10,302 Total current liabilities 47,983 41,791 52,852 48,391

Non-current liabilities Provisions 18 1,161 1,154 1,161 1,154 Borrowings 19 245,311 264,173 230,273 245,562 Deferred tax liabilities 21 31,209 28,619 15,186 12,238 Total non-current liabilities 277,681 293,946 246,620 258,954 Total liabilities 325,664 335,737 299,472 307,345 Net assets 538,110 459,756 474,532 389,399 EQUITY Contributed equity 23 288,711 288,711 288,711 288,711 Retained profits 24 249,399 171,045 185,821 100,688 Total equity 538,110 459,756 474,532 389,399

The above balance sheets should be read in conjunction with the accompanying notes.

58 SunWater Limited annual report 2008-2009 Financial Report statements of changes in equity As at 30 June 2009

Consolidated Parent 2009 2008 2009 2008 Notes $’000 $’000 $’000 $’000 Total equity at the beginning of the financial year 459,756 441,635 389,399 367,771 Profit/(loss) for the year 85,979 17,848 92,758 21,355 Contributions of equity 23 - 6,170 - 6,170 Dividends 25 (7,625) (5,897) (7,625) (5,897) Total equity at the end of the financial year 538,110 459,756 474,532 389,399

The above statements of changes in equity should be read in conjunction with the accompanying notes.

statements of cash flows Consolidated Parent For the year ended 30 June 2009 2009 2008 2009 2008 Notes $’000 $’000 $’000 $’000 Cash flows from operating activities Inflows: Receipts from customers (inclusive of GST and refunded GST) 208,745 194,003 186,654 177,270 Community service obligations 2,476 10,288 2,476 10,288 Interest received 269 250 269 250 Intercompany taxes received - - 2,802 554 Outflows: Payments to suppliers and employees (inclusive of GST) (117,240) (117,973) (114,414) (120,060) Net cash inflow (outflow) from operating activities 26 94,250 86,568 77,787 68,302

Cash flows from investing activities Inflows: Proceeds from sale of property, plant and equipment 12 78,083 20 78,083 20 Proceeds from term debtors 94 237 94 237 Interest received 6,695 2,150 5,798 1,133 Dividends received - - 14,100 11,000 Outflows: Payments for property, plant and equipment (45,584) (46,874) (44,138) (41,918) Net cash inflow (outflow) from investing activities 39,288 (44,467) 53,937 (29,528) Cash flows from financing activities Inflows: Proceeds from borrowing - 15,000 - 15,000 Government grant 680 318 - - Dividend re-investment - 6,170 - 6,170 Outflows: Interest paid (16,833) (18,284) (15,086) (16,213) Repayment of borrowings (16,436) (21,406) (15,000) (20,221) Dividends paid (5,897) (6,170) (5,897) (6,170) Net cash inflow (outflow) from financing activities (38,486) (24,372) (35,983) (21,434)

Net increase (decrease) in cash held 95,052 17,729 95,741 17,340 Cash at the beginning of the financial year 40,049 22,320 24,575 7,235 Cash at the end of the financial year 135,101 40,049 120,316 24,575

The above statements of cash flows should be read in conjunction with the accompanying notes.

SunWater Limited annual report 2008-2009 Financial Report 59 notes to the financial statements 30 June 2009

Note 1 Summary of significant accounting policies (d) Government grants The significant accounting policies that have been adopted in the preparation The parent entity received community service obligation (CSO) payments from of these financial statements are set out below. These policies have been the Queensland Government. The payments fund the Rural Water CSO in consistently applied to the years presented unless otherwise stated. The recognition of the current rural water pricing policies set by the government as financial report includes separate statements for SunWater (the parent entity) well as certain other activities for which there are not any other revenue sources. and the consolidated entity consisting of SunWater and its subsidiaries. These amounts are recorded as revenue from ordinary activities. New rural water infrastructure assets or extensions to existing assets that are (a) Basis of preparation built by clear direction from government for other than commercial return may This general purpose financial report has been prepared in accordance with also incorporate a CSO component. These amounts are initially recorded Australian Accounting Standards, other authoritative pronouncements of the as pre-paid revenue. Revenue is recognised on a systematic basis over the Australian Accounting Standards Board, Australian Accounting Interpretations accounting periods in which the related assets’ costs are recognised. and the Corporations Act 2001. Water allocations are saleable rights that may be granted by the Crown, free The financial statements have been prepared on an accruals basis and are of charge, in a Resource Operations Plan under the Water Act 2000. Interim presented in Australian currency. water allocations (replacing water licences granted under previous legislation) Compliance with IFRS and water allocations are recognised at nominal cost or deemed cost. All other Australian Accounting Standards include Australian equivalents to International water allocations granted free of charge are recognised, when granted, at fair Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures value which is deemed to be cost. that the consolidated and parent entity financial statements and notes of (e) Income tax the consolidated entity and parent entity comply with International Financial SunWater is exempt from income tax under section 24AM of the Income Tax Reporting Standards (IFRS). Assessment Act but, in accordance with part 2 of the Manual for the National Historic cost convention Tax Equivalents Regime, is required to comply with the National Tax Equivalents The historic cost convention has been applied except where otherwise stated. Regime in relation to income tax. Critical accounting estimates Income tax equivalents expense (or income) for the period is the tax payable The preparation of financial statements in conformity with AIFRS requires the on the current period’s taxable income adjusted by deferred tax expenses (or use of certain critical accounting assumptions. It also requires management income) representing changes in deferred tax assets and liabilities attributable to exercise its judgement in the process of applying SunWater’s accounting to temporary differences between the tax bases of assets and liabilities and their policies. The areas involving a higher degree of judgement or complexity, carrying amounts in the financial statements, and to unused tax losses. or areas where assumptions and estimates are significant to the financial Deferred tax assets and liabilities are recognised for temporary differences at statements, are disclosed in notes 3 and 14. the tax rates expected to apply when the assets are recovered or liabilities are (b) Principles of consolidation settled. Deferred tax assets are recognised for deductible temporary differences The consolidated financial statements incorporate the assets and liabilities of and unused tax losses only if it is probable that future taxable amounts will be all subsidiaries of the parent entity as at 30 June 2009 and the financial results available to utilise those temporary differences and losses. of all subsidiaries at that date. The parent entity and its subsidiaries together SunWater and its wholly owned Australian-controlled subsidiaries have are referred to in this financial report as the consolidated entity. Subsidiaries are implemented the tax consolidation legislation as of 1 July 2003. Under that those entities over which the parent entity has the power to govern the financial legislation, the head entity, SunWater, and the controlled entities in the tax and operating policies. SunWater wholly owns all its subsidiaries (refer note 13). consolidated group continue to account for their own current and deferred The balances and effects of all transactions between entities in the tax amounts. These tax amounts are measured as if each entity in the tax- consolidated entity are eliminated in full. Where a subsidiary began or ceased consolidated group continues to be a stand-alone taxpayer in its own right. to be controlled during the reporting period the results are included only from In addition to its own current and deferred tax amounts, SunWater also the date control commenced or up to the date control ceased. Accounting recognises the current tax liabilities (or assets) and the deferred tax assets policies of all subsidiaries are consistent with the accounting policies of the arising from unused tax losses and unused tax credits assumed from controlled parent entity. entities in the tax-consolidated group. Investments in subsidiaries are accounted for at cost in the financial statements Assets or liabilities arising under tax funding agreements with the tax-consolidated of the parent entity. entities are recognised as amounts receivable from or payable to other entities The consolidated entity has no investments in associates or joint ventures. in the group. (c) Revenue recognition Tax consolidation legislation Revenue is measured at the fair value of the consideration received or On adoption of the tax consolidation legislation, the entities in the tax receivable. Amounts disclosed as revenue are net of returns, rebates, trade consolidated group entered into a tax sharing agreement which limits the joint allowances and amounts collected on behalf of third parties. and several liability of the wholly-owned subsidiaries in the case of a default by the head entity, SunWater. New subsidiaries will enter into a similar agreement Water revenue is recognised when water has been delivered to customers or, as soon as practicable after acquisition. in cases where no water has been delivered, is accrued in accordance with contractual provisions. SunWater and its subsidiaries have also entered into tax funding agreements under which the subsidiaries fully compensate SunWater for any current tax Recognition of all other service revenue is based on work completed at the payable assumed and are compensated by SunWater for any current tax reporting date. receivable and deferred tax assets relating to unused tax losses or unused tax Electricity generation revenue is recognised on the amount of electricity credits that are transferred to SunWater under the tax consolidation legislation. generated at the reporting date. The funding amounts are determined by reference to the amounts recognised Water allocations sales revenue is recognised at the point of sale. in the subsidiaries’ financial statements. Interest income is recognised as it accrues. Realised gains on repayment of borrowings where market value is less than book value are recognised in revenue.

60 SunWater Limited annual report 2008-2009 Financial Report notes to the financial statements 30 June 2009

Note 1 Summary of significant accounting policies (continued) (j) Receivables The amounts receivable/payable under the tax funding agreement are due (i) Current receivables upon receipt of the funding advice from SunWater, which is issued as soon All trade receivables are recognised at the amounts receivable as they are due as practicable after the end of each financial year. SunWater may also require for settlement no more than 30 days from the invoice date. The collectibility payment of interim funding amounts to assist with its obligations to pay tax of receivables is assessed at balance date with adequate provision made for instalments. The funding amounts are recognised as current intercompany doubtful debts. All known bad debts are written off. A provision for impairment receivables or payables (refer note 9). of trade receivables is established when there is objective evidence that all amounts due according to the original terms of the receivables will not be able (f) Leases to be collected. Leases of property, plant and equipment where SunWater or a subsidiary, as lessee, has substantially all the risks and rewards of ownership are classified The amount of the impairment loss is recognised in the income statement. as finance leases. Neither SunWater nor any of its subsidiaries has entered into When a receivable for which an impairment allowance had been recognised any finance leases. becomes uncollectible in a subsequent period, it is written off against the provision account. Subsequent recoveries of amounts previously written off are Leases in which a significant portion of the risks and rewards are retained by recognised in the income statement. the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the (ii) Term trade debtors income statement on a straight-line basis over the period of the lease. Term trade debtors represent the term sale of water allocations. Settlement on these debtors ranges from one to three years. Lease income from operating leases is recognised in revenue on a straight-line basis over the lease term. (k) Inventories Materials and stores are valued at the lower of cost and net realisable value. (g) Business combinations Costs have been assigned to individual items of stock primarily on the basis of The purchase method of accounting is used to account for all business weighted average cost. combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other (l) Property, plant and equipment assets are acquired. Cost is measured as the fair value of the assets given, Items of property, plant and equipment are carried at cost or deemed cost shares issued or liabilities incurred or assumed at the date of exchange, plus less accumulated depreciation and impairment losses. SunWater elected to costs directly attributable to the acquisition. exercise the option allowed under AASB 101 First-time Adoption of Australian Identifiable assets acquired and liabilities and contingent liabilities assumed in a Equivalents to International Financial Reporting Standards to adopt the fair value business combination are measured initially at their fair values at the acquisition of an item of property, plant and equipment as its deemed cost. date. The excess of the cost of acquisition over the fair value of the identifiable This means that all items of property, plant and equipment that had been net assets acquired is recorded as goodwill. If the cost of acquisition is less revalued to fair value on or prior to 1 July 2005, the date of transition to AIFRS, than the fair value of the identifiable net assets of the subsidiary acquired, the were measured on the basis of deemed cost at that date. Subsequent acquisitions excess of fair value over cost is recognised directly in the consolidated income are carried at cost less accumulated depreciation and impairment losses. statement, but only after a reassessment of the identification and measurement The cost of self-constructed items includes the direct cost of construction of the net assets acquired. plus costs incidental to the construction, including all other costs incurred (h) Impairment of assets in preparing the assets ready for use, such as engineering design fees, an Goodwill, and intangible assets that have an indefinite useful life such as appropriate proportion of overheads and borrowing costs (refer note 1(q)). The water allocations, are not subject to amortisation and are tested annually for cost also includes the initial estimate of the costs of decommissioning the items impairment, or more frequently if events or changes in circumstances indicate and restoring the site on which they are located where such estimate is relevant that they might be impaired. Other assets are assessed on an annual basis for and reliable in the context of the very long life of most of these assets. Costs indicators of impairment. attributable to pre-feasibility activities and alternative approach assessments are expensed as incurred. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the All items of property, plant and equipment acquired at a cost, or other value, higher of an asset’s fair value less costs to sell and value-in-use. In the case in excess of $1,000 are capitalised in the year of acquisition. Assets under of SunWater’s water infrastructure assets, which are not traded in an active construction are recorded at cost and are not depreciated until they are market, value-in-use is used as recoverable amount. For the purposes of completed and held ready for use. assessing impairment, assets are grouped in cash generating units (CGU) No threshold is applied to items within the infrastructure class of assets which are the lowest levels for which there are separately identifiable cash as these types of assets form a network. Adjustments or additions to inflows which are largely independent of the cash inflows from other assets existing infrastructure assets that are not in the nature of enhancements or groups of assets. Each of SunWater’s water supply schemes is regarded or replacements do not satisfy asset recognition criteria and are expensed as a cash-generating unit. Each hydro-electricity generating station is on completion. regarded as a cash-generating unit. The residual value, the useful life and the depreciation method applied to an Non-financial assets (other than goodwill) that were impaired in a prior period asset are reassessed at least annually. are reviewed for possible reversal of the impairment at each reporting date. (m) Depreciation and amortisation (i) Cash and cash equivalents Depreciation and amortisation is calculated on a straight-line basis so as to For cash flow statement presentation purposes, cash and cash equivalents write off the cost or deemed cost of each depreciable asset, less its estimated includes cash on hand, deposits held at call with financial institutions, other residual value, progressively over its estimated useful life to the entity. Useful short-term, highly liquid investments with original maturities of three months life to the entity is determined after considering a number of factors such or less that are readily convertible to known amounts of cash and which are as manufacturer’s specifications, engineering life, climatic and geographic subject to an insignificant risk of changes in value, and bank overdrafts. conditions and contractual life. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

SunWater Limited annual report 2008-2009 Financial Report 61 notes to the financial statements 30 June 2009

Note 1 Summary of significant accounting policies (continued) Provisions are not recognised for future operating losses. Provisions are For each class of depreciable asset the following depreciation rates were used: measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. Asset class Depreciation rates The discount rate used to determine the present value reflects current market Land Land is not depreciated assessments of the time value of money and the risks specific to the liability. Buildings and land improvements 1.25% to 20% (s) Refurbishment annuity Plant and equipment 8% to 40% A refurbishment annuity forms part of the approved irrigation price path for each Infrastructure 0.5% to 10% water supply scheme, and is billed to irrigation customers as part of the normal (n) Non-current intangible assets water billing process. Under the irrigation price path, SunWater is obliged to set (i) Water allocations apart the annuity for the sole purpose of applying the funds to refurbishment Water allocations not held for sale are intangible assets that are valued at cost activities on each particular water supply scheme. To give effect to this or deemed cost. SunWater elected to exercise the option allowed under AASB requirement, SunWater accounts for the annuity as unearned revenue until 101 First-time Adoption of Australian Equivalents to International Financial the funds have been applied to refurbishment activities at which point revenue Reporting Standards to adopt the fair value of an intangible asset as its deemed is recognised. cost. This means that all water allocations that had been revalued to fair value Expenditures applied to refurbishment activities are immediately matched by on or prior to 1 July 2005, the date of transition to AIFRS, were measured on recognising available annuity (unearned revenue) as income for each water the basis of deemed cost at that date. Subsequent acquisitions are initially supply scheme. Any unspent annuity at year end (unearned revenue) is carried recognised at cost or at fair value where granted free of charge (note 1(d)). as a current liability on the balance sheet. After initial recognition, water allocations may be revalued at their fair value (t) Employee benefits being market value as evidenced by comparable sales, or independent (i) Wages and salaries and annual leave valuation, or, where no reliable market value exists, the present value of net Liabilities for wages, salaries and annual leave due but unpaid at the reporting cash flows. date are recognised in payables at the remuneration rates expected to apply Water allocations held for sale are recognised at the lower of cost and net at the time of settlement and include related on-costs such as payroll tax, realisable value. workers compensation premiums, long service leave levies and employer Water allocations have an indefinite life and are not amortised but are reviewed superannuation contributions. annually for indications of impairment. No recognition threshold is applied. (ii) Long service leave (ii) Software SunWater is levied under the Queensland Government’s long service leave Software has a finite life and is carried at cost less accumulated amortisation scheme at rates determined by actuarial assessment. Levies are expensed in and impairment losses. Amortisation is calculated using the straight-line the period in which they are paid or payable. Amounts paid to employees for method. Amortisation rates for software vary from 20% to 33%. long service leave are claimed from the scheme as and when leave is taken. No provision for long service leave entitlements is taken up in the financial (iii) Goodwill statements as the liability is held on a whole-of-government basis. Goodwill represents the excess of the cost of an acquisition over the fair value of SunWater’s share of the net identifiable assets of the acquired subsidiary at (iii) Superannuation the date of acquisition. Goodwill is not amortised. Instead, goodwill is tested for Employer superannuation contributions are paid to Queensland Government impairment annually, or more frequently if events or changes in circumstances superannuation schemes at rates determined by the State Actuary. indicate that it might be impaired, and is carried at cost less accumulated Contributions are expensed in the period in which they are paid or payable. impairment losses. Gains or losses on the disposal of an entity include the SunWater’s obligation is limited to its contribution to the superannuation carrying amount of goodwill relating to that entity. Where goodwill is less than schemes. Therefore, no liability is recognised for superannuation benefits in $50,000 it is expensed in the same period in which it arises. these financial statements as the liability is held on a whole-of-government basis. (o) Payables (u) Dividends These amounts represent liabilities for goods and services provided to the Provision is made for the amount of any dividend declared by the directors on consolidated entity prior to the end of the financial period that are unpaid. or before the end of the financial year but not distributed at balance date. The amounts are unsecured and are usually paid within 30 days of recognition. (v) Goods and Services Tax (GST) (p) Borrowings Revenues, expenses and assets are recognised net of GST, unless GST is Borrowings are initially recognised at fair value, net of transaction costs not recoverable from the Australian Taxation Office (ATO) in which case it is incurred. Borrowings are subsequently measured at amortised cost. Fees paid recognised as part of the cost of acquisition of the asset or as part of on the establishment of loan facilities, which are not incremental costs relating the expense. to the actual draw-down of the facility, are recognised as prepayments and Receivables and payables are stated inclusive of the amount of GST receivable amortised on a straight-line basis over the term of the facility. or payable. The net amount of GST recoverable from, or payable to, the ATO is (q) Borrowing costs included with other receivables or payables in the balance sheet. Borrowing costs incurred for the construction of any qualifying asset are Cash flows are presented on a gross basis. The GST components of cash capitalised during the period of time that is required to complete and prepare flows arising from investing or financing activities which are recoverable from, or the asset for its intended use. Other borrowing costs are expensed. payable to, the ATO are presented as operating cash flow. SunWater’s borrowings are discrete to each project. Therefore the amount of (w) Rounding of amounts interest capitalised is the actual interest cost incurred on each loan account. Amounts in the financial report and these accompanying notes have been (r) Provisions rounded to the nearest thousand dollars or in certain cases to the Provisions are recognised when SunWater: nearest dollar. has a present legal or constructive obligation as a result of past events; and it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

62 SunWater Limited annual report 2008-2009 Financial Report notes to the financial statements 30 June 2009

Note 1 Summary of significant accounting policies (continued) (vii) AASB 2008-7 Amendments to Australian Accounting Standards – Cost of (x) New accounting standards and interpretations an Investment in a Subsidiary, Jointly Controlled Entity or Associate (effective Certain new accounting standards and interpretations have been published that 1 January 2009) are not mandatory for 30 June 2009 reporting periods. SunWater’s assessment These amendments require that all dividends received from investments in of the impact of these new standards and interpretations is set out below. subsidiaries, jointly controlled entities or associates will be recognised as revenue, even if they are paid out of pre-acquisition profits. SunWater currently (i) AASB 8 Operating Segments and AASB 2007-3 Amendments to treats normal dividends from subsidiaries as revenue. Consequently, no impact Australian Accounting Standards arising from AASB 8 (effective from is expected from the adoption of the amendments. The amendments will be 1 January 2009) adopted from 1 July 2009. SunWater is not the type of entity to which this standard applies because its debt or equity instruments are not traded in a public market. Consequently, this (viii) AASB Interpretation 15 Agreements for the Construction of Real Estate standard will not impact SunWater’s financial report. (effective 1 January 2009) SunWater’s scope of operations does not include the construction of real (ii) Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to estate. Consequently, this interpretation does not impact SunWater. Australian Accounting Standards arising from AASB 123 (effective from (ix) AASB Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 January 2009) The revised AASB 123 has removed the option to expense all borrowing costs (effective 1 October 2008) and, when adopted, will require the capitalisation of all borrowing costs directly SunWater does not have any investments in foreign operations. Consequently, attributable to the acquisition, construction or production of a qualifying asset. this interpretation does not impact SunWater. There will be no impact on the financial report of SunWater, as SunWater (x) AASB 2008-8 Amendment to IAS 39 Financial Instruments: Recognition already capitalises borrowing costs relating to qualifying assets. and Measurement (effective 1 July 2009) (iii) Revised AASB 101 Presentation of Financial Statements and AASB 2007- These amendments prohibit designating inflation as a hedgeable component of 8 Amendments to Australian Accounting Standards arising from AASB 101 a fixed rate debt and also prohibit including time value in the one-sided hedged risk when designating options as hedges. SunWater does not have any of these (effective from 1 January 2009) financial instruments. Consequently, these amendments will not impact SunWater. The September 2007 revised AASB 101 requires the presentation of a statement of comprehensive income and makes changes to the statement (xi) AASB Interpretation 17 Distribution of Non-cash Assets to Owners and of changes in equity, but will not affect any of the amounts recognised in the AASB 2008-13 Amendments to Australian Accounting Standards arising from financial statements. Under this standard, an impact may arise if SunWater, or AASB Interpretation 17 (effective 1 July 2009) one of its subsidiaries, makes a prior period adjustment or reclassifies items AASB-I 17 applies to situations where an entity pays dividends by distributing in the financial statements. If that occurs, the standard requires additional non-cash assets to its shareholders. SunWater does not pay dividends in this disclosures. SunWater will apply the revised standard from 1 July 2009. way currently and it is not envisaged in the foreseeable future. Consequently, (iv) AASB 2008-1 Amendments to Australian Accounting Standard - there is not expected to be any impact when the interpretation applies from Share-based Payments: Vesting Conditions and Cancellations (effective from 1 July 2009. 1 January 2009) Note 2 Financial risk management This standard does not impact SunWater because, as a government owned corporation, it is unable to make share-based payments to employees. SunWater’s activities may, at certain times, expose it to a variety of financial risks being market risk (including currency risk, interest rate risk and price risk), credit (v) Revised AASB 3 Business Combinations, AASB 127 Consolidated and risk and liquidity risk. SunWater’s overall risk management program focuses Separate Financial Statements and AASB 2008-3 Amendments to Australian mainly on counterparty risks and the unpredictability of the financial markets Accounting Standards arising from AASB 3 and AASB 127 (effective and seeks to minimise potential adverse effects on the financial performance of 1 July 2009) the consolidated entity. The objective of SunWater’s financial risk management The revised AASB 3 continues to apply the acquisition method to business policies is to minimise potential adverse effects on SunWater’s financial combinations, but with some significant changes. The standard requires performance. SunWater uses different methods to measure different types of all payments to purchase a business are to be recorded at fair value at the risk to which it is exposed. These methods include sensitivity analysis in the acquisition date, with contingent payments classified as debt subsequently case of interest rate and aging analysis and counterparty risk analysis for credit remeasured through the income statement. There is a choice on an acquisition- risk. The Board has endorsed written principles for overall risk management, by-acquisition basis to measure the non-controlling interest in the acquiree as well as policies covering specific areas, such as mitigating interest rate either at fair value or at the non-controlling interest’s proportionate share of the and credit risk, use of derivative financial instruments and investment of acquiree’s net assets. All acquisition-related costs must be expensed. This is excess liquidity. different to SunWater’s current policy which is set out in note 1(g) above. (a) Market risk The revised AASB 127 requires the effects of all transactions with (i) Foreign exchange risk non-controlling interests to be recorded in equity if there is no change in control. Foreign exchange risk arises when future commercial transactions and SunWater does not currently have any transactions with non-controlling interests. recognised assets and liabilities are denominated in a currency that is not the SunWater will apply the revised standards prospectively to all business entity’s functional currency. Although SunWater does not operate internationally, combinations and transactions with non-controlling interests from 1 July 2009 on infrequent occasions, SunWater may source plant and equipment or in the event that such transactions occur. components of water infrastructure assets internationally and become exposed to foreign exchange risk. The SunWater Board has approved policies to manage (vi) AASB 2008-6 Further Amendments to Australian Accounting Standards foreign exchange risk. When required, SunWater hedges foreign exchange arising from the Annual Improvements Project (effective 1 July 2009) risk on exposures arising from future commercial transactions and recognised The amendments to AASB 5 Discontinued Operations and AASB 1 First-Time assets and liabilities using approved derivative risk instruments on advice from, Adoption of Australian Equivalents to International Financial Reporting Standards and transacted by, Queensland Treasury Corporation. require that all of a subsidiary’s assets and liabilities are classified as held for During 2008-09, SunWater had no significant exposure to foreign exchange risk sale if a partial disposal sale plan results in loss of control. SunWater will apply and did not enter into any derivative contracts to hedge its foreign exchange the amendments prospectively from 1 July 2009. risk exposure.

SunWater Limited annual report 2008-2009 Financial Report 63 notes to the financial statements 30 June 2009

Note 2 Financial risk management (continued) Collateral in the form of insurance bonds is held as security for the advance to (ii) Price risk Burnett Dam Alliance. Commodity price risk arises when future commercial supply agreements are No financial assets and financial liabilities have been offset and presented net in subject to fluctuations in price movements. During 2008-09, SunWater had no the Balance Sheets. significant exposure to price risk. The method for calculating any impairment for credit risk is based on past (iii) Cash flow and fair value interest rate risk experience, current and expected changes in economic conditions and SunWater’s interest rate risk arises from long term borrowings. Borrowings changes in client credit ratings. issued at variable rates expose SunWater to cash flow interest rate risk, whereas (c) Liquidity risk borrowings issued at fixed rates expose SunWater to fair value interest rate Liquidity risk management within SunWater ensures sufficient cash is available risk. SunWater manages its interest rate risk in consultation with Queensland to meet short-term and long-term financial commitments. SunWater has policies Treasury Corporation in accordance with policies approved by the SunWater in place to manage liquidity risk. SunWater manages liquidity risk by monitoring Board. Interest rate risk is measured monthly through the monitoring of changes forecast cash flows to ensure that sufficient cash and short-term borrowing in yields over the debt duration profile. facilities are maintained, so that adequate funds are available at all times to meet The following interest rate sensitivity analysis assumes that the rate would SunWater’s commitments as they arise. be held constant over the financial year, with the change occurring at the The following table sets out the liquidity risk of financial liabilities held by beginning of the financial year. SunWater has assumed a movement of +/- SunWater. It represents the contractual maturity of financial liabilities, calculated 100 basis points in interest rates applicable to its borrowings as a reasonable based on undiscounted cash flows. expectation based on historical patterns for the type of debt facility held. Total CASH 2009 interest rate risk FLOWS Carrying -1% +1% 2009 Carrying Less than 1 - 5 over 5 (contrA- Financial Instruments amount Profit equity Profit equity amount 1 year years years Ctual) $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Consolidated Consolidated Cash 135,101 (1,286) (1,286) 1,286 1,286 Payables 22,390 22,390 - - 22,390 Queensland Treasury Borrowings – Queensland Corporation borrowings 248,868 2,458 2,458 (2,458) (2,458) Treasury Corporation 248,868 18,058 72,173 247,978* 338,209 Overall effect on profit and equity 1,172 1,172 (1,172) (1,172) Deposits payable 372 14 25 333 372 Other 11 11 - - 11 2008 interest rate risk 271,641 40,473 72,198 248,311 360,982 Carrying -1% +1% Financial Instruments amount Profit equity Profit equity Parent $’000 $’000 $’000 $’000 $’000 Payables 19,813 19,813 - - 19,813 Borrowings – Queensland Consolidated Treasury Corporation 216,397 14,501 57,944 217,013* 289,458 Cash 40,049 (283) (283) 283 283 Intercompany loan 24,879 11,003 13,876 - 24,879 Queensland Treasury Deposits payable 372 14 25 333 372 Corporation borrowings 265,593 2,315 2,315 (2,315) (2,315) Other 11 11 - - 11 Overall effect on profit and equity 2,032 2,032 (2,032) (2,032) 261,472 45,342 71,845 217,346 334,533

(b) Credit risk Total Credit risk largely arises from the potential failure of counterparties to meet their CASH obligations under the respective contracts. Credit evaluations are performed on FLOWS 2008 Carrying Less than 1 - 5 over 5 (contrA- all customers requiring credit over a certain amount and on all counterparties to amount 1 year years years Ctual) significant contracts. Exposure to credit risk is monitored on an ongoing basis. $’000 $’000 $’000 $’000 $’000 Cash is invested only with Queensland Treasury Corporation, a highly rated Consolidated financial institution. During 2008-09, SunWater had no transactions involving Payables 18,545 18,545 - - 18,545 derivative financial instruments. Borrowings – Queensland At the balance sheet date there were no other significant concentrations Treasury Corporation 265,593 19,407 77,615 267,238* 364,260 of credit risk in respect to recognised financial instruments. The maximum Deposits payable 367 77 25 265 367 exposure to credit risk at balance date in relation to each class of recognised Other 13 13 - - 13 financial assets is the carrying amount of those assets as represented in the 284,518 38,042 77,640 267,503 383,185 following table: Parent Maximum exposure to credit risk 2009 2008 Payables 18,485 18,485 - - 18,485 Category note $’000 $’000 Borrowings – Queensland Treasury Corporation 231,686 15,706 62,880 231,687* 310,273 Consolidated Intercompany loan 21,963 8,087 13,876 - 21,963 Cash and cash equivalents 8 135,101 40,049 Deposits payable 360 70 25 265 360 Receivables – current 9 8,646 11,294 Other 13 13 - - 13 Receivables – non-current 9 110 214 272,507 42,361 76,781 231,952 351,094 Advance to Burnett Dam Alliance 11 1,000 1,000

144,857 52,557 * Cash flows over 5 years are based on estimated market value. Parent Cash and cash equivalents 8 120,316 24,575 Receivables – current 9 9,439 11,524 Receivables – non-current 9 2,666 214 132,421 36,313

64 SunWater Limited annual report 2008-2009 Financial Report notes to the financial statements 30 June 2009

Note 3 Critical accounting estimates and judgements Note 4 Revenue Estimates and judgements are continually evaluated and are based on historical Consolidated Parent experience and other factors, including expectations of future events that may 2009 2008 2009 2008 $’000 $’000 $’000 $’000 have a financial impact on the entity and that are believed to be reasonable under the circumstances. Revenue from ordinary activities Industrial water charges 99,162 83,728 75,506 63,536 SunWater makes estimates and assumptions concerning the future. The Irrigation water charges 42,782 39,880 41,963 39,157 resulting accounting estimates will, by definition, seldom equal the related actual Urban water charges 6,250 7,938 6,250 7,938 results. The estimates and assumptions that have a significant risk of causing a Drainage charges 1,251 1,202 1,251 1,202 material adjustment to the carrying amounts of assets and liabilities within the Water allocations revenue 11,401 9,210 8,967 6,205 next financial year are discussed below. Consulting and facilities services revenue 24,402 30,516 37,784 37,125 Electricity generation 634 545 633 545 (i) Estimated impairment of assets Community service obligation 3,174 10,370 3,174 10,370 Key assumptions and estimates concerning the future are made when Other fees and charges 502 574 502 574 assessing the value-in-use of water infrastructure assets using the net Grants 482 748 482 748 present value of future cash flows derived from each cash-generating unit. Interest 6,976 2,372 6,079 1,354 Value-in-use is taken to be the recoverable amount in respect to cash-generating Dividends received - - 14,100 11,000 units comprising water infrastructure assets. Rent received 966 1,069 966 1,069 Other 586 758 528 659 Significant factors influencing the assessment of value-in-use include the following: 198,568 188,910 198,185 181,482 • SunWater applied its pre-tax weighted average cost of capital (WACC) as Other income the discount rate. WACC includes a market-determined rate that reflects the Gain on disposal of non-current assets risks associated with operating the business. The risk-free component of (refer note 12) 49,119 14 49,119 14 WACC takes into account the forward-looking long-term average expected Gain on settlement of loan 289 903 289 903 gross domestic product growth, and the forward-looking long-term average Proceeds from bank guarantees expected inflation. (refer note 12) 11,500 - 11,500 - Proceeds from insurance settlement (1) 248 748 248 748 • As a natural monopoly, there is not an open market for the water infrastructure owned by SunWater. 61,156 1,665 61,156 1,665 Total revenue 259,724 190,575 259,341 183,147 • Water charges applied to irrigators are regulated by the Queensland (1) Government which subsidises water prices by way of community service Whilst insurance claims are yet to be finalised, the amount accrued in these financial statements represents the best information available at the date of this report. The final obligation payments for the regulated pricing shortfall incurred against insurance settlement may differ from these amounts. forecast efficient costs of storage and distribution of water for irrigation purposes. As the regulated price does not provide for a commercial return on capital, the reduced cash flows substantially impact on the values Note 5 Expenses excluding finance costs assigned to the water infrastructure assets. Consolidated Parent 2009 2008 2009 2008 • The cash flow projections employ prices for irrigation in the medium to $’000 $’000 $’000 $’000 longer term based on the currently approved pricing arrangements and likely future pricing trends. Depreciation and amortisation Land improvements and buildings 804 543 804 543 • The cash flow projections assume water availability equals expected Plant and equipment 2,196 1,670 2,196 1,670 customer usage over the long term. Water infrastructure 20,416 18,517 14,093 12,165 • The cash flow projections anticipate that business efficiencies will be Software 1,017 1,965 1,017 1,965 achieved over time to meet benchmarked costs and that future price paths Total depreciation and amortisation 24,433 22,695 18,110 16,343 will recover efficient costs. Labour and on-costs 39,251 45,238 40,843 45,473 Contracted services 19,399 21,894 20,245 23,119 (ii) Useful life of property, plant and equipment Electricity 14,549 14,976 13,837 14,370 Many of SunWater’s water infrastructure assets have extremely long lives. Materials 5,249 4,685 9,932 4,870 Factors considered in estimating the useful life of assets are set out in Plant hire 4,946 5,323 4,971 5,341 note 1(m). Motor vehicle operating lease charges 2,484 2,352 2,484 2,352 IT charges 1,152 915 1,152 915 (iii) Non-current intangible assets Bad and doubtful debts (1) 2 (608) 2 (608) Under AASB 138 Intangible Assets, water allocations are assessed as having Loss on disposal of non-current assets 590 186 590 186 an indefinite life. In determining this position, SunWater has assumed that the Travel 1,992 2,278 2,089 2,293 current Resource Operations Licence conditions will continue in perpetuity. Accommodation 2,930 2,686 2,931 2,701 Insurance 4,979 4,117 4,627 3,819 Legal fees 2,569 795 1,574 1,001 Rates and land taxes 1,189 1,260 1,076 1,184 Telephone, facsimile and data lines 2,012 2,022 2,007 1,984 Remuneration of auditors (2) 123 82 107 68 Write off of inventories 72 102 72 36 Cost of water allocations sold 862 1,115 - - Impairment (refer notes 12, 14 & 15) 19,003 16,255 19,003 16,255 Other 2,183 1,149 2,102 1,649 Total expenses excluding finance costs 149,969 149,517 147,754 143,351

(1) Provision for doubtful debts no longer required was written back in 2008. (2) Amounts received or due and receivable by the auditor of the consolidated entity related to the audit of the financial report of the parent entity and its subsidiaries. No other services were provided.

SunWater Limited annual report 2008-2009 Financial Report 65 notes to the financial statements 30 June 2009

Note 6 Finance costs (a) Reconciliation to cash at the end of the year The above figures are reconciled to cash at the end of the financial year as shown in the Consolidated Parent 2009 2008 2009 2008 statement of cash flows as follows: $’000 $’000 $’000 $’000 Balances as per statement of cash flows 135,101 40,049 120,316 24,575 Interest and finance charges paid/payable 17,277 18,754 15,480 16,629 Amount capitalised (366) (3,585) (366) (3,018) (b) Risk exposure SunWater’s risk exposure is discussed in note 2. Finance costs expensed 16,911 15,169 15,114 13,611 Note 9 Receivables Note 7 Income tax and income tax equivalents Consolidated Parent Consolidated Parent 2009 2008 2009 2008 2009 2008 2009 2008 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Current (a) Income tax equivalents expense/(income) Trade debtors 9,697 12,367 6,405 9,795 Current tax equivalents expense/(income) 10,625 7,068 7,593 7,206 Term trade debtors 49 27 49 27 Deferred tax equivalents (income) 2,347 973 2,229 (2,376) Intercompany receivables - - 801 - Over-provided in prior years* (6,107) - (6,107) - Intercompany taxation receivables - - 3,284 2,802 6,865 8,041 3,715 4,830 9,746 12,394 10,539 12,624 Income tax equivalents expense/(income) Less: Provision for impairment of receivables 1,100 1,100 1,100 1,100 is attributable to: 8,646 11,294 9,439 11,524 Profit from continuing operations 6,865 8,041 3,715 4,830 Non-current Deferred tax equivalents expense/(income) Term trade debtors 110 214 110 214 included in income tax equivalents expense comprises: Intercompany receivables - - 2,556 - Decrease/(increase) in deferred tax assets 110 214 2,666 214 (note 16) (243) 5,162 (718) 893 (Decrease)/increase in deferred tax liabilities (a) Impaired receivables (note 21) 2,590 (4,189) 2,947 (3,269) The ageing of trade receivables is as follows: 2,347 973 2,229 (2,376) impair- impair- (b) Numerical reconciliation of income tax equivalents gross ment gross ment expense to prima facie tax equivalents payable 2009 2009 2008 2008 Consolidated $’000 $’000 $’000 $’000 Profit from continuing operations before income tax equivalents expense 92,844 25,889 96,473 26,185 Not past due 6,937 350 9,780 - Tax at 30% 27,854 7,766 28,942 7,855 Past due 0 – 30 days 837 33 833 17 Tax effect of amounts which are not Past due 31 – 60 days 1,530 165 500 123 deductible/(taxable) in calculating More than 60 days 552 552 1,495 960 taxable income: 9,856 1,100 12,608 1,100 Entertainment expenses 22 25 22 25 Disposal of assets to SEQWater (14,664) - (14,664) - (b) Foreign exchange and interest rate risk Dividends from subsidiaries - - (4,230) (3,300) Information about SunWater’s exposure to foreign currency risk and interest rate risk in Sundry items (203) 250 (211) 250 relation to trade and other receivables is discussed in note 2. Prior year over provision (6,107) - (6,107) - Investment allowance (37) - (37) - (c) Fair value and credit risk Due to the short-term nature of these receivables, their carrying amount is assumed to Income tax equivalents expense 6,865 8,041 3,715 4,830 approximate their fair value. * On 15 September 2008, SunWater Limited received a positive ruling from the Australian The maximum exposure to credit risk at the reporting date is the carrying amount of Taxation Office. The ruling allows SunWater Limited as the head company of the each class of receivables mentioned above. For more information on SunWater’s risk SunWater group to be treated as an Irrigation Water Provider, and access the write-off management policies, refer to note 2. under Subdivision 40-F, for capital expenditure on “water facilities” incurred “primarily and principally” for the supply of water to primary producers. The write-off allows eligible expenditure incurred after 1 July 2004 to be written-off pro-rata over three years. Note 10 Inventories The additional deduction available to SunWater Limited for the 2005-2008 financial Consolidated Parent years is $16.2m. 2009 2008 2009 2008 $’000 $’000 $’000 $’000 Note 8 Cash and cash equivalents Materials and stores 2,639 2,444 2,639 2,444 Consolidated Parent 2009 2008 2009 2008 Inventory expense $’000 $’000 $’000 $’000 Inventories recognised as expense during the year ended 30 June 2009 amounted to $1.542 million (2008 – $1.415 million). There were no write-downs of inventories to net Cash on hand 18 17 18 17 realisable value recognised as an expense during the year ended 30 June 2009 Cash at bank 2,477 7,651 663 5,504 (2008 - nil). There were no reversals of previous write-downs (2008: $0.006 million). Deposits on call 116,732 32,381 103,761 19,054 Term deposits 15,874 - 15,874 - 135,101 40,049 120,316 24,575

66 SunWater Limited annual report 2008-2009 Financial Report notes to the financial statements 30 June 2009

Note 11 Other current assets Note 14 Property, plant and equipment Consolidated Parent Consolidated Parent 2009 2008 2009 2008 2009 2008 2009 2008 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

GST receivable 1,562 1,079 1,401 969 Land (1) 8,454 8,296 8,454 8,296 Prepayments 1,167 830 1,167 830 Buildings and land improvements (1) 14,274 13,290 14,274 13,290 Advance to Burnett Dam Alliance 1,000 1,000 - - Less: accumulated depreciation 2,702 2,231 2,702 2,231 Other debtors 50 55 50 55 Accrued revenue (1) 15,473 14,841 16,486 10,137 Total buildings and land improvements 11,572 11,059 11,572 11,059 (1) 19,252 17,805 19,104 11,991 Plant and equipment 17,607 12,126 17,605 12,124 Less: accumulated depreciation 7,909 7,611 7,909 7,611 (1) Includes water delivered to 30 June but not invoiced. Less: accumulated impairment 365 - 365 - Total plant and equipment 9,333 4,515 9,331 4,513 Note 12 Non-current assets classified as held for sale Water infrastructure (1) 694,280 687,223 570,248 563,212 Consolidated Parent Less accumulated depreciation 66,318 45,957 37,367 23,330 2009 2008 2009 2008 Less: accumulated impairment 82,181 83,229 77,332 78,379 $’000 $’000 $’000 $’000 Total water infrastructure 545,781 558,037 455,549 461,503 (2) Buildings and land improvements - 1,238 - 1,238 Assets under construction (1), (2) 46,278 33,480 37,846 33,183 Plant and equipment (2) - 282 - 282 Water infrastructure (see below) (1) (2) 1,916 24,699 1,916 24,699 Total property, plant and equipment 621,418 615,387 522,752 518,554 Assets under construction (2) - 1,700 - 1,700 (1) At cost or deemed cost. (2) Water allocations - 1,958 - 1,958 (2) Includes the costs of investigating feasibilities associated with the development of 1,916 29,877 1,916 29,877 business cases for proposed water infrastructure projects that, at commencement, were deemed more likely to proceed to construction. If circumstances arise in the (1) Sale of water infrastructure asset future whereby any of the business cases are unsuccessful, an impairment loss will be SunWater constructed the Goondicum pipeline to provide water to a mining customer. recognised at that time. No such circumstances were known at 30 June 2009, and no During 2008-09, and prior to commissioning of the pipeline, the customer went into impairment losses were recognised. voluntary administration. SunWater signed a Pipeline Transfer Agreement on 1 May 2009 with another party who agreed to pay $2.5 million to SunWater on the later of 1 May 2013 Reconciliations and the date that the pipeline is legally transferred to them. Legal transfer of the pipeline, Reconciliations of the carrying amounts of each class of property, plant and equipment at which is dependent upon the transfer and assignment of a number of titles, leases and the beginning and end of 2008-09 are set out below. easements, is anticipated in 2009-10 (also see note 14). At the time of signing the transfer Land Buildings Plant & Water assets total agreement, SunWater collected $11.500 million in bank guarantees provided by the & land equip- infra- under mining customer and recognised an impairment of the pipeline asset in the amount of improve- ment struc- Constr- $20.025 million. ments ture uction $’000 $’000 $’000 $’000 $’000 (2) Transfer of assets Under the South East Queensland Water (Restructuring) Act 2007, SunWater was Consolidated directed by the Treasurer of Queensland to transfer certain water infrastructure, plant Carrying amount and equipment, buildings, land improvement assets and unsold water allocations to at 1 July 2008 8,296 11,059 4,515 558,037 33,480 615,387 the Queensland Bulk Water Supply Authority on 1 July 2008. The proceeds of the Additions 241 1,538 7,472 31,030 53,295 93,576 transfer amounted to $77.693 million and a final accounting gain of $48.880 million was Disposals (83) (221) (93) (1,980) - (2,377) recognised. No tax applied as under the National Tax Equivalents Regime government Transfer between imposed transfers are tax neutral. classes - - - - (40,497) (40,497) Transfer to non- current assets Note 13 Other financial assets held for sale (note 12) - - - (1,916) - (1,916) Consolidated Parent Depreciation expense 2009 2008 2009 2008 (note 5) - (804) (2,196) (20,416) - (23,416) $’000 $’000 $’000 $’000 Impairment loss Shares in controlled entities – at cost - - 72,668 72,668 (accumulated impairment) (note 5) - - (365) (22,055) - (22,420) Impairment loss Information relating to the controlled entities is set out below. (non-current asset Country of Class of held for sale) (notes 5, 12) - - - (20,025) - (20,025) Name of entity incorporation shares equity holding Impairment losses 2009 2008 reversed (note 5) - - - 23,106 - 23,106 % % Carrying amount North West Queensland at 30 June 2009 8,454 11,572 9,333 545,781 46,278 621,418 Water Pipeline Pty Ltd Australia Ordinary 100 100 Eungella Water Pipeline Pty Ltd Australia Ordinary 100 100 Burnett Water Pty Ltd Australia Ordinary 100 100

SunWater Limited annual report 2008-2009 Financial Report 67 notes to the financial statements 30 June 2009

Note 14 Property, plant and equipment (continued) Impairment Cash generating units in which material impairment losses were recognised or (reversed) Land Buildings Plant & Water assets total during the financial year are: & land equip- infra- under improve- ment struc- Constr- ments ture uction Consolidated Parent $’000 $’000 $’000 $’000 $’000 Loss (Reversed) loss (Reversed) $’000 $’000 $’000 $’000 Parent Goondicum pipeline 20,025 - 20,025 - Carrying amount at 1 July 2008 8,296 11,059 4,513 461,503 33,183 518,554 This CGU was a stand-alone pipeline Additions 241 1,538 7,472 31,009 45,139 85,399 operation (note 12). The impairment Disposals (83) (221) (93) (1,980) - (2,377) loss represents the difference between Transfer between carrying amount and recoverable classes - - - - (40,476) (40,476) amount being fair value less costs to sell Transfer to non- as determined by negotiated agreement. current assets held for sale (note 12) - - - (1,916) - (1,916) Bundaberg Water Supply Scheme - (5,729) - (5,729) Depreciation expense (note 5) - (804) (2,196) (14,093) - (17,093) This CGU comprises all of the water Impairment loss infrastructure assets in the Bundaberg (accumulated Water Supply Scheme. The reversal impairment) (note 5) - - (365) (22,055) - (22,420) of previously recognised impairment Impairment loss losses arises mainly because revised (non-current asset future cash inflows are now expected to held for sale) (notes 5, 12) - - - (20,025) - (20,025) recover certain previously recognised Impairment losses future cash outflows. Recoverable reversed (note 5) - - - 23,106 - 23,106 amount is determined as value in use. Carrying amount The discount rate used was 10.8% at 30 June 2009 8,454 11,572 9,331 455,549 37,846 522,752 (2008: 10.8%).

Burdekin Haughton Water Supply Scheme 6,975 - 6,975 -

This CGU comprises all of the water infrastructure assets in the Burdekin Haughton Water Supply Scheme. The impairment loss mainly arises because additional future cash outflows related to safety improvement and refurbishment costs are expected to absorb currently forecast net cash inflows. Recoverable amount is determined as value in use. The discount rate used was 10.8% (2008: 10.8%).

Dawson Valley Water Supply Scheme - (8,584) - (8,584)

This CGU comprises all of the water infrastructure assets in the Dawson Valley Water Supply Scheme. The reversal of previously recognised impairment losses largely arises because future cash inflows are forecast to increase following additional water entitlement sales and renegotiation of water supply contracts. Recoverable amount is determined as value in use. The discount rate used was 10.8% (2008: 10.8%).

Nogoa MacKenzie Water Supply Scheme 7,513 - 7,513 -

This CGU comprises all of the water infrastructure assets in the Nogoa MacKenzie Water Supply Scheme. The impairment loss mainly arises because additional future cash outflows related to refurbishment costs have arisen that are expected to absorb currently forecast net cash inflows. Recoverable amount is determined as value in use. The discount rate used was 10.8% (2008: 10.8%).

68 SunWater Limited annual report 2008-2009 Financial Report notes to the financial statements 30 June 2009

Note 15 Intangible assets Note 16 Deferred tax assets (continued) Consolidated Parent Consolidated Parent 2009 2008 2009 2008 2009 2008 2009 2008 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Software (1) 13,704 11,625 13,704 11,625 Movements: Less accumulated amortisation 10,781 9,811 10,781 9,811 Opening balance at 1 July 22,194 34,425 19,217 27,178 Less accumulated impairment 359 695 359 695 Credited/(charged) to the income statement 6,337 (5,162) 6,813 (893) Losses utilised to offset current tax payable (10,611) (7,069) (10,611) (7,068) 2,564 1,119 2,564 1,119 Trade names 8 8 8 8 Closing balance at 30 June 17,920 22,194 15,419 19,217 Water allocations (1) 54,200 55,102 4,513 4,553 Deferred tax assets to be recovered 56,772 56,229 7,085 5,680 after more than 12 months 15,869 20,107 13,384 17,322 Deferred tax assets to be recovered (1) At cost or deemed cost. within 12 months 2,051 2,087 2,035 1,895 Reconciliations Closing balance at 30 June 17,920 22,194 15,419 19,217 Reconciliations of the carrying amounts of intangible assets at the beginning and end of 2008-09 are set out below. Soft- trade Water Note 17 Payables ware names alloc- Consolidated Parent ations 2009 2008 2009 2008 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Consolidated Trade creditors 7,365 4,495 7,143 4,188 Carrying amount at 1 July 2008 1,119 8 55,102 Intercompany taxation payables - - 252 2,940 Sales (note 5) - - (862) Other creditors and accruals 15,025 14,050 12,418 11,357 Additions – at cost 2,152 - - 22,390 18,545 19,813 18,485 Disposals/retirements (26) - (40) Amortisation expense (note 5) (1,017) - - Impairment losses reversed (note 5) 336 - - Note 18 Provisions Carrying amount at 30 June 2009 (1) 2,564 8 54,200 Consolidated Parent 2009 2008 2009 2008 $’000 $’000 $’000 $’000 Soft- trade Water ware names alloc- Current ations Employee benefits (note 22) 4,888 4,980 4,888 4,980 $’000 $’000 $’000 Tenancy obligations - 640 - 640 Parent Dividends 7,625 5,897 7,625 5,897 Carrying amount at 1 July 2008 1,119 8 4,553 12,513 11,517 12,513 11,517 Additions – at cost 2,152 - - Non-current Disposals/retirements (26) - (40) Land commitment (1) 1,161 1,154 1,161 1,154 Amortisation expense (note 5) (1,017) - - Impairment losses reversed (note 5) 336 - - 1,161 1,154 1,161 1,154 Carrying amount at 30 June 2009 (1) 2,564 8 4,513 (1) By way of an agreement between the former State Water Projects and the Department of Natural Resources and Water, SunWater is required to settle with the department, (1) Net of retirements (fully written down) the disposition of certain surplus land.

Note 16 Deferred tax assets Movements in provisions Consolidated Parent Movements in each class of provision during the financial year, other than employee 2009 2008 2009 2008 benefits, are set out below. $’000 $’000 $’000 $’000 Tenancy Land The balance comprises temporary differences attributable to: obligations commitment Provision for doubtful debts 330 330 330 330 $’000 $’000 Property, plant and equipment 2,485 2,977 - - Accrued payables 255 71 239 71 Consolidated Accrued employee benefits 1,466 1,494 1,466 1,494 Carrying amount at 1 July 2008 640 1,154 Revenue received in advance 1,006 - 1,006 - Provisions added/(written back) (216) 7 Provision for lease make good - 192 - 192 Payments made during the year (424) - Provision for Rocklea land commitment 348 346 348 346 Carrying amount at 30 June 2009 - 1,161 Unearned renewal annuity 2,741 2,978 2,741 2,978 Parent Tax losses included in deferred tax assets 9,289 10,866 9,289 10,866 Carrying amount at 1 July 2008 640 1,154 Balance before current year tax losses 17,920 19,254 15,419 16,277 Provisions added/(written back) (216) 7 Tax losses transferred in current year - 2,940 - 2,940 Payments made during the year (424) - Balance at 30 June 17,920 22,194 15,419 19,217 Carrying amount at 30 June 2009 - 1,161

SunWater Limited annual report 2008-2009 Financial Report 69 notes to the financial statements 30 June 2009

Note 19 Borrowings Note 22 Employee benefits Consolidated Parent Consolidated Parent 2009 2008 2009 2008 2009 2008 2009 2008 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Unsecured (1) Employee benefits liability Queensland Treasury Corporation loan 248,868 265,593 216,397 231,686 Provision for employee benefits (note 18 ) 4,888 4,980 4,888 4,980 Intercompany loan - - 24,879 21,963 Accrued salaries and wages (note 17) 16 1,105 16 1,105 248,868 265,593 241,276 253,649 Aggregate employee benefits liability 4,904 6,085 4,904 6,085 Represented by: Employee numbers Current 3,557 1,420 11,003 8,087 Full time equivalents excluding casuals Non-current 245,311 264,173 230,273 245,562 Number of employees as at 30 June 562 573 562 573 248,868 265,593 241,276 253,649 (1) Borrowings by subsidiary company are secured by parent entity guarantee. Note 23 Contributed equity Consolidated Parent (a) Financing arrangements 2009 2008 2009 2008 The loans from Queensland Treasury Corporation (QTC) are interest bearing. The $’000 $’000 $’000 $’000 borrowing arrangements are subject to annual review. Subject to the annual approval of the Queensland Treasurer, borrowings are sourced from the SunWater Client Specific (a) Share capital Pool, except in the case of borrowings by SunWater’s subsidiary companies which borrow Issued and paid up capital: from QTC’s generic debt pool. SunWater may draw up to the amount of the approved 2 ordinary shares of $144.356 million each(1) 288,711 288,711 288,711 288,711 borrowing program (in 2009: nil). SunWater has a credit standby arrangement with QTC (1) Shares have no par value. totalling $15 million. This facility was unused at 30 June 2009 (2008: unused).

Number Contribution total (b) Fair value of shares Per share 2009 2008 $’000 $’000 Carrying Fair Carrying Fair amount value amount value (b) Movements in ordinary share capital $’000 $’000 $’000 $’000 Opening balance 1 July 2008 2 144,356 288,711 The carrying amounts and Equity injection - - fair values of interest bearing Closing balance 30 June 2009 144,356 288,711 liabilities at balance date are: Borrowings 248,868 253,077 265,593 256,326 (c) Capital risk management SunWater’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and Note 20 Other liabilities benefits for other stakeholders, and to maintain an optimal capital structure to reduce Consolidated Parent the cost of capital. 2009 2008 2009 2008 SunWater monitors capital on the basis of the market gearing ratio. This ratio is calculated $’000 $’000 $’000 $’000 as total borrowings divided by total capital. Total capital is calculated as total equity plus Deposits payable 372 367 372 360 total borrowings. Unearned annuity 9,140 9,929 9,140 9,929 During 2009, SunWater’s strategy, which was unchanged from 2008, was to maintain a Other 11 13 11 13 gearing ratio within a 40% upper limit. The market gearing ratios at 30 June 2009 and 30 9,523 10,309 9,523 10,302 June 2008 were as follows: Consolidated Parent 2009 2008 2009 2008 Note 21 Deferred tax liabilities $’000 $’000 $’000 $’000 Consolidated Parent Total borrowings 248,868 265,593 241,276 253,649 2009 2008 2009 2008 Total equity 538,110 459,756 474,532 389,399 $’000 $’000 $’000 $’000 Total capital 786,978 725,349 715,808 643,048 The balance comprises temporary differences attributable to: Market gearing ratio 32% 37% 34% 39% Accrued interest receivable 5 93 5 66 Inventories 680 133 680 133 Accrued revenue 3,808 4,090 2,416 2,379 Note 24 Retained profits Water allocations 7,290 7,992 1,354 1,953 Consolidated Parent Property, plant and equipment 19,426 16,311 10,731 7,707 2009 2008 2009 2008 Closing balance at 30 June 31,209 28,619 15,186 12,238 $’000 $’000 $’000 $’000 Movements Movements: Opening balance at 1 July 28,619 32,808 12,238 15,507 Balance 1 July 171,045 159,094 100,688 85,230 Charged/(credited) to the income statement 2,590 (4,189) 2,948 (3,269) Net profit/(loss) attributable Closing balance at 30 June 31,209 28,619 15,186 12,238 to members of SunWater 85,979 17,848 92,758 21,355 Dividends declared (7,625) (5,897) (7,625) (5,897) Deferred tax liabilities to be settled after more than 12 months 26,716 24,303 12,085 9,660 Balance 30 June 249,399 171,045 185,821 100,688 Deferred tax liabilities to be settled within 12 months 4,493 4,316 3,101 2,578 Closing balance at 30 June 31,209 28,619 15,186 12,238

70 SunWater Limited annual report 2008-2009 Financial Report notes to the financial statements 30 June 2009

Note 25 Dividends Note 27 Commitments for expenditure (continued) Parent SunWater leases property under non-cancellable operating leases expiring from one to 2009 2008 ten years. Leases generally provide SunWater with a right of renewal at which time all $’000 $’000 terms are renegotiated. Lease payments comprise a base amount plus an incremental contingent rental. Contingent rentals are based either on movements in the consumer Ordinary shares price index or operating criteria. 2008 first and final dividend of $2.9485 million per share declared (1) - 5,897 Future projects and acquisitions 2009 first and final dividend of SunWater has been appointed by the State Government as proponent for the $3.8125 million per share declared (1) 7,625 - development of business cases for a range of water infrastructure projects. In addition, SunWater has made in-principle commitments to investigate certain major capital projects 7,625 5,897 and acquisitions. However, these projects and acquisitions are at varying stages of (1) Franking does not apply to SunWater as an NTER entity because the shareholders completion and final costs cannot be accurately quantified at this time. represent the Queensland Government. Details of SunWater’s dam safety upgrade program are disclosed in note 31.

Note 26 Reconciliation of profit after income tax Note 28 Related parties disclosures equivalents to net cash inflow from operating activities Key management personnel compensation Consolidated Parent Director remuneration is approved by the Governor in Council in accordance with the 2009 2008 2009 2008 requirements of the Government Owned Corporations Act 1993. The Board Remuneration $’000 $’000 $’000 $’000 Committee reviews the compensation and other terms of employment of senior executives Profit for the year 85,979 17,848 92,758 21,355 having regard to government policy, relevant market comparatives and performance Depreciation and amortisation 24,433 22,695 18,110 16,343 against goals set at the start of the year. Impairment 19,003 16,255 19,003 16,255 Bad and doubtful debts 2 (608) 2 (608) Key management personnel compensation disclosures by category Net (gain)/loss on sale or disposal of non-current assets (48,529) 172 (48,529) 172 Category 2008-09 2007-08 $’000 $’000 Interest income (7,179) (2,150) (5,798) (1,133) Interest paid 17,317 18,284 15,086 16,213 Consolidated Gain on loan settlement (289) (903) (289) (903) Short-term employee benefits 1,234 1,381 Dividends received - - (14,100) (11,000) Post-employment benefits 146 158 Change in assets and liabilities: Total 1,380 1,539 (Increase)/decrease in inventories and intangibles 586 1,101 (276) (79) Parent (Increase)/decrease in deferred tax assets 4,274 12,231 3,798 7,961 Short-term employee benefits 1,186 1,350 (Increase)/decrease in receivables (1,479) (6,789) (532) (1,451) Post-employment benefits 141 155 (Increase)/decrease in other assets (7,103) 3,468 (7,431) 591 Total 1,327 1,505 (Decrease)/increase in creditors 3,420 7,326 1,838 6,695 (Decrease)/increase in deferred revenue 1,225 1,827 1,199 1,160 Compensation – directors (Decrease)/increase in income taxes payable - - - - Short-term Post- total (Decrease)/increase in deferred tax liabilities 2,590 (4,189) 2,948 (3,269) employee employment benefits Benefits Net cash inflow from operating activities 94,250 86,568 77,787 68,302 $’000 $’000 $’000

Consolidated – 2009 Note 27 Commitments for expenditure Name of director Consolidated Parent Phil Hennessy, Chair 58 5 63 2009 2008 2009 2008 Jane Bertelsen, Deputy Chair 40 3 43 $’000 $’000 $’000 $’000 Julie Boyd (retired 30 September 2008) 8 1 9 (a) Capital expenditure commitments Tom Connor 31 3 34 Capital expenditure commitments John Gibson 40 3 43 (including GST) contracted for but Alan Millhouse (retired 30 June 2008) 2 - 2 not brought to account are as follows: Greg Moynihan 33 3 36 Kirstin Ferguson (commenced 1 October 2008) 21 2 23 ICT projects 161 178 161 178 Neil Turner (commenced 1 October 2008) 19 2 21 Water infrastructure projects 17,238 8,299 13,576 8,299 17,399 8,477 13,737 8,477 Consolidated – 2008 Payable: Name of director Phil Hennessy, Chair 55 5 60 Not later than one year 17,399 8,477 13,737 8,477 Jane Bertelsen, Deputy Chair 35 3 38 Julie Boyd 26 2 28 (b) Non-cancellable operating lease expense commitments Tom Connor 28 3 31 Future operating lease commitments John Gibson 32 3 35 (including GST) not brought to Alan Millhouse 29 2 31 account and payable: Greg Moynihan 22 2 24 Within one year 2,995 2,560 2,995 2,560 Later than one year but not later than five years 12,632 12,283 12,632 12,283 Later than five years 16,295 18,845 16,295 18,845 31,922 33,688 31,922 33,688

SunWater Limited annual report 2008-2009 Financial Report 71 notes to the financial statements 30 June 2009

Short-term Post- total Note 28 Related parties disclosures (continued) employee employment Transactions with director-related entities benefits Benefits $’000 $’000 $’000 (i) SunWater engaged the consulting services of KPMG, a firm of which Mr Phil Hennessy is a partner. Total value of the consulting services (inclusive of GST) was $278,461 Parent – 2009 (2008 – $168,377). The services were procured on a commercial basis in accordance Name of director with board-approved processes and the State Purchasing Policy. Phil Hennessy, Chair 50 5 55 (ii) SunWater provided consulting services and supplied office accommodation to Jane Bertelsen, Deputy Chair 32 3 35 Western Corridor Recycled Water Pty Ltd, a State of Queensland controlled company Julie Boyd (retired 30 September 2008) 7 1 8 of which Mr Phil Hennessy was a director from May 2007 until 1 August 2008. Tom Connor 27 3 30 SunWater entered commercial arrangements with Western Corridor Recycled Water John Gibson 36 3 39 Pty Ltd prior to the appointment of Mr Hennessy. Total value of goods and services Alan Millhouse (retired 30 June 2008) 2 - 2 provided by SunWater (inclusive of GST) was $6,572,093 (2008 – $10,344,069). Greg Moynihan 29 3 32 Kirstin Ferguson (commenced 1 October 2008) 18 2 20 Transactions with subsidiaries Neil Turner (commenced 1 October 2008) 16 2 18 The parent entity within the group is SunWater. Interests in subsidiaries are set out in note 13. All transactions with subsidiaries are carried out under normal commercial terms and Parent – 2008 conditions or at cost. No transactions occurred between subsidiaries. Name of director The following transactions occurred between the parent entity and its subsidiaries: Phil Hennessy, Chair 48 4 52 Jane Bertelsen, Deputy Chair 27 2 29 2009 2008 $’000 $’000 Julie Boyd 23 2 25 Tom Connor 25 2 27 Sales of water to subsidiaries 4,067 3,853 John Gibson 28 3 31 Sales of services to subsidiaries 13,388 6,611 Alan Millhouse 25 2 27 Interest paid to subsidiaries 484 229 Greg Moynihan 20 2 22 Current tax payable assumed from tax consolidated subsidiaries 3,284 2,802 Current tax losses assumed from tax consolidated subsidiaries 252 2,940 Directors’ remuneration excludes insurance premiums (exclusive of GST) of $72,265 Dividends received from subsidiaries 14,100 11,000 (2008 – $65,970) paid by the parent entity in respect of directors’ and officers’ liability Loan received from subsidiary 2,916 21,963 insurance contracts as the contracts do not specify premiums paid in respect of individual directors and officers. The following balances are outstanding at the reporting date in relation to transactions Compensation – executives with subsidiaries: 2009 2008 Short-term Post- total $’000 $’000 employee employment benefits Benefits Receivables (note 9) 4,085 2,802 $’000 $’000 $’000 Payables (note 17) 252 2,940 Parent 2009 Title of executive Transactions with entities subject to common control Chief Executive Officer 366 46 412 All State of Queensland controlled entities are related parties for the purposes of AASB General Manager, Corporate 238 29 267 124 Related Party Disclosures. In its normal commercial business activities, SunWater General Manager, Water Services transacts with Queensland Government departments, statutory bodies, other GOCs and completed service 27/03/09 156 20 176 local government bodies. All material transactions are negotiated on terms equivalent to Acting General Manager, Water Services 15 2 17 those that prevail in arm’s length transactions or in accordance with government policy General Manager, Asset Solutions 207 26 233 The value of these related party transactions and balances, as reported in the financial statements, on an accruals basis, is: Parent 2008 Title of executive 2009 2008 Chief Executive Officer 320 38 358 Financial statement item nature of transaction $’000 $’000 Chief Operating Officer 233 28 261 Cash (note 8) Deposits on call 132,606 32,381 General Manager, Corporate 204 23 227 Receivables (note 9) Water sales 167 1,394 General Manager, Water Services Receivables (note 9) Consultancies 1,338 5,522 completed service 4/07/08 198 25 223 Receivables (note 9) Sale of goods, rent 94 94 General Manager, Water Services appointed 21/05/08 20 2 22 Borrowings (note 19) QTC borrowings 248,868 265,593 Payables (note 17) Electricity, regulatory charges 1,126 1,015 Executives may also earn performance based at-risk incentives payments which are not Contributed equity (note 23) Equity contributions included in this table. from shareholders - 6,170 Dividends (note 25) Dividends declared 7,625 5,897 Performance payments to employees Revenue – interest (note 4) Interest received from QTC 6,574 1,891 Financial year Aggregate total fixed employees Revenue – all other (note 4) Water sales, CSO, grants 6,246 18,697 at-risk salaries receiving Revenue – consulting fees performance and wages Performance remuneration Payments payments (note 4) Consultancies 20,344 31,161 $’000 $’000 $’000 Revenue – other revenue (note 4) Sale of goods, rent 564 564 2008-09 72 984 3 Expense – interest (note 6) Interest paid to QTC 16,788 18,360 2007-08 - - - Expense – all other (note 5) Electricity, regulatory charges 33,526 34,610

72 SunWater Limited annual report 2008-2009 Financial Report notes to the financial statements 30 June 2009

Note 29 Contingencies Note 31 Dam safety upgrade program (a) In September 2008, the Wide Bay Burnett Conservation Council (WBBCC) SunWater has in place a comprehensive Dam Safety Program to ensure the continuing commenced legal proceedings against Burnett Water Pty Ltd (BWPL), a wholly integrity of its referable dams. This program incorporates an ongoing series of inspections, owned subsidiary of SunWater, in connection with the original design and subsequent engineering assessments, and comprehensive risk assessments for all referable dams, operation of the upstream fish lift and the downstream fishway at Paradise Dam. In taking into account all relevant factors including changes in design standards, hydrologic its Statement of Claim, the WBBCC alleges that the design and operation of the fish data and methods, industry best practice and regulator requirements. transfer devices are not in accordance with the Federal permit. The dam safety program has previously identified the need to upgrade a number of In denying the claims, BWPL is confident of its position and will defend the action. dam spillways in response to spillway adequacy reviews. Spillway upgrades have been However, in so doing, BWPL’s legal fees, experts’ fees and other associated costs completed for (2006), Bjelke-Petersen Dam (2008), and Borumba are estimated to be in the order of $3.0 million to $3.5 million in total, of which Dam(1) (2009). approximately $1.8 million is expected to be incurred in the 2009-10 financial year. Whilst the initial program of safety upgrades was prioritised based on spillway adequacy, The trial has been set for September 2009 and, should BWPL be unsuccessful in SunWater is progressively completing Comprehensive Risk Assessments (CRA) for all of defending the claims, it may be ordered to modify or enhance either or both of the fish its referable dams. The CRA considers a much broader range of risk factors, and therefore transfer devices. Costs associated with any such order cannot be reliably estimated at provides a more complete view of upgrade requirements for each dam. this time, however a significant enhancement of the existing infrastructure could cost in As each CRA is completed, the priority of upgrades within the portfolio is assessed, and the range of $10 million to $20 million depending on the order. In addition, costs may if necessary revised. The table below provides a summary of the current prioritisation and be awarded against the Company, which also cannot be reliably estimated at this time. estimate of cost for each upgrade currently scheduled. BWPL is in discussions with the Department of Employment, Economic Development and Innovation (DEEDI) which was the owner of BWPL at the time SunWater acquired safety upgrade Commencement of Works estimated Costs it in December 2005 and, as such, was the owner at the time from which the claims Tinaroo Falls Dam July, 2008 $21.100 million relating to the design of the fishway transfer devices originate. Burdekin Falls Dam August, 2009 $148.000 million DEEDI has been made aware of the WBBCC claim and, whilst it is monitoring the March, 2010 $4.150 million progress of the legal proceedings, it has not acknowledged any responsibility to date. BWPL’s position is that it will seek support and funding from DEEDI for all appropriate Kinchant Dam February, 2011 $43.000 million costs incurred, including costs in defending the action, and if ultimately ordered by the Coolmunda Dam February, 2012 $16.000 million court to do so, the costs of any infrastructure works required to comply with that order. In acting to protect its position, the Company will investigate all commercial and legal At this time, it is not possible to quantify the complete scope of works or the likely cost options open to it. of the remainder of the safety upgrade program, and discussions with Government over At this time, no provision has been made in the financial statements for any costs funding support are continuing. associated with the legal proceedings as described above, nor has any allowance been made for any cost recoveries from other parties. (1) Borumba Dam was transferred to Seqwater on 1 July 2008, with upgrade works (b) During the 2008 year, an audit of Paradise Dam under the Environment Protection completed by SunWater as a commercial contract to Seqwater. and Biodiversity Conservation Act 1999 was carried out by the Department of the Environment, Water, Heritage and the Arts (DEWHA). The findings of the DEWHA report concluded that Paradise Dam was not fully compliant due to drought conditions Note 32 Subsequent events which precluded the downstream fishway from becoming operational. SunWater is To date, no events have occurred subsequent to balance date that materially impact these working with DEWHA to resolve the partial compliance finding. In the event that this financial statements. finding is not resolved satisfactorily, DEWHA may take further legal action under the Act. No provision has been made in the financial statements for any costs associated with resolving the finding of partial compliance, or dealing with any subsequent DEWHA action. (c) In November 2008, one of two fabridams mounted on top of Bedford Weir failed. In the ensuing unexpected release of a large volume of water downstream, a fatality occurred. The incident is the subject of a Workplace Health and Safety Queensland investigation and may be subject to a later enquiry by the Coroner. At the date of this report, both enquiries are ongoing and no provision has been made in the financial statements for any costs resulting from the fabridam failure. (d) SunWater was directed by the Treasurer of Queensland under section 68 of the South East Queensland Water (Restructuring) Act 2007 to indemnify the Queensland Bulk Water Supply Authority in relation to assets transferred on 1 July 2008. This indemnity may give rise to claims on SunWater if any of the conditions are triggered. At the date of this report, there are no known claims or circumstances which would give rise to a claim under the indemnity. (e) At 30 June 2009, SunWater was engaged in commercial disputes under various contracts. None of those disputes has resulted in legal action at the date of this report, however it is not possible to reliably estimate the eventual outcome of these disputes or the financial consequences of thereof.

Note 30 Segment information SunWater and its subsidiaries form a single business segment, providing a range of water-related services that are subject to similar risks and returns. SunWater operates predominantly in one geographic segment, being Queensland. Operations outside Queensland are not material.

SunWater Limited annual report 2008-2009 Financial Report 73 directors’ declaration

In the directors’ opinion: (a) the financial statements and notes set out on pages 58 to 73 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (ii) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2009 and of their performance for the financial year ended on that date; and (b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors.

PA Hennessy JL Gibson Chairman Director Brisbane, Qld 26 August 2009

74 SunWater Limited annual report 2008-2009 Financial Report independent auditor’s report

To the Members of SunWater Limited Matters relating to the Electronic Presentation of the Audited Financial Report The auditor’s report relates to the financial report of SunWater Limited for the financial year ended 30 June 2009 included on SunWater Limited‘s website. The directors are responsible for the integrity of the SunWater Limited’s website. I have not been engaged to report on the integrity of the SunWater Limited‘s website. The auditor’s report refers only to the statements named below. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements. If users of the financial report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report, available from SunWater Limited, to confirm the information included in the audited financial report presented on this website. These matters also relate to the presentation of the audited financial report in other electronic media including CD Rom. Report on the Financial Report I have audited the accompanying financial report of SunWater Limited, which comprises the balance sheet as at 30 June 2009, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards. Auditor’s Responsibility My responsibility to express an opinion on the financial report based on the audit is prescribed in the Auditor-General Act 2009. This Act, including transitional provisions, came into operation on 1 July 2009 and replaces the previous requirements contained in the Financial Administration and Audit Act 1977. The audit was conducted in accordance with the Auditor-General of Queensland Auditing Standards, which incorporate the Australian Auditing Standards. These auditing standards require compliance with relevant ethical requirements relating to audit engagements and that the audit is planned and performed to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of risks of material misstatement in the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion. Independence The Auditor-General Act 2009 promotes the independence of the Auditor-General and QAO authorised auditors. The Auditor-General is the auditor of all Queensland public sector entities and can only be removed by Parliament. The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any person about the way in which audit powers are to be exercised. The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can report to Parliament matters which in the Auditor- General’s opinion are significant. In conducting the audit, the independence requirements of the Corporations Act 2001 have been complied with. I confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of SunWater Limited on 25 August 2009, would be in the same terms if provided to the directors, as at the date of this auditor’s report. Auditor’s Opinion In my opinion – (a) the financial report of SunWater Limited is in accordance with the Corporations Act 2001, including – (i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2009 and of their performance for the year ended on that date;and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Megan Maybury CA Queensland Audit Office As Delegate of the Auditor-General of Queensland Brisbane 28 August 2009

SunWater Limited annual report 2008-2009 Financial Report 75 statement of corporate intent summary.

The 2008-09 Statement of The agreement outlines a comprehensive range of corporate performance Corporate Intent (SCI) is outcomes that SunWater intends to deliver in year one of its rolling five-year corporate plan. the organisation’s annual This Annual Report provides a summary of SunWater’s SCI corporate performance performance agreement with outcomes (refer to page 10). It also provides details about SunWater’s performance shareholding Ministers. in relation to these outcomes under the following key result areas: Financial performance Community and environment Asset sustainability Our customers Our people Business management The organisation’s financial performance is further detailed in the 2008-09 financial report on pages 54-75 of this document. Other key components of the SCI are summarised as follows:

Non-financial performance indicators

UNIT 2007-08 2008-09 YTD ACTUAL ACTUAL TARGET AS AT 30 JUNE 09 Environment Compliance with environmental obligations % No non-compliances1 100 No non-compliances1 Compliance breaches No. 0 0 No non-compliances1 Safety LTIFR2 No. 14.9 0 8.7 LTIDR3 No. 16.3 0 23.44 (10.6) Industry Distribution system efficiency % N/A NWI5 - 5 Customer service levels Exceptions 54 0 1539 Compliance with ROL and ROP No. of show 0 0 0 reporting requirements cause notices Timely compliance with statutory % - 100 100 reporting timeframes Size/value Employees FTEs 573.5 595 565.7 Water allocations6 m ML 2.42 2.31 2.32 Allocations assigned to m ML 0.58 0.59 0.58 non-price-path customers7 % of total 23.81 25.4 24.97 Water deliveries8 m ML 1.02 1.32 1.05

Water delivered/available % 42.68 66 43.27 Temporary water trades m ML 0.10 0.16 0.16

1 The current measure of the number of legal non-conformances is undergoing a review for appropriateness. Dependent on the outcome of this review a new performance indicator may be put forward from 1 July 2009. This same review will also reconsider the most appropriate indicators associated with safety performance. 2 Lost time injury frequency rate = number of lost time injuries x 1,000,000)/employee exposure hours. 3 Lost time injury duration rate = number of work days lost/number of lost time injuries. 4 LTIDR actual reflects a carry over effect of incidents from 2007-08. A truer year to date measurement is an LTIDR of 10.6. 5 Implementation of National Water Initiative (NWI) methodology for assessing irrigation system hotspots. Metrics currently being established. 6 Water allocations and interim water allocations held by customers, SunWater and subsidiaries (excluding loss allowances). 7 Total excludes allocation authority leases, allocation authority sales, allocation authority reserves, allocation authority options, water supply agreements, Burnett Water leases and allocation authority trades. 8 Water deliveries include Customer and SunWater transactions (excluding the SunWater Loss Account, the St George Compensation Account and the Macintyre Brook Environmental Account). 9 The significant increase in the number of exceptions in 2008-09 compared to previous years has been investigated. As a result of the findings SunWater increased its local operational focus on ensuring established procedures are being consistently applied.

76 SunWater Limited annual report 2008-2009 Statement of Corporate Intent Summary LTIFR and LTIDR - SunWater targets Community Service Obligations (CSOs) ‘No-Harm’ safety outcomes from all of its Contracts for CSOs provided by SunWater are negotiated with DERM consistent operations. After adjustment for carry-over with the principles in Queensland Treasury’s Community service obligations: from 2007-08, year end outcomes for LTIFR A policy framework (1999). and LTIDR in 2008-09 of 8.7 and 10.6 respectively show improvement from 14.9 CSO funding as stated in the 2008-09 SCI for the period ending (LTIFR) and 16.3 (LTIDR) in 2007-08. 30 June 2012 follows:

Customer Service Levels - The number CSO CATEGORY FUNDING YEAR of customer service level exceptions from 2008-09 2009-10 2010-11 2011-12 planned and unplanned shutdowns continues $’000 $’000 $’000 $’000 to exceed targets. The majority of the Rural water subsidy (all schemes) 3,524 2,689 2,189 TBA exceptions recorded relate to the Bundaberg scheme. A review of this scheme’s targets ROP development 1,133 617 670 TBA resulted in more realistic targets being set Dam safety upgrades1 1,960 1,880 TBA TBA for 2009-10 and out-years. The significant increase in the number of exceptions in Total 6,617 5,186 TBA TBA 2008-09 compared to previous years has 1 been investigated. As a result of the findings Amounts shown are based on 2005-06 prices (no CPI included). SunWater increased its local operational focus on ensuring established procedures Employment and industrial relations plan are being consistently applied. SunWater’s employment and industrial relations strategy focuses on ensuring it has Water deliveries and water delivered/ a satisfied and appropriately skilled workforce in place to provide ongoing services available - SunWater water deliveries over to its customers and the community. It is also focused on ensuring the organisation’s 2008-09 increased by 3% year on year to a endeavours are achieved in a harmonious industrial climate. figure of 1.05 million ML. That this increase SunWater is committed to the continuation of initiatives provided by the SunWater fell short of target may be attributed in part Collective Agreement 2006-09 (SunWater’s third union-agreed certified agreement to higher than forecast rainfall in the north and the first under the federal WorkChoices legislation), which covers the period of Queensland through the latter part of 1 July 2006 to 30 June 2009. The agreement supports SunWater’s commitment to: 2008, and persistent dry conditions being A preference for the Australian Industrial Relations Commission’s jurisdiction for experienced in a number of central and dispute resolution and the making of collective agreements with unions rather than southern Queensland water supply schemes. individual contracts These circumstances were also in part New individual contracts being limited to staff in higher supervisory/ responsible for the modest rise of 1.4% in the managerial positions water delivered to water available ratio, also Adherence to the government policy Agreement Making in Government Owned significantly below target for the year. Corporations - Guidance for Chief Executive Officers by not entering into Queensland workplace agreements, Australian workplace agreements or non-union agreements, and No forced redundancies. Additionally, SunWater is committed to delivering its stated services and functions utilising internal staff wherever possible. Contractors are expected to be used only for peak workloads and activities outside core competencies. SunWater also ensures the principles of equity and merit are upheld in its processes associated with recruitment, selection and promotion of staff. Further details of the Collective Agreement initiatives progressed during the year are provided on page 35 of this report.

SunWater Limited annual report 2008-2009 Statement of Corporate Intent Summary 77 statement of corporate intent summary.

Government policies Additionally, new or updated government policies as advised and implemented As specified in Attachment 4 of the 2008-09 during the year include: SCI SunWater agreed to adhere to the Government Owned Corporations Air Travel Policy (May 2008) following government policies: Local Industry Policy (November 2007) Agreement Making in Government Owned State Procurement Policy (2008) Corporations - Guidance for Chief Executive Purchasing Carbon Offsets for Queensland Government Air Travel (October 2008) Officers (December 2004) QFleet ClimateSmart Policy (April 2008) Audit and reporting requirements for Government Owned Corporations Corporate Entertainment and Hospitality GOC controlled entities and investments Guidelines (September 2008) (December 2001) Government Owned Corporations Governance Arrangements for Chief and Senior Code of practice for the building and Executives (May 2008) construction industry (August 2000) Government Owned Corporations Release of Information Arrangements (2009) Code of practice for GOCs’ financial Government Sport and Recreation Sponsorship Policy (January 2009) arrangements (October 2004) Government Recycling Policy for Buildings and Civil Infrastructure Community service obligations - Guidelines for the Development of Employment and Industrial Relations Plans in A policy framework (March 1999) GOCs (December 2008) GOCs - Cost of capital principles Corporate Governance Guidelines for GOCs (February 2009) (February 2006) Minimum Remuneration Disclosure Requirements (June 2009) GOCs overseas travel policy (November 2006) Corporate sponsorships and advertising GOC subsidiaries - Key shareholder SunWater continued to contribute to the well-being of regional Queensland requirements for constitutions (2006) communities through investment in, and support for, community-based initiatives Guidelines for the development of such as the SunWater Burdekin Water Festival. Further detail of SunWater’s efforts in employment and industrial relations plans enhancing Queensland communities is provided on pages 20-23 of this report. in GOCs (November 2002) The table below summarises SunWater’s expenditure on all marketing activities Guidelines for export of services by GOCs during 2008-09. (December 2001) Guidelines for frequent flyer schemes Corporate sponsorships and advertising (June 1999) Guidelines for the preparation of statements ACTIVITIES/EVENTS OVER $5000 LISTED BUDGET 2008-09 EXPENDITURE TO 30 JUNE 2009 of corporate intent and corporate plans for GOCs (February 2006) Sponsorship Investment guidelines for GOCs (April 2003) Southern Cross Soloists (Previously reported) 10,000 10,000 2008 ANCOLD Conference (Previously reported) - 9,500 Local industry policy: A fair go for local Other 60,000 55,915 industry (1999) Total sponsorship 70,000 75,415 Remuneration guidelines for directors Corporate entertainment and senior executives in GOCs Staff awards ceremony (held in July 2008) 10,000 12,000 (September 2000) Brisbane Office Christmas Party 15,000 16,900 State purchasing policy (September 2001) Other 25,000 23,120 Corporate Governance Guidelines for GOCs Total corporate entertainment 50,000 52,020 (2005) Advertising Water safety advertising campaign (potential) 150,000 149,000 Other 20,000 17,600 Total advertising 170,000 166,600 Donations Hannah’s Foundation - 6,500 Other related activities Total other related activities budget 30,000 30,000 (Children’s promotional products that support the public safety campaign) Total all activities 320,000 330,535

Additional details of expenditure on sponsorship, advertising, corporate entertainment, donations and other related activities are provided on pages 79-80 of this report. During the year SunWater amended its 2008-09 SCI, in line with a request by shareholders, to include budgeted expenditure for hospitality events less than $5,000 per event. Actual expenditure against these events is also shown on pages 79-80 of this report.

78 SunWater Limited annual report 2008-2009 Statement of Corporate Intent Summary Table 1 Sponsorship, advertising, corporate entertainment, donations and other related activities. Details of individual activities over $5,000 PURPOSE/BENEFITS ACCRUING ACTIVITY DATE YTD BUDGET($) YTD ACTUAL ($) TO THE CORPORATION Sponsorship Southern Cross Soloists - SunWater and July 08 Provides opportunities for regional children to 10,000 10,000 Stanwell Winter Music School develop and enhance their music ability and is in line with SunWater’s sponsorship objectives of supporting our local communities. 2008 ANCOLD Conference Nov 08 Water industry conference to remain informed - 9,5001 about new developments and best practice. TOTAL (1) 10,000 19,500 Advertising Water Safety Advertising Campaign Dec 08 Promotes safe public behaviour on and around 150,000 149,000 (Easter and Christmas) April 09 SunWater assets, especially dams. TOTAL (2) 150,000 149,000 Corporate entertainment Brisbane Office Christmas Party Dec 08 Opportunities for the CEO and executive 15,000 16,9002 managers to convey their thanks to all staff and to reflect on achievements Staff Awards Ceremony July 08 Recognises and rewards staff who go over and 10,000 12,0002 above their duties. TOTAL (3) 25,000 28,900 Donations Hannah’s Foundation SunWater donation associated with the funeral of - 6,5003 Nelani Koefer. TOTAL (4) - 6,500 Other related activities Activity (>5,000) Nil Nil TOTAL (5) Nil Nil TOTAL (1)+(2)+(3)+(4)+(5) 185,000 203,9004

Note: all expenditure exclusive of GST 1. The January to March 2009 quarterly report introduced the sponsorship of the ANCOLD conference. While budgeted, this item had not been itemised as a single sponsorship above $5,000. 2. The cost of the functions had increased from previous years and exceeded the advised budget figures. Both functions remained well within the established thresholds for per head expenditure limits. 3. SunWater made a donation to Hannah’s Foundation to cover the cost of the funeral of Nelani Koefer, whose life was tragically lost in the Bedford Weir incident. 4. Overall expenditure partially offset by underspend as detailed in the notes to Table 2 following.

SunWater Limited annual report 2008-2009 Statement of Corporate Intent Summary 79 statement of corporate intent summary.

Table 2 Details of total expenditure for sponsorship, advertising, corporate entertainment, donations and other related details of individual activities below $5,000.

2008-09 BUDGETED YTD ACTUAL ACTIVITY EXPENDITURE (SCI) ($) EXPENDITURE ($) Sponsorship 60,000 55,9151 Advertising 20,000 17,600 Corporate Entertainment Staff Functions Number of functions 19 19 Actual Expenditure 15,000 15,190 TOTAL (1) Business Development Number of functions 6 4 TOTAL (2) 2,500 1,500 Stakeholder and Community Engagement Number of functions 6 5 TOTAL (3) 7,500 6,430 TOTAL (1)+(2)+(3) 25,000 23,120 Donations Nil Nil Other Related Activity 30,000 30,0002

Note: all expenditure exclusive of GST 1. Budget for sponsorships below $5,000 (per event) originally included the cost of the ANCOLD sponsorship ($9,500). This expenditure was highlighted in the January to March 2009 quarterly report as a single event exceeding $5,000 - there was no budget entry, consistent with the approved 2008-09 SCI. The underspend of $4,085 should be read in conjunction with the $9,500 overspend in Table 1 (previous page). Overall, sponsorship expenditure of $75,415 exceeded a budgeted amount of $70,000. 2. Amount for children’s promotional products that support the public safety campaign.

Table 3 Significant changes in the 2008-09 financial year in sponsorship, advertising, corporate entertainment, donations and other related activities from that specified in the 2008-09 SCI.

BUDGETED REVISED ACTIVITY DATE EXPENDITURE REASON FOR CHANGE EXPENDITURE ($) (SCI) ($) Sponsorship Nil beyond notes in Tables 1 and 2 above Advertising Nil beyond notes in Tables 1 and 2 above Corporate Entertainment Nil beyond notes in Tables 1 and 2 above Donations Nil beyond notes in Tables 1 and 2 above Other Related Activities Annually 30,000 30,000 Nil beyond notes in Tables 1 and 2 above

80 SunWater Limited annual report 2008-2009 Statement of Corporate Intent Summary key statistics.

Scheme summary - customer water allocation and use 2008-09

Scheme Customer No of Customers Water Available Deliveries(3) Temporary Segment Customers Allocations(1) Water(2) Transfers(4) ML ML ML Number Volume ML

Awoonga Callide Pipeline Industrial 18,884 18,884 Water is transported from Gladstone Area Water Board’s Awoonga Dam to Callide Other 33 33 Dam for use by the Callide power stations. Total 29 18,917 18,917 Barker Barambah Irrigation 31,421 11,831 6,916 30 931 Water is released from Bjelke-Petersen Dam to customers who draw water from weirs Urban 2,200 2,100 630 and supplemented sections of Barker and Barambah creeks. Trade 610 124 Total 172 34,231 14,055 7,546 30 931 Bowen Broken Rivers Industrial 30,270 30,290 15,250 3 85 Water from Eungella Dam is distributed to mining customers via the BMA and Eungella Irrigation 5,736 5,736 161 pipelines and is released to the Bowen River Weir to supply the Collinsville and Newlands Urban 1,785 1,765 838 pipelines and downstream irrigators. Other 301 413 302 14 112 Total 56 38,092 38,204 16,551 17 197 Boyne River and Tarong Industrial 29,374 29,374 11,087 Water from is piped via the Tarong Pipeline to the Tarong Power Irrigation 10,666 10,666 4,024 Station and is released to supplement irrigation supplies along the Boyne River. Urban 3,640 3,640 600 Other 394 393 115 1 1 Total 155 44,074 44,073 15,826 1 1 Bundaberg Industrial 887 752 325 2 36 Storages on the Kolan and Burnett rivers (the major storage being Fred Haigh Dam) Irrigation 198,679 140,051 61,574 199 12,126 supply water to the scheme via a series of pump stations, balancing storages, Urban 9,111 8,981 3,100 3 38 channels and pipelines. The allocation and Trade 4,865 delivery figures include those from Paradise Dam. Other 40 18 5 Total 1093 208,717 154,667 65,004 204 12,200 Burdekin Haughton Industrial 12,129 13,051 4,054 2 835 Water is released from Burdekin Falls Dam to Clare Weir, which forms a pumping pool Irrigation 609,186 665,909 379,172 32 7,342 and regulating structure. From here it is distributed through several pump stations, Urban 10,538 10,561 808 23 503 pipelines, balancing storages and channels Other 7 89 82 to the irrigation area, and along the Burdekin River to the north and south Burdekin water Trade 142,024 141,124 boards and river customers. Total 392 773,884 830,734 384,116 57 8,680 Callide Valley Water is released from Callide and Kroombit dams to downstream controlling structures Industrial 3,772 3,542 2,529 and percolates into the underlying aquifers. Irrigators draw their supplies from the Irrigation 18,252 12,754 4,230 2 11 aquifers and directly from Kroombit and Callide creeks during releases. Water is Urban 2,187 1,881 876 pumped from to the Callide power stations and Banana Shire Council. Total 139 24,211 18,177 7,635 2 11 Chinchilla Weir(5) Industrial 12 12 Water from Chinchilla Weir supplements streamflows 35 km upstream to 53 km Irrigation 2,872 3,267 2,097 6 823 downstream of the weir for use by irrigators. Urban 1,160 1,160 776 Total 34 4,044 4,439 2,873 6 823 Cunnamulla Industrial 120 120 The Allan Tannock Weir supplies water to landholders adjoining the ponded area of Irrigation 2,492 2,492 1,780 3 826 the weir for irrigation, stock and domestic supplies and for the town of Cunnamulla. Total 26 2,612 2,612 1,780 3 826

SunWater Limited annual report 2008-2009 Key Statistics 81 key statistics.

Scheme Customer No of Customers Water Available Deliveries(3) Temporary Segment Customers Allocations(1) Water(2) Transfers(4) ML ML ML Number Volume ML

Dawson Valley(5) Industrial 2,887 2,887 1,709 Weirs on the Dawson River provide supplies to river customers and to Irrigation 52,917 60,957 35,267 67 6,701 the channel distribution systems near Theodore. The scheme also includes Urban 1,959 1,786 1,098 an offstream storage. Other 1 11 7 1 10 Trade 168 125 Total 153 57,932 65,766 38,081 68 6,711 Eton(5) Irrigation 51,799 40,853 10,692 23 346 During high river flows, water is harvested from the Pioneer River into Kinchant Dam, Urban 177 140 49 from where it is distributed through a network of pump stations, channels, Other 1,198 850 332 3 3 pipes and balancing storages. Total 303 53,174 41,843 11,073 26 349 Julius Dam Industrial 23,850 15,000 4,481 Julius Dam provides water to the North West Queensland Water Pipeline Pty Ltd Other 5,000 21,750 11,572 (a SunWater subsidiary) which supplies the Ernest Henry Mine. The dam also Trade 10,850 10,850 serves as a backup supply to the Mount Urban 7,900 Isa Water Board. Total 3 47,600 47,600 16,053 Lower Fitzroy Water is released from Eden Bann Weir Industrial 24,006 24,008 19,898 down the Fitzroy River, from which it Irrigation 3,101 3,101 is pumped via the Stanwell Pipeline to the Stanwell Power Station. Irrigation Other 111 118 79 3 6 customers draw supplies from the Fitzroy River. Total 24 27,218 27,227 19,977 3 6 Macintyre Brook Industrial 10 10 Water is released from Coolmunda Dam to weirs along the lower reaches of Macintyre Irrigation 17,526 16,230 9,964 30 1,688 Brook from which it is drawn for irrigation and the Inglewood town water supply. Urban 450 300 224 Other 6,403 15,090 6,272 24 4,649 Trade 790 23 Total 96 25,179 31,653 16,460 54 6,337 Maranoa River(5) supplies water to landholders bordering the ponded area of the weir for irrigation, stock and domestic Irrigation 800 65 53 supplies. This scheme does not operate under Announced Allocation sharing rules. Total 4 800 65 53 Mareeba Dimbulah Industrial 910 1,625 1,128 7 680 Releases from the Tinaroo Falls Dam gravitate through 176 km of main channel, Irrigation 151,350 178,569 80,284 145 10,400 as well as subsidiary channels, pipelines and supplemented streams, to the various Urban 6,654 6,657 3,878 24 3,145 sections of the scheme. Deliveries exclude Other 504 641 167 21 126 those for hydro. Total 1132 159,418 187,492 85,457 197 14,351 Mary River Industrial 50 35 Water for this scheme is taken from the Mary River and Tinana Creek barrages for Irrigation 22,038 22,014 4,994 10 163 irrigation, urban and industrial use. Urban 1,120 1,120 65 Trade 3,000 3,000 Total 187 26,208 26,169 5,059 10 163

82 SunWater Limited annual report 2008-2009 Key Statistics Scheme Customer No of Customers Water Available Deliveries(3) Temporary Segment Customers Allocations(1) Water(2) Transfers(4) ML ML ML Number Volume ML

Nogoa Mackenzie Industrial 28,719 95,617 79,263 66 56,329 The scheme is supplied by via the Selma and Weemah channel Irrigation 164,899 224,847 108,110 112 31,398 systems and supplemented sections of the Nogoa-Mackenzie River. The scheme also Urban 8,450 7,295 4,580 includes three weirs along the Mackenzie Other 533 525 278 47 6,805 River and the Blackwater Pipeline that supplies coalmines around Blackwater. Trade 53 53 Total 364 202,654 328,337 192,231 225 94,532 Pioneer River Industrial 1,920 1,486 723 5 6 The scheme is based on Teemburra Dam, the Mirani, Marian and Dumbleton weirs Irrigation 46,526 46,534 9,121 4 61 and a supplemented section of the Pioneer River. Urban 16,520 16,962 12,399 4 442 Other 864 864 369 Trade 10,500 10,500 Total 22 76,330 76,346 22,612 13 509 Proserpine River Industrial 550 550 134 The scheme comprises and supplemented sections of the Irrigation 39,275 48,270 16,828 1 50 Proserpine River and supplies water to the Six Mile Creek and Kelsey Creek Urban 13,713 11,733 4,978 1 800 water boards. Trade 6,532 6,532 Total 91 60,070 67,085 21,940 2 850 St George Industrial 60 73 23 Customers are supplied from Beardmore Dam via the St George and Buckinbah Irrigation 71,703 86,603 63,939 68 12,054 channel systems and supplemented sections of the Thuraggi watercourse and Urban 2,000 2,449 1,171 . The scheme is also serviced Other 3 0 by three weirs. Trade 1,000 218 Total 160 74,763 89,346 65,133 68 12,054 Three Moon Creek supplies riparian users along Irrigation 14,124 7,609 3,396 4 113 Three Moon Creek and the town of Monto. Groundwater supplies are recharged and Urban 610 600 207 1 10 instream storages are replenished through releases from the dam. Total 92 14,734 8,209 3,603 5 123 Upper Burnett supplements sections and supplies weirs along the Burnett and Nogo rivers. The supplemented section of the Irrigation 28,786 20,228 12,459 95 2,166 Burnett River also collects runoff from the Urban 1,895 1,745 883 Auburn and Boyne rivers and unused water released from Boondooma Dam’s Boyne Trade 1,644 River outlet. The allocation and delivery figures include those from Kirar Weir. Total 157 30,681 23,617 13,342 95 2,166

Upper Condamine Irrigation 30,363 14,949 14,949 Water is released from on Sandy Creek to supplement a series of Urban 3,332 3,332 1,362 weirs on the between Warwick and Cecil Plains. The scheme Other 4 4 1 also includes a pump station and a short pipeline. Total 101 33,699 18,285 16,312 TOTAL ALL SCHEMES 4,985 2,020,325 2,164,918 1,047,634 1,086 161,820

(1) Water allocations and interim water allocations held by customers, including those leased to customers by SunWater (2) Includes announced allocations, carryovers, temporary transfers (from SunWater and customers), bedsands water, risk A water, credit water, streamflow period, channel harvesting, spot sales, water transportation and water use (other authority) (3) Includes allocation water, bedsands water, credit water, streamflow period, risk A and township water, channel harvesting, spot sales, water transportation and water use (other authority) (4) Includes transfer of customer and SunWater allocations (5) Water year does not align with financial year

SunWater Limited annual report 2008-2009 Key Statistics 83 key statistics.

Rural water CSOs paid by government 2008-2009

WATER SUPPLY SCHEME $ Barker Barambah 25,383 Bowen Broken Rivers 411 Boyne River and Tarong 29,310 Bundaberg 249,534 Callide Valley 514,118 Chinchilla Weir 1,969 Cunnamulla 48,205 Dawson Valley 9,979 Eton 158,060 Lower Fitzroy 10,444 Maranoa River 75,082 Mareeba Dimbulah 262,979 Pioneer River 25,607 St George 8,937 Three Moon Creek 293,611 Upper Burnett 252,728 Upper Condamine 9,371 Other 50,958 Total 2,026,686

Summary of storage situation 2008-2009

Storage Name Water Supply Total Dead Storage at Storage at Minimum storage Maximum Storage Scheme Capacity Storage July 2008 June 2009 July 2008 to July 2008 to June 2009 JunE 2009 ML ML ML %Full ML %Full ML %Full ML %Full Allan Tannock Weir Cunnamulla 4,770 500 4,255 89 4,770 100 3,596 75 4,770 100 Bedford Weir Nogoa Mackenzie 22,900 3,290 22,900 100 15,324 67 15,100 66 22,900 100 Ben Anderson Bundaberg 30,300 6,650 20,849 69 25,249 83 19,195 63 30,300 100 Barrage Ben Dor Weir Macintyre Brook 700 20 700 100 700 100 167 24 700 100 Bingegang Weir Nogoa Mackenzie 8,060 25 8,060 100 5,806 72 5,806 72 8,060 100

Bjelke-Petersen Dam Baker Barambah 134,900 1,000 17,838 13 8,264 6 8,057 6 18,413 14 Boondooma Dam Boyne River & 204,200 8,360 97,011 48 97,104 48 79,718 39 97,104 48 Tarong Bowen River Weir Bowen Broken 943 0.5 940 100 940 100 298 32 940 100 Rivers Bucca Weir Bundaberg 11,600 930 7,430 64 6,736 58 5,868 51 11,600 100 Buckinbah Weir St George 5,120 780 5,120 100 5,101 100 4,625 90 5,120 100 Burdekin Falls Dam Burdekin 1,860,000 7,860 1,778,877 96 1,860,000 100 1,630,817 88 1,860,000 100 Haughton Callide Dam Callide Valley 136,370 2,880 10,966 8 11,588 8 7,468 5 12,626 9 Cania Dam Three Moon 88,500 650 4,502 5 5,049 6 4,202 5 5,258 6 Creek Chinchilla Weir Chinchilla 9,780 120 5,996 61 7,128 73 4,232 43 9,780 100 Clare Weir Burdekin 8,250 10 8,250 100 8,250 100 3,691 45 8,250 100 Haughton

84 SunWater Limited annual report 2008-2009 Key Statistics Storage Name Water Supply Total Dead Storage at Storage at Minimum storage Maximum Storage Scheme Capacity Storage July 2008 June 2009 July 2008 to July 2008 to June 2009 JunE 2009 ML ML ML %Full ML %Full ML %Full ML %Full Claude Wharton Upper Burnett 12,800 120 9,022 70 6,660 52 5,476 43 12,800 100 Weir Coolmunda Dam Macintyre Brook 69,000 220 49,187 71 27,403 40 27,166 39 49,187 71 Dumbleton Weir Pioneer River 8,840 130 6,173 70 6,261 71 5,132 58 8,840 100 E. J. Beardmore St George 81,700 3,120 34,535 42 43,382 53 22,120 27 65,970 81 Dam Eden Bann Weir Lower Fitzroy 35,900 9,650 35,900 100 35,900 100 31,658 88 35,900 100 Eungalla Dam Bowen Broken 112,400 1,400 112,062 100 109,206 97 101,146 90 112,400 100 Rivers Fairbairn Dam Nogoa Mackenzie 1,301,000 12,300 1,202,831 92 1,133,811 87 1,013,816 78 1,237,537 95 Fred Haigh Dam Bundaberg 562,000 4,390 2,359 0 2,205 0 2,200 0 2,524 0 Gattonvale Bowen Broken 5,230 0 3,657 70 4,669 89 1,067 20 5,230 100 Offstream Storage Rivers Glebe Weir Dawson Valley 17,700 430 5,275 30 15,275 86 2,383 13 17,700 100 Gyranda Weir Dawson Valley 16,500 2,120 13,872 84 15,020 91 480 3 16,500 100 Jack Taylor Weir St George 10,100 1,670 10,089 100 7,343 73 2,837 28 10,100 100 Baker Barambah 710 96 710 100 708 100 504 71 710 100 John Goleby Weir Upper Burnett 1,690 160 1,021 60 1,338 79 945 56 1,690 100 Jones Weir Upper Burnett 3,720 10 1,476 40 3,451 93 0 0 3,720 100 Julius Dam Julius Dam 107,500 8,190 88,140 82 102,371 95 68,569 64 107,500 100 Kinchant Dam Eton 65,600 600 62,708 96 62,708 96 53,519 82 65,446 100 Kirar Weir Upper Burnett 9,540 21 5,168 54 8,354 88 4,944 52 9,540 100 Kolan Barrage Bundaberg 4,020 1,630 3,793 94 3,896 97 3,377 84 4,020 100 Callide Valley 14,600 30 66 0 66 0 64 0 1,306 9 Leslie Dam Upper Condamine 106,200 2,130 16,132 15 14,407 14 14,407 14 16,880 16 Marian Weir Pioneer River 3,980 110 3,980 100 3,980 100 3,770 95 3,980 100 Mary River Barrage Mary River 12,000 5,050 12,000 100 12,000 100 12,000 100 12,000 100 Mirani Weir Pioneer River 4,660 410 4,660 100 2,898 62 2,730 59 4,660 100 Moolabah Weir St George 2,580 440 2,558 99 2,044 79 892 35 2,580 100 Moura Offstream Dawson Valley 2,820 140 1,656 59 1,602 57 332 12 1,811 64 Storage Moura Weir Dawson Valley 7,700 600 5,753 75 6,471 84 5,065 66 7,700 100 Ned Churchward Bundaberg 29,500 2,600 25,080 85 23,124 78 18,715 63 29,500 100 Weir Neville Hewitt Weir Dawson Valley 11,300 2,120 7,886 70 8,645 77 3,964 35 11,300 100 Orange Creek Weir Dawson Valley 6,140 2,320 5,441 89 5,754 94 4,933 80 5,754 94 Paradise Dam Bundaberg 300,000 13,390 135,021 45 219,097 73 134,766 45 223,439 74 Peter Faust Dam Proserpine River 491,400 970 306,722 62 403,890 82 266,216 54 419,519 85 Silverleaf Weir Baker Barambah 580 26 364 63 540 93 332 57 580 100 Tartrus Weir Nogoa Mackenzie 12,000 2,530 10,161 85 9,802 82 8,057 67 12,000 100 Teemburra Dam Pioneer River 147,500 8,300 147,022 100 147,500 100 136,572 93 147,500 100 Theodore Weir Dawson Valley 4,760 750 4,515 95 4,685 98 4,289 90 4,760 100 Tinana Barrage Mary River 4,750 2,015 4,750 100 4,750 100 3,164 67 4,750 100 Tinaroo Falls Dam Mareeba 438,920 1,300 396,630 90 397,288 91 314,806 72 0 438,920 100 Dimbulah Whetstone Weir Macintyre Brook 506 3 344 68 506 100 242 48 506 100 Wuruma Dam Upper Burnett 165,400 2,430 3,714 2 3,094 2 2,146 1 3,850 2

SunWater Limited annual report 2008-2009 Key Statistics 85 key statistics.

SunWater dams - summary statistics

DAM NAME STREAM NAME NEAREST STRUCTURE STORAGE STORAGE SURFACE YEAR TOWN DESCRIPTION LEVEL ABOVE CAPACITY AREA AT COMPLETED ORIGINAL BED (ML) FULL SUPPLY (METRES) LEVEL (HA) E J Beardmore Balonne River St George Earthfill and mass 12.1 81,700 2,850 1972 concrete (vertical lift gates) Bjelke-Petersen Barker Creek Murgon Earth and rockfill 26.3 134,900 2,250 1988 Boondooma Boyne River Proston Concrete faced 47.8 204,200 1,815 1982 rockfill Burdekin Falls Burdekin River Ravenswood Mass concrete 40.0 1,860,000 22,000 1987 Callide Callide Creek Biloela Earthfill 34.8 136,300 1,240 1965/98 (radial gates) Cania Three Moon Creek Monto Earth and rockfill 40.1 88,500 760 1982 Coolmunda Macintyre Brook Inglewood Earthfill 16.1 69,000 1,645 1968 (radial gates) Eungella Eungella Earth and rockfill 39.6 112,400 848 1969 Fairbairn Emerald Earthfill 31.7 1,301,000 15,000 1972 Fred Haigh Gin Gin Earth and rockfill 43.0 562,000 5,345 1975 Julius Mount Isa Multiple arch 25.2 107,500 1,255 1976 concrete buttress Kinchant Sandy Creek (North Branch) - North Eton Earth and rockfill 18.1 62,800 920 1977/86 water harvested from Pioneer River Kroombit Kroombit Creek Biloela Earth and rockfill, 18.6 14,600 289 1992 RCC spillway Leslie Sandy Creek Warwick Mass concrete 28.9 106,200 1,288 1965/86 (radial gates) Paradise* Burnett River Biggenden Roller compacted 37.1 300,560 2,950 2005 concrete Peter Faust Proserpine River Proserpine Earth and rockfill 39.6 491,400 4,325 1990 Teemburra Teemburra Creek Finch Hatton Concrete faced 54.0 147,500 1,107 1996 rockfill Tinaroo Falls Barron River Atherton Mass concrete 41.8 438,900 3,500 1958 Wuruma Nogo River Eidswold Mass concrete 36.6 165,400 1,639 1968

* Owned by Burnett Water Pty Ltd - a subsidiary of SunWater

86 SunWater Limited annual report 2008-2009 Key Statistics Glossary of terms and acronyms

AASB Australian Accounting Standards Board GOC Government Owned Corporation ACN Australian Company Number GPS Global Positioning System AIFRS Australian equivalents to International Financial GST Goods and Services Tax Reporting Standards IAC Irrigation Advisory Committees AM Member of the Order of Australia ICT Information and Communications Technology ANCOLD Australian National Committee on Large Dams IFRS International Financial Reporting Standards AO Officer of the Order of Australia IT Information Technology ARC Accountability Referrals Committee km Kilometre ATO Australian Tax Office LBWF Lower Burdekin Water Futures AWRIS Australian Water Resource Information System LTI Lost Time Injury BMA BHP Billiton Mitsubishi Alliance LTIDR Lost Time injury Duration Rate BW Burnett Water Pty Ltd LTIFR Lost Time Injury Frequency Rate CATS Corrective Action Tracking System m million CEO Chief Executive Officer ML Megalitre (1,000,000 litres) CGU Cash Generating Units NGER National Greenhouse Energy Reporting CHMP Cultural Heritage Management Plans NPSI National Program for Sustainable Irrigation CIEAM Centre of Integrated Engineering Asset Management NTER National Tax Equivalent Regime CLG Community Liaison Group NWI National Water Initiative COO Chief Operating Officer NWQWP North West Queensland Water Pipeline CPI Consumer Price Index OGOC Office of Government Owned Corporations CRA Comprehensive Risk Assessment PPE&C Personal Protective Equipment and Clothing CRC Cooperative Research Centre QAO Queensland Audit Office CS Continuous Sharing QMS Quality Management System CSO Community Service Obligation QPIF Queensland Primary Industries and Fisheries DEEDI Department of Employment, Economic Development QTC Queensland Treasury Corporation and Innovation QWI Queensland Water Infrastructure Pty Ltd DERM Department of Environment and Resource Management ROP Resource Operations Plan DEWHA Department of Environment Water Heritage and the Arts SCI Statement of Corporate Intent DIP Department of Infrastructure and Planning SDSC Staff Development Steering Committee DR Disaster Recovery SLAM Stop Look Assess Manage EAP Emergency Action Plan TFR Total Fixed Remuneration EBIT Earning Before Interest and Tax WACC Weighted Average Cost of Capital EBITDA Earning Before Interest and Tax Depreciation and Amortisation WASB Water Accounting Standards Board EIS Environmental Impact Statement WBBCC Wide Bay Burnett Conservation Council EMS Environmental Management System WH&S Workplace Health and Safety EWP Eungella Water Pipeline WIT Water Industry Training FTE Full Time Equivalent COOKTOWN No •

r m a SunWater water supply schemes 2009 n b y

R

i v e r P er almer Riv S a n d y Ck LEGEND River St George MOSSMAN M it • chell R iver • SunWater Weirs

W Ho dgkinso a n MAREEBA DIMBULAH WSS • SunWater Dams ls R h iv R er iv CAIRNS Major Rivers er • Granite Creek Weir• Mareeba SunWater Owned/Operated Pipelines Bruce Weir ••Dulbil Weir Leafgold Weir • • • • Tinaroo Falls Dam SunWater Pipelines Under Construction CHILLAGOE Solanum Wei•r • •ATHERTON SunWater Regulated Stream T a Collins te River Weir INNISFAIL SunWater Channel Systems L R y o n ck • d y T at BRISBANE SunWater Brisbane Office Riv e er Ri ve r Ayr SunWater Regional Offices Ck TULLY d SunWater Service Centres d • EMERALD u R E in Clare SunWater Depots a s le

i SOUTH PACIFIC OCEAN g • h R iv e r SCALE 1:4,000,000 (before reduction A3) INGHAM • 0 25 50 100 150 200 250 km

B Riv urdekin er INSET 'A' ber TOWNSVILLE Gil t r R ive Scale 1:2,750,000 i R • v e e a rk r Cl r Giru Weir e v Ayr i r r • R e Rive Val Bird Weir t v ry • d i r Gre go • r R e BURDEKIN HAUGHTON WSS a iv h d l R h l l ic a e Le g aw Clare u t • Julius Dam D S Clare Weir• • BOWEN NORTH WEST CHARTERS TOWERS Ck Bo • gie o QLD PIPELINE • Ri PROSERPINE RIVER WSS ro ve a r P Peter Faust Dam Blue Valley Weir ERNEST COLLINSVILLE • PROSERPINE • • JULIUS DAM WSS CLONCURRY HENRY • PIPELINE MINE WATER PIPELINE W Burdekin Falls Dam Gorge • Collinsville Fli arrigal Ck nd Weir er C • BOWEN BROKEN RIVERS WSS MT ISA CLONCURRY s R a iv p • er e • • R Bowen River Weir & • iv PIONEER RIVER WSS HUGHENDEN er Gattonvale Offstream Storage Kinchant Ck Dam Marian lia NEWLANDS me Weir Dumbleton Weir A BURDEKIN PIPELINE MACKAY r • Mirani Weir • •• ive MORANBAH Eungella Dam • y R • • Eton urr FOR DETAILS OF ttor Ck nc PIPELINE Su Teemburra • lo JULIUS DAM WSS Dam C r SEE INSET 'A' e •SARINA iv ETON WSS r R S e o ut t v d or R i EUNGELLA n a y WATER NEBO l • e B PIPELINE

• EUNGELLA WATER PIPELINE MORANBAH EASTERN EXTENSION

• EUNGELLA WATER PIPELINE ST LAWRENCE SOUTHERN EXTENSION Isa MUTTABURRA ac • Riv er Da rr CLERMONT MARLBOROUGH R Ro pe iver iv • r C R • e k ie r ARAMAC nz LOWER FITZROY WSS cke Tartrus Weir • Ma • CAPELLA Bingegang Weir• Eden Bann Weir • •YEPPOON

r NOGOA MACKENZIE WSS Bedford Weir e STANWELL iv LONGREACH n R • • ROCKHAMPTON so ILFRACOMBE BLACKWATER PIPELINE m • BARCALDINE Selma Weir Tho er JERICHO •• PIPELINE iv • Fairbairn Dam • R BLACKWATER DUARINGA e • c li EMERALD • A GLADSTONE • CALLIOPE

ALPHA SPRINGSURE • CALLIDE VALLEY WSS AWOONGA- ver • Neville Hewitt Weir o Ri r • Stag Ck Weir CALLIDE PIPELINE AGNES WATERS co ISISFORD Rive • ar • a Callide Dam B o •STAG CREEK MIRIAM VALE BLACKALL g Callide Weir• • o ROLLESTON • PIPELINE • N • • • Biloela Kroombit Dam Moura Weir Moura THREE MOON CREEK WSS •• Cania Dam r • e Offstream C Kolan Barrage v i Bucca r le • e R Storage v m DAWSON VALLEY WSS Youlambie Weir TAMBO Niv Ri t •MONTO Weir Bundaberg e e a Riv o tis Monto Weir•• • • e g r • r e m • •• r e C Bazley Weir

War o k Fred Haigh Dam ver v •• Theodore i i R C • rd R Avis Weir • a Theodore Weir Mulgildie Weir• GIN GIN BUNDABERG WSS le • W

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k e Orange Creek Weir R k • Weir HERVEY BAY C • John Goleby Weir CHILDERS C M • o • e l i • r y Gyranda Weir g u • d Kirar Weir Paradise Dam n d • EIDSVOLD • e n • a B a L Glebe Weir S M • UPPER BURNETT WSS BIGGENDEN a MUNDUBBERA • • Maryborough ra n D • GAYNDAH Mary River•• o aw Jones Weir• •• Tinana Barrage a so •TAROOM Claude R n River Barrage iv • e Wharton Weir TIARO r r ADAVALE e BOYNE RIVER & TARONG WSS iv BARKER BARAMBAH WSS MARY RIVER WSS R • o o l P l a u r Boondooma Dam Silverleaf Weir o • B GYMPIE o

R • MURGON • M i a v • Joe Sippel Weir r e MARANOA RIVER WSS • y r • NOOSA CHARLEVILLE Bjelke-Petersen Dam R

i • v • Neil Turner Weir e MITCHELL KINGAROY r •• ROMA QUILPIE YULEBA TARONG PIPELINE • NAMBOUR • • • MILES NANANGO • • CHINCHILLA • Chinchilla Weir k CALOUNDRA • C Co r • n a • d o y C a m C o k KILCOY o B ine C g alonne R u B o River r • o CHINCHILLA WEIR WSS iv m is n e E CABOOLTURE r b R SURAT a iv n • e DALBY e r • WYANDRA TARA • R • • iv • Oa ESK er key Ck Toowoomba •BRISBANE Cecil Plains Weir••Nangwee Weir • • •Wando Weir GATTON •IPSWICH iver •Melrose Weir onie R CUNNAMULLA WSS Mo Lemon Tree We•ir Yarramalong Weir E J Beardmore Dam MILLMERRAN• • THARGOMINDAH • Moolabah Weir Talgai Weir BEAUDESERT • ST GEORGE • UPPER CONDAMINE WSS • • • •CUNNAMULLA • BOONAH Allan Tannock Weir• Jack Taylor Weir• Buckinbah Weir WARWICK ST GEORGE WSS Leslie Dam•• GOONDIWINDI INGLEWOOD Greenup Weir Whetstone Weir• • ••Coolmunda Dam er • Riv k r •Ben Dor Weir oa C ive STANTHORPE lg rie R • u ia ir C Br e W MACINTYRE BROOK WSS MUNGINDI HUNGERFORD HEBEL • • • NEW SOUTH WALES COOKTOWN No •

r m a SunWater water supply schemes 2009 n b y

R

i v e r P er almer Riv S a n d y Ck LEGEND River St George MOSSMAN M it • chell R iver • SunWater Weirs

W Ho dgkinso a n MAREEBA DIMBULAH WSS • SunWater Dams ls R h iv R er iv CAIRNS Major Rivers er • Granite Creek Weir• Mareeba SunWater Owned/Operated Pipelines Bruce Weir ••Dulbil Weir Leafgold Weir • • • • Tinaroo Falls Dam SunWater Pipelines Under Construction CHILLAGOE Solanum Wei•r • •ATHERTON SunWater Regulated Stream T a Collins te River Weir INNISFAIL SunWater Channel Systems L R y o n ck • d y T at BRISBANE SunWater Brisbane Office Riv e er Ri ve r Ayr SunWater Regional Offices Ck TULLY d SunWater Service Centres d • EMERALD u R E in Clare SunWater Depots a s le

i SOUTH PACIFIC OCEAN g • h R iv e r SCALE 1:4,000,000 (before reduction A3) INGHAM • 0 25 50 100 150 200 250 km

B Riv urdekin er INSET 'A' ber TOWNSVILLE Gil t r R ive Scale 1:2,750,000 i R • v e e a rk r Cl r Giru Weir e v Ayr i r r • R e Rive Val Bird Weir t v ry • d i r Gre go • r R e BURDEKIN HAUGHTON WSS a iv h d l R h l l ic a e Le g aw Clare u t • Julius Dam D S Clare Weir• • BOWEN NORTH WEST CHARTERS TOWERS Ck Bo • gie o QLD PIPELINE • Ri PROSERPINE RIVER WSS ro ve a r P Peter Faust Dam Blue Valley Weir ERNEST COLLINSVILLE • PROSERPINE • • JULIUS DAM WSS CLONCURRY HENRY • PIPELINE MINE WATER PIPELINE W Burdekin Falls Dam Gorge • Collinsville Fli arrigal Ck nd Weir er C • BOWEN BROKEN RIVERS WSS MT ISA CLONCURRY s R a iv p • er e • • R Bowen River Weir & • iv PIONEER RIVER WSS HUGHENDEN er Gattonvale Offstream Storage Kinchant Ck Dam Marian lia NEWLANDS me Weir Dumbleton Weir A BURDEKIN PIPELINE MACKAY r • Mirani Weir • •• ive MORANBAH Eungella Dam • y R • • Eton urr FOR DETAILS OF ttor Ck nc PIPELINE Su Teemburra • lo JULIUS DAM WSS Dam C r SEE INSET 'A' e •SARINA iv ETON WSS r R S e o ut t v d or R i EUNGELLA n a y WATER NEBO l • e B PIPELINE

• EUNGELLA WATER PIPELINE MORANBAH EASTERN EXTENSION

• EUNGELLA WATER PIPELINE ST LAWRENCE SOUTHERN EXTENSION Isa MUTTABURRA ac • Riv er Da rr CLERMONT MARLBOROUGH R Ro pe iver iv • r C R • e k ie r ARAMAC nz LOWER FITZROY WSS cke Tartrus Weir • Ma • CAPELLA Bingegang Weir• Eden Bann Weir • •YEPPOON

r NOGOA MACKENZIE WSS Bedford Weir e STANWELL iv LONGREACH n R • • ROCKHAMPTON so ILFRACOMBE BLACKWATER PIPELINE m • BARCALDINE Selma Weir Tho er JERICHO •• PIPELINE iv • Fairbairn Dam • R BLACKWATER DUARINGA e • c li EMERALD • A GLADSTONE • CALLIOPE

ALPHA SPRINGSURE • CALLIDE VALLEY WSS AWOONGA- ver • Neville Hewitt Weir o Ri r • Stag Ck Weir CALLIDE PIPELINE AGNES WATERS co ISISFORD Rive • ar • a Callide Dam B o •STAG CREEK MIRIAM VALE BLACKALL g Callide Weir• • o ROLLESTON • PIPELINE • N • • • Biloela Kroombit Dam Moura Weir Moura THREE MOON CREEK WSS •• Cania Dam r • e Offstream C Kolan Barrage v i Bucca r le • e R Storage v m DAWSON VALLEY WSS Youlambie Weir TAMBO Niv Ri t •MONTO Weir Bundaberg e e a Riv o tis Monto Weir•• • • e g r • r e m • •• r e C Bazley Weir Ben Anderson Barrage

War o k Fred Haigh Dam ver v •• Theodore i i R C • rd R Avis Weir • a Theodore Weir Mulgildie Weir• GIN GIN BUNDABERG WSS le • W

r a

e v Ned Churchward i v r i Wuruma Dam

k e Orange Creek Weir R k • Weir HERVEY BAY C • John Goleby Weir CHILDERS C M • o • e l i • r y Gyranda Weir g u • d Kirar Weir Paradise Dam n d • EIDSVOLD • e n • a B a L Glebe Weir S M • UPPER BURNETT WSS BIGGENDEN a MUNDUBBERA • • Maryborough ra n D • GAYNDAH Mary River•• o aw Jones Weir• •• Tinana Barrage a so •TAROOM Claude R n River Barrage iv • e Wharton Weir TIARO r r ADAVALE e BOYNE RIVER & TARONG WSS iv BARKER BARAMBAH WSS MARY RIVER WSS R • o o l P l a u r Boondooma Dam Silverleaf Weir o • B GYMPIE o

R • MURGON • M i a v • Joe Sippel Weir r e MARANOA RIVER WSS • y r • NOOSA CHARLEVILLE Bjelke-Petersen Dam R

i • v • Neil Turner Weir e MITCHELL KINGAROY r •• ROMA QUILPIE YULEBA TARONG PIPELINE • NAMBOUR • • • MILES NANANGO • • CHINCHILLA • Chinchilla Weir k CALOUNDRA • C Co r • n a • d o y C a m C o k KILCOY o B ine C g alonne R u B o River r • o CHINCHILLA WEIR WSS iv m is n e E CABOOLTURE r b R SURAT a iv n • e DALBY e r • WYANDRA TARA • R • • iv • Oa ESK er key Ck Toowoomba •BRISBANE Cecil Plains Weir••Nangwee Weir • • •Wando Weir GATTON •IPSWICH iver •Melrose Weir onie R CUNNAMULLA WSS Mo Lemon Tree We•ir Yarramalong Weir E J Beardmore Dam MILLMERRAN• • THARGOMINDAH • Moolabah Weir Talgai Weir BEAUDESERT • ST GEORGE • UPPER CONDAMINE WSS • • • •CUNNAMULLA • BOONAH Allan Tannock Weir• Jack Taylor Weir• Buckinbah Weir WARWICK ST GEORGE WSS Leslie Dam•• GOONDIWINDI INGLEWOOD Greenup Weir Whetstone Weir• • ••Coolmunda Dam er • Riv k r •Ben Dor Weir oa C ive STANTHORPE lg rie R • u ia ir C Br e W MACINTYRE BROOK WSS MUNGINDI HUNGERFORD HEBEL • • • NEW SOUTH WALES SUNWATER Brisbane Office Level 10, 179 Turbot Street PO Box 15536 City East BRISBANE Q 4002 Phone (07) 3120 0000 Fax (07) 3120 0260 Customer Information Line 131589 www.sunwater.com.au