2010-2011 ANNUAL REPORT service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability Service area

2 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index contents

Service area map 2 Part 1 – Year in review 4 About us 4 At a glance 6 Message from the Chairman 7 Message from the Managing Director 8 Summary of financial results 10 P art 2 – Water consumption and drought response 14 water consumption report 14 Corporate water consumption 15 Major non-residential water users 15 Drought Response Plan 16 Part 3 – Environmental and social sustainability 17 environmental sustainability – Environmental Consultative Committee report 17 – Water Supply Demand Strategy (2012-2017) 17 – Recycled water 17 – Conservation programs and initiatives 18 – Catchment management and biodiversity 19 – Greenhouse gas emissions 20 – Bulk entitlement reporting 23 Social sustainability – Customer Consultative Committee report 27 – Community Service Obligations 28 Part 4 – Corporate information 29 organisational structure 29 Board committees 30 Board Directors 31 Employment data 33 Health, safety and environment 34 Access to information 36 Other Acts 37 Applicable policies 38 Part 5 – Performance report 39 Part 6 – Financial statements 44 Part 7 – Disclosure index 81

B arwon Water Annual Report 2010-2011 3 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

PART 1 Year in review

A bout us A ssets The Colac system provides water to urban and rural districts extending as far – 10 major reservoirs B arwon Water (Barwon Region Water north as Cressy. Gellibrand, Aireys Inlet/ Corporation) is Victoria’s largest regional – 10 water treatment plants Fairhaven, Apollo Bay/Skenes Creek and urban water corporation. Its history – 2 pre water treatment plants Lorne have their own supply systems. dates back to the establishment of the – 9 water reclamation plants Geelong Municipal Waterworks Trust W ater customers in 1908. – 2 groundwater fields D omestic customers comprise 91.7 per – 212 pumping stations Barwon Water was constituted in cent of the customer base, with the (47 water; 165 sewerage) February, 1994. For the 2010-2011 industrial and commercial sectors reporting period, Barwon Water – 19 water basins accounting for the remaining 8.3 per operated as a statutory corporation – 31 water tanks cent. Around 35 per cent of metered under the Water Act 1989. – mor e than 6,000 kilometres consumption is attributed to non- domestic customers. Barwon Water provides high quality of pipes. water and sewerage services to more W ater reclamation plants than 285,000 permanent residents over W ater sources B arwon Water has nine water 8,100 square kilometres. Over the G eelong region’s water is supplied by reclamation plants governed by holiday period, the serviced population three major surface water sources - the Environmental Protection Authority can reach 510,000 people. Barwon River, East Moorabool River and (EPA) Victoria licensing requirements. West Moorabool River, and from As a major employer in the region, Black Rock, Anglesea, Apollo Bay and underground aquifers. Barwon Water has more than 400 Lorne plants release water through operational, engineering, strategic The Barwon River system, from its Otway ocean outfalls. Plants at Aireys Inlet, planning, financial and administrative Ranges catchment, typically supplies Bannockburn, Portarlington and employees. 80 per cent of the water for Geelong, Winchelsea are land-based systems. the Bellarine Peninsula and Surf Coast via Water from the Colac facility is released Our region the Wurdee Boluc Reservoir and water into Lake Colac. Our region of responsibility stretches treatment plant. The balance is supplied from Little River and the Bellarine from catchments on the Moorabool Recycled water Peninsula in the east to Colac in the River system, which provide water to the A ll water reclamation plants produce west, and from Meredith and Cressy in Moorabool water treatment plant at water suitable for recycling. Barwon the north to Apollo Bay on Victoria’s She Oaks, north of Lethbridge. Water achieved 8.7 per cent water south-west coast. The Moorabool system also provides recycling in 2010-2011 and has a water water to Anakie, Staughton Vale, recycling target of 25 per cent by 2015. The City of Greater Geelong, Borough of Bannockburn, Gheringhap, Teesdale, Queenscliffe,S urf Coast and Colac Shelford and Inverleigh. Biosolids Otway shires and part of Golden Plains Shire are incorporated in our service In 2010-2011, exceptional rainfall allowed In 2010-2011, Barwon Water dried 59,868 area. the Barwon Downs borefield to be tonnes of wet biosolids to produce switched off after providing crucial 14,506 tonnes of dried biosolids product. supplies to the greater Geelong area for more than four years. At the peak of the Future growth drought, the borefield supplied an Over the next five years, Barwon Water average 50 per cent of Geelong’s will commit $666 million to capital works. demand. The borefield has shown signs This will ensure the completion of a of quickly re-charging since being number of major projects that will switched off inA ugust, 2010. deliver water security to the region. It Supplies in the Colac and Otway regions will also guarantee delivery of services in are drawn from five separate sources, all an efficient, cost-effective and located in the forested catchments of environmentally responsible manner, the Otway Ranges. and the capacity to meet future growth and development. 4 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

C orporate Governance Strategic Intent Our promise B arwon Water is established under the I n 2008, Barwon Water developed a ‘We promise to provide Water Act 1989. The Honourable Tim Strategic Intent, its blueprint for the Holding, Minister for Water, was the future. It is a rolling five-year plan that sustainable water and sewerage responsible Minister at the encompasses a promise to stakeholders, management to our community commencement of the reporting strategic directions and objectives for through innovation, leadership, period. From December 2, 2010, the the business and actions for employees. real community relationships Honourable Peter Walsh, Minister for The Strategic Intent forms a framework Water, was the responsible Minister. and a high-performance for Barwon Water to become a high- Since July 28, 2004, Barwon Water has performance organisation. It outlines an workforce.’ operated under a Statement of intention to build on partnerships with Obligations issued by the Minister for the community and plans to provide Our values Water under section 41 of the Water environmental leadership to ensure a Industry Act 1994. sustainable future for the region. – Respect The statement imposes obligations on The Strategic Intent is based on seven – High performance Barwon Water regarding the strategic directions. These pillars inform – Innovation performance of its functions and what we do, what we say, how we exercise of powers. behave and how people experience and – Relationships feel about us. Barwon Water is required to monitor – Leadership compliance with the obligations set out In 2010-2011, the pillars were: in the statement, report on non- – What we do compliance and take remedial action in relation to non-compliance. 1. provide environmental leadership 2. provide long-term water security On January 1, 2004, the Essential and reliable sewerage systems Services Commission became the economic regulator of the Victorian 3. provide high-quality and water sector. The commission’s role affordable water and sewerage encompasses regulation of prices, services service standards and market conduct. – What we say 4. communicate, listen, engage and educate our community and stakeholders – How we behave 5. build a high-performance organisation – Ho w people experience and feel about us 6. achieve a reputation for excellent customer service and stakeholder relationships 7. build trust through performance, education, consultation and engagement

Barwon Water’s 2011-2012 Strategic Intent can be obtained at: www.barwonwater.vic.gov.au or by telephoning 1300 656 007.

B arwon Water Annual Report 2010-2011 5 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

YEAR IN REVIEW

At a glance

2010-11 Change 2009-10 Change 2008-09 Change 2007-08 Change 2006-07 Change (%) (%) (%) (%) (%) Population served (water) 285,393 1.5 281,087 1.7 276,260 1.4 272,477 -1.1 275,433 1.6 Population served (sewerage) 259,053 1.6 254,917 1.8 250,454 1.5 246,799 -1.0 249,247 1.6 Connected properties (water) 137,367 1.7 135,066 1.6 132,905 1.8 130,568 2.7 127,168 1.7 Connected properties (sewerage) 123,632 2.1 121,054 1.5 119,223 1.9 116,963 2.7 113,935 1.7 Water treatment plant volumes (megalitres) 30,326 -0.8 30,583 -5.9 32,493 2.0 31,867 -4.5 33,381 -19.6

Water reclamation plant volumes (megalitres) 23,192 20.0 19,325 1.4 19,061 -8.4 20,806 1.0 20,596 -13.9

Employee numbers 407*# 0.74 404* 8.0 374* 4.2 359* 11.8 375* 4.2 Number of days lost 121 68.0 72 -57.4 169 38.5 122 306.7 30 -79.9 to injury Total revenue ($'000) 154,567 10.5 139,918 10.0 127,236 15.5 110,177 3.3 106,689 0.7 Net operating result 23,864 31.4 18,159 27.0 14,299 120.2 6,493 -28.1 9,030 -27.8 (before income tax) ($'000) Total assets ($'000) 1,908,690 58.2 1,206,538 6.0 1,138,245 6.6 1,067,453 4.3 1,023,831 3.2 Capital expenditure ($'000) 176,891 87.5 94,318 9.2 86,357 48.4 58,190 25.3 46,451 37.3

Notes * Measured as full-time equivalent (FTE) employees # The Australian Bureau of Statistics (ABS) develops and maintains standard occupation coding structures for labour market analysis. The primary ABS occupation coding structure is known as ANZSCO (Australian and New Zealand Standard Classification of Occupations). Barwon Water utilises ANZSCO as its occupational reporting model.

6 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

MS ES AGE FROM the CHAIRMAN

The 2010-2011 year saw Barwon Water and regional communities emerge from one of the worst droughts ever recorded.

After more than a decade of extremely Armstrong Creek, where Barwon Water These, a raft of other projects and dry conditions and five years of will spend more than $150 million on ongoing investigations into new water restrictions, above average rainfall essential infrastructure, is a direct solutions are indicative of the actions boosted depleted storages across the response to those expectations on being taken by the corporation to corporation’s service area. sustainable water management. maintain high standards of service. They also reflect the substantial work This welcome turnaround allowed the The 22,000-lot development will be the that is ongoing to ensure we meet the Board to systematically scale back first residential precinct in greater needs of the community, present and restrictions to the officialP ermanent Geelong to receive recycled water for future. Water Saving Plan in March, 2011. non-drinking purposes from a new high-tech facility at Black Rock and As I am not seeking re-appointment Despite trying times, customers significant progress has been made on beyond this financial year, I wish to responded magnificently to limits on constructing water, sewerage and acknowledge and thank a number of water use, saving more than 45,000 recycled water networks. people and organisations. million litres of drinking water since 2006 when the severest restrictions, Research into alternative water sources, Firstly, the support and advice of the Stage 4, were introduced. such as stormwater harvesting and Victorian and Australian governments aquifer storage and recovery, also will and the co-operation of various This was more than 13,000 million litres support our already diversified supply agencies have allowed Barwon Water to better than forecast and reflected the system. capably fulfill its responsibilities. community’s increased appreciation of the value of this precious resource. Significant capital investment represents Similarly, the wise counsel and a clear commitment by Barwon Water to encouragement of my fellow Directors But healthy reservoirs and entrenched regional growth and development. This and the professionalism of the water saving behavior among customers will not only instil confidence around the management team have ensured were not the sole drivers for the corporation’s capacity to meet future Barwon Water continues to serve and decision. Record investment in new demand, but will provide certainty to the meet the expectations of its customers. infrastructure designed to ensure supply business sector which underpins the security and a number of projects I particularly thank employees for their regional economy. coming on line meant it was appropriate commitment and contribution; they are to ease bans. Of course, new projects come at a cost, justifiably proud of the role they play in but this expenditure is crucial if we are to delivering high standards of service and Moreover, Barwon Water is confident provide safe and reliable services in one in Barwon Water, which is an integral that major capital works now underway, of the fastest growing areas in Victoria. part of our vibrant community. about to begin or in the final stages of planning will confine restrictions to While iconic projects such as the history. Northern Water Plant, Anglesea borefield and new Black Rock plant have Several signature projects, including the been a major focus, a spread of smaller innovative Northern Water Plant to serve but equally important capital works were Geelong’s northern suburbs and the undertaken during the year. Melbourne Geelong pipeline, will Roger Lowrey provide an additional 75 per cent of Of particular note were an improved Chairman current demand. water supply for the township of Meredith, new sewerage infrastructure Recycled water initiatives also will deliver to meet growth across the Bellarine community-wide benefits, including Peninsula, a major upgrade of the dramatic savings of drinking water in Painkalac Reservoir that supplies Aireys new residential developments. Inlet and Fairhaven, construction of a Customers have told us in the strongest new sewerage scheme for Birregurra and possible terms that recycled water must progress on a new water storage for be part of any future planning. Apollo Bay.

B arwon Water Annual Report 2010-2011 7 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

MS ES AGE FROM the managing director

Barwon Water faced a significantly increased set of challenges in 2010-2011 but lifted its performance to meet these challenges.

Perhaps the most significant challenge The Barwon Water Alliance, a private The Strategic Intent continues to ensure was a capital investment program that sector partnership between the service delivery remains leading edge saw unprecedented expenditure on corporation, design and engineering and provides a clear understanding to ensuring future water security and the company GHD and construction employees and customers about what continued delivery of quality services. company John Holland, was responsible the organisation has achieved and what for delivering many projects crucial to it needs to achieve in the future. The total spend for the financial year growth. exceeded $176 million, five times more Environmental leadership remains at the than average and $80 million more than Among the most notable were a top of the agenda, with our Greenhouse the previous year. This figure not only multi-million dollar upgrade of the main Strategy providing a framework to reflects commitment by - and synergies Colac pipeline, replacement of the reduce greenhouse gas emissions, between - our employees and our largest pump station in greater energy use and waste. Reduction partners, but streamlined project Geelong’s extensive sewer network and strategies, including energy audits, management that has allowed us to core infrastructure improvements infrastructure upgrades and installing meet targets and deadlines. across Barwon Water’s vast service area. solar powered monitoring systems, are cutting emissions at a time when Several major projects contributed to A key element in all these important construction activity is increasing. the record, including the Northern projects has been communication. Water Plant, preliminary work on the Based on feedback from customer Our environmental leadership was new Black Rock recycled water plant, surveys, the corporation has placed a never better showcased than through a the near-completed innovative strong emphasis on open dialogue with sustainability initiative that will position biosolids plant also at the Black Rock the community and stakeholders. Geelong as an environmental champion. environmental precinct and land Barwon Water is one of seven key There have been successful forums on purchase for a new water storage at organisations to fund and sign a future water management, information Apollo Bay. covenant that commits to a low carbon kiosks conducted at various locations, future. Significant progress was made on the another outstanding sustainable home Melbourne to Geelong Pipeline and and garden expo and productive liaison Known as Future Proofing Geelong, the water, sewerage and recycled water with agencies. three-year partnership will promote infrastructure for the Armstrong Creek sustainability while leveraging growth Our community and environmental and Torquay North growth corridors. opportunities. It dovetails with Barwon consultative committees also are a Water’s commitment to create liveable constant litmus test to community communities that enjoy economic thinking and expectations. benefits and improved environmental Underpinning all actions and initiatives outcomes. is our Strategic Intent, now in its third With Barwon Water seeking to further iteration, which commits the diversify its water supply, 2010-2011 saw corporation to sustainable water and continued investigations into a range of wastewater management. Of 206 alternative supply options. These ‘new Strategic Intent actions identified in water solutions’ included recycled 2010-2011, 184 were completed. This 89 water, stormwater harvesting, sewer per cent success rate was achieved mining and aquifer storage and despite a rapidly changing environment recovery. in which we operate.

8 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

The aim of this work is to provide a I thank my fellow Board Directors, the secure, resilient water supply for management team and all employees existing customers and ensure a for their support, enthusiasm and sustainable supply for future commitment during what has been a generations in line with the Victorian very successful year. Government’s drive toward more I would also like to acknowledge the liveable cities. support of the Federal and State Our cultural change journey continued, governments toward our major projects with a dynamic focus on building a and our major partners, Shell, John values and performance-based Holland and GHD. At the same time, I organisation. This included the launch wish to recognise the many regional of a new leadership program designed consultants and contractors who have to better equip key personnel in people helped Barwon Water deliver its major management. capital expenditure program. iCatch, a concept for encouraging Finally, I thank the members of our innovations and teamwork, had an Customer Consultative Committee, outstanding year, generating 136 chaired by Ann Fairbairn, and the innovations and 136 ideas. This far Environmental Consultative Committee, exceeded target and resulted in led by Susan Howells, for their valuable combined savings of more than $3.5 contribution and feedback. million, particularly in the operational area. In accordance with the Financial Management Act 1994, I am pleased to The year also was highlighted by the attest that Barwon Water’s annual launch of the new Barwon Water brand report is compliant with all statutory encapsulating the essence and future reporting requirements. direction of the corporation. The new visual identity defines a changing organisation that is prepared to show strong leadership, is innovative, more consultative and supportive of its community. The brand stands as a promise to people in Barwon Water’s service area to Michael Malouf provide a sustainable future for families, Managing Director business and industry.

B arwon Water Annual Report 2010-2011 9 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

summary of FINANCIAL RESULTS

Financial summary Significant changes in Major changes or factors affecting performance B arwon Water’s financial performance financial position An operating surplus (before income to June 30, 2011, continued the B arwon Water’s promise to provide tax) of $23.9 million was achieved. This corporation’s history of strong sustainable water, sewerage and exceeded the target of $21.2 million. performances, particularly in the key recycled water services throughout the areas of efficiency and operational region resulted in expenditure on the Customer revenue was $2.5 million sustainability. following key projects or areas: lower than target. A relatively mild summer, coupled with adoption of Water restrictions and the adoption of – $38.6 million for the Melbourne to water conservation initiatives, reduced conservation measures by the Geelong Pipeline community reduced anticipated water consumption to 5.2 per cent consumption and resulted in revenue – $21.5 million for recycled water below target. infrastructure, including $13.2 below expected levels. However, this Operational savings were achieved million for the Northern Water Plant impact was more than offset by through lower water volumes, a and $3.8 million for the Black Rock operational savings. reduction in the use of groundwater recycled water plant Another record was set for capital sources and resultant savings in works. More than $176 million was – $9.5 million for the ongoing electricity, materials and chemicals. invested, including the start of replacement of the Colac water Overall, total expenditure was construction of the Melbourne to supply pipeline $7.6 million below budget. Geelong Pipeline, which will provide – $5.2 million for improvements in the Revenue associated with development long-term water security to Geelong, water supply system for Meredith across the region was also below target the Bellarine Peninsula and the Surf as development activity was not as high – $49.1 million investment in sewerage Coast. Significant investment also was as expected. made on recycled water infrastructure, infrastructure demonstrating a clear long-term – $41.8 million investment on other Events subsequent to commitment to further utilise this water infrastructure projects. valuable resource. balance date Funding required for the capital No material events have occurred after investment included $45.2 million balance date. C hallenges overcome generated from operations of the Planning for growth across the Barwon business, government grants of region and delivering the required $16 million and new borrowings infrastructure has posed a sizeable of $125.7 million. Consequently, challenge. borrowings increased to $299.5 million at the end of June, 2011. Innovative project delivery structures have been implemented, including a During the 2010-2011 financial year, a build-own-operate scheme for a land, buildings and infrastructure biosolids drying facility at Black Rock, revaluation was undertaken. Land and partnering with customers to deliver building values increased by $53.8 innovative recycled water options and a million whilst infrastructure increased capital works alliance. by $478.7 million – a total increase in property, plant and equipment of The capital works alliance, or the $532.5 million. “Barwon Water Alliance”, has delivered $90.2 million of capital works during The revaluation and the record level of 2010-2011 and set excellent standards capital investment undertaken has for efficiency, project delivery and consequently increased total assets to safety. $1.91 billion, up from $1.21 billion in 2010.

10 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index summary of FINANCIAL RESULTS

Summary of financial results

Financial 2010-11 2009-10 2008-09 2007-08 2006-07 Result ($’000) ($’000) ($’000) ($’000) ($’000) Tariff revenue 132,324 119,054 106,514 90,098 86,465 Capital revenue 15,837 14,689 10,638 8,836 7,652 Government contributions 675 374 2,210 5,103 1,962 Other revenue 5,731 5,801 7,874 5,410 9,459 Total revenue 154,567 139,918 127,236 109,447 105,538 Operating expenditure 77,930 75,758 72,140 66,079 61,703 Depreciation expenditure 31,639 29,989 28,337 27,161 26,633 Finance costs 16,622 11,427 7,972 5,961 4,413 Other expenditure 4,512 4,585 4,488 3,753 3,759 Total expenditure 130,703 121,759 112,937 102,954 96,508 Net result before tax 23,864 18,159 14,299 6,493 9,030 Current assets 45,341 28,014 33,465 27,170 19,101 Non-current assets 1,863,349 1,178,524 1,104,780 1,040,283 1,004,730 Total assets 1,908,690 1,206,538 1,138,245 1,067,453 1,023,831 Current liabilities 74,695 58,694 39,672 28,776 29,388 Non-current liabilities 496,439 216,004 186,922 171,105 104,666 Total liabilities 571,134 274,698 226,594 199,881 134,054 Net cash flows from operations 45,237 35,689 34,377 24,033 29,352 Payments for property, plant and equipment (including infrastructure) 167,249 90,390 76,494 55,960 39,955

Summary of financial performance

Performance indicator 2010-11 2009-10 2008-09 2007-08 2006-07 Internal Financing Ratio 27.05% 39.48% 44.94% 42.95% 73.46% Gearing Ratio (Debt to assets) 15.69% 15.40% 12.80% 9.90% 6.90% Interest Cover (EBIT) 2.49 times 2.60 times 2.85 times 2.12 times 3.13 times Interest Cover (Cash) 4.09 times 4.49 times 5.78 times 5.31 times 7.90 times Return on Assets 2.56% 2.50% 2.00% 1.20% 1.30% Return on Equity 1.47% 1.40% 1.10% 0.50% 0.70%

B arwon Water Annual Report 2010-2011 11 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

summary of FINANCIAL RESULTS

Capital Expenditure Item 2010-11 Change 2009-10 Change 2008-09 Change 2007-08 Change 2006-07 Change $’000 % $’000 % $’000 % $’000 % $’000 %

Water supply Headworks 63,935 135.9 25,575 -2.4 26,196 67.2 15,669 34.9 11,615 115.7 Water treatment and quality 2,527 -25.2 3,379 -40.2 5,650 -15.3 6,674 118.4 3,055 -0.9 Major transfer and distribution 20,227 58.3 12,775 -13.2 14,724 98.2 7,429 67.1 4,445 56.7 Reticulation 12,173 35.8 8,881 1.9 8,711 54.2 5,650 22.5 4,614 34.4 Total water 98,862 87.9 50,610 -8.5 55,283 56.1 35,423 49.3 23,730 61.0

Sewerage Water reclamation 2,001 56.3 1,281 -8.8 1,404 –79.2 6,745 49.8 4,502 34.5 and disposal Main sewers 38,043 86.3 20,408 26.0 16,191 200.3 5,391 -15.9 6,409 5.6 Reticulation and other 9,049 28.2 7,056 30.0 5,429 134.1 2,318 -45.4 4,250 75.7 Total sewerage 49,093 70.7 28,745 24.8 23,024 59.3 14,455 -4.7 15,162 28.1

Recycled water Total recycled water 21,555 151.2 8,580 994.9 784 50.2 521 236.8 154 -48.1

Other works and services Building 422 -5.7 448 -6.7 480 –9.3 528 31.0 403 -41.4 Corporate information 1,653 -27.2 2,271 6.5 2,131 –4.7 2,236 –9.6 2,473 46.3 Other corporate 5,306 44.8 3,665 -21.3 4,656 –7.3 5,024 11.0 4,525 -1.0 Total other works 7,381 15.6 6,383 -12.2 7,267 –6.7 7,789 5.2 7,403 6.5 Total 176,891 83.6 94,318 9.2 86,357 48.4 58,190 25.3 46,451 37.3

The $60.33 million spent on water Other major water infrastructure A significant increase in investment headworks projects, included: projects included: in recycled water infrastructure, – $38.6 million for the ongoing – $4 .19 million for Armstrong Creek including: construction of the Melbourne to Boundary Rd feeder main – $13.26 million for the Northern Geelong Pipeline – $ 3.95 million for mains Water Plant – $9.53 million for the replacement of replacements – $3.81 million for the the Colac Pipeline – $ 1.63 million for Jan Juc high level commencement of the Black Rock – $5.24 million for the ongoing works water supply system recycled water plant on the Anglesea borefield project – $3.59 million for the Armstrong – $2.83 million for the Apollo Bay Bulk Investment in sewerage Creek recycled water transfer Water Supply project infrastructure included: pipeline – $2.36 million for the Painkalac – $ 6.67 million for Cowies Creek Reservoir - embankment upgrade sewer pump station upgrade Consultants and Contracts – $4 .36 million for Birregurra entered into The $20.22 million spent on major Sewerage Scheme Consultants costing less than transfer & distribution projects, – $4 .32 million for Lonsdale Lakes $100,000 included: rising main construction Number of consultants engaged: 110 – $5.26 million for the Meredith water – $4 .13 million for Ocean Grove rising Total cost: $1,690,247.78 supply improvements main no.2 upgrade – $2.82 million for the Lovely Banks Contracts entered into greater than basin lining and covering $10 million: – $2.60 million for Torquay high level No contracts greater than $10 million feeder main Stage 3 were entered into. – $ 2.30 million for Torquay high level tank

12 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index summary of FINANCIAL RESULTS

Consultants and Contracts entered into Consultants costing in excess of $100,000 There were 16 major consultancies engaged in 2010-2011, with a total value of $7,686,165.64.

Name of consultant Particulars of project * Total Project $ Total 2010-2011 $ Future Commitment

Kellogg Brown & Melbourne to Geelong Pipeline design and support services Root Pty Ltd during the construction phase, pipeline design for the Weddell Road syphon duplication, Ocean Grove rising main 8,158,636.75 2,350,803.37 478,348.24 no. 4 replacement procurement and construction services, Lovely Banks to Montpellier pump station design. Sinclair Knight Merz Black Rock Aquifer Storage and Recovery (ASR) project stage 2, recycled water market identification and development at Black Rock water reclamation plant, Armstrong Creek water, sewer and recycled water services, Western Edge recycled water plant functional design, climate change modelling for 3,867,027.52 1,520,700.12 463,805.89 Barwon Downs aquifers, northern Geelong ASR investigations, Melbourne to Geelong Pipeline external site auditing and targeted surveys, dam safety reviews and upgrades, Colac water supply augmentation investigations and other investigations. GHD Pty Ltd Anglesea borefield project construction phase assistance and (excludes project ongoing MAP support, Barwon Heads sewerage pump station work under Barwon design and procurement services, water supply and demand Water Alliance) engagement strategy, main outfall sewer and Armstrong 8,482,921.48 1,278,591.86 18,835.00 Creek development odour control, Apollo Bay water treatment plant augmentation concept design and other investigations. Aquenta Consulting Independent estimating and cost planning services for 389,512.25 389,512.25 - Pty Ltd various projects and water database feasibility tool study. Aurecon Australia Review services for the Northern Water Plant, Black Rock 796,593.51 388,988.06 174,102.65 Pty Ltd Recycled Water Plant design. **BDO Pty Ltd Alliance and new customer relations billing system review services, development of information technology enterprise 381,026.99 381,026.99 - wide security. DB Results Pty Ltd Manage the procurement of the new customer relations and 171,886.62 171,886.62 - billing system. Ernst & Young New customer relations billing system probity services, commercial and financial services for the biosolids 167,509.00 167,509.00 - management project. Black & Veatch Colac water reclamation plant review. 145,795.27 145,795.27 - Australia Pty Ltd DEGW Asia Pacific Planning and procurement services for new office 143,219.44 143,219.44 - Pty Ltd accommodation. Aecom Australia Pty Sewerage modelling strategy, Inverleigh feeder main 136,520.00 136,520.00 - Ltd investigations. Marchment Hill Review of the field services, connection services and water Consulting conservation areas, development of interface agreements for 132,268.41 132,268.41 - technical services. University of Integrated water resource strategy (iSDP model). 126,820.98 126,820.98 - Technology Sydney Minter Ellison Melbourne to Geelong Pipeline services, property rationalisation project, Northern Water Plant advice, other 125,583.90 125,583.90 - legal advice as required. Pitcher Partners Alliance finance audit services, Melbourne to Geelong Consulting Pty Ltd Pipeline project design services, land realisation project 114,148.12 114,148.12 - probity services. SMEC Australia Safety and condition assessments of Barwon Water dams. 112,791.25 112,791.25 - Pty Ltd

Please note all figures are exclusive of GST. * Includes the total cost of the contract for a project, which may include costs other than consultants. **Includes payments made to BDO (NSW-VIC) Pty Ltd and BDO Corporate Finance (NSW-VIC) Pty Ltd.

B arwon Water Annual Report 2010-2011 13 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

PART 2 W ater consumption and drought response

Regional metered water consumption (megalitres)

2010-11 Change 2009-10 Change 2008-09 Change 2007-08 Change 2006-07 Change % % % % % Apollo Bay 195 -10.6 218 7.9 202 2.0 198 -23.8 260 -9.1 Aireys Inlet 86 -10.4 96 -5.0 101 1.0 100 -37.9 161 -6.4 Anglesea 279 -2.2 285 -1.0 288 1.8 283 -11.3 319 -25.3 Bellarine Peninsula 3,246 -5.5 3,437 -2.1 3,512 3.7 3,388 -8.7 3,710 -26.4 Colac 2,376 -9.6 2,629 -8.3 2,866 -5.1 3,021 -13.2 3,480 -5.3

Geelong urban 19,909 0.5 19,807 -6.2 21,114 0.4 21,024 -3.5 21,785 -19.0 Lorne 262 -9.9 291 -2.3 298 -4.2 311 -7.4 336 0.0 Skenes Creek 23 -10.8 26 0.0 26 -7.1 28 -9.7 31 0.0 Torquay 1,134 0.9 1,124 -2.3 1,151 12.7 1,021 -13.0 1,173 -27.3 Total 27,510 -1.4 27,913 -5.6 29,558 0.6 29,374 -6.0 31,255 -18.7 Bellarine Peninsula: Barwon Heads, Bellarine, Breamlea, Clifton Springs, Curlewis, Drysdale, Indented Head, Mannerim, Marcus Hill, Ocean Grove, Point Lonsdale, Portarlington, Queenscliff, St Leonards, Swan Bay, Wallington. Geelong urban includes: Anakie, Avalon, Balliang, Bamganie, Bannockburn, Batesford, Birregurra, Fyansford, Gheringhap, Inverleigh, Leopold, Lethbridge, Little River, Marshall, Maude, Meredith, Modewarre, Moorabool, Moriac, Mount Moriac, Murgheboluc, She Oaks, Shelford, Staughton Vale, Sutherlands Creek, Teesdale, Thompson, Winchelsea, Wurdiboluc.

Residential and non-residential metered water consumption

2010-11 Residential Non-residential District Number Volume Number Volume Total Average annual of Water consumed2 of Water consumed2 consumption consumption3 Customers1 (ML) Customers1 (ML) (ML) (ML) Geelong & District 113,802 15,979 9,879 8,201 24,180 24,676 Colac & District 6,432 1,452 1,107 1,230 2,682 2,955 Apollo Bay/Skenes Creek 2,055 165 172 100 265 280 Lorne 2,213 180 152 82 262 284 Aireys Inlet/Fairhaven 1,509 111 46 10 121 132 Total 126,011 17,887 11,356 9,623 27,510 28,327

1. This is the total number of properties connected to Barwon Water’s water supply service. 2. Metered consumption excludes non-revenue water. 3. Average calculated over three years.

14 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

W ater consumption and drought response

Non-revenue water Total non-revenue water (ML) 2010-11 2009-10 2008-09 2007-08 2006-07 Barwon Water service region 2,816 2,670 2,935 2,494 2,128

This is the sixth year Barwon Water has officially measured employee water consumption for three of its sites/offices. Usage figures for other Barwon Water sites are difficult to determine and compare, as measurements include operational consumption as well as employee water use.

C orporate water consumption

2010-11 Location Total full-time Office space Water consumption kL/FTE Water consumption equivalent (m2) (kL) by office space employees (l/m2) 40-44 Lonsdale Street 157 1,740 435 2.77 250.00 (South Geelong) 61-67 Ryrie Street 150 4,500 1,107 7.38 246.00 33 Bromfield Street 5 190 27 5.40 142.11 Total 312 6,430 1,569 5.03 244.01

Major non-residential water users Customer by volume range Volumetric range (ML per year) No. of customers 200–299ML 5 300–399ML 2 400–499ML 1 500–749ML 0 750–1000ML 0 >1000ML 1 Total number of customers 9

Major customer participation in water conservation programs Name of customer Water conservation program developed Alcoa of Australia Pty Ltd Yes Barrett Burston Ltd Yes Bonlac Foods Ltd Yes City of Greater Geelong Yes CRF Foods Pty Ltd Yes Malteurop Australia Pty Ltd Yes MC Herd Pty Ltd Yes Shell Refinery Pty Ltd Yes Turi Foods P/L Trading as Golden Farms Yes

B arwon Water Annual Report 2010-2011 15 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

drought response plan

Barwon Water uses the Drought C ommunications strategy During 2010-2011, restrictions were used Response Plan as a management in the following systems to manage D esigned to keep the community supply: tool to ensure security of water informed on the status of water supplies supply to customers during and encourage water conservation, the Stage 3 water restrictions lifted – drought and when storages are strategy involves: greater Geelong water supply system depleted. – briefings ot key stakeholders, Stage 2 restrictions were introduced on including local Members of September 1, 2010. Exemptions were Following are the three key Parliament, sporting clubs, the allowed for sportsgrounds, planting elements of the plan: Environmental Consultative drought tolerant turf and elderly and Committee and Customer disabled customers who were permitted a variation of residential watering times. Restriction rule curves Consultative Committee – an advertising campaign using print Stage 2 water restrictions lifted – These are developed for each water and radio media greater Geelong water supply system supply system to guide the introduction – me dia releases and media Stage 1 restrictions were introduced on of water restriction stages depending conferences October 3, 2010. on the time of year and the volume of water in storages. They are also used in – br ochures and signage Stage 1 water restrictions lifted – conjunction with weather forecasts to – cust omer mail out - customers greater Geelong water supply system guide decisions on lifting restrictions. received a letter advising of the level The Permanent Water Saving Plan was of water restriction being introduced on March 1, 2011. implemented and a brochure W ater restrictions by-law explaining the restrictions Stage 2 water restrictions introduced – Apollo Bay, Marengo and This is a state-wide set of rules that – website updates. establish the allowable uses for water Skenes Creek through the various stages of During the recent drought, Barwon Stage 2 restrictions were introduced in restrictions. These rules provide Barwon Water effectively managed water supply Apollo Bay, Marengo and Skenes Creek Water with the power to ensure water to various communities by consistent on October 31, 2011. Restrictions were use is controlled during drought. application of the Drought Response required over the holiday and summer Plan. Water restrictions were introduced tourist seasons because of limited The four stages of water restrictions in accordance with the plan and capacity of the pipeline and storage focus on outdoor water use and restrict applications for exemptions were basin at Marengo. activities such as garden watering, filling considered and responded to in of pools and spas and car washing. accordance with the by-law. Stage 2 water restrictions lifted – Apollo Bay, Marengo and The communications strategy was Skenes Creek particularly effective in achieving significant savings in water Apollo Bay moved from Stage 2 consumption. Geelong’s water restrictions to the Permanent Water consumption under restrictions was Saving Plan on May 1, 2011. consistently at or below the level Permanent water saving measures forecast. invoked – Lorne, Colac, Aireys Inlet and Fairhaven These towns have been under the Permanent Water Saving Plan during 2010-2011.

16 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

PART 3 ENVIRONMENTAL AND SOCIAL SUSTAINABILITY environmental s ustainability Environmental W ater Supply Demand Recycled water Consultative Committee Strategy (2012-2017) A ll Barwon Water’s water reclamation report T he Water Supply Demand Strategy sets plants produce water suitable for recycling. In 2010-2011, the volume of In 2010-2011, Barwon Water’s out Barwon Water’s plan to meet the recycled water used was 1,997 Environmental Consultative Committee challenges of water supply and megalitres, or 8.7 per cent of total met six times and conducted one field population growth over the next recycled water produced. The target set trip. Key issues discussed included: 50 years. by Barwon Water is 25 per cent re-use – utilising net gain credits The strategy includes forecast water by 2015. – planning for recycled water use in availability and customer demand. Detailed design of the new recycled new developments It also outlines the water supply options that will meet water needs in the future. water plant at Black Rock has been – alliance environmental completed. The Federal Government management processes This incorporates the goals established in the Victorian Government’s “Living will kick-start the staged construction of – the Anglesea borefield project. Melbourne, Living Victoria Road Map” the project by contributing $10 million. The committee also heard presentations (2011). The plant will produce Class A recycled from Barwon Water’s Landcare partners water suitable for residential use and Work has commenced on the next and the Corangamite Catchment also improve the quality of Class C Water Supply Demand Strategy Management Authority. recycled water for industry, irrigation (2012-2017), which will develop and sports grounds. Barwon Water thanks the following important information required for the members of the ECC for their next Water Plan (2013-2018) and involve Construction of the Northern Water commitment and expertise during all service areas within the Barwon Plant adjoining the Shell Geelong the year: region. Refinery in Corio is underway. The new Susan Howells (Chair) treatment and recycling facility will In April, 2011, Barwon Water held two Mark Trengove replace drinking water used by the forums in Geelong to invite input to the Deborah Evans refinery with high qualityC lass A Water Supply Demand Strategy and Tony Woolford recycled water, equivalent to 5 per cent Water Plan. A breakfast forum was held Cate Barham of Geelong’s drinking water use. The for business and community leaders and Cameron Steele plant will have the capacity to supply an evening forum and workshop was Tim Gibson Class A irrigation water to the Stead Park open to community members. David Goldie sports complex. A community forum was also held in Daryl Hoffmann Colac on April 7. The project is a collaborative Glen Rogers partnership between Barwon Water, Mark Rodrigue Further community consultation is Victorian and Australian Governments John King planned for late 2011. and Shell Australia. Mark Sanders B arwon Water Annual Report 2010-2011 17 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

environmental s ustainability

W aterSecure Home Showerhead exchange W ater saving grants B arwon Water re-launched WaterSecure B arwon Water offers a showerhead B arwon Water launched a grants Home in April, 2010, with some exchange program to encourage program in 2009-2010 to provide enhancements. customers to replace old inefficient WaterMAP customers with financial units for a new water-saving assistance to implement water Under the new program, a licensed showerhead. conservation projects. plumber: – undertakes a water audit focusing Customers can bring old showerheads Initially, Barwon Water approved on water use, appliances and (up to two per customer) into any $357,000 in grants to eight businesses fittings/fixtures Barwon Water office. participating in the WaterMAP program. – supplies and installs up to two water The program has been running since In 2010-2011, Barwon Water extended efficient showerheads October, 2006, with more than 10,660 eligibility to small and medium – checks for and repairs up to five showerheads exchanged. businesses and not-for-profit minor leaks organisations. A further $112,000 in grants was made available to nine – provides the customer with advice W aterMAP recipients. and written material on water Through the Victorian Government’s conservation. The grants have so far financed water management action plan 407.5 million litres of water savings. Subsidies from Barwon Water and the (WaterMAP) program, Barwon Water Victorian Government mean customers has continued to promote water Geelong carpet manufacturer Godfrey pay $30 for the service, which is valued conservation and water efficiency to its Hirst Australia won the large business at $180. More than 2,550 customers large business customers. award and the Premier’s Recognition participated in the WaterSecure Home Award for best overall applicant at the In 2010-2011, all 106 businesses required program in 2010-2011 and provided prestigious Premier’s Sustainability to submit a WaterMAP did so. consistently positive feedback on the Awards 2011. value of the service and the courteous Each WaterMAP customer is assigned a Barwon Water provided funding for behaviour of the plumbers. dedicated Water Conservation Officer Godfrey Hirst’s water recycling and who provides assistance in all areas of rainwater capture works through the water conservation. W ater tanks grants program. WaterMAP customers continue to utilise C ollecting rainwater from the roof is an the recently introduced web-based effective way of conserving water. Summer awareness application to complete reporting Barwon Water offers a range of tanks to campaign requirements and view consumption customers for outdoor use, toilet data. During the summer holiday period, the flushing and/or laundry use. region’s permanent population of The WaterMAP program is now in its A licensed plumber visits the customer’s 285,000 increases to more than fourth year and a detailed review of the property to discuss tank size, materials, 510,000. This substantial increase has a program has showed water savings of possible locations, roof catchment significant impact on demand for 592 million litres per annum. opportunities, current water use, costs drinking water, especially in coastal and maintenance. This advisory service regions. is free. Customers are offered a Barwon Water has developed a summer 12-month interest free repayment campaign to remind visitors that saving period. A Plumbing Industry water is just as important when on Commission certificate is issued for all holidays. During the 2010-2011 summer, plumbing works. Barwon Water youth and environment Since the program commenced, more ambassadors Joel Corey (AFL footballer) than 1,300 customers have installed and Kelly Cartwright (Paralympian) rainwater tanks provided through helped deliver water conservation Barwon Water. messages through newspaper and radio advertising, visitor guides, posters and in-room cards for accommodation providers.

18 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index environmental s ustainability

C atchment management C orangamite Catchment Victorian Biodiversity and river health Management Authority Strategy B arwon Water harvests water from river health partnership A s a manager of significant areas of land within the catchments of Barham, In 2010-2011, Barwon Water contributed and as a major infrastructure and service Barwon, Gellibrand, Moorabool and $70,000 to 11 river health projects in provider across the region, managing St George rivers and Painkalac Creek. water supply catchments under the impacts on native biodiversity is an Water is harvested from declared Barwon Water-Corangamite Catchment important environmental aspect of Special Water Supply Catchments Management Authority River Health Barwon Water’s activities. Barwon Water (SWSC), supplying drinking water to a Agreement. has continued to implement policies community of over 285,000 permanent and procedures to protect, enhance residents. Work was undertaken in the Upper and restore biodiversity, consistent with Barwon and Barham catchments and the Victorian Biodiversity Strategy and A majority of these SWSC are located included weed control, willow removal, Native Vegetation Framework. within the publicly managed Great riparian revegetation, stream bank Otway National Park, with privately stabilisation and stock exclusion Barwon Water is developing its own managed freehold land also covering a fencing. The work, totalling Biodiversity Strategy to guide efforts in significant proportion ofSWSC . approximately $147,000, was co- this area. Barwon Water has a keen interest in ordinated by Landcare and funded by ensuring the protection and/or Barwon Water, the Corangamite CMA Biodiversity protection rehabilitation of waterways within these and landholders. L andcare partnerships continue to catchments in accordance with the support increased protection of riparian priorities established in the C orangamite inland acid environs and habitat remnants through Corangamite Regional Catchment sulphate soils study landholder engagement, support and Strategy and the Corangamite River on-ground projects. Health Strategy. B arwon Water is part of a regional alliance of agencies with a mutual Procedures, training and support for As part of its commitment to ensuring interest in the emerging natural environmental planning and the sustainable management of the resource management issue of inland management of capital works projects region’s water catchments, Barwon acid sulphate soils. The Corangamite continue to facilitate avoidance and Water continues to support partnership Inland Acid Sulphate Soils Steering minimisation of risks to biodiversity programs specifically for environmental Committee is overseeing a scientific from the siting, design and construction activities within catchment areas. study of potential and actual inland acid of new infrastructure. During 2010-2011, the partnership for sulphate soils sites as a first step in the Moorabool River SWSC was identifying ways to manage potential transferred from the Department of future risks. Primary Industry to the East Moorabool Landcare group by mutual agreement. The table below demonstrates the extent of Barwon Water’s financial commitment to these partnerships during 2010-2011.

Program Partner Focus 2010-2011 funding Landcare Network Southern Otway Barham River SWSC $35,000 Partnerships Landcare Network Landcare Network Partnerships East Moorabool Landcare Group Moorabool River SWSC $35,000 Landcare Network Partnerships Upper Barwon Landcare Network Upper Barwon SWSC $35,000 Waterway health in priority River Health Partnership Corangamite CMA $70,000 waterway reaches Corangamite Region Waterwatch Corangamite CMA Waterway health education $70,000 Catchment protection General environmental support Various - and awareness

B arwon Water Annual Report 2010-2011 19 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

environmental s ustainability

Biodiversity restoration G reenhouse gas emissions B arwon Water’s Community Tree The 2010-2011 greenhouse gas emission Propagation Centre (the ‘nursery’) results in this section have been continues to provide facilities for the calculated using the methods described use of community groups. Through the in the National Greenhouse and Energy centre, native plants are produced for Reporting Act (NGER). Greenhouse gas

use in revegetation projects focusing on emissions are measured in CO2

catchment and biodiversity restoration. equivalent tonnes (tCO2-e). During 2010-2011, the nursery produced Total emissions for 2010-2011 are 70,000 plants with the assistance of estimated at 56,031 CO equivalent more than 1,000 community members, 2 tonnes (tCO -e). Overall, emissions supporting more than 30 local 2 have remained relatively steady since Landcare, school and community 2006-2007. groups. Partnerships with Landcare organisations continue to support progressive restoration of biodiversity values in catchment areas.

Total emissions (tCO2-e) per financial year

tCO2-e 60,000

50,000

40,000 -e 2 30,000

tCO 20,000

10,000

0 2006-07 2007-08 2008-09 2009-10 2010-11

Financial year ending June T otal greenhouse gas emissions

Financial Year tCO2-e 2006-07 58,100 2007-08 54,094 2008-09 52,485 2009-10 53,901 2010-11 56,031

Scope 1 and 2 emissions

^ ^Scope 1 and 2 only Greenhouse gas emissions by business area (tCO2-e) 2010-11 2009-10 2008-09 2007-08 2006-07 Water treatment and supply 8,265 15,763 13,899 13,938 14,062 Sewerage treatment and management 43,792 34,279 34,320 35,791 39,844 Transport 1,351 1,335 1,331 1,554 1,360 Offices & Other 2,623 2,524 2,934 2,812 2,834

Total CO2 emissions 56,031 53,901 52,485 54,094 58,100

20 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index environmental s ustainability

W astewater collection, transfer and treatment processes, together with methane from the breakdown of biosolids, account for 78 per cent of total emissions. The energy required to provide drinking water to customers accounts for about 15 per cent of total emissions. Transport and offices account for a relatively small proportion of total emissions. While total emissions were similar to 2009-2010, there was a considerable change in the source of emissions, including: – a reduction in indirect (Scope 2) emissions from electricity use due to the cessation of Barwon Downs groundwater pumping – an increase in direct (Scope 1) emissions from wastewater treatment processes due to an increase in the total volume of biosolids produced.

^Scope 1 and 2 only G reenhouse gas emissions breakdown by source (tCO2-e)

2010-11 2009-10 2008-09 2007-08 2006-07 Electricity 31,189 37,429 36,756 37,416 38,468 Natural gas 164 164 193 158 141 Liquid fuel (transport and stationary) 1,522 1,564 1,558 1,554 1,360 Methane 18,639 10,312 11,264 10,326 11,183 Nitrous Oxide 4,516 4,431 2,710 4,629 6,944 Soda Ash 1 1 4 11 2

Total CO2 emissions 56,031 53,901 52,485 54,094 58,100

Energy use per employee

Energy use/employee Office (MJ/FTE) 2010-11 2009-10 South Geelong office (including stores) 35,253 36,268 Ryrie Street office 27,228 29,120 Alliance building 24,218 23,289 Colac office 15,358 19,198

Office paper This is the second year Barwon Water has reported its office paper use, which has increased since 2009-2010. This is likely to be due to an improvement in the quality and accuracy of data collected in 2010-2011 compared to last year, which used estimates.

Financial Year Total equivalent A4 reams Employees A4 equivalent reams per full time employee

2010-11 5,226 407.05 B arwon Water 12.8Annual Report 2010-2011 2009-10 3,921 402.58 9.7

B arwon Water Annual Report 2010-2011 21 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

environmental s ustainability

A ctions to reduce T he Green Team emissions T he Green Team is an employee-led During 2010-2011, Barwon Water whole-of-business action group that implemented a range of actions under encourages and supports individuals its Greenhouse Strategy consistent with and groups to adopt more the EPA’s Carbon Management environmentally sustainable behaviour Principles. The corporation has set an and initiatives in the workplace. aspirational target to achieve zero net During 2010-2011, the Green Team emissions (Scope 1 and 2 only) by 2018. implemented or assisted: Actions included: – barwon Water becoming the first Associate Partner of Alcoa and Leadership and co-operation Greening Australia’s Make An – leading the state-wide electricity Impact program management working group and – achieving Waste Wise re- renegotiated electricity contract certification for Ryrie and Lonsdale participation in WSAA greenhouse Street offices benchmarking project – implementing a comprehensive – participation in EPAV-water sector waste recycling system in offices greenhouse project and depots, including polystyrene – signatory to the City of Greater recycling Geelong Sustainability Covenant – developing an action plan for Waste and development of Geelong Low Wise certification for Wurdee Boluc Carbon Growth Plan water treatment plant and Black – sponsorship of Australian Youth Rock water reclamation plant Climate Change Coalition – signing up to EcoBuy, which Conference promotes sustainable procurement – implementation of Sustainability across government and business

SCO2 card energy and emissions – implementing the Urban Orchard database. staff-run fruit and vegetable exchange Emissions avoidance in design – introducing an annual sustainability – application of Carbon Accounting competition called the Golden Procedure to capital works Palm. planning.

Energy efficiency – review of energy audits at key energy using sites.

Alternative energy – investigation into gas as a source of cleaner electricity at Black Rock – inve stigation into a mini-hydro power station at Lorne and Colac.

22 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

BULK ENTITLEMENT REPORTING

Surface water bulk – facilitate water trading between entitlements user groups to ensure appropriate 2010-2011 bulk entitlement redistribution over time of finite performance A bulk entitlement is a legal right to water resources A n overall compliance of 100% was water granted by the Minister for Water – allow specific entitlements for achieved during 2010-2011 for the under the Water Act 1989. Bulk environmental purposes. numerous daily extraction limits entitlements are commonly held by and passing flows across the 10 bulk Barwon Water operates under 10 surface water corporations in Victoria with entitlements. objectives to: water bulk entitlements covering the Barwon, Moorabool, Gellibrand, – provide corporations with a clearly St Georges, Painkalac and Barham river The bulk entitlements require annual defined property right to water systems. Each entitlement provides reporting of water taken and this – provide corporations with flexibility clear direction on the amount and rate information is provided in the following to manage within their entitlements of water that can be harvested each tables. – provide a basis for sharing limited year and the amount that must be water resources, protecting the passed to the environment for river entitlements of other users and health. protecting in-stream values

Bulk entitlements 2010-2011

Bulk Entitlement (Aireys Inlet) Conversion Order 1997

14.1 (d) - Painkalac Reservoir storage volume at 30/6/11 504 ML – 94.4% AHD Level 29.59m 14.1 (e) - Volume taken 2010-2011 164.62 ML No transfers, amendments or new entitlements under this order. Nil

Bulk Entitlement (Apollo Bay–Skenes Creek) Conversion Order 2010

10. (d) – Volume diverted 2010-2011 (West Barham diversion) 342.12 ML – Volume pumped 2010-2011 (Barham River) 33.21 ML Transfers, amendments or new entitlements under this order. New Conversion Order gazetted to reflect operational need for continued diversions from West Barham until new storage constructed for Apollo Bay.

Bulk Entitlement (Colac) Conversion Order 1997 / Bulk Entitlement (Colac) Amendment Order 2003

12.1 (c) – Storage volumes at 30/6/11 Olangolah Reservoir 152 ML – 100% AHD Level 344.32m West Gellibrand Reservoir 1,856 ML – 100% AHD Level 342.05m 12.1 (d) – Volume taken 2010-2011 3,471.85 ML Transfers, amendments or new entitlements under this order. Nil

Bulk Entitlement (Gellibrand) Conversion Order 1997

11.1 (b) – Volume taken 2010-2011 27.66 ML Transfers, amendments or new entitlements under this order. Nil

B arwon Water Annual Report 2010-2011 23 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

BULK ENTITLEMENT REPORTING

Bulk entitlements 2010-2011

Bulk Entitlement (Lal Lal Barwon) Conversion Order 1995

Transfers, amendments or new entitlements under this order. Barwon Water reduced entitlement to inflows and storage capacity to provide for Moorabool Environmental Entitlement. 19.1 (f) - Storage volume in Barwon Water’s capacity share of reservoir at 30/6/11 15,439 ML – 91.9% 19.1 (g) - 2010-2011 flow into Barwon Water’s capacity share of reservoir 17,644 ML 19.1 (h) - 2010-2011 releases to West Moorabool River at specified Point A (reservoir outlet) 475 ML 19.1 (i) - Volume taken under Lal Lal entitlement at specified Point B (She Oaks diversion weir) 148.99 ML 19.1 (j) - Surplus Water • Available Nil • Released Nil 19.1 (k) - 2010-2011 volume taken other than at specified Point B (Pumped at Meredith offtake after Lal Lal releases) 79.94 ML 19.1 (l) - 2010-2011 losses debited to Barwon Water’s capacity share of reservoir 0 19.1 (m) - Losses from releases between specified points A and B N/A 19.1 (o) - Transfer of part of bulk entitlement - Part of entitlement transferred to Moorabool River Environmental 1,075 Entitlement 2010. 19.1 (p) - Any bulk entitlement or licence in respect of the waterway temporarily or permanently transferred to the 0 authority with respect to the reservoir. 19.1 (q) - Any amendment to this bulk entitlement – Lal Lal amendment order 2010 to reflect transfer in 19.1 (o) Yes 19.1 (r) - Any new bulk entitlement granted to the authority with respect to its entitlement to a share of reservoir capacity Nil 19.1 (s) - Any failure by the authority to comply with any provision of this bulk entitlement Nil 19.1 (t) – Any existing or anticipated difficulties experienced by the authority in compiling with this bulk entitlement and Nil any remedial action taken or proposed by the authority

Bulk Entitlement (Lorne) Conversion Order 1997

14.1 (d) – Allen Reservoir storage volume at 30/6/11 222 ML – 100% AHD Level 120.19m 14.1 (e) – Volume taken 2010-2011 355.87 ML Transfers, amendments or new entitlements under this order. Nil

Bulk Entitlement (Meredith) Conversion Order 1995

11.1 (e) – Volume taken 2010-2011 (Pumped from run of river) 71.42 ML Transfers, amendments or new entitlements under this order. Nil

24 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

BULK ENTITLEMENT REPORTING

Bulk entitlements 2010-2011

Bulk Entitlement (She Oaks) Conversion Order 1995

13.1 (d) – Storage volume at 30/6/11 19 ML – 100% 13.1 (e) – Volume taken 2010-2011 (Run of river) 0 13.1 (f) – Volume taken in past 3 years (2008-2009 to 2010-2011) 0 Transfers, amendments or new entitlements under this order. Nil

Bulk Entitlement (Upper Barwon System) Conversion Order 2002

West Barwon Reservoir Wurdee Boluc Reservoir Total Barwon Borefield 15.1 (d) – Storage volume at 30/6/11 12,251 ML – 57% 28,005 ML– 73.6% 40,256 ML – 67.6% - 15.1 (e) – Volume taken 2010-2011 - - 33,287 ML 1,144 ML No transfers, amendments or new entitlements under this order.

Bulk Entitlement (Upper East Moorabool System) Conversion Order 1995 / (Upper East Moorabool System) Conversion Amendment Order 2004

Korweinguboora Bolwarra Bostock Upper Stony Creek Lower Stony Creek Reservoir Weir Reservoir Reservoirs Reservoir 14.1 (d) – Storage volume 1,525 ML – 72.9% 113 ML – 100% 7,427 ML – 99.6% 7,870 ML – 82.9% 94 ML – 35.2% at 30/6/11 14.1 (e) – Volume taken - - - 1,062 ML - 2010-2011 Transfers, amendments or new entitlements under this order. Nil

B arwon Water Annual Report 2010-2011 25 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

BULK ENTITLEMENT REPORTING

G roundwater bulk entitlements The Bulk Entitlement (Anglesea Groundwater) Order 2009 authorises Barwon Water to take up to 35,000 ML of groundwater from the Lower Eastern View Formation in any five year period.

Bulk Entitlement (Anglesea Groundwater) Order 2009

16.1 (a) – Annual amount taken in 2010-2011 1,948 ML 16.1 (b) – Any amendment to this Order Nil 16.1 (c) – Any failure by Barwon Water to comply with this Order The Monitoring and Assessment Program requires a Preliminary Review of trigger values and the monitoring program to be completed within 18 months of the commencement of pumping under the Order which is by April, 2011. Barwon Water has submitted a proposal to the Minister to defer the works required under the Preliminary Review until the full Review required under Clause 12.5 of the Order.

Notes: 1. Information supplied refers to volume in megalitres unless stated otherwise. 2. References (e.g. 14.1 (d)) relate to clause numbers in Bulk Entitlement Order. 3. Telemetry data has been used (final figures from Thiess yet to be submitted).

26 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

S OciaL s ustainability

C ustomer Consultative A ged debtor management C oncession cards Committee report B arwon Water’s actions in assisting B arwon Water has a high proportion of B arwon Water’s Customer Consultative customers experiencing financial customers in receipt of government Committee (CCC) is a key mechanism hardship aids in managing the concession cards. Around 29 per cent of for stakeholder engagement and percentage of customers with debt its domestic customer base is eligible feedback. The CCC also provides a exceeding 60 days. Keeping the 60+ day for government concessions. This figure direct link between the Board, customer debt down is important for the financial has remained stable since 2009-2010. position of Barwon Water and all base and consumer advocacy groups. Eligible concession cards include customers. Membership of the CCC is drawn from Centrelink pension and health care across all customer categories: Assisting customers cards and Department of Veteran’s domestic, business, rural and welfare. experiencing financial Affairs gold cards. The committee met six times in hardship 2010-2011 and discussed a range of M edical concessions B arwon Water works with customers issues, including: who are unable to meet payment in full B arwon Water supports a number of – barwon Water’s Greenhouse by the due date. customers with special medical needs Strategy through Victorian Government dialysis During the 2010-2011 billing cycle, – torquay North and Armstrong concessions. In addition, Barwon Water Barwon Water provided the following Creek recycled water schemes matches the Victorian Government assistance measures: grant and offers a concession for other – water supply diversification – customers were granted extensions medical conditions that require higher – water conservation programs and of time to pay their account. This than usual water consumption. waterMAPs assisted customers with short term Government dialysis rebates totalled – barwon Water’s new billing system cash flow issues to pay their $8,069 during the year, supplemented – water restrictions account without penalty by an additional $269 contributed – bellarine Sewerage Strategy – instalment plans were offered to directly by Barwon Water. – customer engagement and assist customers to pay their feedback account, usually over a six or 12 Flexible payment plan – month period. Instalment amounts – 60+ day debt levels Arrange & Save were agreed to by Barwon Water – water Supply Demand Strategy. with each customer who opted to During 2010-2011, Barwon Water Barwon Water thanks the following pay weekly, fortnightly or monthly, promoted a new assistance program – members of the CCC for their depending on their individual Arrange & Save. This program puts commitment and expertise during circumstances. customers on a payment plan where the year: While instalment plans were active, no they are provided a “credit” of one Ann Fairbairn (Chair) penalties or referrals for debt collection instalment if they meet their instalment Tim Gooden applied. arrangements for five consecutive periods. This program was successful in Scott Richardson – customers may also chose to pay assisting some of Barwon Water’s most Nicolas Heath their bills through Centrepay, a disadvantaged customers experiencing Delwyn Seebeck Centrelink program where financial hardship.D uring the year, 228 Jocelyn McMillan payments are made directly to customers were assisted, with some Leigh Johnston Barwon Water by Centrelink on customers participating a number of Ross Stephens behalf of the customer. Anne Miller times. The program provided customer Margaret Farrell Government Utility Relief credits totalling $13,351. Nick Laurie Gail Price Grants Scheme Victorian Government Utility Relief Grants (URGs) are offered to eligible Barwon Water customers. A total of 108 grants were issued this year, a decrease from the record number of 140 offered during 2009-2010.

B arwon Water Annual Report 2010-2011 27 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

S OciaL s ustainability

Helping customers Valuing diversity Customers requiring assistance have save water access to a free interpreter service. The Victorian Government values the A pool of employees, who speak T he Water Wise program was a Victorian state’s cultural diversity as an economic, languages other than English, also are Government initiative aimed at reducing social and cultural asset of great available to act as interpreters. water bills for eligible concession card importance. Barwon Water publications, such as holders. Barwon Water provided the Barwon Water is committed to water supply notices and fact sheets on services of a registered plumber to improving the quality of service delivery Barwon Water proposals, advise conduct free water audits, including to a culturally and linguistically diverse customers of the availability of the repairs and/or replacement of community and providing a interpreter service. Works notices are inefficient water fittings. The Water Wise discrimination-free work place. translated into Croatian, Dutch, Greek, program provided value for customers German, Italian, Polish and Vietnamese. of up to $500. There were 392 Water More than 40 per cent of Victorians Wise audits in 2010-2011 before the have either been born overseas or have Barwon Water is an equal opportunity program ended in May, 2011. at least one parent born overseas. employer and does not discriminate Around 10 per cent of our customers based on cultural background or The Victorian Government’s Water speak a language other than English at ethnicity. Smart Gardens and Homes Rebate home. Prominent languages include Scheme offers customers rebates on Croatian, Serbian, Vietnamese and items such as rainwater tanks, tank-to- Greek. toilet connections, greywater systems, dual-flush toilets, water-saving Barwon Water is committed to ensuring showerheads, trigger nozzles, flow- the region’s ethnic groups have access control devices and mulch. During to information on water, sewerage and 2010-2011, Barwon Water provided 5,347 recycled water services, and we make rebates to customers totalling $266,220. every attempt to comply with all principles and guidelines under the Multicultural Victoria Act 2004.

C ommunity Service Obligations 2010-11 2009-10 Pension and health concessions $7,668,727 $6,791,170 Utility Relief grants $35,249 $39,829 Dialysis rebates (State Government) $8,069 $6,077 Barwon Water medical rebates $3,441 $2,373¹ Barwon Water Arrange & Save $13,351 $285 Water and Sewer Rebates $421,318 $422,130 Water Wise rebates $182,902 $155,348 Water Smart Gardens & Homes Rebates $266,220² $329,120 Hardship Relief Grant Scheme (Sewerage Connection Scheme) $03 $0 Total $8,599,277 $7,746,332

¹ the medical rebates figure of $2,431 in last year’s annual report was incorrect and has been amended to $2,373. ² the value of Water Smart rebates granted dropped during 2010-2011 due to a lower uptake of large tank rebates compared to 2009-2010. 3 this scheme has been available to Barwon Water customers but there have been no applications to date.

28 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

PART 4 CORPORATE information

Organisational s tructure

Board

Audit and Risk Executive Remuneration Capital Works Management Committee Committee Committee

Internal Auditor Managing Director Media Relations D Davie M Malouf G Vincent

Organisational Finance & Customers and Strategy & Development Administration/ Water Systems Capital Projects Communication Technology L Hunter (resigned Co. Secretary C Bicknell P Northey L Muñoz J Adamski February 28, 2011) M Watson M Stephens

B arwon Water Annual Report 2010-2011 29 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

CORPORATE I nformation

Role of the Board Audit and Risk Executive Remuneration T he Board is responsible for the overall Management Committee Committee corporate governance of Barwon Water, The Audit and Risk Management The Executive Remuneration including strategic direction, Committee comprises a non-executive Committee comprises the non- establishing goals for management and Chairman and four non-executive executive Chairman and two non- monitoring the achievement of those Directors. Meetings are held quarterly executive Directors. The committee goals to optimise performance within and at any other time as requested by a reviews remuneration arrangements the parameters of the organisation’s member of the committee or the and terms of employment for the broader obligations. Barwon Water is internal or external auditor. The General Management team and subject to the Water (Governance) committee liaises with the internal succession planning. Act 2006. auditor and external auditor to evaluate Members/Directors: the adequacy and effectiveness of the Roger Lowrey (Committee Chair) B oard composition overall governance framework. John McDonald During 2010-2011, the committee T he Board comprises a non-executive Robyn Batten addressed facilitating risk management Chairman, six non-executive Directors (resigned February, 2011) and a Managing Director. across the organisation and reviewed and approved the risk register and The non-executive Chairman and strategies to address risks, monitoring Capital Works Committee non-executive Directors are appointed action plans and risk levels. by the Minister for Water. The Managing The Capital Works Committee, Members/Directors: Director is appointed by the Board in comprising non-executive Directors, is accordance with the Water John McDonald (Committee Chair) responsible for overseeing the capital (Governance) Act 2006. Diane James works delivery process. The committee reviews capital works objectives, John Bugg delivery strategies, scope, timing and B oard meetings Hugh Gleeson budgets. B oard meetings are scheduled monthly. Jodi Heath Members/Directors: Additional meetings are convened as Robyn Batten (Committee Chair – circumstances warrant. Minutes of R isk attestation resigned February, 2011) meetings record Board decisions. I , Roger Lowrey, certify that the Barwon Diane James The Managing Director and General Region Water Corporation has risk (Committee Chair from February, 2011) Managers attend Board meetings. management processes in place Hugh Gleeson The General Manager Finance and consistent with the Australian/ John Bugg Administration is also the Company New Zealand Risk Management Jodi Heath Secretary, providing advice to the Board Standard ISO 31000:2009 and an on governance matters. internal control system is in place that The Board has three sub-committees: enables the executive to understand, Ethical standards manage and satisfactorily control risk Audit and Risk Management; Capital T he Board acknowledges the need for, exposures. Works; and Executive Remuneration. and continued maintenance of, the The Chairman and Managing Director The Audit and Risk Management highest standards of corporate are ex-officio members of theA udit and Committee verifies this assurance and governance practice and ethical Risk Management and Capital Works that the risk profile of the Barwon conduct by all Directors, employees and committees. Each Board sub- Region Water Corporation has been contractors. The Board has a committee has its own Board-approved critically reviewed within the last comprehensive governance framework charter and reports to the Board 12 months. that seeks to ensure high standards of following each meeting. ethical behaviour through adoption of policies supported by specific awareness and compliance programs.

Roger Lowrey Chairman 25 August 2011

30 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

CORPORATE in formation

Performance evaluation B oard Directors John McDonald DEPUTY CHAIRMAN T he Board has established a formal Roger Lowrey LS, MAdmin (Monash) process to review its own performance, CHAIRMAN Appointed to Board: October, 2003 its committees and individual Directors BA (Hons), DipEd consistent with the Governance Appointed to Board: October, 2003 John McDonald is a licensed surveyor Guidelines issued by the Department of and has a Master of Administration from Roger Lowrey has a Bachelor of Arts Sustainability and Environment and Monash University. He worked in the (honours) degree from the University of State Services Authority. water industry throughout Victoria for Melbourne. He has worked extensively 40 years, retiring as Chief Executive across both the public and private Officer of Southern Rural Water. Independent advice sectors in the education, emergency services, planning, small business, John was an inaugural board member of Individual Directors have access to aviation and finance industries. For the the Corangamite Catchment independent advice from a range of past 17 years, he has worked in the Management Authority. He is currently services. finance industry specialising in a member of Surf Coast Shire’s superannuation, industrial law and Environmental Advisory Committee. C ode of Conduct human resource management. Michael Malouf The Public Service Code of Conduct has Roger has been a Barwon Water MANAGING DIRECTOR been issued to Barwon Water Director since 2003 and was Chair of the BEng (Civil), MBA, LGE, FIPAA, FAICD, employees with the objective of Audit Committee in 2007. He became FIEAust, CPEng EngExec promoting a spirit of service to the Chairman of Barwon Water on January 1, Appointed to Board: September, 2007 community. It emphasises the principles 2008. of merit, responsible management, Michael Malouf is Managing Director of management competence and Roger grew up in Winchelsea and has Barwon Water. lived in Geelong and the surrounding efficiency and maintaining appropriate Michael’s previous positions include standards of integrity and conduct. district most of his life. His personal interests include his family, horse General Manager Property and Leasing racing, writing, cooking and the at Pratt Holdings, Chief Executive of Geelong Football Club. Carlton Football Club and Chief Executive at Melbourne City Council, City of Greater Geelong, City of Wyndham and City of Melton. Michael is currently a member of the Committee for Geelong, G21 Geelong Region Alliance, Deakin University Engineering Advisory Board, Deakin University Geelong Community Leaders Group, IWA Executive Council, Chair of the Australian Division of the WateReuse Association, a Director of St Laurence Community Services and a member of the Victorian Regional Development Australia Barwon South West Committee.

B arwon Water Annual Report 2010-2011 31 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

CORPORATE in formation

Diane James AM Robyn Batten Hugh Gleeson GAICD BSW, MSW, MBA, Dip AICD BE(Civil), FIEAust, MAICD Appointed to Board: October, 2006 Appointed to Board: October, 2006 Appointed to Board: July, 2010 Resigned from Board: February, 2011 Diane James was involved with Hugh Gleeson is the Chief Executive numerous state and federal bodies in Over the past 20 years, Robyn Batten Officer of United Energy and Multinet coastal and oceans management for 25 has held executive management Gas, which distribute electricity and gas years. As Chair of the Victorian Coastal positions in local government and in the eastern and south-eastern Council, she led the development of the health and is currently the Executive suburbs of Melbourne to more than Victorian Coastal Strategy and was a Director of Uniting Aged Care. Through 600,000 customers each. leading campaigner for the introduction these roles and membership of other Hugh has worked in the energy and of Victoria’s world-first marine national boards, Robyn has developed significant utility sector for more than 25 years, parks. In 2011, she was awarded Member experience in corporate governance, holding various executive positions of the Order of Australia for her risk management, strategic planning before taking on his current role in contribution to the development of and change management. 2003. coastal planning and management in Robyn has trained as a nurse and social Victoria. Hugh has been Director of the Energy worker and holds a Bachelor of Social Network Association of Australia since Diane is an advisory board member of Work, Master of Social Work, Master of its formation in 2003 and has previously the Environment Protection Authority. Business Administration and Diploma held the positions of Deputy Chairman She is also on the board of St Laurence from the Australian Institute of and Chairman. Hugh was a director of Community Services. Company Directors. the Australian Gas Association in 2002 In the private sector, Diane runs a to 2003 and was a member of the Jodi Heath company that markets and exports a national electricity Reliability Panel in MBA, MAICD product for children with disabilities. 2009 to 2011. Appointed to Board: July, 2010 She successfully completed a Graduate Certificate in Innovation and Jodi Heath has a Master of Business Entrepreneurship in 2010. Administration degree specialising in Corporate Governance from Deakin John Bugg University. Over the past 12 years, Jodi BComm, DipEd (Melb), ACE (Bristol UK), has held management positions within MEd Admin (New England), FACE, the telecommunications industry and FAPPA, GAICD has recently embarked on a new role Appointed to Board: October, 2006 with National Australia Bank (NAB) as Regional Executive Retail, Geelong and John Bugg was formerly the Head of South West Victoria. Junior School at Geelong Grammar Highton and Essendon Grammar Jodi is also a Board member of the School, Melbourne. Committee for Geelong, The Gordon TAFE and Vice-President of Bike Safe. He was elected to the Borough of She also holds current memberships Queenscliffe Council in March, 1997, and with G21 Geelong Region Alliance, was Mayor from 1998-2001 and St Laurence Community Services, 2004-2005. He has been an active Deakin Alumni Community and Geelong member of several regional and local Business Club. She is also an Australian community committees. Rural Leaders Fellow and a member of John was a member of the Geelong the Australian Institute of Company Regional Library Corporation from 1997 Directors. until 2006 and for some of that time Jodi places a high value on making a held the position of Chairman. positive contribution to the local He was also a trustee of the Geelong community in which she works and Regional Performing Arts Centre from resides. Jodi and her husband live in 1998 to 2006 and a Board member of Torquay and enjoy the Surf Coast G21. lifestyle. Both are keen cyclists.

32 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

CORPORATE in formation

2010-2011 Board and committees of the Board attendance Audit and Risk Executive Remuneration Capital Works Board meetings Management committee committee meetings committee meetings meetings RD Lowrey 19 of 19 * 1 of 1 **3 of 4 JR McDonald 19 of 19 3 of 4 1 of 1 *3 of 4 M Malouf 17 of 19 *** *** *** RA Batten 12 of 14 * 1 of 1 2 of 2 RJ Bugg 16 of 19 4 of 4 * 4 of 4 H Gleeson 16 of 19 3 of 4 * 4 of 4 J Heath 17 of 19 4 of 4 * 2 of 4 D James 19 of 19 3 of 4 * 4 of 4

*Indicates non member of committee **Indicates ex-officio member of committee ***Managing Director is ex-officio on all subcommittees Emm ploy ent Data Employment and Conduct Ethical employment and A nzsco - 2010

Principles subcontracting policy ANZSCO Occupation Headcount B arwon Water complies with the Public D epartments are required to ensure all Classification Administrators Act 2004. Employees are tenderers identify the use of sub- Managers 27 selected on the basis of ability, contractors or third parties that would Professionals 132 knowledge and skills in fair and open be employed under conditions of Technicians & Trade 86 competition that ensures equal employment or rates of pay that might Workers opportunity. Promotion and be considered exploitative or outside Clerical & Administrative 81 advancement of qualified individuals the norm within their industry sector, Workers within Barwon Water is based on these due to the ethnic, economic, social, or Machinery Operators & 29 same principles, relevant to the position other situation of the groups Drivers involved. concerned. Labourers 68 Employees receive fair and equitable Contracts will not be entered into with Total 423 treatment without regard to race, the tenderers where any such instances Notes: colour, sex, sexual preference, age, of possible exploitation or The Australian Bureau of Statistics (ABS) develops and physical or mental disability, pregnancy, underpayment arrangements are maintains standard occupation coding structures for religion, political opinion, national identified. labour market analysis. The primary ABS occupation coding structure is known extraction or social origin. as ANZSCO (Australian and New Zealand Standard Classification of Occupations). A nzsco - 2011 Barwon Water utilises ANZSCO as its occupational Harassment, Bullying and reporting model. ANZSCO Occupation Headcount Discrimination Policy Classification This policy supports the right of all Managers 27 people to work in an environment free Professionals 128 from harassment, bullying and Technicians & Trade 89 discrimination. Behaviour to the Workers contrary will result in disciplinary action Clerical & Administrative 86 up to and including dismissal. Workers Machinery Operators & Barwon Water provides equal 30 Drivers employment opportunity (EEO) and bullying prevention training to all Labourers 66 employees. Fully trained contact Total 426 officers are available to provide information to employees about their rights and obligations relating to the prevention of harassment, bullying and discrimination. B arwon Water Annual Report 2010-2011 33 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

CORPORATE in formation

Employment statistics

2011 Total Total FTE Casual Part-time Full-time (Headcount) (Percentage) 2011 2011 2011 Female 3 28 89 120 28% 107.32 Male 5 8 293 306 72% 299.73 Total 8 36 382 426 100% 407.05

2010 Total Total FTE Casual Part-time Full-time (Headcount) (Percentage) 2010 2010 2010 Female 3 35 82 120 28% 105.63 Male 3 6 294 303 72% 298.23 Total 6 41 376 423 100% 403.86

Notes: • Excludes external contractors/consultants and temporary staff employed by employment agencies. • Includes six (6) State Government appointed Board Directors. • FTE means full-time employee equivalent.

Health, Safety and environment

B arwon Water achieved its lead Health, Lost time accidents Safety and Environment (HSE) performance targets, including the 2006-07 9 number of work place inspections 2007-08 11 undertaken, unsafe conditions 2008-09 14 reported, safety meetings held and safe 2009-10 4 work method statements being developed for high risk activities. 2010-11 9 In line with its corporate HSE management plan, comprehensive Number of days lost due reviews were undertaken for confined to accidents space entry process and lone and isolated workers. Barwon Water’s 2006-07 30 contractor management and induction 2007-08 122 program were reviewed and 2008-09 169 implemented during the second half of 2009-10 72 the year. 2010-11 107 Ergonomic assessments have been undertaken for more than 160 Barwon Water experienced an increased workstations and work environments number of lost time injuries during across the organisation. An updated 2010-2011. However, the average time process for workplace injury lost per injury was reduced from 27 days management was implemented during to 3.6 days as a result of an early the last two months of the year. This intervention program and a greater includes goal-orientated return to work range of return to work duties being programs and return to work planning identified for employees to undertake. as soon as an incident occurs.

34 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

Health, Safety and environment

Injury statistics A ll injuries Injuries - body part and cause - case summary summary Cause All incidents/Injuries Total Slips/trips 13 Ear 2 Hitting objects with part 12 Trunk 2 of body Internal (hernia) 2 Repetitive movement with low 6 muscle loading Multiple locations 2 Muscular strain/stress 7 Eye 2 Being hit by moving object 5 Shoulders/arms 7 Fall from height 2 Feet/toes 1 Manual handling 6 Face/head 7 Insect/spider bites and stings 1 Back 9 Exposure to sharp, sudden Hip/leg 10 2 sound Hands/fingers 7 Mechanical vibration 1 General/unspecified 2 Contact/exposure biological 1 factors Contact with chemical or 2 substance Slide/cave in 1 Mental stress 1

2010-2011 HSE training*

Course length Number of sessions Total employees Total employee Course name (hours) offered trained training hours 4WD 7 1 2 14 Applied First Aid (Level 2) 16 4 62 992 Asbestos Awareness 2 2 13 26 ATV 7 1 2 14 Chainsaw Operator 6 3 14 84 Chief Warden 1 2 10 10 Confined Space Entry Initial 16 2 13 208 Confined Space Entry Refresher 4 18 168 672 Construction Induction 7.5 1 8 60 Contractor Management 2 10 73 146 CPR Refresher 4 8 79 316 Emergency Management Manual 2 1 13 26 Fire Extinguisher 3 4 83 249 Incident and Investigation Training 7 3 42 294 Infection Control Awareness 1 6 81 81 Internal Auditor Refresher 2.5 1 6 15 Manual Task Risk Assessment 4.5 1 10 45 Render Hazmat Incident Safe 8 2 19 152 Slinging Awareness 4 4 32 128 Sunsmart 1.5 4 71 106.5 Total HSE class employee training hours 2010-2011 3638.5 Total number of HSE courses offered at Barwon Water in 2010-2011 20

* Does not include public classes for individual employee training such as Excavator License and Elevated Work Platform

B arwon Water Annual Report 2010-2011 35 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

acces s to I nformation

Victorian Information Statement of availability of Financial Management Privacy Act 2000 other information Act 1994 B arwon Water complies with the The following information is available Other information as required under information privacy principles set out from Barwon Water on request, subject the Financial Management Act 1994, but under the Victorian Information Privacy to the Freedom of Information Act 1982: not specifically referred to, has been Act 2000. retained by the Accountable Officer and – a statement that declarations of is available to the Minister, Members of Barwon Water’s Customer Charter and pecuniary interests have been duly Parliament and the public on request. Personal Privacy Charter refer to its completed by all relevant officers commitment to protect the privacy of – details of shares held by a senior This information includes: pecuniary customers. Barwon Water ensures the officer as nominee or held interests of relevant officers; shares held information it holds is protected and it beneficially in a statutory authority by a senior officer; details ofB arwon actively prevents any unauthorised or subsidiary Water publications; changes to fees and access to, and improper use of, charges; major external reviews carried – details of publications produced by customer information. out on Barwon Water; research and the entity about itself, and how development activities; overseas visits; A copy of Barwon Water’s Personal these can be obtained major promotional, public relations and Privacy Charter can be viewed at – details of changes in prices, fees, marketing activities; assessments and http://www.barwonwater.vic.gov.au. charges, rates and levies charged by measures to improve the occupational the entity health and safety of employees; and Freedom of – details of any major external reviews major sponsorships. Information Act carried out on the entity B arwon Water has a comprehensive – details of major research and Infrastructure assets - website that satisfies the information development activities undertaken application of FRD 121 needs of many individuals. Barwon by the entity During 2010-2011, Barwon Water’s Water is also committed to ensuring – details of overseas visits undertaken infrastructure assets were revalued by information is accessible to customers including a summary of the the Valuer-General of Victoria in in compliance with the Freedom of objectives and outcomes of compliance with Financial Reporting Information Act 1982. each visit Direction (FRD) 121 and associated Access to documents held by Barwon – details of major promotional, public Ministerial Directives. The revaluation to Water can be obtained by writing to the relations and marketing activities a fair value approach, represented by Freedom of Information Manager undertaken by the entity to develop depreciated replacement cost, was (PO Box 659, Geelong 3220) and community awareness of the entity booked to the financial accounts as at including payment of the $23.90 ($24.40 and its services 30 June 2011. as from July 1, 2011) application fee. – details of assessments and The revaluation and recognition in measures undertaken to improve More information or a FoI application Barwon Water’s accounts follows two the occupational health and safety form is available at: prior years where a transitional of employees www.barwonwater.vic.gov.au/foi. exemption was applied, and estimates – a general statement on industrial of the revaluation impact have been Nine Freedom of Information requests relations within the entity and included for the preparation of whole of were received during the year. details of time lost through government financial reports. Full access was granted to four industrial accidents and disputes applications, one was not proceeded – a list of major committees with and five are still in progress at the sponsored by the entity, the close of the financial year period. purposes of each committee and Full access granted 4 the extent to which the purposes Partial access granted - have been achieved. Not proceeded with 1 Continuing 5 Responses were prepared within the statutory reporting period of 45 days.

36 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

A scces to I nformation

Building Act 1993 – alt eration to fifth floor to – alteration to Development Services accommodate additional staff area to accommodate additional B arwon Water maintained its buildings relocated from Alliance building staff in accordance with the Building Act – alt eration to fourth floor to – installation of roller door in store 1993. Works during 2010-2011 included: accommodate additional meeting area to solve problem of forklifts Ryrie Street complex facilities and to provide better staff being driven on public roads interaction – minor foyer upgrade – upgrade of ground floor kitchen. – minor alteration to third floor to – installation of LED sign on accommodate additional staff for Alliance concourse to provide public with ICT department. – alterations undertaken to highly visible key messages accommodate additional staffing South Geelong – refurbishment of first floor north requirements. floor space to accommodate – nur sery upgrade to provide better Strategy and Innovation facilities for visiting community Lorne depot department and provide additional groups – hse and security upgrade of Lorne training/project area – r efurbishment Field Services store area. – minor alteration to second floor lunch room north to accommodate additional – alt eration to first floor technical staff forP eople and Performance services area to accommodate department additional staffing requirements other acts Whistleblowers Protection The Act provides protection to Act 2001 ‘whistleblowers’ who make disclosures in accordance with the Act and The Whistleblowers Protection Act 2001 establishes a system for the matters came into effect on January 1, 2002. disclosed to be investigated and appropriate action taken. The Act encourages and facilitates disclosures of improper or corrupt Whistleblowers may be members of the conduct by public officers and public public or employees. bodies.

Records Register There was one disclosure under the Act in 2010-2011 File A File B File C File D File E Date disclosure received 7/7/2010 Type of disclosure Corrupt conduct Is disclosure a public interest disclosure? No Date above determination made 8/7/2010 Date complainant informed of determination 9/7/2010 Date disclosure referred to the Ombudsman N/A Determination made by Ombudsman N/A Was the investigation referred back to the Ombudsman? No Did the Ombudsman take over the investigation? No Did the complainant request the Ombudsman to take over investigation? No Findings of the public body Disclosure occurred. Employee resigned. Recommendations made by the Ombudsman N/A Date reporting requirements satisfied 14/7/2010

During the year under review, the Ombudsman undertook an investigation into a Barwon Water activity and made certain recommendations for policy and practices that have now been fully implemented in the corporation.

B arwon Water Annual Report 2010-2011 37 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Applicable Policies

Victorian Industry Contracts completed during 2010-2011 Participation Policy to which the VIPP applied: Barwon Water completed 13 contracts The Victorian Industry Participation valued at $47.06 million to which the Policy Act 2003 requires public bodies VIPP applied. All the contracts were in and departments to report on the regional Victoria. implementation of the Victorian Industry Participation Policy (VIPP). The outcomes reported by contractors under VIPP included: Contracts commenced during – lo cal content contributed 80 per 2010-2011: cent of the total value of the Barwon Water commenced five contracts contracts totalling $153.83 million to – 1 98 full-time equivalent jobs which the VIPP applied. All the contracts – eight apprenticeships/traineeships. were in regional Victoria. The following benefits to the Victorian Commitments by contractors under economy in terms of skills and VIPP included: technology transfer increases included: – an overall level of local content of – b ore drilling skills 89 per cent of the total value of the contracts – wat er treatment technology – 183 full-time equivalent jobs – construc tion of treatment plants – 56 apprenticeships/traineeships. – construc tion of pump stations – construc tion of pipelines and The following benefits to the Victorian valves. economy in terms of skills and technology transfer increases included: National Competition Policy – manufacture of steel pipe and Competitive neutrality seeks to enable fittings fair competition between government – apprenticeship training and private sector businesses. Any – health safety and environmental advantages or disadvantages that training government businesses may – waste water re-use construction experience, simply as a result of training government ownership, should be neutralised. Barwon Water continues to – graduate programs implement and apply this principle in its – temporary water supply and under business undertakings. pressure line stopping training.

38 P art 4 – Corporate information | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

PART 5 Performance report

Statement of Performance for the 2010-11 Financial Year Financial Performance Indicators 2009-10 2010-11 2010-11 Variance Note Result Result Target % Internal Financing Ratio 1 39.5% 27.0% 18.2% 48.4 Gearing Ratio (Debt to assets) 15.4% 15.7% 14.9% 5.4 Interest Cover (EBIT) 2 2.60 times 2.49 times 2.19 times 13.7 Interest Cover (Cash) 2 4.49 times 4.09 times 3.52 times 16.2

Notes: 1. Reduced level of capital expenditure with the change in timing for some major capital work projects has resulted in a favourable ratio result to target. 2. A reduced level debt compared to target caused by the timing of the capital works program resulted in a favourable result to target.

Service and Environmental Performance Indicators 2009-10 2010-11 2010-11 Variance Note Result Result Target % Re-use Indicators Effluent reuse (% by volume) 1 16.03% 8.7% N/A N/A Biosolids reuse (% by dry mass) 2 55.0% 128.3% 100% 28.3

Sewage Treatment Standards Number of analyses complying with licence agreements as % of samples 3 100% 96.67% 99.7% -3.0

Notes: 1. B arwon Water has set a target to recycle 25 per cent of treated water available by 2015. Interim targets are not applicable and projects to meet the 2015 target are currently underway. 2. Favourable conditions in 2010-2011 enabled Barwon Water to dry accumulated biosolids from 2009-2010 and exceed the yearly target of 100 per cent. 3. Plant performance issues at Colac meant the phosphorus annual median was not met.

B arwon Water Annual Report 2010-2011 39 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Performance report 2010-2011

Service and Environmental Performance Indicators 2009-10 2010-11 2010-11 Variance Note Result Result Target %

Water supply interruptions Number of customers receiving 5 unplanned interruptions in the year 1 13 47 174 73

Interruption time indicators Average duration of unplanned water supply interruptions (minutes) 2 106 93 100 7

Restoration of water supply Unplanned water supply interruptions restored within 5 hours 2 96.5% 98.1% 96.5% 1.7

Reliability of sewerage collection services Sewer spills from reticulation and branch sewers (number) – Priority 1 and 2 3 393 298 513 42

Containment of sewer spillages Sewerage spills contained within 5 hours 4 100% 100% 100% 0

Customer complaints indicators Water quality complaints per 1000 customers (number) 7 1.29 2.02 N/A N/A Sewerage service quality and reliability complaints per 1000 customers (number) 5, 7 0.36 0.36 N/A N/A Billing complaints per 1000 customers (number) 7 0.13 0.15 N/A N/A Sewage odours complaints per 1000 customers (number) 6, 7 0.4 0.20 N/A N/A

Notes: 1. Water main replacement program and other proactive improvements as well as favourable climate conditions are resulting in lower interruptions. 2. Continued emphasis on prompt fault diagnosis and efficient repair has resulted in improved performance. 3. Increased rainfall improving ground conditions and reducing tree root intrusion into pipes, together with the successful delivery of maintenance and rehabilitation programs, has resulted in a record low number of sewer spills. The use of Barwon Water’s asset management tool (SIMS) ensures these maintenance and rehabilitation programs are concentrated on problematic sewer pipes. 4. Continued emphasis on efficient response is reflected in this excellent result. 5. Increased rainfall improving ground conditions and the successful delivery of maintenance and rehabilitation programs has resulted in a record low number of sewerage system blockages and spills. The result of this improved sewerage collection system performance is the favourable number of sewerage service complaints. 6. The prevention of odour generation is a critical consideration in the design of all new Barwon Water sewerage infrastructure. Barwon Water has also worked extensively to address odour generation in the existing sewerage systems. The result of these actions is the lowest ever recorded number of odour complaints. 7. Target not required in ESC Final Determination.

40 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index certification of Performance Report

W e certify that the accompanying Performance Report of Barwon Region Water Corporation in respect of the 2010-2011 financial year is presented fairly in accordance with the Financial Management Act 1994. The statement outlines the relevant performance indicators as determined by the responsible Minister, the actual results achieved for the financial year against predetermined performance targets and these indicators, and an explanation of any significant variance between the actual results and performance targets. As at the date of signing, we are not aware of any circumstances which would render any particulars in the Performance Report to be misleading or inaccurate.

R Lowrey Chairman

M Malouf Managing Director (Accountable Officer)

Dated this 25th day of August 2011.

B arwon Water Annual Report 2010-2011 41 VAGO Victorian Auditor-General’s Office

INDEPENDENT AUDITOR’S REPORT

To the Board Members, Barwon Region Water Corporation

The Performance Report The accompanying performance report for the year ended 30 June 2011 of the Barwon Region Water Corporation comprises the performance indicators, the related notes and the certification of performance report.

The Board Members’ Responsibility for the Performance Report The Board Members of the Barwon Region Water Corporation are responsible for the preparation and the fair presentation of the performance report in accordance with the Financial Management Act 1994 and for such internal control as the Board Members determine is necessary to enable the preparation of the performance report that is free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility As required by the Audit Act 1994, my responsibility is to express an opinion on the performance report based on the audit, which has been conducted in accordance with Australian Auditing Standards. Those Standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the performance report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the performance report. The audit procedures selected depend on judgment, including the assessment of the risks of material misstatement of the performance report, whether due to fraud or error. In making those risk assessments, consideration is given to the internal control relevant to the entity’s preparation and fair presentation of the performance report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the overall presentation of the performance report. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

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

Level 24, 35 Collins Street, Melbourne Victoria 3000 Telephone 61 3 8601 7000 Facsimile 61 3 8601 7010 Email [email protected] Website www.audit.vic.gov.au

Auditing in the Public Interest

42 VAGO Victorian Auditor-General’s Office

Independent Auditor’s Report (continued)

Opinion In my opinion, the performance report of the Barwon Region Water Corporation in respect of the 30 June 2011 financial year presents fairly, in all material respects, and in accordance with the Financial Management Act 1994.

Matters Relating to the Electronic Publication of the Audited Performance Report This auditor’s report relates to the performance report of the Barwon Region Water Corporation for the year ended 30 June 2011 included both in the Barwon Region Water Corporation’s annual report and on the website. The Board Members of Barwon Region Water Corporation are responsible for the integrity of the Barwon Region Water Corporation’s website. I have not been engaged to report on the integrity of the Barwon Region Water Corporation’s website. The auditor’s report refers only to the subject matter described above. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements. If users of the performance report are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited performance report to confirm the information contained in the website version of the performance report.

MELBOURNE D D R Pearson 26 August 2011 Auditor-General

Level 24, 35 Collins Street, Melbourne Victoria 3000 Telephone 61 3 8601 7000 Facsimile 61 3 8601 7010 Email [email protected] Website www.audit.vic.gov.au

Auditing in the Public Interest

B arwon Water Annual Report 2010-2011 43 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

PART 6 Financial Statements

Statement of Comprehensive Income for the financial year ended 30 June 2011

2011 2010 NOTE $’000 $’000

Revenue from operating activities Service charges 73,182 65,264 Usage charges 53,265 49,056 Tradewaste charges 5,877 4,734 Government contributions 675 374 Non-government contributions 15,837 14,689 Other 5,435 5,782 Interest 561 62 3 154,832 139,961

Revenue from non-operating activities Net gain/(loss) on disposal of non-financial assets 9.4 (807) (634) Other revenue 542 591 (265) (43) Total revenue 154,567 139,918

Expenses from operating activities Direct operating 28,198 29,992 Administration 11,579 12,435 Borrowing costs 4 16,612 11,419 Depreciation, amortisation and impairment 9.3 31,639 29,989 Employee benefits 5 38,153 33,331 Environmental contribution 4,416 4,416 Bad and doubtful debts 96 169 Finance charges 10 8 Total expenses 130,703 121,759 Net result before tax 23,864 18,159 Income tax expense 6 7,205 5,470 Net result for the year 18 16,659 12,689

Other comprehensive income 0 0 Gain/(loss) on revaluaton of property, plant and equipment 16 532,559 0 Income tax relating to components of other comprehensive income 16 (159,767) 0 Total other comprehensive income 372,792 0 Total comprehensive income for the year 389,451 12,689 The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 44 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

FINANCIAL Statements

Balance Sheet as at 30 June 2011

2011 2010 NOTE $’000 $’000

Assets Current assets Cash and cash equivalents 7 15,318 5,770 Receivables 8 27,682 20,181 Inventories 1,279 1,292 Prepayments 1,062 771 Total current assets 45,341 28,014

Non-current assets Deferred tax assets 6 3,777 3,446 Receivables 8 44 54 Property, plant and equipment 9 1,856,990 1,171,614 Intangible assets 10 2,538 3,410 Total non-current assets 1,863,349 1,178,524 Total assets 1,908,690 1,206,538

Liabilities Current liabilities Payables 11 40,789 27,004 Interest bearing liabilities 12 22,000 20,850 Employee entitlements 14 8,289 7,667 Provisions 14 3,617 3,173 Total current liabilities 74,695 58,694

Non-current liabilities Payables 11 369 369 Deferred tax liabilities 6 217,964 50,661 Interest bearing liabilities 12 277,470 164,470 Employee entitlements 14 636 504 Total non-current liabilities 496,439 216,004

Total liabilities 571,134 274,698

Net assets 1,337,556 931,840

Equity Reserves 16 378,454 5,662 Contributed Capital 17 418,794 402,529 Accumulated funds 18 540,308 523,649 Total equity 1,337,556 931,840

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

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

B arwon Water Annual Report 2010-2011 45 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

FINANCIAL Statements

Statement of Changes in Equity for the financial year ended 30 June 2011

Contributed Accumulated Capital Reserves Funds Total NOTE ($'000) ($'000) ($'000) ($'000)

Balance at 1 July 2009 395,029 5,662 510,960 911,651

Comprehensive income for the year

Net result for the year 18 0 0 12,689 12,689 Other comprehensive income for the year 0 0 0 0

Total comprehensive income for the year 0 0 12,689 12,689

Transactions with the State in its capacity as owner: Contributions by owners 17 7,500 0 0 7,500

Balance at 30 June 2010 16, 17, 18 402,529 5,662 523,649 931,840

Balance at 1 July 2010 402,529 5,662 523,649 931,840

Comprehensive income for the year

Net result for the year 18 0 0 16,659 16,659 Increase/(decrease) in property, plant and equipment 16 0 372,792 0 372,792 as a result of revaluation, net of income tax Other comprehensive income for the year 0 0 0 0

Total comprehensive income for the year 0 372,792 16,659 389,451

Transactions with the State in its capacity as owner: Contributions by owners 17 16,265 0 0 16,265

Balance at 30 June 2011 16, 17, 18 418,794 378,454 540,308 1,337,556

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

46 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

FINANCIAL Statements

C ash Flow Statement for the financial year ended 30 June 2011

2011 2010 NOTE $’000 $’000 Inflows Inflows (Outflows) (Outflows) Cash flows from operating activities

Receipts Service, usage and tradewaste charges 129,143 118,002 Interest 489 63 Non-government contributions 7,295 3,959 Government contributions 675 374 GST received from the ATO 18,205 12,014 Other 6,354 6,772

Payments Employees (37,187) (32,211) Suppliers (59,067) (58,592) Interest and other costs of finance (15,150) (10,276) Environmental contribution (5,520) (4,416) Net cash provided by operating activities 20.1 45,237 35,689

Cash flows from investing activities Payments for purchase of property, plant and equipment (167,249) (90,390) Proceeds from sale of property, plant and equipment 1,410 1,256 Net cash used in investing activities (165,839) (89,134)

Cash flows from financing activities Government contributions 16,000 7,500 Proceeds from borrowings 125,700 44,300 Refinanced maturing TCV loans (11,550) (5,000) Net cash provided by (used in) financing activities 130,150 46,800

Net increase/(decrease) in cash held 9,548 (6,645)

Cash and cash equivalents at the beginning of the financial year 5,770 12,415

Cash and cash equivalents at the end of the financial year 15,318 5,770

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

B arwon Water Annual Report 2010-2011 47 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

1. statement of 1.4 Comparative amounts 1.7 Revenue recognition Unless otherwise stated, all accounting accounting policies 1.7.1 Water usage and sewer policies applied are consistent with disposal charges This financial report of Barwon Region those of the prior year. Comparatives Water Corporation is a general purpose are adjusted where necessary to Revenue is brought to account when financial report that consists of a enhance comparability in conformity services have been provided or when a Statement of Comprehensive Income, with any changes in presentation and rate/tariff is levied or determined. Balance Sheet, Statement of Changes in disclosure. Water usage and sewer disposal charges Equity, Cash Flow Statement and notes (including tradewaste charges) are accompanying these statements. The 1.5 Classification between current recognised as revenue when the general purpose financial report and non-current services are provided. Meter reading is complies with Australian accounting In the determination of whether an undertaken progressively during the standards, other authoritative asset or liability is current or non- year. An estimate is made to account for pronouncements of the Australian current, consideration is given to the revenue in respect of meters not read at Accounting Standards Board, time when each asset or liability is balance date. Interpretations and the requirements of expected to be realised or paid. The the Financial Management Act 1994 and asset or liability is classified as current if 1.7.2 Government grants and applicable Ministerial Directions. it is expected to be turned over within contributions Where applicable, those paragraphs of the next twelve months, being the Government grants and contributions the Australian Accounting Standards corporation’s operational cycle with the are recognised as operating revenue on (AAS’s) applicable to not-for-profit exception of employee benefits (refer receipt or when the entity obtains entities have been applied. This financial note 1.20). control of the contribution and meets report has been prepared on an accrual certain other criteria as outlined by 1.6 Critical accounting estimates and going concern basis. The annual AASB 1004, whichever is the sooner, and financial statements were authorised for The preparation of financial statements disclosed in the Statement of issue by the Chief Finance Officer on in conformity with AAS’s requires the Comprehensive Income as government 25 August 2011. use of certain critical accounting grants and contributions. However, estimates. Estimates and judgements grants and contributions received from 1.1 Functional and presentation are continually evaluated and are based the Victorian State Government, which currency on historical experience and other were originally appropriated by the Items included in this financial report factors, including expectations of future Parliament as additions to net assets or are measured using the currency of the events that may have a financial impact where the Minister for Finance and the primary economic environment in on the entity and that are believed to be Minister for Water have indicated are in which Barwon Region Water reasonable under the circumstances. the nature of owners’ contributions, are Corporation operates (‘the functional The entity makes estimates and accounted for as Equity – Contributions currency’). The financial statements are assumptions concerning the future. The by Owners. presented in Australian dollars, which is resulting accounting estimates will, by Barwon Region Water Corporation’s definition, seldom equal the related functional and presentation currency. actual results. The estimates and assumptions that have a significant risk 1.2 Historical cost of causing a material adjustment to the The financial statements have been carrying amounts of assets and liabilities prepared on a historical cost basis, with within the next financial year are the exception of certain non-current statements which relate to the actuarial assets which, as noted, are at valuation. assumptions used to determine the corporation’s defined superannuation 1.3 Rounding benefit asset and employee benefit The amounts shown in the financial provisions and assumptions in statements are expressed to the nearest estimating fair value of infrastructure thousand dollars. assets. These assumptions and their related carrying amounts are discussed in Notes 1.21, 9, 14, and 15.

48 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

Notes to the Financial Statements

1.7.3 Developer contributions/fees 1.8 Depreciation and amortisation 1.9 Borrowing costs paid by developers Where assets have separate identifiable Borrowing costs are recognised as Water infrastructure assets built by components that have distinct useful expenses in the period in which they are developers in new land subdivisions lives and/or residual values, a separate incurred. Borrowing costs include that, on completion, are provided to the depreciation rate is determined for each interest on bank overdrafts and corporation or fees paid by developers component. short-term and long-term borrowings, to connect new developments to the amortisation of discounts or premiums Land is not depreciated. Depreciation corporation’s existing water supply and relating to borrowings, amortisation of on other assets is calculated using the sewerage systems are recognised as ancillary costs incurred in connection straight line method to allocate their revenue when the contributions are with the arrangement of borrowings cost or revalued amounts, net of their received. and finance lease charges. residual values, over their estimated Developer contributed assets are useful lives, commencing from the time 1.10 Website costs recognised on the issue by Barwon the asset is held ready for use. The Costs in relation to websites controlled Water of the relevant declaration of assets residual values and useful lives are by the corporation are charged as serviced areas. The value of these assets reviewed and adjusted, if appropriate, at expenses in the period in which they are is based on fair value. Fair value is each balance sheet date. incurred unless they relate to the determined based on a replacement Intangible assets with finite useful lives acquisition of an asset, in which case cost matrix that allows for various asset are amortised as an expense on a they are capitalised and amortised over types, locations and depths. The fair systematic basis (typically straight-line), their period of expected benefits. value of these assets is recognised as commencing from the time the asset is Generally, costs in relation to feasibility revenue in the accounts when the available for use. The amortisation studies during the planning phase of a corporation gains control of the assets. periods are reviewed and adjusted if website, and ongoing costs of 1.7.4 Interest income appropriate at each balance date. maintenance during the operating Intangible assets with indefinite useful phase are considered to be expenses. Interest income is recognised using the lives are not amortised. However, all Costs incurred in building or enhancing effective interest rate method. intangible assets are assessed for a website, to the extent that they impairment annually. represent probable future economic benefits controlled by the entity that Depreciation rates within each asset can be reliably measured, are capitalised class are consistent with the previous as an asset and amortised over the year and fall within the following ranges: period of the expected benefits.

Depreciation 1.11 State government dividend Property, Plant and Ranges Equipment Class Barwon Water is required to pay a (%) dividend in accordance with a Buildings 1.25-15.00 determination of the Treasurer of Infrastructure - distribution 1.25-15.00 Victoria made under the Public Infrastructure - harvesting 1.25-15.00 Authorities (Dividends) Act 1983, based and major transfer on a prescribed percentage of the Infrastructure - reserves 1.25-15.00 previous financial year’s reported net and river profit. Infrastructure - quality 1.25-15.00 An obligation to pay a dividend only Infrastructure - collection 1.25-15.00 arises after consultation with the Infrastructure - treatment 1.25-15.00 Minister for Water and the Treasurer, and disposal and a formal declaration is made by the Plant, equipment and other 1.25-27.00 Treasurer. Although this process has not Intangible assets 20.00-27.00 yet been completed on the 2010-2011 result at the reporting date, the Board’s preliminary dividend estimate in respect of 2010-2011 is $4,779,169 (2009-2010 estimate was $2,012,000 which was not declared payable).

B arwon Water Annual Report 2010-2011 49 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

1.12 Environmental contributions evidence that the corporation will not 1.16.2 Measurement of Non-Current The Water Industry (Environmental be able to collect all amounts due Physical Assets Contributions) Act 2004 amended the according to the original terms of All non-current physical assets are Water Industry Act 1994 to make receivables. The amount of the recognised initially at cost and provision for environmental provision is the difference between the subsequently revalued at fair value less contributions to be paid by water supply asset’s carrying amount and the present accumulated depreciation and authorities. The Act establishes an value of estimated future cash flows, impairment in accordance with the obligation for authorities to pay into the discounted at the effective interest rate. requirements of Financial Reporting consolidated fund annually in The amount of the provision is Direction (FRD) 103D. accordance with a pre-established recognised in the Statement of Revaluations are conducted in schedule of payments, which sets out Comprehensive Income. accordance with FRD 103D. Scheduled the amounts payable by each 1.15 Inventories revaluation is undertaken every five corporation. Inventories comprise stores and years with an annual assessment of fair The first four year schedule of payments materials used in the construction of value to determine if it is materially ended on 30 June 2008, with a revised new works and for the repair and different to carrying value.I f the schedule now applying to 30 June 2012. maintenance of existing assets. All difference to carrying value is greater than 10 per cent, a management The purpose for the environmental inventories are measured at the lower of revaluation is undertaken while a contribution is set out in the Act and the cost and net realisable value. Costs are movement greater than 40 per cent will funding may be used for the purpose of assigned to inventory quantities on normally involve an Approved Valuer financing initiatives that seek to hand at balance date on a weighted (usually the Valuer General of Victoria) promote the sustainable management average cost (WAC) basis. Inventories to perform detailed assessment of the of water or address water-related include goods held for distribution at no fair value. If the movement in fair value initiatives. The environmental or nominal cost in the ordinary course since the last revaluation is less than or contributions are disclosed separately of business operations. equal to 10 per cent, then no change is within expenses. 1.16 Recognition and measurement made to carrying amounts. 1.13 Cash and cash equivalent of assets 1.16.3 Plant, equipment and motor assets Property, plant and equipment vehicles are measured at fair represent non-current physical assets For the purposes of the Cash Flow value Statement, cash and cash equivalents comprising land, buildings, water, For the plant, equipment and vehicles include cash on hand, deposits held at sewerage and drainage infrastructure, asset class, where the corporation is call with financial institutions, other plant, equipment and motor vehicles, able to demonstrate that there is no short-term, highly liquid investments used by the corporation in its evidence that a reliable market-based with original maturities of three months operations. Items with a cost or value in fair value (or other fair value indicators) or less that are readily convertible to excess of $1,000 and a useful life of exist for these assets, depreciated known amounts of cash and which are more than one year are recognised as replacement cost is used to represent a subject to an insignificant risk of an asset. All other assets acquired are reasonable approximation of fair value. changes in value and bank overdrafts. expensed. Bank overdrafts are shown with interest Where assets are constructed by the 1.16.4 Revaluation of non-current bearing liabilities on the Balance Sheet. corporation, the cost at which they are physical assets recorded includes an appropriate share 1.14 Receivables In the prior period, FRD 121 of fixed and variable overheads. Infrastructure Assets (Water/Rail) Trade receivables are recognised initially provided a temporary exemption for at fair value (which equates to cost) and Assets acquired at no cost or for the fair value measurement of water subsequently measured at amortised nominal consideration by the infrastructure assets controlled by water cost, less provision for impairment. corporation are recognised at fair value entities, at the entity reporting level. Trade receivables are due for settlement at the date of acquisition. This exemption no longer applies for no more than 30 days from the date of 1.16.1 Repairs and maintenance the current period. Water infrastructure recognition for tariff and sundry assets, at both the entity reporting level debtors. Routine maintenance, repair costs and minor renewal costs are expensed as and whole of government reporting Collectability of trade receivables is incurred. Where the repair relates to the level, are therefore measured at fair reviewed on an ongoing basis. Debts replacement of a component of an asset value less accumulated depreciation which are known to be uncollectible are and the cost exceeds the capitalisation and impairment in accordance with FRD written off.A provision for impairment threshold, the cost is capitalised and 103D. These assets comprise is established when there is objective depreciated. substructures or underlying systems 50 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

Notes to the Financial Statements held to facilitate harvesting, storage, All other assets are assessed annually for date of classification. Assets are not treatment and transfer of water to meet indicators of impairment, except for: depreciated or amortised while they are customer needs. They also include • inventories; classified as held for sale.A ssets infrastructure assets that underlie classified as held for sale are classified as • deferred tax assets; sewage and drainage systems. current assets. • financial instrument assets. The initial fair value assessment for 1.17 Intangibles water infrastructure in the current If there is an indication of impairment, Intangible assets represent identifiable period was undertaken with the assets concerned are tested as to non-monetary assets without physical involvement from the Valuer General of whether their carrying value exceeds substance. Intangible assets are Victoria (VGV) and under the their recoverable amount. Where an recognised at cost. Costs incurred instructions of the Department of asset’s carrying amount exceeds its subsequent to initial acquisition are Treasury and Finance (DTF). recoverable amount, the difference is capitalised when it is expected that The assessment was performed on a written-off by a charge to theS tatement additional future economic benefits will portfolio basis for various categories of of Comprehensive Income except to the flow to the corporation. water infrastructures. Further details of extent that the write-down can be the valuation exercise is provided in debited to an asset revaluation reserve Amortisation is allocated to intangible Note 9. amount applicable to that class of asset. assets with finite useful lives on a systematic basis over the asset’s useful Revaluation increments are credited The recoverable amount for most assets life. The amortisation period and directly to equity in the revaluation is measured at the higher of depreciated method are reviewed at each balance reserve, except that, to the extent that replacement cost and fair value less date. In addition, an assessment is made an increment reverses a revaluation costs to sell. Recoverable amount for at each reporting date to determine decrement in respect of that class of assets held primarily to generate net whether there are indicators of asset previously recognised as an cash inflows is measured at the higher impairment. If so, the assets concerned expense in determining the net result, of the present value of future cash flows are tested as to whether their carrying the increment is recognised as revenue expected to be obtained from the asset value exceeds their recoverable in determining the net result. and fair value less costs to sell. It is deemed that, in the event of the loss of amount. Revaluation decrements are recognised an asset, the future economic benefits ‘Software and software development immediately as an expense in the net arising from the use of the asset will be costs’ are the only intangible assets result, except that, to the extent that a replaced unless a specific decision to currently recognised by the credit balance exists in the revaluation the contrary has been made. corporation. These assets are both reserve in respect of the same class of acquired and internally generated and assets, they are debited to the A reversal of an impairment loss on a have a finite useful life. They are revaluation reserve. revalued asset is credited directly to equity under the heading revaluation measured at cost less accumulated Revaluation increases and revaluation reserve. However, to the extent that an amortisation (calculated on a straight decreases relating to individual assets impairment loss on the same class of line basis) less any accumulated within a class of property, plant and asset was previously recognised in the impairment losses. These assets are equipment are offset against one Statement of Comprehensive Income, a reviewed annually for indicators of another within that class but are not reversal of that impairment loss is also impairment. offset in respect of assets in different recognised in the Statement of 1.18 Payables classes. Comprehensive Income. Payables consist predominantly of trade Assets constructed during 2010-2011 1.16.6 A ssets (or disposal groups) and sundry creditors. These amounts were not subject to an external held for sale represent liabilities for goods and revaluation as the cost is deemed to services provided to the corporation approximate fair value as at 30 June Assets classified as held for sale are prior to the end of the financial year, 2011. measured at the lower of their carrying amount and fair value less costs to sell, which are unpaid at financial year end. Revaluation reserves are not transferred as their carrying amount will be The amounts are unsecured and are to accumulated funds on derecognition recovered principally through a sale usually paid within 30 days of of the relevant asset. transaction, rather than through recognition. continuing use. The corporation 1.16.5 Impairment of assets Payables are initially recognised at fair considers that the sale is highly value, being the cost of the goods and Intangible assets with indefinite useful probable, the asset is available for services, and subsequently measured at lives are tested annually as to whether immediate sale in its present condition amortised cost. their carrying value exceeds their and the sale is expected to be recoverable amount completed within 12 months from the

B arwon Water Annual Report 2010-2011 51 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

1.19 Interest bearing liabilities The components of this current LSL 1.21 Provisions Borrowings are initially recognised at liability are measured at: Provisions are recognised when the fair value, net of transaction costs • present value – component that the corporation, as a result of a past event, incurred. Borrowings are subsequently corporation does not expect to settle has a legal or constructive obligation measured at amortised cost. within 12 months that can be estimated reliably, and it is probable that an outflow of economic Interest bearing liabilities in the Balance • nominal value – component that the benefits will be required to settle the Sheet are classified as current liabilities corporation expects to settle within obligation. unless the corporation has an 12 months. unconditional right to defer settlement Non-Current Liability – conditional LSL The amount recognised as a provision is of the liability for at least 12 months after (representing less than seven* years of the best estimate of the consideration the balance sheet date. continuous service) is disclosed as a required to settle the present obligation non-current liability. There is an at the end of the reporting period, 1.20 Employee benefits unconditional right to defer the taking into account the risks and 1.20.1 Wages and salaries, annual leave settlement of the entitlement until the uncertainties surrounding the and sick leave employee has completed the requisite obligation. years of service. Conditional LSL is Liabilities for wages and salaries and 1.22 Commitments annual leave, expected to be settled required to be measured at present Commitments include operating, within twelve months of the reporting value. capital and other outsourcing date, are recognised in employee In calculating present value, commitments arising from non- benefit liabilities in respect of consideration is given to expected cancellable contractual or statutory employees’ services up to the reporting future wage and salary levels, sources and are disclosed at their date and are measured at the amounts experience of employee departures and nominal value. expected to be paid when the liabilities periods of service. Expected future are settled, at their nominal values. payments are discounted using market 1.23 B OO (build, own and operate) Employee benefits, which are not yields at the reporting date on national schemes expected to be settled within twelve government bonds with terms to The corporation has entered into months, are measured as the present maturity and currency that match, as contractual arrangements with a third value of the estimated future cash closely as possible, the estimated future party to build, own and operate a outflows to be made by the entity, in cash outflows. biosolids drying facility at the Black respect of services rendered by Rock Water Reclamation Plant. The employees up to the reporting date. *In accordance with Barwon Region contractor will lease land from Barwon Sick leave entitlements are of a Water Corporation Enterprise Water to build the thermal drying plant non-vesting nature and are paid upon a Agreement 2008. and will operate the facility for 20 years valid claim by an employee. 1.20.3 Superannuation in exchange for a stream of payments. Regardless of the expected timing of The amount charged to the Statement At the end of the contract period, the settlements, liabilities in respect of of Comprehensive Income in respect of assets will be decommissioned and employee benefits are classified as a superannuation represents the removed by the contractor and the site current liability, unless there is an contributions made by the corporation returned to Barwon Water at no cost to unconditional right to defer the to the superannuation plan in respect to Barwon Water. settlement of the liability for at least 12 the current services of corporation staff. At 30 June 2011, the facility was still in months after the reporting date, in Superannuation contributions are made the construction phase, and payments which case it would be classified as a to the plans based on the relevant rules to the contractor for the operation of non-current liability. of each plan. the facility had not commenced. Future contractual commitments are disclosed 1.20.2 Long service leave 1.20.4 Employee benefit on-costs in Note 19. Current Liability – unconditional LSL Employee benefit on-costs, including (representing seven* or more years of payroll tax and worker’s compensation, continuous service) is disclosed as a are recognised and included in current liability even where the employee benefit liabilities and costs corporation does not expect to settle when the employee benefits to which the liability within 12 months because it they relate are recognised as liabilities. does not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

52 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

Notes to the Financial Statements

1.24 Income tax In these circumstances, the GST is Financial instruments are classified and The corporation is subject to the recognised as part of the cost of measured as set out below. National Tax Equivalent Regime (NTER), acquisition of the asset or as part of an 1.27.2 Classification and measurement which is administered by the Australian item of the expense. Receivables and Taxation Office. payables are stated inclusive of GST. Financial Assets The income tax expense or revenue for The net amount of GST recoverable Cash and cash equivalents include cash the period is the tax payable on the from, or payable to, the ATO is included on hand and deposits held at call with current period’s taxable income based as a current asset or liability in the financial institutions and are recorded at on the national corporate income tax Balance Sheet. fair value. rate of 30 per cent adjusted by changes Cash flows arising from operating Loans and Receivables in deferred tax assets and liabilities activities are included in the Cash Flow Trade receivables, loans and other attributable to temporary differences Statement on a gross basis. The GST receivables are recognised initially at between the tax bases of assets and component of cash flows arising from fair value and subsequently measured at liabilities and their carrying amounts in investing and financing activities, which amortised cost, less provision for the financial statements and to unused are recoverable from, or payable to, the impairment. tax losses. ATO, are classified as operating cash Deferred tax assets and liabilities are flows. Payables recognised for temporary differences at 1.26 Contributions by Owners Payables are recognised when Barwon the tax rates expected to apply when Water becomes obliged to make future Additions to net assets which have been the assets are recovered or liabilities are payments resulting from the purchase designated as contributions by owners settled, based on those tax rates which of goods and services. are enacted or substantially enacted. are recognised as contributed capital. The relevant tax rates are applied to the Other transfers that are in the nature of Financial Liabilities contributions or distributions have also cumulative amounts of deductible and Borrowings are initially recognised at been designated as contributions by taxable temporary differences to fair value, net of transaction costs owners. Transfers of net assets arising measure the deferred tax asset or incurred, and are subsequently from administrative restructurings are liability. No deferred tax asset or liability measured at amortised cost using the treated as distributions to or is recognised in relation to these effective interest rate method. temporary differences if they arose in a contributions by owners. transaction, other than a business 1.27.3 Fair valuation 1.27 Financial instruments combination, that at the time of the The fair value of financial instruments transaction did not affect either 1.27.1 Recognition traded in active markets is based on accounting profit or taxable profit or Financial instruments, incorporating quoted market prices at the balance loss. Deferred tax assets are recognised financial assets and financial liabilities, sheet date. The quoted market price for deductible temporary differences are recognised when Barwon Water used for financial assets held byB arwon and unused tax losses only if it is becomes a party to the contractual Water is the current bid price. probable that future taxable amounts provisions of the instrument. Trade date will be available to utilise those accounting is adopted for financial The carrying value less impairment temporary differences and losses. assets that are delivered within provision of trade receivables and payables is a reasonable approximation Current and deferred tax is recognised timeframes established by marketplace of their fair values due to the short-term in profit or loss, except to the extent convention. nature of trade receivables. The fair that it relates to items recognised in Initial measurement of financial value of financial liabilities for disclosure other comprehensive income or directly instruments is at fair value plus purposes is estimated by discounting in equity. In this case, the tax is also transaction costs where the instrument the future contractual cash flows at the recognised in other comprehensive is not classified as at fair value through current market interest rate that is income or directly in equity, profit or loss. Transaction costs related available to Barwon Water for similar respectively. to instruments classified as at fair value financial assets. through profit or loss are expensed to 1.25 Goods and services tax profit or loss immediately. The carrying amounts and aggregate Revenues, expenses and assets are net fair values of financial assets and recognised net of the amount of goods financial liabilities at balance date have and services tax (GST), except where the been provided in Note 13. amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

B arwon Water Annual Report 2010-2011 53 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

1.28 Impairment of financial assets 1.29 New accounting standards and interpretations had been issued but At each reporting date, the corporation interpretations issued that are were not mandatory for financial year assesses whether there is objective not yet effective ending 30 June 2011. The corporation evidence that a financial instrument has Certain new accounting standards and has not and does not intend to adopt been impaired. Impairment losses are interpretations have been published these standards early. recognised in the Statement of that are not mandatory for the 30 June Comprehensive Income. 2011 reporting period. As at 30 June 2011, the following standards and

Standard/ Summary Applicable for Impact on financial statements Interpretation annual reporting periods beginning on or after AASB 9 Financial AASB 9 Financial Instruments addresses the 1 January 2013 The entity is yet to assess its full impact. Instruments, AASB classification, measurement and derecognition However, initial indications are that it may 2009-11 Amendments to of financial assets and financial liabilities. The affect the entity’s accounting for its Australian Accounting standard is not applicable until 1 January 2013 available-for-sale financial assets, since AASB Standards arising from but is available for early adoption. The 9 only permits the recognition of fair value AASB 9 and AASB derecognition rules have been transferred from gains and losses in other comprehensive 2010-7 Amendments to AASB 139 Financial Instruments: Recognition and income if they relate to equity investments Australian Accounting Measurement and have not been changed. that are not held for trading. Fair value gains Standards arising from The group has not yet decided when to adopt and losses on available-for-sale debt AASB 9 (December AASB 9. investments, for example, will therefore have 2010) to be recognised directly in profit or loss.

Revised AASB 124 In December 2009 the AASB issued a revised 1 January 2011 The group will apply the amended standard Related Party AASB 124 Related Party Disclosures. It is effective from 1 July 2011. When the amendments are Disclosures and AASB for accounting periods beginning on or after 1 applied, the group will need to disclose any 2009-12 Amendments January 2011 and must be applied transactions between its subsidiaries and its to Australian retrospectively. The amendment removes the associates. However, there will be no impact Accounting Standards requirement for government-related entities to on any of the amounts recognised in the disclose details of all transactions with the financial statements. government and other government-related entities and clarifies and simplifies the definition of a related party. AASB 2009-14 In December 2009, the AASB made an 1 January 2011 The entity does not make any such Amendments to amendment to Interpretation 14 The Limit on a prepayments. The amendment is therefore Australian Interpretation Defined Benefit Asset, Minimum Funding not expected to have any impact on the - Prepayments of a Requirements and their Interaction. The entity’s financial statements. Minimum Funding amendment removes an unintended Requirement consequence of the interpretation related to voluntary prepayments when there is a minimum funding requirement in regard to the entity’s defined benefit scheme. It permits entities to recognise an asset for a prepayment of contributions made to cover minimum funding requirements. AASB 1053 Application On 30 June 2010 the AASB officially introduced 1 July 2013 The impact of this standard will depend on of Tiers of Australian a revised differential reporting framework in instructions provided by DTF on its Accounting Standards Australia. Under this framework, a two-tier applicability to the entity. The entity will and AASB 2010-2 differential reporting regime applies to all assess its impact once DTF has provided Amendments to entities that prepare general purpose financial guidance on this standard. Australian Accounting statements. Standards arising from Reduced Disclosure Requirements

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Notes to the Financial Statements

Standard/ Summary Applicable for Impact on financial statements Interpretation annual reporting periods beginning on or after AASB 2010-4 Further In June 2010, the AASB made a number of 1 January 2011 These amendments are not expected to Amendments to amendments to Australian Accounting have any significant impact on the entity’s Australian Accounting Standards as a result of the IASB’s annual disclosures. Standards arising from improvements project. the Annual Improvements Project

AASB 2010-6 In November 2010, the AASB made 1 July 2011 These amendments are not expected to Amendments to amendments to AASB 7 Financial Instruments: have any significant impact on the entity’s Australian Accounting Disclosures which introduces additional disclosures. Standards – Disclosures disclosures in respect of risk exposures arising on Transfers of Financial from transferred financial assets. The Assets [AASB 1 & AASB 7] amendments will affect particularly entities that sell, factor, securitise, lend or otherwise transfer financial assets to other parties. AASB 2010-8 In December 2010, the AASB amended AASB 112 1 January 2012 The entity will apply the amendment from 1 Amendments to Income Taxes to provide a practical approach July 2012. It is currently evaluating the impact Australian Accounting for measuring deferred tax liabilities and of the amendment. Standards – Deferred deferred tax assets when investment property is Tax: Recovery of measured using the fair value model. AASB 112 Underlying Assets requires the measurement of deferred tax assets [AASB 112] or liabilities to reflect the tax consequences that would follow from the way management expects to recover or settle the carrying of the relevant assets or liabilities, that is through use or through sale. The amendment introduces a rebuttable presumption that investment property which is measured at fair value is recovered entirely by sale. AASB 2010-9 AASB 1 First-time Adoption of Australian 1 January 2011/ Neither of these amendments will affect the Amendments to Accounting Standards was amended in 1 January 2013 financial statements of the group. Australian Accounting December 2010, by eliminating references to Standards – Severe fixed dates for one exemption and one Hyperinflation and exception dealing with financial assets and Removal of Fixed Dates liabilities. The AASB also introduced a new for First-time Adopters exemption for entities that resume presenting [AASB 1] and their financial statements in accordance with Australian Accounting Standards after having AASB 2010-10 Further been subject to severe hyperinflation. Amendments to Australian Accounting Standards – Removal of Fixed Dates for First-time Adopters [AASB 2009-11 & AASB 2010-7]

B arwon Water Annual Report 2010-2011 55 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

2. Financial risk Objectives, policies and process used to c) Liquidity risk management objectives manage these risks are disclosed in the Liquidity risk is the risk that Barwon and policies paragraphs below: Water will not be able to meet its financial obligations as they fall due. i) Interest rate risk B arwon Water’s activities expose it to a Barwon Water’s policy is to settle Barwon Water’s exposure to market variety of financial risks: market risk, financial obligations within 30 days and, interest rates relates primarily to credit risk and liquidity risk. This note in the event of dispute, make payments Barwon Water’s long-term borrowings presents information about Barwon within 30 days from the date of and funds invested on the money Water’s exposure to each of these risks resolution. market. and the objectives, policies and Barwon Water manages liquidity risk by processes for measuring and The corporation minimises its exposure maintaining adequate reserves, banking managing risk. to interest rate changes on borrowings facilities and reserve borrowing facilities by holding fixed rate debt with an even Barwon Water’s overall risk by continuously monitoring forecasts spread of maturity profiles, atB oard management program focuses on the and actual cash flows and matching the approved limits. unpredictability of financial markets and maturity profiles of financial assets and seeks to minimise potential adverse Barwon Water has minimal exposure to financial liabilities. effects on the financial performance of interest rate risk through its holding of Barwon Water’s financial liability Barwon Water. Barwon Water uses cash assets and other financial assets. maturities have been disclosed in different methods to measure different Note 13. types of risk to which it is exposed. ii) Foreign exchange risk These methods include sensitivity Barwon Water has no exposure to 2.2 Fair value measurements analysis in the case of interest rate, changes in the foreign exchange rate. The fair value of financial assets and other price risks and ageing analysis. financial liabilities must be estimated for iii) Other price risk Risk management is carried out under recognition and measurement or for Barwon Water has no significant policies approved by the Board of disclosure purposes. exposure to other price risk. Directors. Financial risks are identified, As of 1 July 2009, Barwon Water has evaluated and hedged against with Market risk sensitivity analysis is adopted the amendment to AASB 7 close co-operation with Barwon Water’s provided in Note 2.3. Financial Instruments: Disclosures which operating units. The Board provides requires disclosure of fair value b) Credit risk written principles for overall risk measurements by level of the following management, as well as policies Credit risk is the risk of financial loss to fair value measurement hierarchy: covering specific areas, such as, interest Barwon Water as a result of a customer rate risk, credit risk, use of derivative or counterparty to a financial i) quot ed prices (unadjusted) in active financial instruments and non- instrument failing to meet its markets for identical assets or derivative financial instruments and contractual obligations. Credit risk liabilities (level 1) investment of excess liquidity. arises principally from Barwon Water’s ii) inputs other than quoted prices receivables and financial assets available included within level 1 that are 2.1 Risk exposures for sale. observable for the asset or liability, The main risks Barwon Water is exposed Barwon Water’s exposure to credit risk either directly (as prices) or to through its financial instruments are is influenced by the individual indirectly (derived from prices) level as follows: characteristics of each customer. The 2), and a) Market risk receivable balance consists of a large iii) inputs for the asset or liability that number of residential and business are not based on observable market Market risk is the risk that changes in customers which are spread across a data (unobservable inputs) (level 3). market prices will affect the fair value or diverse range of industries. Receivable future cash flows ofB arwon Water’s balances are monitored on an on-going financial instruments.M arket risk basis to ensure that exposure to bad comprises foreign exchange risk, debts is not significant.B arwon Water interest rate risk and other price risk. has in place a Billing and Collection Barwon Water’s exposure to market risk Policy for the collection of overdue is primarily through interest rate risk, receivables. there is no exposure to foreign exchange risk and insignificant An analysis of the ageing of Barwon exposure to other price risks. Water’s receivables at reporting date has been provided in Note 8.

56 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

Notes to the Financial Statements

The following table present Barwon 2.3 Market risk sensitivity analysis Water’s assets and liabilities measured The sensitivity analysis below has taken and recognised at fair value: into consideration past performance, future expectations, economic forecasts 2011 2010 and management’s knowledge and Level 1 Level 1 experience of the financial markets. At 30 June 2011 $’000 $’000 Barwon Water believes that a movement Financial assets of 1% in interest rates is reasonable over

the next 12 months. Cash and cash equivalents 15,318 5,770 Barwon Water’s exposure to interest The fair value of financial instruments rate movements has been calculated as traded in active markets (such as outlined below: publicly traded derivatives, and trading • cash and cash equivalents – average and available-for-sale securities) is monthly balance of cash and cash based on quoted market prices at the equivalents held during year at 1% end of the reporting period. The quoted interest rate movement, and market price used for financial assets • interest bearing liabilities – total held by the group is the current bid known maturing borrowings and price. These instruments are included in anticipated new borrowings for the level 1. following year at 1% interest rate movement.

M arket Risk Sensitivity Analysis

30 June 2011 30 June 2010 Interest rate risk Interest rate risk -1% +1% -1% +1% Carrying Carrying amount Result Equity Result Equity amount Result Equity Result Equity $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial assets Cash and cash equivalents 15,318 (76) (76) 76 76 5,770 (31) (31) 31 31 Receivables 27,726 0 0 0 0 20,235 0 0 0 0 Financial liabilities Payables 41,158 0 0 0 0 27,373 0 0 0 0 Interest bearing liabilities 299,470 1,162 1,162 (1,162) (1,162) 185,320 1,680 1,680 (1,680) (1,680) Total increase/(decrease) 1,086 1,086 (1,086) (1,086) 1,649 1,649 (1,649) (1,649)

B arwon Water Annual Report 2010-2011 57 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

3. Revenue

2011 2010 $’000 $’000

Revenue Service charges - Water service charges 18,945 16,938 - Sewerage service charges 54,237 48,326 Usage charges - Water usage charges 49,296 45,434 - Sewage disposal charges 3,969 3,622 Tradewaste charges 5,877 4,734 Government contributions 675 374 Other services rendered 5,435 5,782 Non-government contributions - Assets received from developers 8,541 10,730 - Fees paid by developers 4,462 3,959 - Customer capital contributions 2,834 0 Interest received/receivable 561 62 154,832 139,961

Revenue from non-operating activities Net gain/(loss) on non-financial assets (807) (634) Rent 542 591 (265) (43) Total revenue 154,567 139,918

4. borrowing Costs Expense

2011 2010 $’000 $’000 Interest on fixed borrowings 13,731 10,181 Interest on 11am borrowings 793 52 Financial accommodation levy 2,088 1,186 Total borrowing costs 16,612 11,419

5. employee benefits

2011 2010 $’000 $’000 Salaries and wages 26,796 25,207 Annual leave 2,260 2,017 Long service leave 945 916 Employer superannuation contributions 5,392 2,880 Other 2,760 2,311 Total employee benefit costs 38,153 33,331

58 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

Notes to the Financial Statements

6. national equivalent income tax

6.1 Prima facie income tax expense on pre-tax accounting profit reconciles to the income tax expense in the accounts as follows:

2011 2010 $’000 $’000

Income tax expense Current tax (4,012) (6,288) Deferred tax 11,217 11,758 Under/(over) provided in prior years 0 0 7,205 5,470

Income tax expense is attributable to: Surplus from continuing operations 7,205 5,470 Aggregate income tax expense 7,205 5,470

Deferred income tax/(revenue) expense included in income tax comprises: Decrease/(increase) in deferred tax assets (331) (545) (Decrease)/increase in deferred tax liabilities 171,315 12,304 (Decrease)/increase in equity (159,768) 0 11,217 11,759

6.2 Reconciliation of income tax expense to prima facie tax payable

2011 2010 $’000 $’000

Net result before income tax expense 23,864 18,159 Tax at the Australian tax rate of 30% (2010 30%) 7,159 5,448

Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: Entertainment/sundry 19 15 Under/(over) provision in prior years 27 7 Income tax expense 7,205 5,470

B arwon Water Annual Report 2010-2011 59 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

6.3 Amounts recognised directly in equity

NOTE 2011 2010 $’000 $’000

Aggregate current and deferred tax arising in the reporting period and not recognised in net operating result but directly debited or credited to equity: Net deferred tax - debited/(credited) directly to equity 16 159,768 0 159,768 0

6.4 Deferred tax assets

2011 2010 $’000 $’000

The balance comprises temporary differences attributable to: Amounts recognised in operating statement Provisions and accrued expenditure not deductible 3,777 3,446 Other 0 0 Tax losses 89,010 84,998 92,787 88,444

Movements Opening balance at 1 July 88,444 81,611 Credited/(charged) to the operating statement 331 545 (Under)/over provided in prior years 0 0 Tax losses 4,012 6,288 Closing balance at 30 June 92,787 88,444

Deferred tax asset to be recovered after more than 12 months 89,198 85,178 Deferred tax asset to be recovered within 12 months 3,589 3,266

60 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

Notes to the Financial Statements

6.5 Deferred tax liabilities

2011 2010 $’000 $’000

The balance comprises temporary differences attributable to: Amounts recognised in operating statement Depreciation 109,356 100,529 Expenditure capitalised 20,402 17,958 Other 2,776 2,500 Amounts recognised in equity Asset revaluations 174,440 14,672 306,974 135,659

Movements Opening balance at 1 July 135,659 123,356 Credited/(charged) to the operating statement 11,547 12,303 Under/(over) provided in prior years 0 0 Credited/(charged) to equity 159,768 0 Closing balance at 30 June 306,974 135,659

Deferred tax liability to be recovered after more than 12 months 303,848 132,961 Deferred tax liability to be recovered within 12 months 3,126 2,698

6.6 Financial statement classification

2011 2010 $’000 $’000

Deferred tax asset closing balance 92,787 88,444 Less accumulated tax losses offset against deferred tax liability (89,010) (84,998) Deferred tax asset per financial statements 3,777 3,446

Deferred tax liability closing balance 306,974 135,659 Less accumulated tax losses offset against deferred tax asset (89,010) (84,998) Deferred tax liability per financial statements 217,964 50,661

B arwon Water Annual Report 2010-2011 61 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

7. cash and cash equivalent assets

2011 2010 $’000 $’000

Cash on hand 8 8 Cash at bank 200 5,193 Investments at call - TCV 15,110 569 Total cash and cash equivalent assets 15,318 5,770

7.1 Reconciliation to cash at end of year

2011 2010 $’000 $’000

The above figures are reconciled to cash at the end of the financial year as shown in the Cash Flow Statement, as follows: Balances as above 15,318 5,770 Balances as per Cash Flow Statement 15,318 5,770

8. Receivables

2011 2010 $’000 $’000

Current Tariff and sundry 10,353 11,015 Accrued charges 10,875 9,356 Provision for impaired receivables (84) (190) Other receivables 6,538 0 27,682 20,181

Non-current Other receivables 44 54 44 54

Total receivables 27,726 20,235

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Notes to the Financial Statements a) Provision for impaired receivables As at 30 June 2011, current receivables of Barwon Water with a nominal value of $87,738 (2010: $193,241) were impaired. The amount of the provision was $84,497 (2010: $190,000). The individually impaired receivables relate mainly to disconnected tenant debt which is not secured against the property. It was assessed that it is unlikely the impaired receivables will be recovered. The ageing of these receivables is as follows: 2011 2010 $’000 $’000

Over 6 months (84) (190) (84) (190)

As at 30 June 2011, trade receivables of $3,612,487 (2010: $2,842,570) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these receivables is as follows: 2011 2010 $’000 $’000

30 to 90 days 2,586 2,026 90 to 150 days 272 165 Over 150 days 754 652 3,612 2,843

Movements in the provision for impaired receivables are as follows: 2011 2010 $’000 $’000

Opening balance at 1 July (190) (95) Provision for impairment recognised during the year (95) (168) Receivables written off during the year as uncollectable 201 73 Closing balance at 30 June (84) (190)

The creation and release of the provision for impaired receivables has been included in “other expenses” in the Statement of Comprehensive Income. Amounts charged to the provision account are generally written off when there is no expectation of recovering additional cash. b) Fair value and credit risk Due to the short-term nature of the current receivables, their carrying value is assumed to approximate their fair value. Carrying amount Fair value 2011 $’000 $’000

Non-current receivables Scheme debtors (non-current) 44 44 44 44

Carrying amount Fair value 2010 $’000 $’000

Non-current receivables Scheme debtors (non-current) 54 54 54 54

The maximum exposure to credit risk at the reporting date is the higher of the carrying value and fair value of each class of receivables mentioned above. Barwon Water does not hold any collateral as security.

B arwon Water Annual Report 2010-2011 63 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

9. property, plant and equipment details

2011 2010 $’000 $’000

Land At fair value 30/6/11 (comparative at fair value 30/6/07) 109,582 54,487 At cost 1,376 1,654 Total Land 110,958 56,141

Buildings At fair value 30/6/11 (comparative at fair value 1/7/04) 16,268 11,546 At cost 0 4,492 Less accumulated depreciation 0 2,760 Total Buildings 16,268 13,278

Infrastructure - water distribution At fair value 30/6/11 (comparative at cost) 534,214 541,989 Less accumulated depreciation and impairments 0 99,606 Total water distribution 534,214 442,383

Infrastructure - water harvesting and major transfer At fair value 30/6/11 (comparative at cost) 297,568 160,264 Less accumulated depreciation and impairments 0 30,007 Total water harvesting and major transfer 297,568 130,257

Infrastructure - reserves and river improvements At cost 0 404 Less accumulated depreciation 0 210 Total reserves and river improvements 0 194

Infrastructure - water quality At fair value 30/6/11 (comparative at cost) 87,236 73,896 Less accumulated depreciation and impairments 0 15,935 Total water quality 87,236 57,961

Infrastructure - sewer collection At fair value 30/6/11 (comparative at cost) 485,482 364,137 Less accumulated depreciation and impairments 0 71,416 Total sewer collection 485,482 292,721

Infrastructure - sewer treatment and disposal At fair value 30/6/11 (comparative at cost) 122,922 123,391 Less accumulated depreciation 0 25,899 Total sewer treatment and disposal 122,922 97,492

Plant, equipment and other At cost 39,988 39,956 Less accumulated depreciation 28,867 27,979 Total plant, equipment and other 11,121 11,977

Capital works in progress At cost 191,221 69,210 Total CWIP 191,221 69,210 Total property plant and equipment 1,856,990 1,171,614

64 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

Notes to the Financial Statements

Land and buildings was valued at 30 June 2011 by Ben Driller AAPI, Certified Practising Valuer, Egan National Valuers (Vic) under contract by the Valuer-General of Victoria, using a fair value methodology. Where market based evidence of fair value is not available due to the specialised nature of an asset, a depreciated replacement cost approach may have been required. Where properties have appropriate zoning and are capable of being readily sold, the sale history and other information in relation to similar properties in the area has been used to determine an active and liquid market valuation. Infrastructure was valued at 30 June 2011 by Paul Larcher MA (Oxon), PhD, CENG MICE, AECOM Australia, under contract from the Valuer-General of Victoria, using a depreciated replacement cost methodology to determine fair value.

9.2 Movements during the reporting period

Carrying Transfers amount at between 1 July Additions Disposals Revaluation Impairments Asset Classes Depreciation Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

2010-2011 Land 56,141 265 0 49,683 0 4,869 0 110,958 Buildings 13,278 0 0 4,151 0 (766) (395) 16,268 Water distribution 442,383 0 (361) 59,028 (1,675) 45,707 (10,868) 534,214 Water harvesting and major 130,257 0 (268) 190,848 (106) (20,564) (2,599) 297,568 transfer Reserves and river 194 0 0 0 0 (194) 0 0 improvements Water quality 57,961 0 (92) 30,065 (178) 1,104 (1,624) 87,236 Sewer collection 292,721 0 (21) 170,593 (0) 29,408 (7,219) 485,482 Sewer treatment and 97,492 0 0 28,191 0 (203) (2,558) 122,922 disposal Plant, equipment and other 11,977 799 (1,475) 0 0 2,983 (3,163) 11,121 Capital works in progress 69,210 184,355 0 0 0 (62,344) 0 191,221 1,171,614 185,419 (2,217) 532,559 (1,959) 0 (28,426) 1,856,990

2009-2010 Land 56,399 0 (258) 0 0 0 0 56,141 Buildings 13,301 0 5 0 0 474 (502) 13,278 Water distribution 406,806 38 (542) 0 0 45,928 (9,847) 442,383 Water harvesting and major 102,587 0 0 0 0 30,865 (3,195) 130,257 transfer Reserves and river 212 0 0 0 0 0 (18) 194 improvements Water quality 54,630 0 0 0 0 5,073 (1,742) 57,961 Sewer collection 273,658 63 22 0 0 26,539 (7,561) 292,721 Sewer treatment and 98,977 0 0 0 0 1,186 (2,671) 97,492 disposal Plant, equipment and other 12,705 3,486 (1,117) 0 0 335 (3,432) 11,977 Capital works in progress 79,041 100,569 0 0 0 (110,400) 0 69,210 1,098,316 104,156 (1,890) 0 0 0 (28,968) 1,171,614

B arwon Water Annual Report 2010-2011 65 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

9.3 Depreciation, amortisation and impairment charges for the year

2011 2010 $’000 $’000

Depreciation 28,426 28,968 Amortisation 1,254 1,021 Impairment 1,959 0 Depreciation,amortisation and impairment for year 31,639 29,989

9.4 Profit/(loss) on disposal of property, plant and equipment

2011 2010 $’000 $’000

Proceeds on sale of property, plant and equipment 1,410 1,256 Less written down value 2,217 1,890 Net profit/(loss) on disposal (807) (634)

10. intangible assets

Carrying Transfers amount at between 1 July Additions Asset Classes Amortisation Total $’000 $’000 $’000 $’000 $’000

2010-2011 Cost 10,500 0 202 0 10,702 Less: accumulated amortisation (7,280) 0 0 (1,254) (8,534) Net carrying amount 3,220 0 202 (1,254) 2,168 Software development (work in progress) 190 382 (202) 0 370

Total intangible assets 3,410 382 0 (1,254) 2,538

2009-2010 Cost 8,139 0 2,361 0 10,500 Less: accumulated amortisation (6,259) 0 0 (1,021) (7,280) Net carrying amount 1,880 0 2,361 (1,021) 3,220 Software development (work in progress) 1,620 931 (2,361) 0 190

Total intangible assets 3,500 931 0 (1,021) 3,410

66 P art 4 – Corporate Governance | Part 5 – Performance report | Part 6 – Financial statements | Part 7 – disclosure index

Notes to the Financial Statements

11. Payables

2011 2010 $’000 $’000

Current Trade creditors 5,302 5,419 Accrued expenses 32,924 19,332 Other creditors 2,563 2,253 Total current payables 40,789 27,004

Non-current Other creditors 369 369

Total payables 41,158 27,373

12. interest bearing liabilities

12.1 Details of Barwon Water’s borrowings at balance date are as follows:

2011 2010 $’000 $’000

Current - secured Treasury Corporation of Victoria 22,000 20,850 Total current interest bearing liabilities 22,000 20,850

Non-current - secured Treasury Corporation of Victoria 277,470 164,470

Total interest bearing liabilities 299,470 185,320

A ll interest bearing liabilities have been transacted with the approval of the Treasurer of Victoria and hence are subject to Statutory Guarantee by the State of Victoria in accordance with the Borrowing and Investment Powers Act 1987. As a result all interest bearing liabilities are classified as secured.

B arwon Water Annual Report 2010-2011 67 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

13. Financial instruments

13.1 Interest rate risk exposures The following table sets out Barwon Water’s exposure to interest rate risk, including the contractual repricing dates and the effective weighted average interest rate by maturity periods. Exposures arise predominantly from liabilities bearing variable interest rates as Barwon Water intends to hold fixed rate liabilities to maturity.

Fixed interest maturing in Floating Non interest 1 year or Over 1 to Over 2 to Over 3 to Over 4 to Over interest rate less 2 years 3 years 4 years 5 years 5 years bearing Total 30 June 2011 $ $ $ $ $ $ $ $ $

Financial assets Cash and cash equivalents 15,318 0 0 0 0 0 0 0 15,318 Receivables 0 0 0 0 0 0 0 27,726 27,726 Total financial assets 15,318 0 0 0 0 0 0 27,726 43,044

Financial liabilities Payables 0 0 0 0 0 0 0 (41,158) (41,158) Interest bearing liabilities/ borrowings 0 (22,000) (14,500) (13,970) (14,000) (13,500) (221,500) 0 (299,470)

Total financial liabilities 0 (22,000) (14,500) (13,970) (14,000) (13,500) (221,500) (41,158) (340,628)

Net financial assets/ liabilities 15,318 (22,000) (14,500) (13,970) (14,000) (13,500) (221,500) (13,432) (297,584) Weighted average interest rate 0.00% 5.91% 5.89% 6.97% 7.00% 6.88% 7.21%

Floating Fixed interest maturing in Non interest 1 year or Over 1 to Over 2 to Over 3 to Over 4 to Over interest rate less 2 years 3 years 4 years 5 years 5 years bearing Total 30 June 2010 $ $ $ $ $ $ $ $ $

Financial assets Cash and cash equivalents 5,770 0 0 0 0 0 0 0 5,770 Receivables 0 0 0 0 0 0 0 20,235 20,235 Total financial assets 5,770 0 0 0 0 0 0 20,235 26,005

Financial liabilities Payables 0 0 0 0 0 0 0 (27,373) (27,373) Interest bearing liabilities/ borrowings (9,300) (11,550) (12,000) (14,500) (13,970) (14,000) (110,000) 0 (185,320) Total financial liabilities (9,300) (11,550) (12,000) (14,500) (13,970) (14,000) (110,000) (27,373) (212,693)

Net financial assets/ liabilities (3,530) (11,550) (12,000) (14,500) (13,970) (14,000) (110,000) (7,138) (186,688) Weighted average interest rate 2.95% 5.20% 5.18% 5.17% 6.34% 6.45% 6.50%

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Notes to the Financial Statements

13.2 Fair valuation The carrying amounts and fair values of financial assets and financial liabilities at balance date are:

2011 2010 Carrying Fair value Carrying Fair value amount $’000 amount $’000 $’000 $’000

Financial assets Cash and cash equivalents 15,318 15,318 5,770 5,770 Receivables 27,726 27,726 20,235 20,235 Total financial assets 43,044 43,044 26,005 26,005

Financial liabilities Payables (41,158) (41,158) (27,373) (27,373) Interest bearing liabilities/borrowings (299,470) (311,575) (185,320) (195,524)

Total financial liabilities (340,628) (352,733) (212,693) (222,897)

Cash, cash equivalents and non-interest bearing financial assets and financial liabilities are carried at cost which approximates their fair value. The fair value of other financial assets and financial liabilities is based upon market prices, where a market exists or by discounting the expected future cash flows at current interest rates.

14. Provisions

14.1 Employee benefits

2011 2010 $’000 $’000

Current: Annual leave and unconditional long service leave entitlements, representing 7 years of continuous service: - employee benefits expected to be settled within 12 months, measured at nominal value 3,069 2,769 - employee benefits expected to be settled after 12 months, measured at present value 5,220 4,898 Total Current 8,289 7,667

Non-Current: Conditional long service leave, measured at present value 636 504 Total Non-Current 636 504

Total Employee Benefits 8,925 8,171

In measuring the present value of long service leave entitlements, a discount rate of 5.28% (5.16% in 2010), a workcover premium of 0.93% (0.93% in 2010) and a increase in employee costs of 4.6% (4.48%) was assumed.

B arwon Water Annual Report 2010-2011 69 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

14.2. Short term provisions

2011 2010 $’000 $’000

Current liabilities Other 3,617 3,173 Total current provisions 3,617 3,173

Opening balance at 1 July 2010 3,173 2,329 Additional provisions raised during year 2,236 1,708 Amounts used (1,792) (864) Balance at 30 June 2011 3,617 3,173

In accordance with AASB 137 ‘Provisions, Contingent Liabilities and Contingent Assets’ a provision has been established for the further treatment and processing of stored biosolids consistent with EPA licensing requirements.

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Notes to the Financial Statements

15. Superannuation On the basis of the results of the most During 2010-2011, Barwon Water was recent full actuarial investigation not required to make any payments to B arwon Water makes employer conducted by the Fund’s actuary as at 31 the Fund in respect of retrenchment superannuation contributions in respect December 2008, Barwon Water makes increments ($0 in 2009-2010). Barwon of most employees to the Local employer contributions to the Fund’s Water’s liability to the Fund as at 30 June Authorities Superannuation Fund (the Defined Benefit Scheme at rates 2011, including retrenchment Fund). Obligations for contributions are determined by the Fund’s Trustee. increments, accrued interest and tax is recognised as an expense in profit or The rate is currently 9.25% of members’ $0 ($0 in 2009-2010). loss when they are due. The Fund has salaries (9.25% in 2009-2010). The Fund’s liability for accrued benefits two categories of membership, In addition, Barwon Water reimburses was determined in the 30 June 2008 accumulation and defined benefits, the Fund for the difference between actuarial investigation pursuant to the each of which is funded differently. resignation and retrenchment benefits then requirements of Australian The Fund’s accumulation category, paid to employees. Employees are also Accounting Standard AAS25 as follows: Vision Super Saver, receives both required to make member contributions employer and employee contributions to the Fund. As such, assets accumulate 31 Dec 08 on a progressive basis. Employer in the Fund to meet member benefits, $’000 contributions are normally based on a as defined in theT rust Deed, as they Net Market Value of Assets 3,630,432 fixed percentage of employee earnings accrue. Accrued Benefits (per 3,616,422 (9% required under Superannuation Following an interim actuarial review accounting standards) Guarantee Legislation). No further conducted by the Trustee in late 2010, Difference between Assets 14,010 liability accrues to the employer as the as at 31 December 2008, a funding and Accrued Benefits superannuation benefits accruing to the shortfall of $71 million for the Fund was Vested Benefits 3,561,588 employees are represented by their determined. A call to Employers for share of the net assets of the Fund. additional contributions was made for The financial assumptions used to The Fund’s Defined Benefit Plan is a the financial year 30 June 2011.B arwon calculate the Accrued Benefits for the multi-employer sponsored plan. As the Water’s allocation of the shortfall was defined benefit category of the Fund Fund’s assets and liabilities are pooled $2,272,529.28 which was paid in May were: and are not allocated by employer, the 2011. Actuary is unable to allocate benefit A further actuarial review will be Net Investment Return 8.50% pa liabilities, assets and costs between undertaken as at 31 December 2011 by Salary Inflation 4.25% pa employers. As provided under AASB 119, mid 2012. Based on the result of this Barwon Water does not use defined Price Inflation 2.75% pa review, a detailed funding plan will be benefit accounting for these developed and implemented to achieve contributions. the target of full funding by Barwon Water makes employer 31 December 2013. Barwon Water will be contributions to the defined benefit notified of any additional required category of the Fund at rates contributions by late 2012. determined by the Trustee on the advice of the Fund’s Actuary.

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Notes to the Financial Statements

15.1 Superannuation contributions Contributions by Barwon Water to the above superannuation boards for the financial year ended 30 June 2011 are detailed below:

2011 2010 Type of scheme Rate $’000 $’000 Vision Super Defined Benefits 9.25% - 18.25% 1,467 1,456 Vision Super Accumulation Plan 9.00% 1,450 1,307 Emergency Services & State Super Defined Benefits 14.50% - 17.30% 24 23 Other Funds Accumulation Plan 9.00% 199 132

There were no contributions outstanding or loans issued from or to either of the above schemes at 30 June 2011.

16. Reserves

2011 2010 $’000 $’000

Asset Revaluation Reserve surplus/(deficit) Balance at 1 July 5,662 5,662 Revaluation increment / (decrement) on non-current assets 532,559 0 Tax effect of revaluation of assets (159,767) 0 Balance at 30 June 378,454 5,662

The asset revaluation reserve is used to record asset revaluation increments and decrements in the value of non-current physical assets.

17. contributed Capital

2011 2010 $’000 $’000

Contributed capital at 1 July 402,529 395,029 Capital transactions with the State in its capacity as owner arising from: - Northern Water Plant 10,000 6,000 - Black Rock Recycled Water Plant 0 1,500 - Melbourne-Geelong Pipeline 6,000 0 - Crown Land 265 0 16,265 7,500 Contributed capital at the end of the year 418,794 402,529

State of Victoria 2010-2011 capital contributions were received for key project milestones in relation to the Northern Water Plant and Melbourne to Geelong Pipeline, as well as various parcels of Crown Land transfers. In addition, government contributions were received and recognised in the Statement of Comprehensive Income - refer Note 3.

18. accumulated funds

2011 2010 $’000 $’000

Accumulated funds at the beginning of the financial year 523,649 510,960 Net result for the year 16,659 12,689 Accumulated funds at the end of the financial year 540,308 523,649

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Notes to the Financial Statements

19. Commitments

Outstanding contractual commitments for major works, services and materials entered into and not provided for in the Balance Sheet at 30 June 2011, amount to $403,456,000 (2010: $293,906,000) exclusive of GST.

2011 2010 2011 2010 $’000 $’000 $’000 $’000

BOO commitments Total BOO (build, own and operate) expenditure for a biosolids drying facility where the contractor will lease land from Barwon Water to build the thermal drying plant and will operate the facility for twenty years in exchange for a stream of payments, contracted for at balance date but not provided for in the accounts: Net Present Cost Nominal Cost - Not later than 1 year 6,532 2,070 6,794 2,188 - Later than 1 year but not later than 5 years 31,646 30,383 38,546 37,006 - Later than 5 years 81,575 80,175 185,688 185,433 Total BOO commitments 119,753 112,628 231,028 224,627

Capital commitments Total capital expenditure contracted for the construction of water, sewerage and drainage infrastructure at balance date but not provided for in the accounts: - Not later than 1 year 137,219 58,858 - Later than 1 year but not later than 5 years 23,925 30 - Later than 5 years 6,564 0 Total capital commitments 167,708 58,888

Operating commitments Total operating expenditure contracted for at balance date but not provided for in the accounts: - Not later than 1 year 304 1,296 - Later than 1 year but not later than 5 years 0 263 Total operating commitments 304 1,559

Environmental commitments Total environmental contribution expenditure commitment at balance date but not provided for in the accounts: - Not later than 1 year 4,416 4,416 - Later than 1 year but not later than 5 years 0 4,416 Total environmental commitments 4,416 8,832

B arwon Water Annual Report 2010-2011 73 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

20. notes to the Cash Flow Statement

20.1 Reconciliation of net cash provided by operating activities to net profit/loss

2011 2010 $’000 $’000

Net Profit after income tax 16,659 12,689

Changes in assets and liabilities Increase/(decrease) in employee provision 754 898 Increase/(decrease) in other provisions 444 845 Increase/(decrease) in bad debts provision (106) 95 Decrease/(increase) in receivables (3,720) (978) Decrease/(increase) in accrued interest receivable (72) 1 Decrease/(increase) in stock 13 21 Decrease/(increase) in prepayments (292) (325) Increase/(decrease) in creditors/accrued expenses 447 (2,920)

Add/(less) non-cash flows in net profit Depreciation, amortisation and impairment 31,639 29,989 (Profit)/Loss on disposal of property, plant and equipment 807 634 Non-cash capital contributions (8,541) (10,730) Income tax expense 7,205 5,470

Net cash provided by operating activities 45,237 35,689

20.2 Financing facilities Barwon Water has an overdraft facility of $100,000. The facility is subject to annual review by its bankers and at 30 June 2011, the amount of credit unused was $100,000. At 30 June 2011, Barwon Water had fully drawn firmly committed long term financing facilities of $299,470,000 (2010: $185,320,000).

21. responsible person related disclosures

21.1 Responsible persons The relevant Minister and Directors of Barwon Region Water Corporation are deemed to be responsible persons by ministerial direction pursuant to the provisions of the Financial Management Act 1994. The responsible persons (Minister) of Barwon Region Water Corporation during the reporting period was the Hon Tim Holding MP, Minister for Water (1 July 2010 to 1 December 2010) and the Hon Peter Walsh MP, Minister for Water (2 December 2010 to 30 June 2011). The responsible persons (Directors) of Barwon Region Water Corporation at any time during the reporting period were: M K Malouf (Accountable Officer) RA Batten (resigned 02/02/2011) RJ Bugg H Gleeson (term commenced 01/07/2010) J Heath (term commenced 01/07/2010) DM James RD Lowrey (Chairperson) JR McDonald (Deputy Chairperson)

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Notes to the Financial Statements

21.2 Remuneration of responsible persons The remuneration of the responsible persons (Minister) is reported in the annual report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members’ Interests which each member of the Parliament completes.

2011 2010 $’000 $’000

Income received, or due and receivable, by responsible persons of Barwon Water and related parties. 643 668

The number of responsible persons of Barwon Water whose income from Barwon Water and related parties was within the specified bands are as follows:

Total Remuneration Base Remuneration $ $ 2011 2010 2011 2010 20,000 - 29,999 1 0 1 0 30,000 - 39,999 5 6 5 6 60,000 - 69,999 1 0 1 0 70,000 - 79,999 0 1 0 1 320,000 - 329,999 0 0 1 1 370,000 - 379,999 1 1 0 0 Total Numbers 8 8 8 8 Total Amount $643,045 $667,861 $594,519 $622,094

The retirement benefits paid byB arwon Water in connection with the retirement of responsible persons of the corporation amounted to $0.

21.3 Other transactions of responsible persons and their related entities During the year transactions occurred between Barwon Water, responsible persons and their related entities. The transactions were those of a normal customer/supplier relationship.

B arwon Water Annual Report 2010-2011 75 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Notes to the Financial Statements

21.4 Executive officers remuneration

2011 2010 $’000 $’000

Income received, or due and receivable, by executives of Barwon Water and related parties whose income was at least $100,000. 3,139 3,022

The number of executive officers of Barwon Water whose income from Barwon Water and related parties was within the specified bands are as follows:

Total Remuneration Base Remuneration $ $ 2011 2010 2011 2010 100,000 - 109,999 1 0 1 1 110,000 - 119,999 0 1 6 6 120,000 - 129,999 5 6 4 2 130,000 - 139,999 4 2 3 3 140,000 - 149,999 1 2 0 0 150,000 - 159,999 3 1 0 0 170,000 - 179,999 0 1 1 2 190,000 - 199,999 0 1 4 5 200,000 - 209,999 1 5 0 0 210,000 - 219,999 4 0 0 0 230,000 - 239,999 1 0 1 0 Total numbers 20 19 20 19 Total amount $3,138,802 $3,022,411 $2,889,554 $2,774,253

22. auditor’s remuneration

2011 2010 $ $

Amounts received, or due and receivable, by the Victorian Auditor-General for auditing the accounts. 73,500 70,000

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Notes to the Financial Statements

23. contingent assets/contingent liabilities

2011 2010 $’000 $’000

Contingent assets As at 30 June 2011, there were no contingent assets recognised. 0 0

Contingent liabilities Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the accounts, are as follows: Claims or possible claims in relation to a rainwater tank rebates scheme in a subdivision in the Geelong region. 1,207 1,542 Possible gainshare and delivery performance payable by the corporation in relation to capital projects. 901 0 Total contingent liabilities $2,108 $1,542

24. events subsequent to balance date

No matters or circumstances have arisen since the end of the reporting period which significantly affected or may significantly affect the operations of the corporation, the results of those operations, or the state of affairs of the corporation in future financial years.

B arwon Water Annual Report 2010-2011 77 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

B ARwon REGION WATER CORPORATION

Statutory Certificate

W e certify the attached financial statements for Barwon Region Water Corporation have been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994, applicable Australian Accounting Standards, Interpretations and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out in the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and notes to and forming part of the financial statements, presents fairly the financial transactions during the year ended 30 June 2011 and the financial position of the corporation as at 30 June 2011. We are not aware of any circumstance which would render any particulars included in the financial statements to be misleading or inaccurate.

R Lowrey Chairman Barwon Region Water Corporation

M Malouf Managing Director Barwon Region Water Corporation

M Watson Chief Finance and Accounting Officer Barwon Region Water Corporation

Dated this 25th day of August, 2011

78 VAGO Victorian Auditor-General’s Office

INDEPENDENT AUDITOR’S REPORT

To the Board Members, Barwon Region Water Corporation

The Financial Report The accompanying financial report for the year ended 30 June 2011 of the Barwon Region Water Corporation which comprises the statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement, note comprising a summary of significant accounting policies and other explanatory information, and the statutory certification has been audited.

The Board Members’ Responsibility for the Financial Report The Board Members of the Barwon Region Water Corporation are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards, including the Australian Accounting Interpretations, and the financial reporting requirements of theFinancial Management Act 1994, and for such internal control as the Board Members determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility As required by the Audit Act 1994, my responsibility is to express an opinion on the financial report based on the audit, which has been conducted in accordance with Australian Auditing Standards. Those Standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The audit procedures selected depend on judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, consideration is given to the internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used, and the reasonableness of accounting estimates made by the Board, as well as evaluating the overall presentation of the financial report. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

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

Level 24, 35 Collins Street, Melbourne Victoria 3000 Telephone 61 3 8601 7000 Facsimile 61 3 8601 7010 Email [email protected] Website www.audit.vic.gov.au

Auditing in the Public Interest

B arwon Water Annual Report 2010-2011 79 VAGO Victorian Auditor-General’s Office

Independent Auditor’s Report (continued)

Opinion In my opinion, the financial report presents fairly, in all material respects, the financial position of the Barwon Region Water Corporation as at 30 June 2011 and of its financial performance and its cash flows for the year then ended in accordance with applicable Australian Accounting Standards, including the Australian Accounting Interpretations, and the financial reporting requirements of the Financial Management Act 1994.

Matters Relating to the Electronic Publication of the Audited Financial Report This auditor’s report relates to the financial report of the Barwon Region Water Corporation for the year ended 30 June 2011 included both in the Barwon Region Water Corporation’s annual report and on the website. The Board Members of Barwon Region Water Corporation are responsible for the integrity of the Barwon Region Water Corporation’s website. I have not been engaged to report on the integrity of the Barwon Region Water Corporation’s website. The auditor’s report refers only to the subject matter described above. 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 publication on a website, they are advised to refer to the hard copy of the audited financial report to confirm the information contained in the website version of the financial report.

MELBOURNE D D R Pearson 26 August 2011 Auditor-General

Level 24, 35 Collins Street, Melbourne Victoria 3000 Telephone 61 3 8601 7000 Facsimile 61 3 8601 7010 Email [email protected] Website www.audit.vic.gov.au

Auditing in the Public Interest

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PART 7 Disclosure index

The 2010-2011 Annual Report of the Barwon Region Water Corporation is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the authority’s compliance with statutory disclosure requirements.

Legislation Requirement Page reference Report of Operations Charter and purpose FRD 22B Manner of establishment and the relevant Ministers 5 FRD 22B Objectives, functions, powers and duties 4-5, 30 FRD 22B Nature and range of services provided 4 Management and structure FRD 22B Organisational structure 29 Financial and other information FRD 10 Disclosure index 81-82 FRD 12A Disclosure of major contracts 12 FRD 22B Operational and budgetary objectives and performance against objectives 10, 39-41 FRD 22B Employment and conduct principles 33 FRD 22B Occupational health and safety policy 34 FRD 22B Summary of the financial results for the year 10-12 FRD 22B Significant changes in financial position during the year 10 FRD 22B Major changes or factors affecting performance 10 FRD 22B Subsequent events 10 FRD 22B Application and operation of Freedom of Information Act 1982 36 FRD 22B Compliance with building and maintenance provisions of Building Act 1993 37 FRD 22B Statement on National Competition Policy 38 FRD 22B Application and operation of the Whistleblowers Protection Act 2001 37 FRD 22B Details of consultancies over $100,000 13 FRD 22B Details of consultancies under $100,000 12 FRD 22B Statement of availability of other information 36 FRD 25 Victorian Industry Participation Policy disclosures 38 FRD 27B Presentation and reporting of performance information 39-41 FRD 29 Workforce Data disclosures 33-34 FRD 30A Standard requirements for the design and print of annual report N/A SD 4.5.5 Risk management compliance attestation 30 SD 4.2(g) General information requirements 4-12 SD 4.2(j) Sign-off requirements 9

B arwon Water Annual Report 2010-2011 81 service area map | Part 1 – Year in review | Part 2 – Water Consumption and drought response | Part 3 – Environmental and social sustainability

Appendix one: disclosure index

Legislation Requirement Page reference Financial Statements Ministerial Reporting Directions MRD 01 Performance Reporting 39-41 MRD 02 Reporting on water consumption and drought response 14-16 MRD 03 Environmental and social sustainability reporting 17-22, 27-28 Disclosure of information on bulk entitlements, transfers of water entitlements, MRD 04 23-26 allocations and licences, irrigation water usage and licence requirements MRD 05 Annual reporting of non-residential major water users 15 Financial statements required under Part 7 of the FMA SD4.2(a) Statement of changes in equity 46 SD4.2(b) Statement of Comprehensive Income 44 SD4.2(b) Balance Sheet 45 SD4.2(b) Cash Flow Statement 47 Other requirements under Standing Directions 4.2 Compliance with Australian accounting standards and other authoritative SD4.2(c) 48 pronouncements SD4.2(c) Compliance with Ministerial Directions 48 SD4.2(d) Rounding of amounts 48 SD4.2(c) Accountable officer’s declaration 78 SD4.2(f) Compliance with Model Financial Report 78 Other disclosures as required by FRDs in notes to the financial statements FRD 03A Accounting for Dividends 49 FRD17A Long service leave wage inflation and discount rates 45, 52, 69 FRD 19 Private provision of public infrastructure 52, 73 FRD 21A Responsible person and executive officer disclosures 74-75 FRD 102 Inventories 50 FRD 103D Non-current physical assets 45, 50-51, 64-66 FRD 104 Foreign currency 48 FRD 105A Borrowing costs 44, 47, 49, 58 FRD 106 Impairment of assets 44, 51, 54, 64-66 FRD 109 Intangible assets 51, 66 FRD 107 Investment properties N/A FRD 110 Cash flow statements 47, 74 FRD 112C Defined benefit superannuation obligations 52, 71-72 FRD 113 Investments in subsidiaries, jointly controlled entities and associates N/A Financial Instruments – General Government Entities and public non financial FRD 114A 53, 68 corporations FRD 119 Contributions by owners 45, 46, 47, 53, 72 FRD 120 Accounting and reporting pronouncements applicable from 2009-10 reporting period 48-54 FRD 121 Infrastructure assets 45, 50-51, 64-65 Legislation Freedom of Information Act 1982 36 Building Act 1993 37 Whistleblowers Protection Act 2001 37 Victorian Industry Participation Policy 38 Act 2003 Multicultural Victoria Act 2004 28

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Additional copies This annual report is available for viewing or download from Barwon Water’s website www.barwonwater.vic.gov.au As part of Barwon Water’s goal to continually improve its environmental performance, it prints limited numbers of the annual report. Barwon Water encourages those with internet access to view the report online. If you require any additional printed copies, please contact Barwon Water using one of the below methods.

Your feedback B arwon Water welcomes your feedback on its performance and the content of this report. Email: [email protected] Telephone: 1300 656 007 Calling from overseas: +61 3 5226 2500 In writing: PO Box 659 Geelong Victoria 3220 In person: 61-67 Ryrie Street Geelong Victoria

ISSN 1838-2916 (Print) ISSN 1838-2924 (Online) © Barwon Region Water Corporation 2011. This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968.

Barwon Water is always looking for ways to improve its practices to reduce its environmental footprint. This extends to the paper and processes it uses.

Revive Laser is an Australian made, 100% recycled paper which is FSC Recycled Certified. Revive Laser is also certified Greenhouse FriendlyTM by the Australian Government’s Department of Climate Change. Pulp is Process Chlorine Free (PCF) and helps divert waste from Australian landfill sites. Australian Paper is an ISO 14001 certified mill which utilises renewable energy sources.

GSDM 10300 B arwon Water Annual Report 2010-2011 83 61-67 Ryrie Street Geelong Victoria 3220 PO Box 659 Geelong Victoria 3220 1300 656 007 www.barwonwater.vic.gov.au