2012/2013 ANNUAL REPORT OUR SERVICE AREA

Navarre

Redbank

Havelock Timor Landsborough Bowenvale

Alma Maryborough Centenary Reservoir Tullaroop Sugarloaf Avoca Reservoir Reservoir Bung Bong Craigie Lead Daisy Hill Dam Majorca

Amphitheatre Talbot

Talbot Reservoir Lexton Lexton Maryborough Reservoir Reservoir Clunes Hepburn Springs Smeaton Hepburn Reservoir Waubra Daylesford Kingston Broomfield Bullarto Reservoir Learmonth Newlyn Lake Creswick Beaufort Learmonth Reservior Cosgrave Reservoir Dean Burrumbeet Miners Rest Dean Blackwood Lake White Swan Reservoir Burrumbeet Reservoir Wilson’s Moorabool Ballarat Reservoir Reservoir Colbrook Gong Gong Reservoir Reservoir

Kirk’s Wallace Bungaree Carngham Haddon Reservoir Gordon

Snake Valley Ballan Lal Lal Smythesdale Reservoir Pittong Buninyong Scarsdale Napoleons Skipton Linton

Enfield

Dereel LEGEND

Corindhap Water pipeline Rokewood Recycled water Water reclamation plants Water treatment plants Major roads Lakes and reservoirs Water district

0 4.75 9.5 19 Kilometres Sewer district

02 ANNUAL REPORT 2012/13 CONTENTS

Section 1 – About Us Section 4 – Performance Our Profile 04 Financial Performance 21 Facts and Figures 04 Summary of Financial Results 21 What We Do 04 Major Works and Contracts 22 Our History 05 Consultancies over $10,000 22 What Guides Us 06 Consultancies under $10,000 22 From Our Chair and Managing Director 07 Performance Report 24 Our Key Events 08 Objectives Report 28 Environmental Sustainability 29 Section 2 – Supply Information Social Sustainability 34 Corporate Water Consumption 09 Drought Response 35 Major Water Users 09 Disclosure Index 36 Water Consumption Report 10 Management of Drinking Water Quality 10 Section 5 – Financial Statements 2012/13 Financials 37 Section 3 – Corporate Governance The Board’s Role – Committees 11 Section 6 – Appendices Board Meeting Attendance 12 Bulk Entitlements Compliance Report 84 Board of Directors 13 Organisational Structure 15 Executive Team 16 Workforce 18 Occupational Health and Safety 18 Legislative Compliance 19 Freedom of Information 19 Statement of Availability of Other Information 19 Applicable Acts 19 Applicable Policies 19 Community Inclusiveness 20

ANNUAL REPORT 2012/13 03 OUR Profile

Facts and Figures W hat We Do as at 30 June 2013 Constitution General Information Central Highlands Region Water Corporation (CHW) is one of 19 Total Population Serviced 134,600 state-owned water businesses. Its name was changed from Central Highlands Region Water Authority effective 1 July 2007 under the Current Operating Revenue $90 million provisions of the Water (Governance) Act 2006 (Vic). Value of Infrastructure, Property, $879 million Each water business has a Chairperson (appointed by the Minister) Plant and Equipment and a Board of Directors. The Board has a range of responsibilities including: Number of Full-Time Equivalent Employees 176.98 • Steering the entity. • Setting objectives and performance targets. Water Supply Services • Ensuring compliance with legislation and government policy. Total Number of Connections 63,934 Each Board appoints a Managing Director who sits on the Board and Number of Non-Residential Customers 4,716 is the primary link between the Board and the staff. Bulk Water Supply Volume 12,397ML The Board of CHW reports to the Minister for Water via the Department of Environment and Primary Industries. The responsible Number of Water Treatment Plants 15 Minister during the 2012/2013 reporting period was The Hon Peter Walsh, MLA. CHW operates under the Water Act 1989 (Vic) and is required to Headworks Infrastructure carry out the following statutory functions in districts under its control: Number of Reservoirs 30 Water Supply Number of Diversion Weirs 13 • To provide, manage, operate and protect water supply systems, Number of Groundwater Bores 33 including the collection, storage, treatment, transfer and distribution of water. Bulk Water Entitlements Held 17 • To identify community needs relating to water supply and to plan for the future needs of the community relating to water supply. Retail Water Supply Infrastructure • To develop and implement programs for the conservation and efficient use of water. Length of Water Mains 2,432km • To investigate, promote and conduct research into any matter Number of Service Basins and Tanks 50 related to its functions, powers and duties in relation to water supply. Number of Water Pumping Stations 41 • To educate the public about any aspect of water supply. Wastewater Services Sewerage • To provide, manage and operate systems for the conveyance, Total Number of Connections 53,918 treatment and disposal of sewage and, if the Corporation so Number of Major Trade Waste Customers 20 decides, of trade waste. Number of Wastewater Treatment Plants 12 • To identify community needs relating to sewerage services and to plan for the future needs of the community relating to sewerage Total Volume of Wastewater Treated 10,421ML services. Volume of Effluent Irrigated to Land 995ML • To develop and implement programs for the recycling and reuse of treated wastewater. • To investigate, promote and conduct research into any matter Wastewater Collection Infrastructure which relates to its functions, powers and duties in relation to sewerage services. Approximate Length of Sewer Mains 1,291km • To educate the public about any aspect of sewerage. Number of Wastewater Pumping Stations 95 Environment CHW performs these functions in an environmentally sound way, recognising the need to preserve aspects that affect landscape, fauna and flora.

04 ANNUAL REPORT 2012/13 OUR HISTORY

1837 First European settlers to Ballarat District. 1973 Water supplied to Rokewood Waterworks Trust. Works to enable water to be obtained from Bungal Dam commenced. 1851 21 September first gold licences issued. October first public Miners Rest Waterworks Trust incorporated into the Ballarat agitation for a water supply. Water Commissioners. 1856 January first Municipal Council meeting in Ballarat. Ballarat 1974 28 October HRH Prince of Wales visited White West Council established water sub-committee. First Swan Reservoir. improved water supply, Wendouree Swamp, bank raised, pumps and tanks erected, water carts and road improved. 1976 The Ballarat Water Commissioners’ staff assumed responsibility for the running of the West Moorabool Water 1857 Ballarat East Council formed, established water Board. sub-committee. Occasional joint meetings of East and West Councils held. 1979 Lal Lal and Magpie areas included in Water Supply District. 1858 First water supply piped from the Swamp, pipes laid from 1983 Public Bodies Review Committee recommended location where Wendouree Parade and Webster Street meet The Ballarat Water Commissioners and The Ballarat (at rockery), to Sturt Street, near Lydiard Street. December Sewerage Authority should include other Trusts, namely: first piped water available. Buninyong Waterworks Trust, Bungaree - Wallace Waterworks Trust, Smythesdale - Scarsdale Waterworks 1861 11 January John Kirk sold his dam to the Government of Trust, Linton Waterworks Trust and Rokewood Waterworks Victoria, laying the foundation for the future Ballarat Water Trust. Northern distribution main completed and Bungal Supply System. water can now supply the whole northern area. 1862 June - Ballaarat and Ballaarat East Water Supply Committee 1984 Government direction that Ballarat Water Board be formed was constituted. Kirks Dam forms foundation of Ballarat’s and include the other five Trusts. Ballarat Water Board first permanent water supply. commenced operation from 1 July 1984. 1866 Water Supply Committee composed of eight Members. 1991 Daylesford Water merges with Ballarat Water Board. 1867 Ballaarat and Ballaarat East Water Supply Committee 1994 Ballarat Water Board changes name to Central Highlands reconstituted, 10 Members, five from each Council. Region Water Authority. Creswick and District and Learmonth Pincotts Reservoir completed (capacity 45,000,000 gallons). Water Board incorporated into Central Highlands Region 1877 Gong Gong Reservoir completed Water Authority. Maryborough Water Board merges with (capacity 411,000,000 gallons). Central Highlands Region Water Authority. 1880 By Act of Parliament ‘The Ballarat Water Commissioners’ 1995 Beaufort Water Board merges with Central Highlands Region constituted comprising seven Members, three appointed by Water Authority. Government and two from each Council (Chairman J Noble 1997 Water Reform Package announced. Wilson, Secretary and Treasurer JB Cathcart, Engineer CH Bagge). 2004 Government releases white paper – Securing Our Water Future Together. 1885 The Ballarat Water Commissioners’ first permanent home constructed (corner Grenville and Lewis Streets). Contractor: 2006 Goldfields Superpipe – Ballarat Link to secure Ballarat’s water Llewellyn and Edwards. Tender amount: £2,158. supply for the next 50 years. 1891 Wilsons Reservoir completed 2006 December Ballarat registered lowest annual rainfall on record (capacity 220,000,000 gallons). since 1882. 1915 Moorabool Reservoir completed 2007 Groundwater from the Cardigan Aquifer supplements the (capacity 1,478,000,000 gallons). Ballarat & District water supply system, providing up to an additional 3,000 million litres of water a year. 1920 ‘The Ballarat Sewerage Authority’ constituted. Chairman Hon F Brawn MLC, Engineer-in-Chief A Farrer, Secretary and 2007 Name changed to Central Highlands Region Treasurer Col W Brazenor DSO. Water Corporation. 1947 Water Supply District extended to area of 65 2008 Goldfields Superpipe – Ballarat Link officially opened on 19 square miles. May 2008 with water flowing through the pipeline six weeks ahead of schedule. Superpipe switched on at Ballarat’s White 1952 White Swan Reservoir completed Swan Reservoir. (capacity 3,274,000,000 gallons). 2009 Mini-Hydro Electricity Generator commissioned to 1962 Total catchment area 24,182 acres – vested in harness energy from the Goldfields Superpipe at White Commissioners 6,849 acres. Population supplied 58,000. Swan Reservoir. 1967 Water supplied to Smythesdale - Scarsdale 2010 Record rainfalls and flooding across the district. Country Waterworks Trust. Towns Sewer Project commenced. 1972 Water supplied to Linton Waterworks Trust. Bungal Dam 2011 The Central Highlands Region received above average rainfall completed. Major extensions at Sebastopol Treatment resulting in most reservoirs reaching capacity for the first time Plant completed. in 15 years. 2012 150 years of permanent water supply to Ballarat and District 2013 Sewerage services provided to the towns of Gordon, Smythesdale and Waubra.

ANNUAL REPORT 2012/13 05 WHAT GUIDES US

Vision A sustainable water future based on community partnerships.

Mission Providing quality water and wastewater services fairly, efficiently and sustainably to communities in the Central Highlands Region.

Guidina g V lues The values that guide CHW’s decision making are encapsulated in the following themes:

Collaborate CHW collaborates with our customers and stakeholders to ensure we are meeting their expectations. Collaboration between staff, management and the Board ensures an efficient team effort in delivering water and wastewater services to our customers.

Innovate Through innovation we offer industry leadership, manage limited resources and provide products and services to meet customer needs. Innovation is a mindset whereby we are always seeking to understand “what we are trying to achieve” and “how else we can achieve this outcome more effectively.”

Deliver We deliver water and wastewater services 24/7. We deliver on our promises to customers and stakeholders.

Trust As stewards for present and future generations we are trusted to manage our resources sustainably. We are trusted by our customers for the quality of the products and services we provide. We trust our colleagues to work together to deliver the business objectives.

06 ANNUAL REPORT 2012/13 MESSAGE FROM OUR CHAIR AND MANAGING DIRECTOR

Welcome Cash flows from operating activities increased modestly despite absorbing the Defined Benefit Superannuation shortfall of Following major capital works over the past five years to ensure $5.2m which was paid during 2012/13. Cash flows from secure water supplies for the Central Highlands Region, investing activities decreased as CHW returns to a more 2012/13 has been a year of consolidation and detailed planning business as usual capital expenditure program following a as we head into Water Plan 3. sustained period of significant infrastructure spend driven by Water Plan 3 is our strategic and operational plan for the next the drought and Government initiatives. The resultant net cash five years and was signed off by the economic regulator, the outflow from operating and investing activities of $4.4m was Essential Services Commission in June this year. It will see CHW’s best result for seven years. Central Highlands Water (CHW) charge a small tariff increase in year one (2013/14) and CPI only in the following four years Community and Customers: Delivery of KPI’s (2014-18). This low tariff increase will give residential and business customers pricing certainty over the five years. CHW successfully met all of its long term key performance indicators for water quality and environmental wastewater reuse The year also saw the significant milestone of CHW celebrating and discharge in accordance with regulatory obligations across 150 years of a permanent water supply to Ballarat. This was 38 separate water quality monitoring zones and 11 licensed celebrated by 1,200 residents and staff at a Community Day wastewater plants respectively during the year. A significant held at Kirks Reservoir Park and a luncheon attended by the accomplishment was 100% delivery of a major program of Minister for Water in November 2012. scheduled system maintenance works during 2012/13 to improve disinfection residuals in both the Ballarat and Projects Maryborough drinking water supply pipeline networks. Water Plan 3 will see Central Highlands Water deliver over This year saw the introduction of CHW’s “Hydration Station” $100m of capital works programs to support and improve water trailer to events throughout the region and the launch of water and wastewater infrastructure services. Operationally the “Grow Your Own Food” gardening program at the Ballarat we will continue a focus on high customer service standards. Begonia Festival in March 2013, a three-day event which was attended by 30,000 people. New projects to commence in 2013/14 include an upgrade to the Ballarat South Wastewater Treatment Plant (Ballarat’s In August 2012, CHW launched a new website which main plant), the Maryborough Water Quality upgrade, Musical provides customers with an enhanced first point of contact, Gully Dam upgrade and a two-kilometre rising main upgrade additional functionality plus access to a wider range of in Sebastopol. information and services. A number of major projects have been completed over the past twelve months. Of particular note was the completion of the Board and Organisation Country Town Sewerage Project in the towns of Gordon, We would like to acknowledge the enthusiasm, commitment Smythesdale and Waubra and a major upgrade to the Beaufort and contribution of our fellow Board members. We are highly Wastewater Treatment Plant. We were pleased to have the Hon conscious of the need to manage prudently for the future. Peter Walsh, Minister for Water mark the completion of these Management and the Board are united to ensure that our sewerage schemes on 12 April at Smythesdale. We are operations going forward will be efficient and cost effective, continuing work on the Blackwood sewerage project with the and customer focussed. Blackwood community, stakeholders and regulators to investigate and determine an appropriate sewerage solution During September/October, the Board farewelled Director for the town. Tim Blood who did not seek re-appointment following the conclusion of his 2-year term and subsequently welcomed Work also commenced on connecting a new bore supply for Director Gaye Mason who has been appointed for a 3-year Redbank. This project will provide improved water quality to term with CHW. The Board also farewelled Director Vicki this small town in the region’s north. Coltman on 30 June 2013 following her resignation from In addition to the above, in partnership with the Pyrenees Shire the Board. Council, a new sewerage scheme was constructed at Snake Finally, we would like to acknowledge the contribution of our Valley during the year. This project will provide access to a employees and contractors throughout the past year. Without pressurised sewer scheme for approximately 150 customers them, CHW would not have delivered such a strong with the capacity to expand up to 200 as the community performance and service to our customers. continues to grow.

Financial Performance CHW delivered a profit before tax of $5.5m, the strongest Jeremy Johnson Paul O’Donohue financial result over the Water Plan 1 & 2 period. Operating Chair Managing Director revenues were driven higher by an increase in retail water 27 August 2013 27 August 2013 demand following a warm and dry summer period and the recognition of higher gifted asset revenue after a strong development phase occurring throughout the region.

ANNUAL REPORT 2012/13 07 OUR KEY EVENTS 2012/13

July January • Paul O’Donohue appointed Managing Director • Sponsored the Power FM and 3BA Skyworks at Lake Wendouree on Australia Day August • Appoint MWH as new engineering services provider • D.R. Gordon Building announced winner of the CHW Trade Business Award at the CGU Commerce Ballarat February Business Excellence Awards. Other category finalists: • Gordon sewerage scheme becomes operational SS Electrics and Sleeps Plumbing • Launch of new CHW website March • CHW participates and supports the Begonia Festival as a October “Community Partner” • Avoca Water Treatment Plant – Raw water main • Smythesdale sewer scheme becomes operational duplication • Gaye Mason appointed to Board April • Official launch for the commencement of sewerage November services to Smythesdale, Gordon and Waubra under the • Community day held at Kirks Reservoir Park to celebrate Country Towns Sewer Project 150 years of serviced water supply to Ballarat • Waubra sewer scheme becomes operational • Sponsored the Maryborough RACV Energy Breakthrough Crafty Design Category May • Ballarat South Wastewater Treatment Plant lagoon renewal project design phase • New Beaufort Wastewater Treatment Plant becomes operational

June • Waubra replacement bore project completed • New Tullaroop pump and switchboard completed • Kirks Reservoir road rehabilitation works completed

08 ANNUAL REPORT 2012/13 CORPORATE WATER MAJOR WATER CONSUMPTION USERS

These amounts represent water consumption at CHW’s Customer by Volume Range Learmonth Road Ballarat site, including the office, workshop Section 122ZJ Water Act 1989 and maintenance areas and the High Street Maryborough office. These amounts do not include any treatment plants or Volumetric Range – ML per year No of Customers other work sites. Equal to or greater than 200ML and less than 300ML 0 300ML 400ML 0 Consumption 2,037KL 400ML 500ML 0 No of Employees (FTE) 176.98 500ML 750ML 1 Annual Use 11.5KL per person 750ML 1000ML 0 Daily Use 31.5 litres per person 750ML 1000ML 0 Per m2 Office Space 509 litres Greater than 1000ML 0 Total Number of Customers 1

KL= 1,000 Litres ML = 1,000,000 Litres

Major Non-Residential Customers and their Participation in Water Conservation Programs Section 122ZJ Water Act 1989 Non-Residential Customer Participation in Water Conservation Programs McCain Foods (Aust) Pty Ltd Significant reductions in water consumption achieved in recent years have been maintained

ANNUAL REPORT 2012/13 09 WATER CONSUMPTION REPORT

2012/13 Water Consumption by Water Supply System

Residential Non-Residential Concessional Totals

Metered Metered Metered Total Metered Average Annual 2011/12 usage Water Consumption Water Consumption Water Consumption Total Water Consumption Consumption as % of Average Supply System Connections (ML) Connections (ML) Connections (ML) Connections (ML) (ML) Demand Amphitheatre 66 12.0 1 0.02 6 0.7 73 12.7 10 127.2% Avoca 570 82.0 72 22.9 19 4.4 661 109.3 92 118.8% Ballarat & District 47,317 7,064.3 3,658 2,438.2 565 604.7 51,540 10,107.2 8,761 115.4% Beaufort 698 98.1 88 25.6 16 7.6 8.2 131.3 117 112.2% Blackwood 324 23.2 10 2.8 6 1.8 340 27.8 25 111.2% Clunes 843 129.9 70 31.1 10 8.0 923 169.0 151 111.9% Daylesford 2,505 352.0 284 115.9 31 37.5 2,820 505.4 442 114.3% Dean 16 4.5 3 1.1 2 0.7 21 6.3 5 126.0% Forest Hill 454 106.1 30 11.9 9 0.6 493 118.6 101 117.4% Landsborough 110 15.6 26 5.2 8 0.7 144 21.5 17 126.5% Learmonth 125 24.9 19. 19.6 8 2.3 152 46.8 36 130.0% Lexton 91 13.3 5 0.5 6 0.5 102 14.3 12 119.2% Maryborough & District 5,172 811.7 443 185.0 97 105.7 5,712 1,102.4 897 122.9% Redbank 38 3.9 4 0.07 1 0.01 43 4.0 4 100.0% Waubra 100 19.3 3 0.20 5 0.8 108 20.3 16 126.9% Totals 58,429 8,761 4,716 2,860 789 776 63,934 12,397 10,686 116.0%

Average calculated between years 2008 to 2013 Wastewater connections all systems: 53,918 Non-revenue water all systems 1,659 MANAGEMENT OF DRINKING WATER QUALITY

CHW is committed to managing its water supply systems Water Quality Improvement Projects effectively to provide safe, high quality drinking water that meets regulatory requirements such as the Safe Drinking During 2012/13, CHW implemented and continued a number Water Act 2003 and the Safe Drinking Water Regulations of major initiatives to maintain and improve water quality for 2005. customers, including: • A major upgrade of the control systems at Maryborough In accordance with the legislation, we have prepared and Water Treatment Plant, allowing greater automation of the implemented a ‘catchment to tap’ Risk Management Plan plant and improved operational control to identify and manage risks in relation to all of our water supply systems. • A new Water Treatment Plant (desalination/disinfection) was constructed and commissioned to provide high quality This Plan is audited by approved auditors from the potable/drinking water to customers in the townships of Department of Health, and CHW last underwent an audit Landsborough and Navarre during November 2011. The audit confirmed that CHW continues to be compliant with the obligations of the • Major denitrification works across the Ballarat and Safe Drinking Water Act 2003. Maryborough water supply service area CHW has developed a comprehensive testing and monitoring program to verify the effectiveness of risk management processes. Detailed results of compliance with those parameters specified in the Safe Drinking Water Regulations 2005 are outlined in the annual Water Quality Report.

10 ANNUAL REPORT 2012/13 CORPORATE GOVERNANCE

The Board’s Role - Committees Sustainability Committee The function of the Sustainability Committee is to ensure that Audit Committee the CHW Board maintains a focus on sustainability throughout its policies, operations and service delivery. This The primary objective of the Audit Committee is to support includes the broad areas of: the Board in fulfilling its responsibilities in sound corporate governance and in the reporting practices of Central • Resource sustainability; Highlands Water. • Water efficiency; The Committee also: • Climate change response; • Oversees and appraises the scope and quality of the • Catchment management and biodiversity; and audits conducted by internal and external auditors; • Energy and waste management. • Maintains, by holding quarterly meetings, open lines of This will be achieved through: communication among the Board, internal auditors and the external auditors to exchange views and information, • Maintaining, by holding quarterly meetings, open lines of and confirm their respective authorities and responsibilities; communication among the Board, and key stakeholders to exchange views and information, and confirm their • Serves as an independent and objective party to review respective authorities and responsibilities; the reliability and integrity of financial information; • Oversight of CHW’s Sustainability Framework, • Determines the adequacy of Central Highlands Water’s administrative, operating and accounting controls; and • Providing thought leadership into policy development of the Board; and • Identifies and monitors systems for reporting operating risks, with the aim of minimising them. • Making recommendations consistent with the strategic plan to the Board to assist the advancement of CHW’s The Audit Committee Charter is a policy statement that integration of the Sustainability Management Principles into outlines the parameters and framework in place to ensure the the performance of the Corporation’s functions, powers Audit Committee is fulfilling its corporate governance and duties. responsibilities including but not limited to those outlined in the “Standing Directions of the Minister for Finance under the The Committee will annually review its Sustainability Financial Management Act 1994”. Framework (Principles; Objectives; Key Programs), its Work Plan and Annual Calendar. Membership Membership The Audit Committee will comprise at least three independent Ian Coles (Chair) non-executive directors and may include one independent Stewart Howe external member who shall have diverse and complementary Jo Plummer backgrounds. Each member should have a working knowledge of finance and accounting practices, compliance and or risk management practices and be capable of making Remuneration Committee a valuable contribution to the Committee. At least one The role of the Remuneration Committee is to fix and review member must have appropriate expertise in financial the performance and salary of the Managing Director. It also accounting or auditing. receives and reviews recommendations from the Managing Appropriate expertise being defined as one or a combination Director about the remuneration and performances of the of the following: Executive Management. • Relevant past employment experience in an accounting The Committee may also be used by the Managing Director profession; or Directors to canvass any issues about staffing or • Requisite professional qualification in accounting; or organisation structure, but will provide no direction to the Managing Director on these matters. • Comparable experience with financial oversight responsibilities. Membership Jeremy Johnson (Chair) Membership Ian Coles Richard Nicholson (Chair) Vicki Coltman * Jo Plummer * Resigned from the Board effective on 30 June 2013 Gaye Mason

ANNUAL REPORT 2012/13 11 CORPORATE GOVERNANCE

Customer Participation Committee OUTGOING Board Members The aim of the Customer Participation Committee is to: CHW would like to thank the following outgoing Board • Identify and recommend to the Board outcomes and members for their valuable contribution and commitment to strategies to enhance CHW’s relationships with key the corporation during their tenure. stakeholders including, but not limited to, local government, business, community and government; Tim Blood • Maintain, by holding quarterly meetings and meetings of Tim served on the CHW Board from July 2010 the Customer Liaison Group, open lines of communication to September 2012 among the Board, and the community; • Identify and manage the role of the Customer Liaison Vicki Coltman Group; Vicki served on the CHW Board from October 2011 • Manage the tasks undertaken by the group; and to June 2013 • Ensure a continuing and effective contribution from the group. Board Member Meeting Attendance Membership Board Meetings 1 July 2012 – 30 June 2013 Vicki Coltman (Chair)* Gaye Mason No of Stewart Howe meetings Board Member attended * Resigned from the Board effective on 30 June 2013 Jeremy Johnson (Chair) 7 of 7 Customer Liaison Group (CLG) Richard Nicholson (Deputy Chair) 7 of 7 The role of the Customer Liaison Group is to provide Paul O’Donohue (Managing Director)** 7 of 7 feedback to Central Highlands Water on a wide range of key community water and wastewater issues. The group has Ian Coles 7 of 7 three main aims: Jo Plummer 6 of 7 • To represent customer interests to Central Highlands Stewart Howe 7 of 7 Water; Vicki Coltman*** 6 of 7 • To help develop mechanisms for information flows; and • To provide and receive feedback, particularly on service Gaye Mason** 6 of 6 standards. Tim Blood* 1 of 1

The Group will comprise of up to 10 community members *Concluded Board Appointment 30 September 2012 broadly representative of CHW’s customer base and selected **Commenced Board Appointment 1 October 2012 following public advertisements for volunteers, plus two ***Resigned from the Board effective on 30 June 2013 Directors of the CHW Board. Membership Board and Committee Vicki Coltman (Chair)* Richard Nicholson Performance Appraisals

* Resigned from the Board effective on 30 June 2013 Performance appraisals are conducted annually with assistance of an independent consultant. They provide an objective evaluation of the performance of Board members.

12 ANNUAL REPORT 2012/13 BOARD OF DIRECTORS

The eight-member Board of CHW is accountable to the Hon Peter Walsh MLA, Minister for Water. All members are involved in several Board Committees.

Jeremy Johnson, Chair Dip (BusSt) Jeremy is the Chief Executive Officer of Sovereign Hill, Ballarat. He is Honorary Treasurer of the Council of Australasian Museum Directors, past President of the Board and Executive Council of the Victorian Employers’ Chamber of Commerce and Industry (VECCI) and Chairman of the Victorian Tourism Industry Council. A Justice of the Peace, Jeremy was awarded an Honorary Doctorate by the University of Ballarat in 2011 for his services to the business community. Jeremy is also a Fellow of the Chartered Institute of Company Secretaries.

Richard Nicholson, Deputy Chair BE (HONS), GAICD A Director and owner of a 100 year old family business in commercial construction, Richard is a qualified civil engineer with practiced skills in business and financial risk management. A Graduate Member of the Australian Institute of Company Directors, he is a Director and past President of the Sovereign Hill Museums Association (2006-2008) and is currently the Chair of the Gold Museum Committee.

Ian Coles, Director BE (HONS), Grad Dip Bus Admin, FAICD Ian is a consultant and company director with extensive public and private sector experience in management, environmental and sustainability programs and projects. He is a Director of several private sector and government organisations, as well as an independent member of EPA Victoria’s Risk and Audit Committee, and a Sessional Member of Planning Panels Victoria.

Vicki Coltman, Director GAICD, MBA, B.Bus. Vicki is a City of Ballarat Councillor, elected in October 2012; a current Director of Ballarat ICT Ltd and the Art Gallery of Ballarat; and a Trustee of the Ballarat Art Gallery Foundation. She is a business analyst and project manager, with experience designing and implementing IT systems and processes at a variety of small to large organisations. Vicki is an active contributor in the community sector, frequently volunteering her management and governance knowledge to support local not-for-profit agencies and organisations.

ANNUAL REPORT 2012/13 13 BOARD OF DIRECTORS

Stewart Howe, Director BE (Chem), MA Fin, FAICD, FFIN, M AUS IMM Stewart has 30 years’ experience in the global oil, gas and mining sectors in executive management, operations, mergers and acquisitions and restructuring roles. His career with BP and Zinifex included direction of major investment programs to develop long life natural resource assets, plus directorship of a range of subsidiary and joint venture companies. For the past three years Stewart has run his own corporate advisory firm, directing restructuring initiatives and investment selection for private equity funds. He holds non-executive advisory roles and ownership interests in two privately owned mining and engineering service companies. Stewart has a Chemical Engineering degree and Masters in Applied Finance. He is a Fellow of AICD and Finsia.

Gaye Mason, Director BBus (Acc), GradDip (AppInfSys), Grad Dip (AppCorpGov), MBA, FAICD, FCPA, ACSA Gaye is a Board Member of the Southern Metropolitan Cemeteries Trust and chairs the Audit & Risk Committees for City of Port Phillip and Wyndham Council. She is an independent member of the Department of Health and AMES’ Audit and Risk committees.

Jo Plummer, Director GAICD, MBA, Grad Cert Mgt, Dip Retail Mgt, Cert IV in TAA Jo is owner and Director of Out of the Box Business Services. This boutique management and consultancy business specialises in assisting organisations, teams and individuals to think strategically and operate efficiently. She is also currently working with the Transport Accident Commission in their Business Improvement branch on a part-time contract basis. She has a strong commercial background having held product development and procurement, business planning, and strategic design roles with well-known retail brands for over twenty years. She also has previous experience as a non-executive Director and Committee Chair in the not-for-profit sector.

Paul O’Donohue, Managing Director GradDip (BusMan), BA (Management), Diploma (L’ship), FIWA, MAICD Paul is the Managing Director of Central Highlands Water. Since joining the organisation in 2003, he has overseen many key business areas including strategy, long-term planning, communications and account management. Prior to joining Central Highlands Water, Paul held senior management positions in the recreation and hospitality sectors.

14 ANNUAL REPORT 2012/13 ORGANISATIONAL STRUCTURE

State Government of Victoria Hon Peter Walsh MLA, Minister for Water

Board of Directors Chair Jeremy Johnson

Managing Director Paul O’Donohue

General Management Team

Water Resource Infrastructure Strategy and Business Customer and Operations Delivery Planning Services Community Jeff Haydon Warren Jose Steve Millard - Acting Anthony O’Brien Graham Holt

Sustainability Infrastructure Land Development Organisational Customer Service Delivery Development Water and Major Projects and Network Services Wastewater Country Towns Strategic Planning Finance and Treatment Sewerage Project Governance Community Engagement and Water Resources Information Marketing Communications Laboratory Technology Business Development Contracts and Purchasing

ANNUAL REPORT 2012/13 15 EXECUTIVE TEAM

Jeff Haydon Warren Jose General Manager General Manager Water Resource Operations Infrastructure Delivery The Water and Resource Operations Division comprises the The Infrastructure Delivery Division is responsible following sections and services. for developing and maintaining strategies, systems, policies and procedures in relation to infrastructure Sustainability capital works programs. Protect source water quality through the careful management of our surface water catchments and aquifers; care for and Country Towns Sewerage Project protect our natural assets, including biodiversity and Project team in place to support the delivery of wastewater ecological systems; maximise the beneficial reuse of biosolids services to the towns of Blackwood, Beaufort, Gordon, and reclaimed water; and implement programs to account for Smythesdale and Waubra. and reduce water consumption, waste generation and greenhouse gas emissions. Water and Wastewater Treatment Steve Millard Provision of safe drinking water, meeting Department of Acting General Manager Health requirements; sustainable return to the environment of Strategy and Planning treated wastewater meeting EPA Corporate Licence and water quality compliance and reporting. Land Development Water Resources Manage and process requirements relating to subdivision and special land use requests in relation to water and wastewater Drought Response; hydrologic monitoring; dam safety; services for all fifteen supply systems. In 2012/13 the team system modelling; and management of groundwater licences processed 1411 applications for service connections. and bulk entitlements. Major Projects and Strategic Planning Laboratory Manage the long term and strategic planning for the Delivering a comprehensive chemical and microbiological Corporation. The delivery of the 50 year Water Supply analysis and sampling regime while maintaining a National Demand Strategy, Capital Expenditure Plan, Corporate Plan Association of Testing Authorities (NATA) accreditation to and Water Plan 3 draft submission have been some of the support our water and wastewater operations in meeting our key strategic projects undertaken. Master plans, options obligations in servicing our customers. development and concept designs undertaken on major infrastructure projects including Ballarat West Urban Growth Zone and Lexton Water Supply Improvement Project.

16 ANNUAL REPORT 2012/13 Anthony O’Brien Graham Holt General Manager General Manager Business Services Customer and Community

The Division comprises the following functions and services: Customer Service • Manage all customer enquiries Organisational Development (OD) • Meter Reading, Billing and Collection Provides leadership in the areas of proactive and efficient human resource management, change management, OH&S • Debt Management and learning and development to our customers within CHW. • Hardship Support The OD key strategic themes are: Develop inspiring • Trade Waste Management leadership; Build an adaptive and aligned culture; Grow • Key Account Management capability; and Attract and retain the right people. • Demand Forecasting Finance and Governance Responsible for the majority of customer touch points, Responsible for ensuring that the financial and accounting with a focus on improved customer service, additional operations, functions and obligations of the business are payment options and improved IT solutions including meter managed according to applicable standards and regulations. reading technology. Management and monitoring of all business performance indicators both regulatory and non regulatory including Network Services reporting and business analysis. Delivering the governance • Manage the sewerage and water network framework including audit support, insurance, risk • Management of all sewerage and water pumping stations management, business continuity and compliance. • Capital Investment projects Information Communications Technology (ICT) • Maintenance programs Delivering Information Communications Technology services • Faults and emergency response and support to drive improved customer engagement and • Non revenue water business efficiency. Enabling the business to meet these objectives through hardware and software support, IT • Trade waste administration, communication and spatial system support. This operational area of the business ensures water and The ICT strategy is clustered around high level strategic sewer assets deliver customer needs and responds to initiatives: Digital Ecosystem, Self-Serve, Foundation any fault calls. There is also a stringent assets maintenance Technology, Agile Business and Universal Access. program. Areas of capital investment are also identified by this team, such as our water and sewerage mains Contracts and Purchasing renewal program. Ensuring the strategic and efficient procurement of major goods and services undertaken by CHW including oversight Trade waste management, including development of new and assurance for all purchasing and contracts of goods and agreements, review of existing agreements, measurement of services and management of the supply chain for our performance and setting of appropriate tariffs. operations. Oversight and management of CHW’s commercial Community Engagement and Marketing and passenger fleet. Responsible for the external and internal communications of CHW via newsletters, media, internet and announcements relating to the provision of water and wastewater and other services provided by CHW. Includes regular water resource updates and general information on key projects and activities. The water plan communication program is also a key role of this team, gaining a clear understanding of our customer needs through our community engagement program.

Business Development This is a new role to investigate where the business can be more efficient and look at business opportunities for additional growth.

ANNUAL REPORT 2012/13 17 OUR OCCUPATIONAL HEALTH WORKFORCE AND SAFETY REPORT

Staff Numbers 2012/13 Occupational Health and Safety (OH&S) Committee Division Total Full-Time Membership comprises 10 employee representatives and 3 Equivalent management representatives. All new members of the OH&S 2012/13 Committee participated in OH&S representatives training. The Managing Director 1.74 OH&S Committee promotes consultation with staff within Business Services 29.90 CHW to ensure a safe and healthy workplace. The OH&S Water Resource Operations 47.00 Committee continued its focus on sustained improvement by Infrastructure Delivery 10.00 reviewing risks in operational areas contributing to potential injury and strengthening existing controls. Strategy and Planning 10.52 Customer and Community 77.83 The OH&S Committee also focused on reinforcing the organisation’s safety culture throughout the various teams Total 176.98 within the organisation. Major OH&S initiatives achieved throughout this financial year include: • Review of Fatigue Management procedures for staff to Staff Numbers 2011/12 reduce the risks associated with employees working after hours and on call; Division Total Full-Time • Review of injury management procedures to ensure injured Equivalent staff receive the right advice and treatment to help get 2011/12 them back to work quickly and safely; Managing Director 1.74 • CHW has appointed a new on-site physiotherapy service Business Services 33.26 provider to provide physiotherapy consultations to injured Water Resource Operations 52.84 staff and as a preventative measure to treat staff with Infrastructure Delivery 10.00 aches and pains to prevent an injury from occurring; and Strategy and Planning 11.53 • Developed and trialled an online contractor induction Customer and Community 78.32 system to reduce the risks associated with contractors working at remote sites. Total 187.69 During this financial year CHW successfully completed a surveillance audit on the safety management system, focused on Wastewater Treatment and Asset Management . No areas Gender Participation in the Workforce of non-conformance were identified throughout the audit and CHW continued to retain certification to AS/NZS 4801:2001. 2012/13 2011/12 CHW monitors the OH&S performance of the organisation by Female Employees 33% 30% measuring a range of indicators including the Significant Injury Male Employees 67% 70% Frequency Rate (SIFR). This is calculated by measuring the number of medical treatments and lost time injuries incurred by staff and contractors. CHW reduced the target SIFR from 30 to 20 this financial year with a view to reducing the target further in future. CHW achieved a SIFR result of 25 for the 2012/13 period continuing the trend of improved results over recent years. New OH&S Enterprise Agreement leading Key Performance Indicators were also introduced for the 2012/13 period focusing on the implementation of interim controls for risks and proactive health monitoring programs. The target of 100% was achieved for both of these measures. During 2012/13 CHW recorded five lost time incidents with 72 days lost.

18 ANNUAL REPORT 2012/13 LEGISLATIVE COMPLIANCE

Risk Management Compliance Attestation Compliance with Whistleblowers Protection I, Richard Nicholson certify that Central Highlands Water has Act 2001 risk management processes in place consistent with the CHW has procedures in place to help employees Australian / New Zealand Risk Management Standard understand the requirements and obligations under the ISO31000:2009 and an internal control system in place that Whistleblowers Protection Act 2001. There were no enables the Executive to understand, manage and disclosures, disclosed matters, requests, recommendations satisfactorily control risk exposures. The Audit Committee or investigations described in section 104(b) – (j) of the Act verifies this assurance and that the high and extreme risks of during the year. Central Highlands Water have been reviewed and audited within the last 12 months. The Whistleblowers Protection Act 2001 (WB Act) was repealed and replaced with the Protected Disclosure Act 2012 (PD Act) on 10 February 2013. As the change of legislation occurred midway through the 2012/13 financial year, this disclosure complies with the requirements of the Richard Nicholson PD Act and section 104 of the WB Act, for each of the Chair (Acting) relevant time periods. 27 August 2013 Compliance with the Protected Disclosures Act 2012 Freedom of Information The PD Act was part of a package of integrity reforms The Freedom of Information Act 1982 allows public access to introduced by the Victorian Coalition Government, which documents held by government entities. During 2012/13 also established the Independent Broad-based Anti- CHW received three valid requests for access to documents corruption Commission (IBAC). under the Freedom of Information Act 1982. Access was The PD Act enables people to make disclosures about granted in all three cases. improper conduct within the public sector without fear of Requests for access to CHW documents under the Freedom reprisal. It aims to ensure openness and accountability by of Information Act are to be addressed to: encouraging people to make disclosures and protecting The Freedom of Information Officer them when they do. PO Box 152 What is a ‘protected disclosure’? Ballarat Victoria 3353 A protected disclosure is a complaint of corrupt or improper Each request must be accompanied by a $25.10 application conduct by a public officer or a public body. fee and clearly identify the documents sought. General Central Highlands Water is a “public body” for the purposes enquiries relating to Freedom of Information can be made by of the PD Act. contacting the Freedom of Information Officer during business hours on 1800 061 514. What is ‘improper or corrupt conduct’? Statement of Availability of other Information Improper or corrupt conduct involves substantial: Information listed in Financial Reporting Direction 22D of the • mismanagement of public resources; or Financial Management Act 1994 is held at Central Highlands • risk to public health or safety or the environment; or Water’s office in Learmonth Road Ballarat and is available on • corruption. request, subject to the Freedom of Information Act 1982. The conduct must be criminal in nature or a matter for Building Act 1993 which an officer could be dismissed. CHW conducts a regular program aimed at ensuring How do I make a ‘protected disclosure’? compliance with all relevant provisions of the Building Act 1993 in building and maintenance activities. Any areas of You can make a protected disclosure about Central concerns are logged and addressed. Highlands Water or its board members, officers or employees by contacting the Department of Environment Information Privacy Act 2000 and Primary Industries (DEPI) or IBAC on the contact details provided below. CHW has, to the best of its knowledge, met its obligations Please note that Central Highlands Water is not able to under the Information Privacy Act 2000. receive protected disclosures.

ANNUAL REPORT 2012/13 19 LEGISLATIVE COMPLIANCE

How can I access Central Highlands Water procedures Victorian Industry Participation Policy for the protection of persons from detrimental action? Disclosures (VIPP) Central Highlands Water has established procedures for the protection of persons from detrimental action in reprisal Contracts commenced to which a VIPP applied: During the for making a protected disclosure about Central Highlands financial year, CHW did not commence any contracts to Water or its employees. which a VIPP applied. Contracts completed to which a VIPP applied: During the Contacts financial year, CHW did not complete any contracts to which a VIPP applied. Department of Environment and Primary Industries Jennifer Berensen, Senior Advisor, Privacy & Ombudsman Community Inclusiveness Department of Environment and Primary Industries • Continued to give due consideration to heritage and Address: PO Box 500, East Melbourne Vic 3002 cultural-related issues on major capital works projects, Ph: 03 9637 8697 notably consideration of indigenous aspects. Website: www.depi.vic.gov.au • Provided sponsorship support to over 40 community groups and organisations across the entire service area • Continued to offer a telephone interpreter service for Independent Broad-Based Anti-Corruption customers with account enquiries. Commission Victoria • Continued to deliver CHW’s Education Program to primary, Address: Level 1, North Tower, 459 Collins Street, secondary and tertiary students in the region, including Melbourne Victoria 3001. maintaining a comprehensive dedicated education Mail: IBAC, GPO Box 24234, Melbourne Victoria 3000 website. Internet: www.ibac.vic.gov.au • Maintained practices of Equal Employment Opportunity within the organisation. Phone: 1300 735 135 • Provided work experience opportunities for both male and Email: see the website above for the secure email female students. disclosure process, which also provides for anonymous disclosures. Significant Changes in Financial Position National Competition Policy No significant changes have occurred to affect the Corporation’s financial position. Competitive neutrality is a guiding principle of the National Competition Policy. It requires that government Performance – Factors Affecting Performance owned businesses should compete with private sector businesses on the same basis. CHW has operated in a No significant changes have occurred to affect the manner that meets the National Competition Policy Corporation’s performance. compliance requirements.

20 ANNUAL REPORT 2012/13 SUMMARY OF FINANCIAL RESULTS

2008/09 2009/10 2010/11 2011/12 2012/13 $’000 $’000 $'000 $'000 $'000 Core business revenue 55,123 60,099 68,543 74,564 84,373 Government contributions 886 3,808 1,089 75 1,205 Other revenue 3,015 2,750 4,034 3,239 4,562 Total revenue 59,024 66,657 73,666 77,878 90,140 Operating expenditure 37,623 39,169 42,214 47,531 45,611 Depreciation expenditure 15,507 17,536 17,830 19,881 22,306 Finance costs 7,239 8,736 10,702 11,960 12,154 Other expenditure 8,367 4,191 4,183 4,573 4,529 Total expenditure 68,736 69,632 74,929 83,945 84,600 Net result before tax (9,711) (2,975) (1,263) (6,067) 5,540 Current assets 24,416 26,778 21,401 23,471 29,813 Non-current assets 824,033 854,584 916,011 920,382 918,238 Total assets 848,449 881,362 937,412 943,853 948,051 Current liabilities 32,251 49,045 56,244 46,665 27,088 Non-current liabilities 108,186 124,354 146,352 166,633 185,796 Total liabilities 140,437 173,399 202,956 213,298 212,884 Net cash flows 7,434 8,288 10,964 14,995 15,323 from operations Payments for property, plant and 61,350 48,090 33,151 25,920 19,897 equipment (including infrastructure)

SUMMARY OF FINANCIAL PERFORMANCE

Performance Indicator 2008/09 2009/10 2010/11 2011/12 2012/13

Internal Financing Ratio N/A 17.23% 33.07% 64.03% 77.01%

Gearing Ratio N/A 16.31% 17.16% 18.20% 18.94%

Interest Cover (EBIT) N/A 0.86 0.88 0.93 1.46

Interest Cover (Cash) N/A 1.93 1.96 2.26 2.18

Return on Assets N/A 0.63% 1.00% 0.63% 1.87%

Return on Equity N/A -0.30% -0.35% -0.58% 0.53%

ANNUAL REPORT 2012/13 21 MAJOR WORKS

Major Works Completed in 2012/2013 Amount Number of Consultancies 54 Gordon Sewerage Scheme $7,500,000 UNDER $10,000 Smythesdale Sewerage Scheme $6,700,000 Total value of Consultancies $171,125 Waubra Sewerage Scheme $3,900,000 UNDER $10,000 Beaufort Wastewater Treatment Details of all consultancies $3,700,000 $2,860,135 Plant Upgrade OVER $10,000 value Ballarat South Wastewater Treatment MWH Australia Pty Ltd $845,659 $2,180,000 Plant Upgrade PricewaterhouseCoopers $391,824 Everything Infrastructure Services Pty Ltd $270,039 GHD Pty Limited $240,391 Major Works Commenced / Continuing Amount AWT Water Pty Ltd $136,740 in 2012/2013 Honeywell Ltd $131,434 Dam Safety Improvement Project $2,480,000 (Musical Gully Reservoir) CORE HR Services $122,218 Ballarat South Wastewater Treatment Plant $14,780,000 Marsden Jacob Associates $110,181 Upgrade Project Tuscany Business Systems Pty Ltd $91,813 Lexton Pipeline Project $3,000,000 PBJ & Associates $49,749 Pitcher Partners $44,197 Disclosure of Major Contracts Gilbert and Sutherland Pty Ltd $41,499 • Procurement Australia Small & Large Market Electricity Contract – AGL DLA Piper Australia $40,344 • Sales of Sawlogs – Central Highlands Timber. Urban Water Solutions Pty Ltd $39,829 • Provision of Engineering Support Services – MWH Australia. Water Governance Group $33,750 • Provision of Laboratory Services – Australian Laboratory Glossop Town Planning Pty Ltd $32,902 Services Group. Templar Justin $32,360 • Provision of Sewer Pump Station Maintenance Environmental Systems & Services $31,707 Services – Bartlett’s Environmental. TGM Group Pty Ltd $24,760 WHK $20,000 Inside Infrastructure Pty Ltd $19,858 Aurecon Australia Pty Ltd $17,758 Aecom Australia Pty Ltd $17,500 H20 Team Pty Ltd $14,844 Red Stategic Communications $12,900 Mark Gurry & Associates $12,700 Professional Advantage $11,550 Martin Summons $10,815 Eclipse Computing Australia Pty Ltd $10,814

22 ANNUAL REPORT 2012/13 PERFORMANCE REPORT 2012/13

In our opinion, the accompanying Report of Performance of Central Highlands Region Water Corporation in respect of the 2012/13 financial year is presented fairly in accordance with the Financial Management Act 1994. The report outlines the relevant performance indicators as determined by the responsible Minister, the actual results achieved for the financial year against pre-determined 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 circumstance which would render any particulars in the report to be misleading or inaccurate.

Richard Nicholson Paul O’Donohue Chair (Acting) Managing Director 27 August 2013 27 August 2013

ANNUAL REPORT 2012/13 23 PERFORMANCE REPORT 2012/13

Performance Indicator Performance measures are to be provided as per 2011/12 2012/13 2012/13 Variance ESC definitions Notes Result Result Target % S1 Water supply interruptions Number of customers receiving five (5) unplanned S1.1 1 10 0 0 N/A interruptions in the year S2 Interruption time indicators Average duration of unplanned water supply interruptions S2.1 2 127.7 142.2 120 -18.5 (minutes) S3 Restoration of water supply Unplanned water supply interruptions restored within S3.1 96.69% 96.36% 98.70% -2.34 five (5) hours S4 Reliability of sewerage collection services Sewer spills from reticulation and branch sewers S4.1 3 33 29 51 43 (priority 1 and 2) S5 Containment of sewer spillages S5.1 Sewerage spills contained within (5) hours 100% 100% 100% 0 S6 Customer complaints indicators S6.1 Water quality complaints per 1000 customers 4 3.36 3.89 6.6 41 Sewerage service quality and reliability complaints S6.2 5 0.09 0.02 0.30 94 per 1000 customers S6.3 Billing complaints per 1000 customers 6 0.48 0.80 1.0 20 S6.4 Sewerage odour complaints per 1000 customers 7 0.13 0.13 0.5 75

Notes: 1. CHW’s targeted water mains renewal program has rectified localised aged infrastructure in the network which caused the high 2011/12 result.. 2. Large bursts in the months of July, August and November 2012 impacted on CHW’s performance for this KPI during 2012/13. 3. CHW’s sewer main renewal and proactive maintenance programs continue to drive improved performance both in year on year terms and against the target based on a five year average. 4. CHW implemented a planned Denitrification program in the Ballarat Water Supply System during the February/ March 2013 period, which lead to a slight increase in the number of taste and odour related contacts. 5. CHW recorded the lowest number of sewerage service and reliability complaints since 2004, which reflects the continued efforts of CHW’s planned maintenance programs on sewerage infrastructure. 6. CHW experienced an increase in the number of billing related complaints during 2012/13, however remained slightly below our internal target level. 7. Performance level maintained from prior year due to a continued focus on planned maintenance programs.

24 ANNUAL REPORT 2012/13 Performance Indicator Performance measures are to be provided as per ESC 2011/12 2012/13 2012/13 Variance definitions Notes Result Result Target % E1 Reuse indicators E1.1 Effluent reuse (volume) 1 16.7% 18.4% 15.8% 2.6 E1.2 Biosolids reuse (dry mass) 2 100% 115% 100% 15 E2 Sewage treatment standards Number of analyses complying with licence agreements E2.1 100% 100% 100% 0 as % of samples.

Notes: 1. Central Highlands Water recycled a larger volume of water during 2012/13. Seven out of the ten wastewater treatment plants recycled 100% of available effluent. 2. Central Highlands Water achieved compliance during 2012/13, with a number of stockpiles being recycled from Ballarat South Wastewater Treatment Plant.

2011/12 2012/13 2012/13 Variance Performance Indicator Notes Result Result Target %

Internal Financing Ratio 1 64.03% 77.01% 29.00% 48.0

Gearing Ratio 2 18.20% 18.94% 17.20% -1.7

Interest Cover (EBIT) 3 0.93 1.46 0.70 108.0

Interest Cover (Cash) 4 2.26 2.18 3.10 -29.7

Notes: 1. Favourable variance driven by the combination of the improved operating result due to increased demand and a lower capital expenditure program. 2. Unfavourable variance driven by increased borrowings in Fy13. 3. Favourable variance driven by CHW returning to a net profit position. 4. Unfavourable variance driven by the impact of the industry wide superannuation call in 2011-12. In addition, interest costs have risen due to increased debt levels.

ANNUAL REPORT 2012/13 25 VAGO REPORT

26 ANNUAL REPORT 2012/13 VAGO REPORT

ANNUAL REPORT 2012/13 27 OBJECTIVES AND PERFORMANCE REPORT

CHW’s objectives during the past 12 months have included More than thirty key actions have been identified in response working to continue to strengthen its long-term capabilities. to these key strategic areas which collectively build flexible Based upon a strong understanding of the key drivers of and adaptive capacity through the organisation. change, CHW recognises that future success is dependent The Board reviewed the Robust Strategies during the year upon the organisation’s ability to respond to changing future and recommitted to their ongoing implementation. circumstances. In addition to the Robust Strategies, the strategic direction Nine strategic objectives have been developed and refined in of the organisation was also shaped by the following: response to the key uncertainties facing CHW over the • Development of Water Plan 3 for the 2013-18 planning period. regulatory period In summary, these are: • 2012 Statement of Obligations 1. Adaptable Business Model – building a capital structure • 2012 Water Industry Regulatory Order (WIRO) that provides ability for the business to be responsive to future industry reforms • Ongoing water law reform directions; and 2. Responsive to Customers and Community – • Development of the Office of Living Victoria and understanding and responding to changing customer associated policy directions expectations, attitudes and beliefs including drivers of value creation 3. Scanning Capability – building business intelligence systems to ensure Central Highlands Water can identify and react to changes in the business environment 4. Resource Smart – to optimise use of total resources used or developed by Central Highlands Water 5. High Performance – to continuously improve and enhance individual and organisation performance 6. Partnerships and Strategic Alliances – to maximise leverage and minimise risk exposure to gain competitive advantage 7. Information Communication Technologies – building seamless connectivity enables transfer of ideas, experiences and information while building organisation effectiveness and efficiency 8. Commercial Acumen – to improve the focus on the link between organisational strategy and its financial impacts 9. Water Resource Adaptability – developing water resources systems that are robust and flexible and able to provide agreed customer levels of service despite an uncertain future

28 ANNUAL REPORT 2012/13 ENVIRONMENTAL SUSTAINABILITY

Water Conservation Our education programs play an important part in the overall environmental sustainability management services CHW CHW continued to support water efficiency during the past provides. A dedicated education officer provided numerous year, extending many of the current programs and adding tours, talks and educational materials to schools and children some new ones. from all age levels. Tours include the White Swan Water The State Government Showerhead Exchange Program for Treatment Plant, Ballarat South Wastewater Treatment Plant residential customers continued. The Non-Residential and several of CHW’s gardens and reservoirs. CHW also Program continued with a focus on small business. Thanks to continued to provide numerous educational fact sheets via State Government funding CHW was able to add additional the website. resources to provide water efficiency advice and assistance with funding for customer water efficiency investments. The State Government funding included the new Living Victoria Paper Use Small Business Rebates and Small Business Grants. The 2012/13 2011/12 Small Business Grants project was completed in 2012/13 Total units of copy paper and the Small Business Rebates will be available until 30 1,364 1,499 June 2015. used (reams) Units of copy paper used The waterMAP program for large non-residential customers 7.7 8 continued as a voluntary participation program and a number per FTE (reams/FTE) of water use reviews were carried out with customers. The free service for the accommodation industry of delivering Water Supply Demand Strategies 3 star rated showerheads in exchange for inefficient models continued with the State Government providing a selection of Victoria has an integrated and dynamic water planning high quality showerheads for exchange. CHW continues to framework, in which Water Supply Demand Strategies play an be a partner in the Regional Sustainability Alliance Ballarat. important role in guiding strategic local planning for regional urban water corporations. The purpose of Water Supply Grow Your Own Food, a new and exciting garden program Demand Strategies is to identify the best mix of measures to was launched during the year. This initiative formed the maintain a balance between the demand for water and cornerstone program through CHW’s participation as a available supply in our towns over a 50-year outlook. Community Partner to The City of Ballarat in the Ballarat Begonia Festival. CHW’s Community Partnership included CHW released a Water Supply Demand Strategy for each of several gardening presentations on The Garden Stage from its fifteen water supply systems in 2011/12 and is required to the well known television presenter and gardening expert review the strategy at five year intervals. The development Melissa King. Melissa was also available throughout the process, completed in March 2012, included detailed festival in the CHW Marquee to provide expert advice and technical analysis, community workshops, stakeholder information on growing your own food. Throughout the consultation, draft strategies, public submissions, and three days of the Begonia Festival in excess of 30,000 submission to the Department of Environment and Primary people attended. Industries (DEPI). CHW encouragement and support of local government water The new Statement of Obligations (SoO) requires that by 31 conservation programs continued and now includes ongoing March 2017, and within each five yearly period thereafter, involvement with Integrated Water Management planning for CHW must develop, in accordance with any written the new Ballarat West Growth Area residential development guidelines issued by the Minister, an Integrated Water Cycle area and the Ballarat West Employment Zone business Strategy that identifies the best mix of measures to maintain a development area. CHW’s involvement includes participation balance between the demand for water and the supply of on technical working groups and input to Integrated Water water in cities and towns. The Integrated Water Cycle Management planning and documentation. Water efficiency Strategy for each town will effectively replace the Water continues to be an important element of planning future Supply Demand Strategies. demand and supply of water and is strongly incorporated into CHW’s major role in the Living Ballarat Integrated Water Cycle Management Strategy guided by the Office of Living Victoria.

ANNUAL REPORT 2012/13 29 ENVIRONMENTAL SUSTAINABILITY (cont)

Regional Catchment Strategies Delivered on Ground Works to Improve Catchment Water Quality CHW continued to engage with Catchment Management Authorities with regard to the Corporation’s assets and their • Ballarat Catchment association with regional natural resources. This was Delineated fishing zones and facilitated access for fishing at underpinned by the reinforcement of drinking water quality Moorabool Reservoir whilst protecting infrastructure, water standards and the impact of broader catchment land use. quality and public liability. Collaboration has been maintained in statutory planning Completed willow removal along the West Moorabool River decisions. Negotiations over bulk entitlement passing flow from Mollongghip to Moorabool Reservoir, Giles Creek at and monitoring requirements were ongoing. Five Catchment Kirks Reservoir and Fellmongers Creek at Gong Gong Management Authority regions that are located in CHW’s Reservoir. drinking water catchments are: Worked with adjoining landholders to protect water quality • Corangamite CMA through the replacement of 4,500 metres of perimeter fences at Lal Lal, Beales, Gong Gong, and Moorabool Reservoirs. • North Central CMA • Glenelg Hopkins CMA • Evansford Reservoir Catchment • Port Phillip and Western Port CMA Refurbished 1,000 metres of water race line and erected • Wimmera CMA 2,000 metres of stock exclusion fencing to improve water transport to Talbot Reservoir. Catchment Management Completed a title boundary survey for a one-kilometre section of unreserved crown land along McCallum’s Creek. CHW proactively manages its land, water and biodiversity Partnered with the adjacent landholder at the Evansford resources. The Corporation is responsible for a diverse range Reservoir to implement waterway fencing and stock of natural assets across the Central Highlands region of exclusion. Victoria. CHW continued to implement actions to reduce risks to water • Avoca Reservoir Catchment quality within its declared water supply catchments. Key Partnered with the adjacent landholder at the Sugarloaf actions to control risks in addition to statutory planning in Reservoir race line to implement erosion control and catchments are detailed below. developed alternative access to reservoir to allow fishing access. Water Catchment Protection Policy We adopted the revised guidelines for planning permit applications in open, potable water supply catchment areas. Biosecurity and Invasive Species This has required local government to review and update CHW provided a submission to the Department of Domestic Wastewater Management Plans (DWMPs) to ensure Environment and Primary Industries (DEPI) on the proposed the incorporation of the new requirements listed in the framework for new invasive species management legislation. guidelines. Consequently there has been a decrease in the CHW annual investment in invasive species management approval of planning permit application with CHW approving targeted priority species and aligned with DEPI priorities. 46 out of 65 planning referrals within the Corporation’s declared special water supply catchment areas. CHW also assisted VicWater in the development of a Victorian River Health Strategy standard method for the calculation of dwelling density within A CHW staff member continued to participate in the drinking water catchments in order to determine the Stakeholder Reference Committee for the Victorian Waterway requirements of guideline one for planning permit applications Strategy. The Draft Strategy was formerly released for public in open, potable water supply catchment areas. comment in early 2013. Notably this includes water quality, wastewater discharges, extreme events and riparian land management. In 2012/13, CHW’s ongoing management of waterways included the continued rehabilitation of Birches Creek at Lawrence Weir, Woolen Creek, Black Creek, Creswick Creek, Yarrowee Creek, Lal Lal Creek and the West Moorabool River.

30 ANNUAL REPORT 2012/13 Biodiversity Program Central Highlands Water continued to support the Corangamite Waterwatch program with a $10,000 donation. The Biodiversity Program focused on: The program supports local community groups to conduct • Implementation and monitoring of biodiversity offset sites; water quality testing and delivers educational programs to • Threatened flora and fauna management including school groups. protection of Growling Grass Frog habitat and Internal procedures and support for capital project managers management of Basalt Peppercress; continued to facilitate the reduction and avoidance of • Weed control in sensitive biodiversity areas and around vegetation removal from infrastructure projects. Central significant plant populations, Highlands Water aims to deliver a net gain in native • Native revegetation projects; and vegetation in accordance with Victoria’s Native Vegetation Management Framework by: • Flora and fauna surveys of catchment areas. • Selection of suitable development area to avoiding Central Highlands Water returned 14 hectares of pine forest vegetation removal where possible; and cleared areas into native vegetation. Thirty-three • Minimising impact to habitat through thoughtful design; and thousand native plants were established in the Moorabool • Mitigating any losses through biodiversity offset sites. Catchment, Gong Gong Reserve, Creswick Wastewater Treatment Plant and Daylesford Wastewater Treatment Plant. CHW implements and monitors biodiversity offset management plans. The duration of these plans is 10 years with ongoing commitments to site protection, weed control and pest animal control.

Offset Capital Works Project Offset Site Management Actions Complete

Creswick Wastewater Treatment Cosgrave - Whiteswan Pipeline Revegetation, weed control 2016 Plant (WWTP) Shepherds Flat Weed and rabbit control 2017 Goldfields Superpipe Talbot Reservoir Weed and rabbit control 2017 BushBroker 2017 Newlyn - Cosgrave Pipeline Cosgrave Reserve Weed control 2017 Spring’s Road Sewer Brown Hill, Yarrowee Creek Revegetation, weed control 2018 Russell Reservoir Weed control 2018

Creswick Sewerage Transfer System Creswick Wastewater Treatment Revegetation, weed control 2018 Plant (WWTP)

Daylesford Sewer Flow Containment Shepherds Flat Weed and rabbit control 2019 Kangaroo Creek - Orrs Spring - Willow removal, weed Bullarto Dam Wall Upgrade 2019 Bullarto control

Gong Gong Dam Wall Upgrade Kirks Park - Brewery Tap Road Revegetation 2020

Moorabool Reservoir, Simpsons Blackwood Basin Upgrade Revegetation 2020 Road

Avoca Brine Project BushBroker 2020

Beaufort Wastewater Treatment Plant Weed control, revegetation, Lal Lal Reservoir 2022 Gordon Wastewater Treatment Plant pest animal control

Musical Gully Reservoir Upgrade Musical Gully In progress

Redbank Groundwater Supply Upgrade Shepherds Flat In progress

ANNUAL REPORT 2012/13 31 GREENHOUSE GAS EMISSIONS

CHW produces greenhouse emissions from activities such as electricity use for pumping, water and wastewater treatment, office based services, methane and nitrous oxide emissions from wastewater treatment, carbon dioxide from combustion of fuel to provide energy for vehicles, generators and diesel pumps. Sources of greenhouse gas emissions from CHW’s operations are detailed in the table below.

Central Highlands Water’s Scope 1 & 2 Greenhouse Gas Emissions by Operational Area

ESC Performance 2008/09 2009/10 2010/11 2011/12 2012/13 Variance Comments Indicator Scope 1 & 2 (tCO2-e) %

Annual water consumption increased by 11% from the Water treatment 42722 38566 4238 2932 3148 7% previous year. This resulted in a 7% increase in and supply greenhouse gas emissions.

Ongoing focus on energy efficiency has allowed CHW Sewerage treatment 11544 10231 12347 9715 9417 -3% to meet growth demands whilst achieving a minor and management reduction in greenhouse gas emissions.

Transport related emissions have remained relatively Transport 857 945 1079 1085 1029 -5% unchanged with a 5% reduction due to business as usual variability. During 2012/13 land-use change has resulted in 100 Other 1361 1524 1133 1079 988 -8% tCO2-e being sequestered in the biomass of trees. Offsets gained from claiming of Renewable Energy Offsets - 15 -15 -15 -15 0% Certificates (RECs) from Kirks Reservoir Depot Solar Panel System. Total 56483 51251 18782 14826 14596 -2%

Central Highlands Water’s greenhouse gas emissions have been assessed in accordance with the National Greenhouse Accounts (NGA) Factors July 2012, National Greenhouse and Energy Reporting System Measurement - Technical Guidelines, July 2012 and National Greenhouse and Energy Reporting (Measurement) Determination June 2008.

Central Highlands Water’s Scope 1 & 2 Greenhouse CHW is the first water corporation in Victoria to sign up to the Gas Emissions by Emissions Source State Government’s Greener Government Building Program. Greener Government Buildings (GGB) is a program administered Fugitives by the Department of Treasury and Finance which aims to reduce Petrol 13.94% Government’s environmental impact and operational costs by 0.79% Electricity LPG 79.10% improving the energy efficiency of existing government buildings. 0.08% CHW is continuing to work with Energy Services Company

Diesel Honeywell to identify energy efficiency opportunities across 2.82% its operations. Gas 3.26% A number of abatement projects have been undertaken during the reporting period for the purpose of reducing greenhouse gas emissions including: • Implementing an education and behaviour change program CHW currently provides external reporting on greenhouse gas which encourages staff to switch off lights and monitors, emissions to stakeholders including the Essential Services reduce waste and water consumption; Commission, Environment Protection Authority (EPA), VicWater, • Operating Kirks Reservoir Depot on a 4.1kW solar panel

Water Services Association of Australia and the Department of system (this saves approximately 15 tCO2-e each year); Environment and Primary Industries. • Sequestering 27 tonnes of carbon or 100 tCO2-e in the CHW is committed to the following outcomes via its EPA biomass of various revegetation projects undertaken Corporate Licence Sustainability Commitment: throughout the reporting period; and • The preparation of an annual inventory of greenhouse gas • Implementing various other projects and activities which have emissions and energy consumption; achieved greenhouse gas reductions, such as water and • Forecasting greenhouse gas emissions over a five-year horizon; wastewater process optimisation, trade waste management, pump replacements, demand management programs, • Identifying and assessing greenhouse gas reduction unaccounted water reductions, and fleet vehicle replacements. opportunities; and • Incorporating cost effective and sustainable greenhouse gas and energy reduction opportunities into strategic and regulatory planning processes.

32 ANNUAL REPORT 2012/13 CENTRAL REGION SUSTAINABLE WATER STRATEGY

The Central Region Sustainable Water Strategy (SWS) was released in 2006 and commits to a wide range of actions that aim to protect rivers and aquifers while securing water supplies for cities, towns and farms in Melbourne, Ballarat, Geelong, the Inner West and the Latrobe Valley. Most actions in the Central Region SWS have been implemented or are of an ongoing nature. The Government is focussed on implementing the Living Melbourne, Living Victoria initiative, which aims to establish Victoria as a world leader in integrated water cycle management. The government has established the Office of Living Victoria to deliver key aspects of this initiative, including administering the Living Victoria Fund and preparing integrated Water Cycle Plans for Melbourne’s four main growth areas, including Ballarat. CHW is responsible for several actions outlined in the Central Region SWS in order to implement the strategy at a local level. The status of those actions is summarised in the following table.

Conservation and Efficiency

Action 4.1 Status Comments The Government requires Central Highlands Water to AHEAD OF Central Highlands Water remains ahead of schedule work with its customers to achieve a 25% reduction SCHEDULE to achieve these targets due to the implementation of in total per capita water use for Ballarat by 2015, successful demand management programs and the increasing to 30% by 2020. The basis of comparison community’s response to prolonged drought conditions. is the 1990s average water use. Residential consumption is currently less than the 2020 target of 197 litres per person per day and non-residential customers are on track to achieve the 2015 target. Action 4.2 Status Comments Central Highlands Water will implement a range of AHEAD OF Due to highly successful water efficiency programs, the conservation and efficiency measures within the SCHEDULE 1,400 ML per year target water savings by residential sector (homes) and non-residential sector 2011 is being exceeded as a result of significant savings in order to meet its new conservation targets. achieved in both residential and non-residential programs. Alternative Supplies Action 4.3 Status Comments Central Highlands Water will substitute potable water COMPLETED Construction work has been completed and the delivery of with recycled water in Lake Wendouree and for use recycled water to Lake Wendouree commenced in August by industry. 2009. Interconnections Action 4.4 Status Comments Central Highlands Water will connect Cosgrave COMPLETED The Cosgrave-White Swan connection was commissioned Reservoir to White Swan Reservoir to allow access in late 2006. The pipeline connection has delivered more to Central Highlands Water’s currently unused than 2,000 ML since becoming operational. entitlement. Action 4.5 Status Comments Central Highlands Water will develop infrastructure COMPLETED The project was successfully completed in October 2007. to transfer unused entitlement in Newlyn Reservoir The pipeline has delivered 200 ML to the Ballarat system. directly into White Swan Reservoir via the Cosgrave- Due to good local rainfall this resource was not required in White Swan pipeline. 2012/13.

Action 4.6 Status Comments Central Highlands Water will interconnect to the COMPLETED The Ballarat-Goulburn connection was completed well Goulburn system (White Swan Reservoir to Lake ahead of schedule in May 2008. Since commissioning, the Eppalock) to allow access to water from the Waranga pipeline has contributed more than 22,000 ML to Ballarat’s Channel. water supply system. Augmentations Action 4.7 Status Comments Central Highlands Water will develop infrastructure COMPLETED This groundwater project was completed in July 2007. It to supply water from Cardigan aquifer to the Ballarat has provided 4,400 ML of water for the Ballarat system and urban water supply system during dry periods. was last used to supplement Ballarat’s urban water supply in December 2009. In addition it was used to deliver 128 ML to Lake Wendouree during the year. Action 4.8 Status Comments Following the completion of major augmentation COMPLETED This was completed late 2010. options for Geelong and Ballarat, the Government will transfer part of the water authorities’ water entitlements in the West and lower Moorabool catchments to the environment.

ANNUAL REPORT 2012/13 33 SOCIAL SUSTAINABILITY REPORTING

V alue of Community Service Obligations Provided Community Reference Committees 2012/13 Customer Liaison Group CHW’s Customer Liaison Group (CLG) has played No. Applied Amount Amount an important role since 1996. Its membership is For Granted Granted (2012/13) (2012/13) (2011/12) made up of a cross-section of community representation, including from residential, business, Rebates and Concessions municipal and welfare organisations. Members express an independent view on the perspectives, Pensioner & views and opinions of the sector of the community Health Care Card 21,693 $4,416,865 $4,167,488 Concessions they represent. The group consists of up to ten community Life Support Rebates 3 $296 $569 members and was chaired by Director Vicki Rebate Paid to Coltman. The purpose of the CLG is to provide Not-for-Profit 1,186 $304,203 $281,941 feedback to CHW on a wide range of key Organisations community water and wastewater issues.

Hardship Relief The group has three main aims:

Utility Relief Grant • To represent customer interests to CHW; 301 $126,287 $104,145 Scheme* • To help develop mechanisms for information flow; and CHW Hardship Relief 41 $10,113 $20,489 • To provide and receive feedback, particularly on service standards. Water Saving The CLG met on four occasions during 2012/13 Water Saving and discussed a wide range of key topics including: 469 $59,407 $54,693 Products Rebates • CHW’s strategic and corporate planning Guaranteed Service Levels processes; • Customer and stakeholder communications; Customer Charter 293 $14,650 $20,200 Rebates • Water Resources and Major Project updates;

*Customers receive payment for the Relief Grant Scheme directly from the • Customer Service Survey results; Department of Human Services. • Case studies on customer contacts; and Management of Social and Economic Impacts • Ballarat mains cleaning program. During this reporting period, CHW undertook a number of measures Maryborough Water Resource Stakeholder to address the social and economic impacts on customers in relation Task Group to difficulties with payment of accounts and other circumstances. The Maryborough Water Resource Stakeholder These include: Task Group (MWRSTG) meets to discuss with • Canvassed issues with Customer Liaison Group members to community members and Council representatives, gauge customer input into CHW’s strategies and programs water resource options and projects for the • Promoted Permanent Water Saving Rules (PWSR) throughout Maryborough & District water supply system, and the region to agree on the best forms of communication within the community. The group consists of up to twelve CHW’s Customer Resolution Officer worked with customers members and is chaired by the Central Goldfields throughout the year to achieve goals in relation to service delivery. Shire Council Mayor. CHW’s Customer Assistance Program (which includes a dedicated Customer Assistance Officer) facilitated: The group met on two occasions during 2012/13 and discussed a wide range of key topics including: • access to concessions including a large increase in Utility Relief Grants • Water resources and major project updates; • referral to a CHW sponsored no-cost financial counselling service • Water usage and water quality; • access to the State Government’s Water Wise Program • Communique to the media; and for concession customers • Maryborough mains cleaning. • a large range of payment options

34 ANNUAL REPORT 2012/13 DROUGHT RESPONSE REPORTS 2012/13

The 2012/13 season provided generally mild conditions for water resources across the Central Highlands Water region. Systems were at good levels at the start of the season and rainfall, although somewhat below average, was sufficient to hold reservoir levels albeit with some decline through the year. The more northern systems did record lower levels than those in the south. Of Central Highlands Water’s 15 water supply systems, 13 held Permanent Water Saving Rules throughout the season. At Blackwood, the completion of a new storage basin which has increased storage by approximately 65%, allowed water restrictions to be removed. Permanent Water Saving Rules were implemented in August 2012. The only CHW system remaining on water restrictions is Redbank where Stage 2 restrictions were held throughout the year. Supply was from the Redbank Reservoir which declined from 33% to 13%. Given the ongoing decline of the reservoir resource it was decided to proceed with developing a new groundwater supply and this was substantially completed by June 2013. It is expected that this supply will be operational by the 2013/14 summer. The new supply will be used as required but surface supply, being of more suitable water quality, will be used when available.

System Date Drought Response Action Comment Amphitheatre All year PWSRs Good storage levels maintained throughout year. Avoca All year PWSRs System supplied from groundwater for much of year Ballarat All year PWSRs Good storage levels maintained throughout year. Beaufort All year PWSRs Good storage levels maintained throughout year. Blackwood 9 August Stage 2 -PWSRs New basin successfully completed and filled and 2012 restrictions removed in August 2012. Clunes All year PWSRs Groundwater levels recharged and no supply issues. Daylesford All year PWSRs Dry summer and some decline in reservoir levels. Dean All year PWSRs Reliable groundwater supply for this small system. Forest Hill All year PWSRs Good groundwater levels. Landsborough All year PWSRs This system is now supplied from groundwater with a new water treatment plant commissioned in 2011/12. Learmonth All year PWSRs Reliable groundwater supply for this small system. Lexton All year PWSRs Adequate resource but some constraints due to water quality. Reservoir declined through year. Maryborough All year PWSRs System supplied primarily from Tullaroop Reservoir. All reservoirs declined through season in 2012/13. Redbank All year Stage 2 Supply from reservoir with some supplement from drought relief bore. New groundwater supply substantially completed. Waubra All year PWSRs Reliable groundwater supply for this small system.

ANNUAL REPORT 2012/13 35 DISCLOSURE INDEX

The 2012/13 Annual Report of the Central Highlands Region Water Corporation is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the Corporation’s compliance with statutory disclosure requirements.

Legislation Requirement Page Reference

Report of Operations Charter and purpose FRD 22 D Manner of establishment and the relevant Ministers 04 FRD 22 D Objectives, functions, powers and duties 04 FRD 22 D Nature and range of services provided 04 Management and structure FRD 22 D Organisation structure 15 FRD 22 D Names of Board Members 13-14 Financial and other information FRD 22 D Statement of workforce data 18 FRD 22 D 5 year summary of the financial results 21 FRD 22 D Significant changes in financial position during the year 20 FRD 22 D Operating and budgetary objectives and performance against objectives 24-26 FRD 12 A Disclosure of Major Contracts 22 FRD 22 D Major changes or factors affecting performance 20 FRD 22 D Subsequent events 80 FRD 22 D Application and operation of the Freedom of Information Act 1982 19 FRD 22 D Compliance with building and maintenance provisions of Building Act 1993 19 FRD 22 D Statement on National Competition Policy 20 FRD 22 D Application and operation of the Whistleblowers Protection Act 2001 19,20 FRD 22 D Details of consultancies over $10,000 22 FRD 22 D Details of consultancies under $10,000 22 FRD 22 D Statement of availability of other information 19 FRD 22 D Occupational Health and Safety 18 FRD 10 Disclosure index 36 FRD 25 Victorian Industry Participation Policy disclosures 20 SD 4.2 (j) Accountable Officer’s Declaration 24 SD 4.5.5 Risk Management Attestation 19

Financial Statements Financial statements required under Part 7 of the FMA SD 4.2(c) Compliance with Australian accounting standards and other authoritative pronouncements 41-55 SD 4.2(c) Compliance with Ministerial Directions 41-55 SD 4.2(d) SD 4.2(c) SD 4.2(a) SD 4.2(b) Rounding of amounts, Accountable Officer’s Declaration, Statement of changes in equity, 41,24,39,37 Comprehensive Operating Statement SD 4.0(b) Statement of financial position 38 SD 4.2 (b) Statement of cash flows during the year 40 Other disclosures in notes to the financial statements FRD 21 Responsible person and executive officer disclosures 75-76 FRD 23 Superannuation liabilities and disclosure 73-74

Legislation Freedom of Information Act 1982 19 Building Act 1993 19 Whistleblowers Protection Act 2001 19-20 Victorian Industry Participation Policy Act 2004 20

MINISTERIAL REPORTING DIRECTIONS MRD 01 Performance Reporting 24-26 MRD 02 Reporting on Water Consumption and Drought Response 9-10, 35 MRD 03 Environmental and Social Sustainability Reporting 29,34 MRD 04 Disclosure of Information on Bulk Entitlements, Transfer of Water Entitlements, Allocations and Licenses, Irrigation Water 84-85 Usage and License Entitlements MRD 05 Annual Reporting of Major Non-Residential Water Users 29-34

36 ANNUAL REPORT 2012/13 COMPREHENSIVE OPERATING STATEMENT for the reporting period ended 30 June 2013

2013 2012 Note $’000 $’000

Revenue Service charges 1.2, 3 52,691 49,331 Usage charges 1.2, 3 23,293 19,848 Government grants and contributions 1.2, 3 1,205 75 Developer contributions 1.2, 3 2,037 1,367 Interest 278 310 79,504 70,931

Income fom non-operating activities Gifted Assets 3 7,247 4,227 Net Gain / (Loss) on disposal of non-current assets 3 (1,173) (519) Other income 3 4,562 3,239 10,636 6,947 Total Income 90,140 77,878

Expenses Borrowing costs 1.3, 3 (12,154) (11,960) Depreciation 1.3, 3 (18,249) (18,511) Amortisation 1.3, 3 (4,057) (1,370) Employee benefits 1.10, 3 (17,305) (22,248) BOOT Tolls 1.12 (8,739) (8,196) Contractors and Materials (14,622) (12,457) Utilities (2,950) (2,635) Environmental Contributions (1,995) (1,995) Other 3 (4,529) (4,573)

Total Expenses (84,600) (83,945)

Net Result before tax 5,540 (6,067) Income Tax (expense) / revenue 4 (1,677) 1,806

Net Result after tax 3,863 (4,261) Other comprehensive income

Other comprehensive income/(expense) - -

Total comprehensive result 3,863 (4,261)

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

ANNUAL REPORT 2012/13 37 BALANCE SHEET as at 30 June 2013

2013 2012 Note $’000 $’000

ASSETS Current Assets Cash and Cash Equivalents 1.6, 2, 5 6,891 2,719 Receivables 1.7, 6 22,023 19,946 Inventories 1.8 502 481 Prepayments 397 325 Total Current Assets 29,813 23,471

Non Current Assets Receivables 1.7, 6 211 134 Biological Assets 7 5,616 5,605 Infrastructure Property Plant and Equipment 8 878,929 878,829 Intangible assets 9 33,482 35,814 Total Non Current Assets 918,238 920,382

Total Assets 948,051 943,853

LIABILITIES Current Liabilities Payables 1.9, 10, 20 8,672 13,401 Borrowings 1.21, 11 14,346 29,190 Employee benefits 1.10, 12 4,070 4,074 Total Current Liabilities 27,088 46,665

Non Current Liabilities Refundable Contributions - 23 Borrowings 1.21, 11 165,252 142,598 Employee benefits 1.10, 12 225 5,370 Net Deferred Tax Liabilities 1.14, 13 20,319 18,642 Total Non Current Liabilities 185,796 166,633

Total Liabilities 212,884 213,298

Net Assets 735,167 730,555

EQUITY Contributed Capital 1.18 358,241 357,491 Reserves 14 88,722 88,722 Accumulated funds 288,204 284,342 Total Equity 735,167 730,555

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

38 ANNUAL REPORT 2012/13 STATEMENT OF CHANGES IN EQUITY for the reporting period ended 30 June 2013

Contributed Accumulated Note Capital Reserves Funds Total $’000 $’000 $’000 $’000

Balance at 30 June 2011 357,491 88,722 288,603 734,816

Total comprehensive income/(loss) for the year as reported in the 2012 financial report - - (4,261) (4,261) Transactions with the State in its capacity as owner: Equity Contributions - - - -

Balance at 30 June 2012 357,491 88,722 284,341 730,555

Total comprehensive income/(loss) for the year - - 3,863 3,863 Transactions with the State in its capacity as owner: Equity Contributions 750 - - 750

Balance at 30 June 2013 358,241 88,722 288,204 735,167

ANNUAL REPORT 2012/13 39 CASH FLOW STATEMENT for the reporting period ended 30 June 2013

2013 2012 Note $’000 $’000

Cash Flows from Operating Activities Receipts Service and usage charges 74,676 63,554 Interest received 278 268 GST received from the Australian Tax Office 1.16 5,152 4,944 Developer contributions 2,037 672 Other 5,168 1,747 Government Grants and Contributions 1,205 75

Payments Payments to suppliers and employees (inclusive of GST) (58,216) (42,151) Interest and other costs of finance paid (12,981) (12,159) Environmental contributions (1,995) (1,995)

Net Cash (outflow)/inflow from Operating Activities 19 15,323 14,955

Cash Flows from Investing Activities Proceeds from sale of infrastructure, property, plant and equipment 186 966 Payments for purchases of infrastructure, property, plant and equipment (19,897) (23,357) Payments for intangible assets - (2,563)

Net Cash (outflow)/inflow from Investing Activities (19,711) (24,954)

Cash Flows from Financing Activities Repayments of borrowings (4,190) (1,048) Proceeds from new borrowings 12,000 12,000

Government Equity Contributions 1.2 750 -

Net Cash (outflow)/inflow from Financing Activities 8,560 10,952

Net increase/(decrease) in cash and cash equivalents 4,172 953 Cash and cash equivalents at the beginning of the year 2,719 1,766

Cash and cash equivalents at the end of the financial year 5 6,891 2,719

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

40 ANNUAL REPORT 2012/13 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note Note 1 Accounting Policies 1 Accounting Policies 1.1 Basis of Accounting 2 Financial Risk Management Objectives and Policies General 3 Comprehensive Operating Statement Disclosures The financial report includes separate financial statements for Central Highlands Region Water Corporation (CHW, the 4 Income Tax Corporation) as an individual reporting entity. 5 Cash and Cash Equivalents This general purpose financial report consists of a 6 Receivables Comprehensive Operating Statement, Balance Sheet, 7 Biological Assets Statement of Changes in Equity, Cash Flow Statement and notes accompanying these statements. The general 8 Infrastructure, Property, Plant and Equipment purpose financial report has been prepared in accordance 9 Intangible Assets with Australian Accounting Standards (AASs), Interpretations and other authoritative pronouncements of the Australian 10 Payables Accounting Standards Board (AASB), and the requirements 11 Interest Bearing Liabilities of the Financial Management Act (1994) and applicable 12 Employee Benefits Ministerial Directions. 13 Deferred Tax The Corporation is a not for profit entity for the purpose of preparing the financial statements. 14 Reserves Where appropriate, those AASs paragraphs applicable to 15 Commitments for Expenditure not-for-profit entities have been applied. 16 Contingent Liabilities and Contingent Assets The accrual basis of accounting has been applied in the 17 Superannuation preparation of this financial report whereby assets, liabilities, equity, income and expenses are recognised in the reporting 18 Responsible Persons Disclosures period to which they relate, regardless of when cash is 19 Cash Flow Information received or paid. 20 Financial Instruments The annual financial report was authorised for issue by the 21 Events occurring after balance date Board on 27 August 2013. 22 Jointly Controlled Assets The principal address is 7 Learmonth Road, Wendouree VIC 3355.

Accounting policies Unless otherwise stated, all accounting policies applied are consistent with those of the prior year. Where appropriate, comparative figures have been amended to align with current presentation and disclosure.

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

Classification between current and non-current In the determination of whether an asset or liability is current or non-current, consideration is given to the time when each asset or liability is expected to be realised or paid. The asset or liability is classified as current if it is expected to be turned over within the next twelve months, being CHW’s operational cycle.

ANNUAL REPORT 2012/13 41 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Rounding Government Grants and Contributions Unless otherwise stated, amounts in the report have been Government grants and contributions are recognised as rounded to the nearest thousand dollars. operating revenue on receipt or when the Corporation obtains control of the contribution and meets certain other criteria as Historical Cost Convention outlines in AASB 1004, whichever is sooner, and disclosed This financial report has been prepared under the historical in the comprehensive operating statement as government cost convention, as modified by the revaluation of financial contributions. However, grants and contributions received assets, certain classes of property, plant and equipment and from the Victorian State Government, which were originally investment property. appropriated by the Parliament as additions to net assets or where the Minister for Finance and the Minister for Water Accounting estimates have indicated are in the nature of owners’ contributions, are The preparation of the financial report in conformity with AASs accounted for as Equity - Contributed Capital. requires the use of certain accounting estimates that affect the application of accounting policies and the reported amounts Interest and Rents of assets, liabilities, income and expenses. Actual results Interest income is recognised as revenue when earned. may differ from these estimates. It also requires management Rentals are recognised as income on a straight line basis to exercise its judgement in the process of applying the over the rental period. Corporation’s accounting policies. During the period ended 30 June 2011 a revaluation of assets was undertaken across 1.3 Expense Recognition the entire water industry. The asset revaluations were taken to account in 2010/11. The review also included a revised Borrowing Costs set of useful lives for long lived assets. The adoption of Borrowing costs are recognised as an expense in the period these assumptions is being reviewed by a VicWater working in which they are incurred. Borrowing costs include interest group and this work is still in progress as at 30 June 2013. on bank overdrafts and short-term and long-term borrowings, Accordingly, the Corporation will assess the findings and amortisation of discounts or premiums relating to borrowings, adjust the carrying amounts of assets within the next financial amortisation of ancillary costs incurred in connection with the year where appropriate. arrangement of borrowings and finance lease charges.

Depreciation and Amortisation of Non-Current Assets 1.2 Revenue All non-current physical assets that have a limited useful life Service and usage charges are depreciated. Where assets have separate identifiable Rate/tariff and service charges are recognised as revenue components that have distinct useful lives and/or residual when levied or determined. values, a separate depreciation rate is determined for each Trade Waste charges are recognised as revenue at the component. end of the service delivery period. Volume meters are read Depreciation is calculated using the straight line basis to and appropriate charges levied as per the trade waste allocate their cost or revalued amounts, net of their residual agreements. The meters are read on a monthly basis with values, over their estimated useful lives, commencing from the accounts sent on a quarterly basis. time the asset is held ready for use. The assets residual values Water usage charges by measure are recognised as revenue and useful lives are reviewed, and adjusted if appropriate, at when the water is provided. Meter reading is undertaken each balance sheet date. progressively during the year. An estimation, calculated by Intangible assets with finite useful lives are amortised as multiplying the number of days since the last reading by each an expense on a systematic basis (typically straight line) customer’s average service usage, is made at the end of each commencing from the time the asset is available for use. The accounting period in respect of meters which have not been amortisation periods are reviewed and adjusted if appropriate read at balance date. at balance date. Intangible assets with indefinite useful lives are not amortised. However, all intangible assets are assessed Developer contributions for impairment annually as outlined in Note 1.4. Water infrastructure assets built by developers in new land subdivisions are provided to CHW on completion and upon acceptance are recognised at their fair value as revenue. Fees paid by developers to connect new developments to the Corporation’s existing water supply and sewerage systems are recognised as revenue when the contributions are received.

42 ANNUAL REPORT 2012/13 Major depreciation periods used are listed below: Other Expenses Periods These costs generally represent other operating costs incurred during the course of normal operations. Supplies Buildings and services costs are recognised as an expense in the - Buildings 20 - 100 years reporting period in which they are incurred. The carrying - Leasehold improvements 30 - 66.67 years amounts of any inventories held for distribution are expensed Infrastructure Water when distributed. - Storages 40 - 400 years - Distribution network 40 - 150 years 1.4 Infrastructure assets, property, plant and equipment - Treatment plants 15 - 100 years Recognition and Measurement of Assets Infrastructure Waste Water Infrastructure, property, plant and equipment represent - Distribution network 20 - 150 years non-current assets comprising land, buildings, leasehold - Treatment plants 25 - 100 years improvements, water, sewer and drainage infrastructure, BOOT Assets 44 years plant, equipment and motor vehicles used by CHW in its operations. Items with a cost or value in excess of $1,000 and Plant and Equipment 3 - 20 years a useful life of more than one year are recognised as an asset. All other assets acquired are expensed. Intangible Assets Software 3 - 12 years Where assets are constructed by the Corporation, the cost at which they are recorded includes an appropriate share of fixed and variable overheads. Employee benefits These expenses include all costs related to employment Acquisition (other than superannuation which is accounted for The purchase method of accounting is used for all acquisitions separately) including wages and salaries, fringe benefits tax, of assets, regardless of whether equity instruments or other leave entitlements, redundancy payments and WorkCover assets are acquired. Cost is measured as the fair value of the premiums. assets given or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Superannuation Where assets are constructed by CHW, the cost at which The amount recognised in the comprehensive operating they are recorded includes an appropriate share of fixed and statement is the employer contributions for members of both variable overheads. Assets acquired at no cost or for nominal defined benefit and defined contribution superannuation plans consideration by CHW are recognised at fair value at the date that are paid or payable during the reporting period. Refer to of acquisition. Note 17 for additional superannuation disclosures. The Department of Treasury and Finance (DTF) in their Annual Repairs and Maintenance Financial Statements, disclose on behalf of the State as the Routine maintenance, repair costs and minor renewal costs sponsoring employer, the net defined benefit cost related are expensed as incurred. Where the repair relates to the to the members of these plans as an administered liability. replacement of a component of an asset and the cost Refer to DTF’s Annual Financial Statements for more detailed exceeds the capitalisation threshold, the cost is capitalised disclosures in relation to these plans. and depreciated.

BOOT Tolls Measurement of Non-Current Physical Assets These expenses include costs incurred in operating CHW’s All non-current physical assets except water infrastructure water and wastewater treatment plants. assets are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and Contractors & Materials impairment in accordance with the requirements of Financial These expenses include costs incurred in operating and Reporting Direction (FRD) 103D. maintaining CHW’s assets as well as costs incurred for Revaluations are conducted in accordance with FRD 103D. consultants and specialist advice. Scheduled revaluation is undertaken every five years with an Utilities annual assessment of fair value to determine if it is materially These expenses include amounts made for telephone and different to carrying value. If the difference to carrying value electricity costs. is greater than 10 per cent, a management revaluation is undertaken while a movement greater than 40 per cent Environmental Contributions will normally involve an Approved Valuer (usually the Valuer The Corporation has a statutory obligation to pay an General of Victoria) to perform detailed assessment of the fair environmental contribution to the Department of Environment value. If the movement in fair value since the last revaluation is and Primary Industries. This contribution is recognised as an less than or equal to 10 per cent, then no change is made to expense during the reporting period as incurred. carrying amounts.

ANNUAL REPORT 2012/13 43 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Cultural depreciated assets and collections, heritage assets Impairment of Assets and other non-current physical assets that the entity intends Intangible assets with indefinite useful lives are tested annually to preserve because of their unique historical, cultural or as to whether their carrying value exceeds their recoverable environmental attributes are measured at the cost of replacing amount. All other assets are assessed annually for indicators the asset less, where applicable, accumulated depreciation of impairment, except for; calculated on the basis of such cost to reflect the already - inventories; consumed or expired future economic benefits of the asset. - deferred tax assets; Depreciated replacement cost has been adopted as an - financial instrument assets; and estimate of fair value under the revaluation model adopted for - certain biological assets related to agricultural activity; these assets. Plant, equipment and motor vehicles are measured at fair If there is an indication of impairment, the assets concerned value. For the plant, equipment and vehicles asset class, are tested as to whether their carrying value exceeds their where the Corporation is able to demonstrate that there is recoverable amount. Where an asset’s carrying amount no evidence that a reliable market-based fair value (or other exceeds its recoverable amount, the difference is written-off fair value indicators) exist for these assets, depreciated by a charge to the statement of other comprehensive income replacement cost is used to represent a reasonable except to the extent that the write-down can be debited to approximation of fair value. an asset revaluation reserve amount applicable to that class of asset. Water infrastructure assets, are measured at fair value less accumulated depreciation and impairment in accordance The recoverable amount for most assets is measured at the with FRD 103D. These assets comprise substructures or higher of depreciated replacement cost and fair value less underlying systems held to facilitate harvesting, storage, costs to sell. Recoverable amount for assets held primarily treatment and transfer of water to meet customer needs. They to generate net cash inflows is measured at the higher of the also include infrastructure assets that underlie sewage and present value of future cash flows expected to be obtained drainage systems. from the asset and fair value less costs to sell. It is deemed that, in the event of the loss of an asset, the future economic The initial fair value assessment for water infrastructure in the benefits arising from the use of the asset will be replaced year ended 30 June 2011 was undertaken with involvement unless a specific decision to the contrary has been made. from the Valuer General of Victoria (VGV) and under the instructions of the Department of Treasury and Finance (DTF). A reversal of an impairment loss on a revalued asset is The assessment was performed on a portfolio basis for credited directly to equity under the heading revaluation various categories of water infrastructures. reserve. However, to the extent that an impairment loss on the same class of asset was previously recognised in the Revaluation of Non-Current Physical Assets statement of other comprehensive income, a reversal of that Revaluation increments are credited directly to equity in impairment loss is also recognised in the comprehensive the revaluation reserve, except that, to the extent that an operating statement. increment reverses a revaluation decrement in respect of that same class of assets previously recognised as an expense 1.5 Finance Leases in determining the net result, the increment is recognised as other comprehensive income in determining the net result. Leases of property, plant and equipment where CHW has substantially all the risks and rewards incidental to ownership Revaluation decrements are recognised immediately as an are classified as finance leases. Finance leases are capitalised expense in the net result, except that, to the extent that a at the lease’s inception at the lower of the fair value of the credit balance exists in the revaluation reserve in respect leased property and the present value of the minimum lease of the same class of assets, they are debited to the payments. The corresponding rental obligations, net of finance revaluation reserve. charges, are included in payables. Each lease payment is Revaluation increases and revaluation decreases relating allocated between the liability and finance charges so as to to individual assets within a class of property, plant and achieve a constant rate on the finance balance outstanding. equipment are offset against one another within that class but The interest element of the finance cost is charged to the are not offset in respect of assets in different classes. comprehensive operating statement over the lease period Revaluation reserves are not transferred to accumulated funds so as to produce a constant periodic rate of interest on on derecognition of the relevant asset. the remaining balance of the liability for each period. The property, plant and equipment acquired under finance lease is depreciated over the shorter of the assets useful life and the lease term.

44 ANNUAL REPORT 2012/13 1.6 Cash and Cash Equivalents 1.10 Employee Benefits Cash and cash equivalents include cash on hand, deposits (i) Wages and salaries, and annual leave held at call with financial institutions, other short-term, Liabilities for wages and salaries, and annual leave expected highly liquid investments with original maturities of three to be settled within 12 months of the reporting date are months or less that are readily convertible to known amounts recognised in employee benefit liabilities in respect of of cash and which are subject to insignificant risk of changes employees’ services up to the reporting date and are in value, and bank overdrafts. Bank overdrafts are shown measured at the amounts expected to be paid when the within borrowings on the balance sheet but are included liabilities are settled, at their nominal values. Employee benefits with cash and cash equivalents for cashflow statement which are not expected to be settled within 12 months are presentation purposes. measured as the present value of the estimated future cash outflows to be made by the Corporation, in respect of services 1.7 Receivables rendered by employees up to the reporting date. Regardless of the expected timing of settlements, provisions made in Trade receivables are recognised initially at fair value and respect of employee benefits are classified as a current liability, subsequently measured at amortised cost, less an allowance unless there is an unconditional right to defer the settlement for impaired receivables. Trade receivables are due for of the liability for at least 12 months after the reporting date, in settlement no more than 30 days from the date of recognition which case it would be classified as a non-current liability. for water utility debtors, and generally no more than 30 days for other debtors. (ii) Long service leave Current Liability – unconditional LSL (representing 7 or Collectability of trade receivable is reviewed on an ongoing more years of continuous service) is disclosed as a current basis. Debts which are known to be uncollectible are written liability even where the Corporation does not expect to settle off. An allowance for impaired receivables is established when the liability within 12 months because it does not have the there is objective evidence that CHW will not be able to collect unconditional right to defer the settlement of the entitlement all amounts due according to the original terms of receivables. should an employee take leave within 12 months. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated The components of this current LSL liability are measured at: future cash flows, discounted at the effective interest rate. The • Present value – component that the Corporation does not amounts credited to to the allowance are recognised as an expect to settle within 12 months; and expense in the comprehensive operating statement. • Nominal value – component that the Corporation expects to settle within 12 months. 1.8 Inventories Non-Current Liability – conditional LSL Inventories comprise stores and materials used in the (representing less than 7 years of continuous service) is construction of new works and for the repair and maintenance disclosed as a non-current liability. There is an unconditional of existing assets. All inventories are valued at the lower of right to defer the settlement of the entitlement until the cost and net-realisable value. Costs are assigned to inventory employee has completed the requisite years of service. quantities on hand at balance date on a first in, first out basis Conditional LSL is required to be measured at present value. (FIFO). Inventories held for distribution are measured at the lower of cost and current replacement cost. In calculating present value, consideration is given to expected future wage and salary levels, experience of 1.9 Payables employee departures and periods of service. Expected future payments are discounted using market yields at the reporting Payables consist predominantly of trade and sundry creditors. date on national government bonds with terms to maturity These amounts represent liabilities for goods and services and currency that match, as closely as possible, the estimated provided to CHW prior to the end of the financial year, which future cash outflows. are unpaid at financial year end. The amounts are unsecured and are usually paid within 30 days of recognition. (iii) Superannuation Payables are initially recognised at fair value, being the cost The amount charged to the comprehensive operating of the goods and services, and subsequently measured at statement in respect of superannuation represents the amortised cost. contributions made by CHW to the superannuation plan in respect to the current services of current entity staff. Superannuation contributions are made to the plans based on the relevant rules of each plan.

ANNUAL REPORT 2012/13 45 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

(iv) Employee Benefits On-Costs 1.14 Taxation Employee benefit on-costs, including payroll tax and worker’s CHW is subject to the National Tax Equivalent Regime (NTER), compensation, are recognised and included in employee which is administered by the Australian Tax Office. benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities. The income tax expense or revenue for the period is the expected tax payable or receivable on the current period’s (v) Performance payments taxable income based on the national corporate income tax Performance payments for the Corporation’s Executive rate of 30%, adjusted by changes in deferred tax assets and Officers are based on a percentage of the annual salary liabilities attributable to temporary differences between the tax package provided under their contract(s) of employment. bases of assets and liabilities and their carrying amounts in A liability is recognised and is measured as the aggregate the financial statements, and to unused tax losses. of the amounts accrued under the terms of the contracts to Deferred tax assets and liabilities are recognised for temporary balance date. differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax 1.11 Biological Assets rates which are enacted or substantially enacted. The relevant The fair value of timber in forestry plantations is calculated by tax rates are applied to the cumulative amounts of deductible using the closing balance of the previous year, applying the and taxable temporary differences to measure the deferred tax average rate per cubic metre sold during the financial year to asset or liability. No deferred tax asset or liability is recognised the increase/(decrease) in natural growth of the plantations in relation to these temporary differences if they arose in a and then applying a discounted cash flow to calculate the transaction that at the time of the transaction did not affect gains/(losses) attributable to price changes over time. either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable 1.12 BOOT (Build Own Operate and Transfer) Contracts amounts will be available to utilise those temporary differences Central Highlands Water has two BOOT contracts in and losses. operation. The first was signed on 12th April 1999 and Current and deferred tax is recognised in profit or loss, except commenced full operational tolling in December 2000 for to the extent that it relates to items recognised in other the supply of treated water to Ballarat and a number of comprehensive income or directly in equity. In this case, the neighbouring communities for a period of 25 years. The tax is also recognised in other comprehensive income or second was signed on 12th November 2003 and commenced directly in equity, respectively. full operational tolling in June 2006 for the supply of treated water to four small towns (Beaufort, Blackwood, Forest Hill and Clunes) for a period of 20 years. 1.15 Dividend Policy As ownership of the asset(s) is transferred to the CHW at the CHW is required to pay a dividend in accordance with a end of the contractual term and this term is for the major part determination of the Treasurer of Victoria under the Public of the economic life of the asset(s), CHW accounts for the Authorities (Dividend) Act 1983, based on a prescribed asset(s) under the BOOT scheme as a finance lease. Finance percentage of the previous year’s adjusted net profit. An leases are capitalised at the lease’s inception at the lower of obligation to pay a dividend only arises after consultation with the fair value of the leased property and the present value the relevant portfolio Minister and the Treasurer and a formal of the minimum lease payments. The corresponding rental determination is made by the Treasurer. CHW’s preliminary obligations, net of finance charges, are included in payables. estimate in respect to the reporting period is nil. Each stream of lease payment is allocated between the liability and finance charges so as to achieve a constant rate 1.16 Goods and Services Tax on the finance balance outstanding. The interest element of Revenues, expenses and assets are recognised net of the finance cost is charged to the operating statement over goods and services tax (GST), except where the amount of the lease period so as to produce a constant periodic rate GST incurred is not recoverable from the Australian Taxation of interest on the remaining balance of the liability for each Office (ATO). In these circumstances, the GST is recognised period. The asset(s) acquired in a BOOT scheme that meets as part of the cost of acquisition of the asset or as part of an the classification of finance lease is depreciated over the item of expense. asset’s useful life. Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO 1.13 Changes in Accounting Policy is included as a current asset or liability in the balance sheet. The accounting policies are consistent with those of the Cash flows arising from operating activities are disclosed in previous year, unless stated otherwise. the Cash Flow Statement on a gross basis - i.e. inclusive of GST. The GST component of cashflows arising from investing and financing activities which is recoverable or payable to the taxation authority is classified as operating cash flows.

46 ANNUAL REPORT 2012/13 1.17 Prepayments The intangible assets of CHW relate to internally generated software development costs, which have a finite life and are Prepayments represent payments in advance of receipt amortised on a straight line basis over no more than three of goods or services or that part of expenditure made in years, and tradeable water entitlements which have an one accounting period covering a term extending beyond indefinite life. that period.

1.21 Interest bearing liabilities 1.18 Equity Borrowings are initially recognised at fair value, net of Contributions by owners transaction costs incurred. Borrowings are subsequently Additions to net assets which have been designated as measured at amortised cost. Any difference between the contributions by owners are recognised as contributed proceeds (net of transaction costs) and the redemption capital. Other transfers that are in the nature of contributions amount is recognised in the operating statement over the or distributions have also been designated as contributions period of the borrowings, using the effective interest method. by owners. Transfers of net assets arising from administrative Borrowings are classified as current liabilities unless CHW has restructurings are treated as distributions to or contributions an unconditional right to defer settlement of the liability for at by owners. least 12 months after the balance sheet date. Grants and contributions received from the Victorian State Government, which were originally appropriated by the 1.22 Provisions Parliament as additions to net assets or where the Minister for Finance and the Minister for Water have indicated are in the Provisions are recognised when the corporation, as a result nature of owners’ contributions, are accounted for as Equity – of a past event, has a legal or constructive obligation that Contributions by Owners. can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 1.19 Financial Instruments The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at Recognition the end of the reporting period, taking into account the risks Financial instruments are initially measured at fair value, plus in and uncertainties surrounding the obligation. the case of a financial asset or financial liability not at fair value through profit and loss, transaction costs that are directly attributable to the acquisition or the issue of the financial 1.23 Commitments asset or liability. Subsequent to initial recognition, the financial Commitments for future expenditure include operating instruments are measured as set out below: and capital commitments arising from contracts. These commitments are disclosed by way of a note (refer to Note Loans and receivables 15) at their nominal value and inclusive of the goods and Loans and receivables are non-derivative financial assets services tax (GST) payable. In addition, where it is considered with fixed or determinable payments that are not quoted appropriate and provides additional relevant information to in an active market. They are included in current assets, users, the net present values of significant individual projects except for those with maturities greater than 12 months are stated. These future expenditures cease to be disclosed after the reporting date which are classified as non-current as commitments once the related liabilities are recognised in assets. Loans and receivables are included in trade and the balance sheet. other receivables and other receivables in the balance sheet. Loans and receivables are recorded at amortised cost less impairment. 1.24 Contingent assets and contingent liabilities Contingent assets and contingent liabilities are not recognised Impairment of financial instruments in the balance sheet, but are disclosed by way of a note (refer At each reporting date, CHW assesses whether there to Note 16) and, if quantifiable, are measured at nominal is objective evidence that a financial instrument has value. Contingent assets and liabilities are presented exclusive been impaired. Impairment losses are recognised in the of GST receivable or payable respectively. Comprehensive Operating Statement.

1.25 New Accounting Standards and Interpretations 1.20 Intangibles Certain new accounting standards and interpretations have Intangible assets represent identifiable non-monetary assets been published that are not mandatory for the 30 June 2013 without physical substance. Intangible assets are recognised reporting period. As at 30 June 2013, the following standards at cost. Costs incurred subsequent to initial acquisition are and interpretations had been issued but were not mandatory capitalised when it is expected that additional future economic for financial year ending 30 June 2013. The Corporation has benefits will flow to CHW. not and does not intend to adopt these standards early.

ANNUAL REPORT 2012/13 47 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Standard / Interpretation Summary Applicable Impact on departmental for annual financial statements reporting periods beginning on or after

AASB 9 Financial AASB 9 Financial Instruments addresses the 1 January 2015 CHW is yet to assess its full Instruments, AASB 2010-7 classification, measurement and derecognition impact. However, initial indications Amendments to Australian of financial assets and financial liabilities. The are that it may affect the entity’s Accounting Standards arising standard is not applicable until 1 January accounting for its available-for- from AASB 9 (December 2015 but is available for early adoption. The sale financial assets, since AASB 2010) and AASB 2012-6 derecognition rules have been transferred 9 only permits the recognition of Amendments to Australian from AASB 139 Financial Instruments: fair value gains and losses in other Accounting Standards - Recognition and Measurement and have not comprehensive income if they Mandatory Effective Date been changed. The group has not yet decided relate to equity investments that of AASB 9 and Transition when to adopt AASB 9. are not held for trading. Fair value Disclosures gains and losses on available- for-sale debt investments, for example, will therefore have to be recognised directly in profit or loss.

AASB 10 Consolidated AASB10 introduces a single definition of 1 January 2014 CHW is yet to assess its full Financial Statements, AASB control that applies to all entities and focuses impact. The Corporation will apply 11 Joint Arrangements, on the need to have both power and rights amended standard from 1 January AASB 12 Disclosure of or exposure to variable returns. AASB 11 2014. Interests in Other Entities, introduces a new approach for which the AASB 127 Separate Financial focus is no longer on the legal structure of Statements, AASB 128 joint arrangements, but rather on how rights Investments in Associates and obligations are shared by the parties and Joint Ventures and to the joint arrangement. Based on the AASB 2011-7 Amendments assessment of rights and obligations, a joint to Australian Accounting arrangement will be classified as either a joint Standards arising from the operation or joint venture. AASB 12 sets out Consolidation and Joint the required disclosures for entities reporting Arrangements Standards. under the two new standards, AASB 10 and AASB 11, and replaces the disclosure requirements currently found in AASB 127 and AASB 128. These standards provide more reliable and relevant information for users to assess the composition of the group and the amounts, timing and uncertainty of future cash flows.

AASB 1053 Application On 30 June 2010 the AASB officially 1 July 2013 CHW is yet to assess its full of Tiers of Australian introduced a revised differential reporting impact. The Corporation will apply Accounting Standards, framework in Australia. Under this framework, amended standard from 1 July AASB 2010-2 Amendments a two-tier differential reporting regime 2013. to Australian Accounting applies to all entities that prepare general Standards arising from purpose financial statements. Tier 1 are the Reduced Disclosure Australian Accounting Standards as currently Requirements, AASB 2011-2 applied and Tier 2 is the reduced disclosure Amendments to Australian regime which retains the recognition and Accounting Standards measurement requirements of Australian arising from the Trans- Accounting Standards but with reduced Tasman Convergence Project disclosure requirements. AASB 2011-6 – Reduced Disclosure extends the relief for intermediate parent Requirements and AASB entities from consolidation, equity accounting 2011-6 Amendments to and proportionate consolidation to parent Australian Accounting entities that report under tier 2, where the Standards – Extending parent higher up the group is reporting either Relief from Consolidation, under tier 1 or tier 2. the Equity Method and Proportionate Consolidation – Reduced Disclosure Requirements

48 ANNUAL REPORT 2012/13 Standard / Interpretation Summary Applicable Impact on departmental for annual financial statements reporting periods beginning on or after

AASB 119 Employee These standards require the recognition of all 1 January 2013 CHW is yet to assess its full Benefits, AASB 2011-10 remeasurements of defined benefit liabilities/ 1 July 2013 impact. However, initial indications Amendments to Australian assets immediately in other comprehensive are that this change may impact Accounting Standards arising income (removal of the so-called ‘corridor’ CHW’s financial statements. The from AASB 119 and AASB method) and the calculation of a net interest Corporation will apply amended 2011-11 Amendments to expense or income by applying the discount standard from 1 July 2013. AASB 119 (September rate to the net defined benefit liability or asset. 2011) arising from Reduced Disclosure Requirements.

AASB 2010-10 Further AASB 1 First-time Adoption of Australian 1 January 2013 This amendment will not affect Amendments to Australian Accounting Standards was amended in the financial statements of the Accounting Standards – December 2010 by eliminating references Corporation. Removal of Fixed Dates for to fixed dates for one exemption and one First-time Adopters [AASB exception dealing with financial assets and 2009-11 & AASB 2010-7] liabilities.

AASB 2011-4 Amendments Removes the individual key management 1 July 2013 CHW does not expect any to Australian Accounting personnel disclosure requirements from AASB significant impact from these Standards to remove 124 Related Party Disclosures, to achieve consequential amendments. Individual Key Management consistency with the international equivalent Personnel Disclosure standard and remove a duplication of the Requirements requirements with the Corporation Act 2001. The amendments cannot be adopted early.

AASB 2011-12 Amendments The interpretation provides guidance on the 1 January 2013 This amendment does not affect to Australian Accounting accounting for waste removal (stripping) costs the financial statements of the Standards arising from in the production phase of a mine. Such Corporation. Interpretation 20 [AASB 1] tripping costs can only be recognised as an asset if they generate a benefit of improved access to an identifiable component of the ore body, it is probable that the benefits will flow and the costs can be measured reliably.

AASB 13 Fair Value It explains how to measure fair value and aims 1 January 2013 The Corporation has yet to Measurement and AASB to enhance fair value disclosures. determine which, if any, of its 2011-8 Amendments to current measurement techniques Australian Accounting will have to change as a result of Standards arising from the new guidance. It is therefore AASB 13 not possible to state the impact, if any, of the new rules on any of the amounts recognised in the financial statements. However, application of the new standard will impact the type of information disclosed in the notes to the financial statements. The group will adopt the new standard from its operative date, which means that it will be applied in the annual reporting period ending 30 June 2014.

ANNUAL REPORT 2012/13 49 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Standard / Interpretation Summary Applicable Impact on departmental for annual financial statements reporting periods beginning on or after

AASB 2013-1 Amendments This Standard removes the requirements 1 July 2014 CHW is yet to assess its full to AASB 1049 - Relocation relating to the disclosure of budgetary impact. The Corporation will apply of Budgetary Reporting information from AASB 1049 (without amended standard from 1 July Requirements substantive amendment). All budgetary 2014. reporting requirements applicable to public sector entities are now located in a single, topic-based, Standard AASB 1055 Budgetary Reporting.

AASB 2012-11 Amendments The Standard makes various editorial 1 July 2013 CHW is yet to assess its full to Australian Accounting corrections to Australian Accounting impact. The Corporation will apply Standards - Reduced Standards – Reduced Disclosure amended standard from 1 July Disclosure Requirements and Requirements (Tier 2). These corrections 2014. Other Amendments ensure that the Standards reflect decisions of the AASB regarding the Tier 2 requirements.

AASB 2012-7 Amendments This Standard adds to or amends the 1 July 2013 CHW is yet to assess its full to Australian Accounting Australian Accounting Standards – Reduced impact. The Corporation will apply Standards - Reduced Disclosure Requirements for AASB 7 Financial amended standard from 1 July Disclosure Requirements and Instruments: Disclosures, AASB 12 Disclosure 2013. Other Amendments of Interests in Other Entities, AASB 101 Presentation of Financial Statements and AASB 127 Separate Financial Statements. AASB 1053 Application of Tiers of Australian Accounting Standards provides further information regarding the differential reporting framework and the two tiers of reporting requirements for preparing general purpose financial statements.

AASB 2012-1 Amendments This Standard applies to annual reporting 1 July 2013 As noted above, the Corporation to Australian Accounting periods beginning on or after 1 July 2013. does not plan to adopt these Standards – Fair Value Earlier application is permitted for annual standards until their effective date. Measurement – Reduced reporting periods beginning on or after 1 July As such, this amendment will not Disclosure Requirements 2009 but before 1 July 2013, provided that been adopted until the year ended [AASB 3, AASB 7, AASB 13, the following are also adopted for the same 1 July 2013 AASB 140 & AASB 141] period: (a) AASB 1053 Application of Tiers of Australian Accounting Standards; (b) AASB 13 Fair Value Measurement; and (c) AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13.

AASB 2012-2 Amendments This Standard amends the required 1 January 2013 This amendment does not affect to Australian Accounting disclosures in AASB 7 to include information the financial statements of the Standard - Disclosures - that will enable users of an entity’s financial Corporation. Offsetting Financial Assets statements to evaluate the effect or potential and Financial Liabilities effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities, on the entity’s financial position.

AASB 2012-3 Amendments This Standard adds application guidance 1 January 2014 As noted above, the Corporation to Australian Accounting to AASB 132 to address inconsistencies does not plan to adopt these Standard - Offsetting identified in applying some of the offsetting standards until their effective date. Financial Assets and criteria of AASB 132, including clarifying As such, this amendment will not Financial Liabilities the meaning of “currently has a legally been adopted until the year ended enforceable right of set-off” and that some 1 July 2014 gross settlement systems may be considered equivalent to net settlement.

50 ANNUAL REPORT 2012/13 Standard / Interpretation Summary Applicable Impact on departmental for annual financial statements reporting periods beginning on or after

AASB 2012-4 Amendments This Standard adds an exception to the 1 January 2013 This amendment does not affect to Australian Accounting retrospective application of Australian the financial statements of the Standard - Government Accounting Standards to require that first- Corporation. Loans time adopters apply the requirements in AASB 139 Financial Instruments: Recognition and Measurement (or AASB 9 Financial Instruments) and AASB 120 Accounting for Government Grants and Disclosure of Government Assistance prospectively to government loans existing at the date of transition to Australian Accounting Standards. This means that first-time adopters would not recognise the corresponding benefit of the government loan received at a below- market rate of interest as a government grant. However, entities may choose to apply the requirements of AASB 139 (or AASB 9) and AASB 120 to government loans retrospectively if the information needed to do so had been obtained at the time of initially accounting for that loan. These amendments give first-time adopters the same relief as existing preparers of Australian-Accounting- Standards financial statements.

AASB 2012-5 Amendments These amendments are a consequence of the 1 January 2013 This amendment does not affect to Australian Accounting annual improvements process, which provides the financial statements of the Standard arising from Annual a vehicle for making non-urgent but necessary Corporation. Improvements- 2009-2011 amendments to Standards. Cycle

AASB 2012-9 Amendments This Standard makes an amendment to 1 January 2013 This amendment does not affect to AASB 1048 arising from Australian Accounting Standard AASB 1048 the financial statements of the the Withdrawal of Australian Interpretation of Standards. The amendment Corporation. Interpretation 1039 arises from the withdrawal of Australian Interpretation 1039 Substantive Enactment of Major Tax Bills in Australia.

ANNUAL REPORT 2012/13 51 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Standard / Interpretation Summary Applicable Impact on departmental for annual financial statements reporting periods beginning on or after

AASB 2012-10 Amendments The amendments to AASB 10 and related 1 January 2013 This amendment does not affect to Australian Accounting Standards revise the transition guidance the financial statements of the Standards - Transition relevant to the initial application of those Corporation. guidance and other Standards, to clarify the circumstances in Amendments (clarifications which adjustments to an entity’s previous only) - no separate disclosure accounting for its involvement with other needed entities are required and the timing of such adjustments. These amendments result from proposals issued in AASB Exposure Draft ED 224 Transition Guidance (December 2011). Further amendments to AASB 10 and related Standards revise their application paragraphs, so that they apply mandatorily to not-for-profit entities for annual reporting periods beginning on or after 1 January 2014, with early application permitted for not-for-profit entities only from 1 January 2013. The application of the amendments set out in AASB 2011- 7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards is similarly amended. There is no change to the application date for for-profit entities, which are required to apply those Standards for annual reporting periods beginning on or after 1 January 2013, with early application permitted. This standard also makes various editorial amendments to a range of Australian Accounting Standards and to Interpretation 12 Service Concession Arrangements, including amendments to reflect changes made to the text of IFRSsby the IASB.

52 ANNUAL REPORT 2012/13 Standard / Interpretation Summary Applicable Impact on departmental for annual financial statements reporting periods beginning on or after

AASB 1055 Budgetary AASB 1053 Application of Tiers of Australian 1 January 2014 As noted above, the Corporation Reporting Accounting Standards establishes a does not plan to adopt these differential reporting framework consisting standards until their effective date. of two tiers of reporting requirements As such, this amendment will not for preparing general purpose financial be adopted until the year ended statements: (a) Tier 1: Australian Accounting 1 January 2014 Standards; and (b) Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements. Tier 1 requirements incorporate International Financial Reporting Standards (IFRSs), including Interpretations, issued by the International Accounting Standards Board (IASB), with the addition of paragraphs on the applicability of each Standard in the Australian environment. Publicly accountable for-profit private sector entities are required to adopt Tier 1 requirements, and therefore are required to comply with IFRSs. Furthermore, other for-profit private sector entities complying with Tier 1 requirements will simultaneously comply with IFRSs. Some other entities complying with Tier 1 requirements will also simultaneously comply with IFRSs. Tier 2 requirements comprise the recognition, measurement and presentation requirements of Tier 1 but substantially reduced disclosure requirements in comparison with Tier 1.

ANNUAL REPORT 2012/13 53 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 2 Financial Risk Management Objectives (ii) Foreign Exchange Risk and Policies The Corporation has no exposure to changes in the foreign exchange rate. The Corporation’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. (iii) Other Price Risk The Corporation’s Board has the overall responsibility for The Corporation has no significant exposure to Other Price the establishment and oversight of the Corporation’s risk Risk. management framework. The Corporation’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse Market Risk Sensitivity Analysis effects on the financial performance of the Corporation. The The sensitivity analysis below has taken into consideration Corporation uses different methods to measure different past performance, future expectations, economic forecasts types of risk to which it is exposed. These methods include and management’s knowledge and experience of the financial sensitivity analysis in the case of interest rate and other price markets, the Corporation believes that: risks and ageing analysis for credit risk. - a movement of 0.5% in interest rates is reasonable over the Risk management is carried out by the finance department next 12 months. under policies approved by the Board of Directors. The finance department identifies and evaluates financial risks Interest Rate Risk on behalf of the Corporation. The Board provides written -0.5% +0.5% principles for overall risk management, as well as policies Carrying covering specific areas, such as foreign exchange risk, interest Amount Result Equity Result Equity 30 June 2013 $’000 $’000 $’000 $’000 $’000 rate risk, credit risk and investment of excess liquidity. Financial Assets Cash 5,872 (5) (4) 5 4 2.1 Risk Exposures Deposits at Call 1,019 (3) (2) 3 2 Total increase / (decrease) (8) (6) 8 6 The main risks the Corporation is exposed to through its Financial Liabilities Loans1 0 0 0 0 0 financial instruments are as follows: Total increase / (decrease) 0 0 0 0

(a) Market Risk 1 Interest rate risk only applies to Loans held at variable rates (30th June 2013: $Nil; 30th June 2012: $14m). Market risk is the risk that changes in market prices will affect the fair value or future cash flows of the Corporation’s financial Interest Rate Risk instruments. Market risk comprises of foreign exchange -0.5% +0.5% risk, interest rate risk and other price risk. The Corporation’s Carrying exposure to market risk is primarily though interest rate risk, Amount Result Equity Result Equity there is no exposure to foreign exchange risk and insignificant 30 June 2012 $’000 $’000 $’000 $’000 $’000 Financial Assets exposure to other price risks. Objectives, policies and Cash 418 (3) (1) 3 1 processes used to manage these risks are disclosed in the Deposits at Call 2,301 (5) (2) 5 2 paragraphs below: Total increase / (decrease) (8) (3) 8 3 Financial Liabilities Loans1 14,000 70 49 (70) (49) (i) Interest Rate Risk Total increase / (decrease) 70 49 (70) (49)

The Corporation’s exposure to market interest rates relates 1 Interest rate risk only applies to Loans held at variable rates primarily to the Corporation’s long term borrowings and (30th June 2012: $14m; 30th June 2011: $22m). funds invested on the money market. The Corporation minimises its exposure to interest rate changes on its long term borrowings by holding a mix of fixed and floating rate debt. Debt is sourced from Treasury Corporation Victoria and is managed within a range of Board approved limits with debt levels and interest rates being monitored regularly. CHW manages interest rate risk by endeavouring to enter into all new borrowings at fixed interest rates, thereby avoiding risks attributable to movements in interest rates. This approach has not changed from the previous period. The Corporation has minimal exposure to interest rate risk through its holding of cash assets and other financial assets. The Corporation manages its interest rate risk by maintaining a diversified investment portfolio.

54 ANNUAL REPORT 2012/13 (b) Credit Risk Credit risk is the risk of financial loss to the Corporation as a result of a customer or counterparty to a financial instrument failing to meet its contractual obligations. Credit risk arises principally from the Corporation’s receivables and financial assets available for sale. The Corporation’s exposure to credit risk is influenced by the individual characteristics of each customer. The receivables balance consists of a large number of residential and business customers which are spread across a diverse range of industries. Receivable balances are monitored on an on-going basis to ensure that exposure to bad debts is not significant. Credit risk for receivables is managed in the following ways: - payment terms are 30 days - debt collection policies and procedures, including use of a debt collection agency. An analysis of the ageing of the Corporation’s receivables at reporting date has been provided in Note 20.

(c) Liquidity Risk Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they fall due. The Corporation’s policy is to settle financial obligations within 30 days and in the event of dispute make payments within 30 days from the date of resolution. The Corporation manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, and by continuously monitoring forecasts and actual cash flows and matching the maturity profiles of financial assets and financial liabilities. The Corporation’s financial liability maturities have been disclosed in Note 20.

ANNUAL REPORT 2012/13 55 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 3 Comprehensive Operating Statement Disclosures

2013 2012 $’000 $’000

Revenues

Service Charges Water access 15,384 14,454 Wastewater access 36,954 34,539 Fire service 141 202 Trade waste 212 136 Total 52,691 49,331

Usage Charges Water volume 21,752 18,566 Wastewater volume 396 384 Trade waste volume 962 762 Recycled water volume 183 136 Total 23,293 19,848

Government contributions Operating 1,205 75 Total 1,205 75

Developer contributions Fees paid by developers 2,037 1,367 Gifted Assets 7,247 4,227 Total 9,284 5,594

Net gain/(loss) on disposal of non current assets Net gain/(loss) on disposal of: Plant and equipment (124) (193) Retired Infrastructure (1,049) (326) Total (1,173) (519)

Other Revenue

Forestry timber sales 914 1,112 Insurance Recoups 688 351 Sundry income 2,960 1,776 Total 4,562 3,239

56 ANNUAL REPORT 2012/13 Note 3 Comprehensive Operating Statement Disclosures (cont’d)

2013 2012 $’000 $’000

Expenses Depreciation Buildings (297) (261) Plant and equipment (1,389) (1,488) Infrastructure Assets (16,563) (16,762) Total (18,249) (18,511)

Amortisation Infrastructure Assets (876) (876) Intangible Assets (3,181) (494) Total (4,057) (1,370)

Employee Benefits - salaries and wages (13,366) (13,665) - annual leave (1,029) (928) - long service leave (434) (323) - superannuation contributions (1,343) (1,302) - unfunded superannuation liability - (5,190) - other (1,133) (840) Total (17,305) (22,248)

Borrowing Costs expense Interest paid/payable (9,658) (9,380) Interest on Finance Leases (2,496) (2,580) Total (12,154) (11,960)

Other Expenses Auditors’ remunerations - Auditor General for Audit of financial statements (71) (69) - Internal audit (115) (131) Bad and Doubtful debts – Trade and Tariff Debtors (193) (128) Harvesting Costs (508) (725) Postage (167) (183) Legal Fees (130) (250) Insurance Costs (671) (629) Training (236) (193) Bank and Merchant Fees (244) (318) Advertising (95) (149) Bulk Water Charges (604) (641) Temporary Water Charges (258) (205) Other Expenses (1,237) (952) Total (4,529) (4,573)

ANNUAL REPORT 2012/13 57 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 4 Income Tax

2013 2012 $’000 $’000

The income tax expense for the financial year differs from the amount calculated on the net result. The differences are reconciled as follows:

(a) Components of Tax Expense Current Tax payable 194) 3,615) Deferred Tax relating to temporary differences 1,483 (1,809) 1,677 1,806

Deferred income tax expenses included in income tax expense comprises: (Decrease)/Increase in deferred tax assets (1,497) 1,153 Decrease/(Increase) in deferred tax liabilities 14 (2,965) (1,483) (1,812)

(b) Reconciliation of income tax to prima facie tax payable Net result before income tax 5,539 (6,067)

Tax at the Australian tax rate of 30% (2012: 30%) (1,662) 1,820

Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: - Expenditure not allowed for income tax purposes (15) (14)

Income tax as reported in the Comprehensive Operating Statement (1,677) 1,806

58 ANNUAL REPORT 2012/13 Note 5 Cash and Cash Equivalents

2013 2012 $’000 $’000

Cash Cash on Hand 3 4 Cash at Bank 5,869 414 Deposits at Call 1,019 2,301 6,891 2,719

ANNUAL REPORT 2012/13 59 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 6 Receivables

2013 2012 $’000 $’000

Current Trade Receivables 17,967 16,741 Provision for impaired receivables (161) (147) GST Receivable 589 735 Sundry Receivables 890 1,118 Accrued Income - Gifted Assets 2,631 1,458 Other Receivables 106 41 Total current receivables 22,023 19,946 Non Current Other Receivables 211 134 Total non current receivables 211 134

Total Receivables 22,234 20,080

(a) Provision for Doubtful Debts As at 30 June 2013, current receivables of the Corporation with a nominal value of $200,757 (2012: $185,767) were impaired. The amount of the provision was $161,000 (2012: $147,000). The individually impaired receivables mainly related to unsecured tenant debtors. It was assessed that a portion of the receivables is expected to be recovered. The aging of these receivables is as follows:

2013 2012 $’000 $’000

3-6 months 20 - Over 6 months 181 186 201 186

Movements in the provision for impaired receivables are as follows:

2013 2012 $’000 $’000

At 1 July 147 147 Provision for impairment recognised during the year 161 147 Receivables written off during the year as uncollectible (147) (147) Unused amount reversed - - 161 147

The creation and release of the provision for impaired receivables has been included in ‘other expenses’ in the comprehensive operating statement. Amounts charged to the provision account are generally written off when there is no expectation of recovering additional cash.

60 ANNUAL REPORT 2012/13 Note 6 Receivables (cont)

(b) Past due but not impaired trade receivables As at 30 June 2013, trade receivables of $1,277,625 (2012: $1,349,522) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The aging analysis of these receivables is as follows:

2013 2012 $’000 $’000

Up to 6 months 1,040 1,141 Over 6 months 238 209 1,278 1,350

The other amounts within receivables do not contain impaired assets and are not quite past due. Based on credit history, it is expected that these amounts will be received when due. (c) 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.

2013 2012

Carrying Carrying Amount Fair Value Amount Fair Value $’000 $’000 $’000 $’000

Other receivables 211 211 134 134 211 211 134 134

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables mentioned above. The Corporation does not hold any collateral as security. Refer to Note 2 for more information of the risk management policy of the Corporation.

ANNUAL REPORT 2012/13 61 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 7 Biological Assets

2013 2012 hectares hectares

Timber volume (hectares) 1,323 1,327

2012 2012 $’000 $’000

Movements in carrying amounts of timber in forests:

Carrying amount at beginning of period 5,605 5,640 Gains arising from changes in fair value less estimated point of sale costs attributable to 1,426 1,287 physical changes Gains/(losses) arising from changes in fair value less estimated point of sale costs attributable (500) (210) to price changes Decreases due to harvest (915) (1,112) Carrying amount at end of period 5,616 5,605

CHW manages significant timber plantations in its catchments for the purpose of catchment protection. These plantations are managed on a 35 year cycle from planting to harvesting. The value of the timber in these forest has been calculated on a discounted cash flow basis, based on the harvesting forecast over this 35 year period and using a discount rate of 5.72%. The movement in carrying amounts of timber in forests over the period reflects changes in the harvesting forecast.

62 ANNUAL REPORT 2012/13 Note 8 Infrastructure, Property, Plant and Equipment

2013 2012 $’000 $’000

Land At fair value 37,681 37,681 At Cost 3,481 3,482 Total 41,162 41,163 Buildings At fair value 10,256 10,256 At Cost 4,262 2,359 Less: Accumulated depreciation (1,372) (285) Total 13,146 12,330 Plant and Equipment At fair value 14,926 14,926 At Cost 1,015 1,789 Less: Accumulated depreciation (8,016) (8,171) Total 7,925 8,544 Infrastructure assets Headworks At Cost 113,562 88,923 At fair value 718,274 718,274 Less: Accumulated depreciation (32,204) (19,087) Total 799,632 788,110 Capital Works In Progress At Cost 17,064 28,682 Total Capital works in progress 17,064 28,682

Total Infrastructure, Property, Plant and Equipment 878,929 878,829

Revaluation of Land, Buildings and Infrastructure Assets Land, buildings and infrastructure assets were valued at 30 June 2011. The valuation of land and buildings were completed by Egan National Valuers acting as an agent for the Valuer General of Victoria. The valuation of infrastructure assets was completed by AECOM, also acting as an agent for the Valuer General of Victoria. For land and buildings, the valuer used a market based comparison approach whereby CHW’s properties were compared to recent comparable land sales in comparable proximity to the subject properties and applying an appropriate $-rate per square metre/hectare rate to determine their valuation. For infrastructure assets, the approach taken by the valuer was to undertake physical site inspection of a sample of CHW’s infrastructure assets and determine their useful life via condition assessments. This sample size included assets across all asset classes for above ground assets owned by CHW. From this data, AECOM then estimated useful remaining lives for all other assets in the appropriate asset classes. To form a judgement on assets that are unable to be inspected (i.e. underground assets), AECOM utilised a combination of CHW’s asset condition data and previous deterioration curves in their databases for underground assets operating under similar conditions. AECOM then established current optimised current replacement costs (determined on an optimum modern equivalent basis) and assigned salvage values using industry benchmarking data. With the establishment of remaining useful lives, current replacement costs and salvage values, AECOM were then able to establish fair value using the depreciated replacement cost method.

ANNUAL REPORT 2012/13 63 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 8 Infrastructure, Property, Plant and Equipment (cont’d)

Reconciliations Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the financial year are set out below.

Transfer Opening Work in Work in Closing WDV at Progress Progress WDV at 1 July Gifted to amounts 30 June 2012 Additions Assets Disposals Revaluations Assets Impairment Other expensed Depreciation 2013 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 2012/2013

Land 41,163 - - (1) ------41,162 Buildings 12,329 - - (25) - 1,139 - - - (297) 13,146 Plant and 8,546 - - (343) - 1,110 - - - (1,389) 7,925 Equipment Infrastructure 788,110 - 6,345 (2,123) - 23,863 - - - (16,563) 799,632 Assets Work In Progress 28,682 15,344 - - (26,113) - (849) - - 17,064 Carrying amount 878,830 15,344 6,345 (2,492) - - (849) - (18,249) 878,929 at end of year

Transfer Opening Work in Work in Closing WDV at Progress Progress WDV at 1 July Gifted to amounts 30 June 2011 Additions Assets Disposals Revaluations Assets Impairment Other expensed Depreciation 2012 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 2011/2012 Land 41,096 - - - - 67 - - - - 41,163 Buildings 12,139 - - - - 451 - - - (261) 12,329 Plant and 8,242 - - (1,193) - 2,949 - 35 - (1,487) 8,546 Equipment Infrastructure 779,864 - 3,529 (325) - 22,679 - - - (17,637) 788,110 Assets Work In Progress 35,630 22,255 - - (26,146) - (3,057) - - 28,682 Carrying amount 876,971 22,255 3,529 (1,518) - - (3,022) - (19,385) 878,830 at end of year

64 ANNUAL REPORT 2012/13 Note 9 Intangible Assets

2013 2012 $’000 $’000

At fair value 39,818 39,830 Less: accumulated depreciation (6,336) (4,016) 33,482 35,814

Tradeable Software Water Rights Total $’000 $’000 $’000

Year Ended 30 June 2013 Opening WDV at 1 July 2012 5,219 30,595 35,814 Additions 849 - 849 Amortisation (3,181) - (3,181)

Closing WDV at 30 June 2013 2,887 30,595 33,482

Year Ended 30 June 2012 Opening WDV at 1 July 2011 2,656 30,595 33,251 Additions 143 - 143 Transfer Work in Progress to Assets 2,914 - 2,914 Amortisation (494) - (494)

Closing WDV at 30 June 2012 5,219 30,595 35,814

Note 10 Payables

2013 2012 $’000 $’000

Current Payables Trade Creditors 3,169 3,386 Accrued Expenses 5,435 8,668 Sundry Creditors, Deposits and Retention Monies 68 847 Total current payables 8,672 13,401

Non current Total non current payables - -

Total Payables 8,672 13,401

(a) Foreign currency risk and interest rate risk for trade and other payables The carrying amounts of the Corporation’s trade and other payables are all denominated in Australian Dollars. For an analysis of the sensitivity of trade and other payables to interest rate risk, refer to Note 2.

ANNUAL REPORT 2012/13 65 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 11 Borrowings

2013 2012 $’000 $’000

Current Secured Finance Leases: BOOT Assets 1,346 1,190 Total current secured borrowings 1,346 1,190 Unsecured Loans** 13,000 28,000 Total current unsecured borrowings 13,000 28,000 Total current borrowings 14,346 29,190

Non current Secured Finance Leases: BOOT Assets 31,252 32,598 Total non current secured borrowings 31,252 32,598 Unsecured Loans** 134,000 110,000 Total non current unsecured borrowings 134,000 110,000 Total non current borrowings 165,252 142,598

** All borrowings 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.

Total borrowings 179,598 171,790

Assets pledged as security Non Current Finance Lease Water Infrastructure Assets 29,011 29,887

Credit Standby Arrangements Bank Overdrafts 150 150 Used at Balance Date - - Unused at Balance Date 150 150

Loan Facilities Total Facilities 150,000 146,000 Used at balance date 147,000 138,000 Unused at Balance Date 3,000 8,000

66 ANNUAL REPORT 2012/13 Note 11 Borrowings (cont’d)

2013 2012 Carrying Fair Carrying Fair Amount Value Amount Value On Balance Sheet $’000 $’000 $’000 $’000 Non traded financial liabilities Loans 147,000 156,711 138,000 151,017 Lease Liabilities 32,599 32,599 33,790 33,790 179,599 189,310 171,790 184,807

On Balance Sheet The fair values of non-current borrowings are based on cash flows discounted using borrowing rates varying from 4.38% to 7.345%, depending on the type of borrowing (2012: 4.66% to 7.425%).

(a) Risk Exposures The exposure of the Corporation’s borrowings to interest rate changes and the contractual repricing dates at balance date are as follows:

2013 2012 $’000 $’000

6 months or less - 14,000 6 -12 months 13,000 14,000 1-5 years 48,000 44,000 Over 5 years 86,000 66,000 147,000 138,000

Current borrowings 13,000 28,000 Non-Current borrowings 134,000 110,000 147,000 138,000 The carrying amounts of the Corporation’s borrowings are denominated in Australian dollars. For an analysis of the sensitivity of borrowings to interest rate risk and foreign exchange risk refer to Note 2.

ANNUAL REPORT 2012/13 67 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 12 Employee Benefits

2013 2012 $’000 $’000

Current Annual leave, rostered days off (RDO’s) and unconditional long service leave entitlements, representing 7 years of continuous service:

- RDO’s expected to be settled within 12 months, measured at nominal value 87 161 - Annual Leave expected to be settled within 12 months, measured at nominal value 969 940

- Annual Leave expected to be settled after 12 months, measured at present value 315 320 - Long service leave expected to be settled after 7 years of continuous service, 2,699 2,653 measured at present value Total Current 4,070 4,074

Non Current Conditional long service leave, measured at present value 225 180 Deferred benefits superannuation liability - 5,190 Total Non Current 225 5,370

Total Employee Benefits 4,295 9,444

Note 1.10 sets out the value measurement applied to employee entitlements. The following assumptions were adopted in measuring present values:

Weighted average rates of increase in annual employee entitlement to settlement of liabilities 4.50% 4.31% Weighted average discount rates 3.79% 3.05% Weighted average terms to settlement of the liability 14 years 14 years

68 ANNUAL REPORT 2012/13 Note 13 Deferred Tax

2013 2012 $’000 $’000

Deferred Tax Assets The balance comprises temporary differences attributable to: - Tax Losses 62,441 67,040 - Employee Benefits 48 - - Accrued Expenses 1,288 1,275 - Accrued Superannuation Expenses - 1,557 Deferred Tax Assets 63,777 69,872

Movements: Opening balance at 1 July 69,872 65,103 Loss Utilisation (4,598) - Credited/(debited) to the comprehensive operating statement (1,497) 4,769 Closing balance at 30 June 63,777 69,872

Deferred tax assets to be recovered after more than 12 months 62,441 67,040

Deferred tax assets to be recovered within 12 months 1,336 2,832

Deferred Tax Liabilities The balance comprises temporary differences attributable to: Amounts recognised in the comprehensive operating statement - Infrastructure, Property, Plant and Equipment 75,506 71,784 - Accrued Income (4,218) 3,924 Aggregate in Operating Statement 71,288 75,708

Amounts recognised directly in equity Buildings (Revaluation) 12,806 12,806 Deferred Tax Liabilities 84,094 88,514

Movements: Opening balance at 1 July 88,514 85,551 Credited/(debited) to the comprehensive operating statement (14) 2,963 Revaluation of Land, Buildings and Infrastructure (4,406) - Closing balance at 30 June 84,094 85,514

Set-of deferred tax assets 63,777 69,872 Net Deferred Tax Liablities 20,317 18,642

ANNUAL REPORT 2012/13 69 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 14 Reserves

2013 2012 $’000 $’000

Movement in reserves

(a) Asset Revaluation Reserve Opening Balance 1 July 26,663 26,663 Increment (decrement) on revaluation - - Add Back tax effect of revaluation decrement - - Closing balance at 30 June 26,663 26,663

(b) Building Revaluation Reserve Opening balance at 1 July 28,083 28,083 Increment (decrement) on revaluation - - Less tax effect of revaluation increment - - Closing balance at 30 June 28,083 28,083

(c) Infrastructure Revaluation Reserve Opening balance at 1 July 33,976 33,976 Increment (decrement) on revaluation - - Less tax effect of revaluation increment - - Closing balance at 30 June 33,976 33,976

Total Reserves 88,722 88,722

70 ANNUAL REPORT 2012/13 Note 15 Commitments for Expenditure

2013 2012 $’000 $’000

Capital commitments (1) Commitments for capital expenditure entered into but not yet recognised as liabilities, payable: Within one year 2,679 6,092 Later than one year but not later than 5 years 2 921 Later than 5 years - - 2,681 7,013 (1) All commitments are exclusive of GST.

Build-Own-Operate-Transfer – Supply of Treated Water by the Private Sector On 12th April 1999 Central highlands Water signed a Build, Own, Operate and Transfer (BOOT) contract with Ballarat Water Pty Ltd to supply Ballarat and a number of neighbouring communities with treated water for a period of 25 years On 12 November 2003 Central highlands Water signed another BOOT contract with Ballarat Water Pty Ltd to supply four small towns (Beaufort, Blackwood, Forest Hill and Clunes) with treated water for a period of 20 years. Service Charge Central highlands Water is obligated to pay Ballarat Water Pty Ltd an annual service charge comprising both fixed and variable components. At 30 June 2013 the present value of the obligation has been measured using a discount rate of 5.72%. Nominal Value of Consideration The nominal value of the purchase consideration provided for the supply of services under the arrangement as at the date of entering the contract has been determined on the following basis:

Present value of Minimum future minimum future lease payments lease payments

2013 2012 2013 2012 $’000 $’000 $’000 $’000

BOOT related finance lease liabilities payable Within one year 3,748 3,687 1,346 1,190 Later than one year but not later than 5 years 15,643 15,380 7,242 6,468 Later than 5 years 31,436 35,447 24,010 26,130

Minimum lease payments 50,827 54,514 32,598 33,788 Less: Future interest charges 18,229 20,726 - - Present value of minimum lease payments 32,598 33,788 32,598 33,788

Representing lease liabilities Current (refer Note 11) 1,346 1,190 Non Current (refer Note 11) 31,252 32,598 Total 32,598 33,788

ANNUAL REPORT 2012/13 71 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 15 Commitments for Expenditure (cont’d)

2013 2012 $’000 $’000

Commitments contracted for but not recognised as liabilities: Obligation for Service Charge Within one year 6,712 6,602 Later than one year but not later than 5 years 30,295 29,541 Later than 5 years 56,217 63,683 Total 93,224 99,826

Finance Lease Commitments are payable as follows: Within one year 3,748 3,687 Later than one year but not later than 5 years 15,643 15,380 Later than 5 years 31,436 35,447

Minimum lease payments 50,827 54,514

Less: Future interest charges 18,229 20,726

Total 32,598 33,788

Environmental Commitments Commitments for payments in relation to environmental contributions are as follows: Within one year 3,123 1,995 Later than one year but not later than 5 years 6,246 9,429 Total 9,369 11,424

72 ANNUAL REPORT 2012/13 Note 16 Contingent Liabilities and Contingent Assets Central Highlands Water does not have any contingent assets to disclose in this current period. A contingent liability may arise in regards to CHW’s storage of biosolids at wastewater treatment plants.

CHW is developing further beneficial reuse applications for reducing biosolids held in storage. At the date of this report CHW cannot reliably estimate the potential liability if any. CHW’s management of biosolids is compliant with regulatory requirements.

Note 17 Superannuation

Vision Super Central Highlands Water makes employer superannuation contributions in respect of most of its employees to Vision Super Superannuation Fund (the Fund). The Fund has two categories of membership, each of which is funded differently.

(a) Accumulation The Fund’s accumulation category, Vision Super Saver, receives both employer and employee contributions on a progressive basis. Employer contributions are normally based on a fixed percentage of employee earnings in accordance with the Superannuation Guarantee Legislation (9% in 2012/2013 and 2011/2012). No further liability accrues to the employer as the superannuation benefits accruing to employees are represented by their share of the net assets of the Fund.

(b) Defined Benefits Members The Fund’s Defined Benefit Plan is a multi-employer sponsored plan. As the Fund’s assets and liabilities are pooled and are not allocated by employer, the Actuary is unable to allocate benefit liabilities, assets and costs between employers. As provided under AASB 119, on the basis of the results of an actuarial investigation conducted by the funds actuary as at 31 December 2010, CHW does not use defined benefits accounting for these contributions. CHW makes employer contributions to the defined benefits category of the Fund at rates determined by the Fund’s Trustee on the advice of the Fund’s Actuary. Central Highlands Water makes the following contributions: - 9.25% of members’ salaries (9.25% in 2011/2012); - the difference between resignation and retrenchment benefits paid to any retrenched employees, plus contribution tax (same as 2011/2012).

The Fund’s liability for accrued benefits was determined in the 31 December 2011 actuarial investigation pursuant to the then requirements of Australian Accounting Standard AAS 25 as follows:

$m Net Market Value of Assets $4,315.3 Accrued Benefits (per accounting standard) $4,642.1 Difference between Assets and Accrued Benefits $ 326.8 Vested Benefits $4,838.5

The assumptions used in this actuarial investigation are summarised below: (a) Net investment return: 7.5% p.a. (gross: 8.25%p.a.) (b) Salary Inflation: 4.25% p.a. (c) Price Inflation: 2.75% p.a.

(c) Defined Benefits Unfunded Liability Shortfall Vision Super’s actuary projected a shortfall at 1 July 2013 of $453m net of tax. CHW is a member of the Defined Benefits fund. The Corporation was made aware of the expected shortfall through the year and was informed formally of their share of the shortfall on 31 July 2012 which amounted to $5.2m. This amount consists of $4.4m in contributions and $0.8m in contributions tax. The Corporation accounted for this shortfall in the 30 June 2012 Annual Report in the Comprehensive Income Statement in Employee Benefits Expenses (Note 3) and in the Balance Sheet in Employee Benefits Provision (Note 12). CHW paid the Defined Benefits fund shortfall in full on 28 June 2013.

ANNUAL REPORT 2012/13 73 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

CHW contributes in respect of its employees to the following superannuation schemes:

Contribution 2013 2012 Type of Scheme Rate $’000 $’000

Vision Super Scheme (Super Saver) Defined Benefits 9.00% 629 664 Vision Super Scheme (DEFB) Super Guarantee 9.25% 340 342 Australian Superannuation Super Guarantee 9.00% 57 50 AMP Super Guarantee 9.00% 33 27 ASGARD Super Guarantee 9.00% 12 19 VIC Super Super Guarantee 9.00% 29 32 Portfolio Super Super Guarantee 9.00% 19 18 MLC Super Super Guarantee 9.00% 6 16 Summit Super Guarantee 9.00% 4 12 NAB Super Guarantee 9.00% 0 8 Russell Supersolution Super Guarantee 9.00% 0 8 UniSuper Super Guarantee 9.00% 14 4 CBUS Super Super Guarantee 9.00% 11 10 Vanguard Presonal Super Super Guarantee 9.00% 0 5 Plum Super Super Guarantee 9.00% 16 10 Telstra Super Guarantee 9.00% 22 12 ING Master Super Super Guarantee 9.00% 6 6 Health Superannuation Super Guarantee 9.00% 6 6 Superwrap Super Guarantee 9.00% 0 2 HESTA Super Super Guarantee 9.00% 5 5 Equipsuper Super Guarantee 9.00% 6 9 BT SuperWrap Super Guarantee 9.00% 7 5 Rest Super Guarantee 9.00% 20 6 Colonial First State Super Guarantee 9.00% 11 7 JWM Superannuation Fund Super Guarantee 9.00% 4 4 Mercer Super Guarantee 9.00% 5 4 Navigator Personal Retirement Super Guarantee 9.00% 6 5 Crook Super Super Guarantee 9.00% 0 0 Host Plus Super Guarantee 9.00% 6 3 LG Super Super Guarantee 9.00% 7 1 Wendouree Superannuation Fund Super Guarantee 9.00% 2 1 Force For Good Superannuation Super Guarantee 9.00% 2 1 Nicholson FRF Pty Ltd Super Guarantee 9.00% 2 1 Perpetual Wealthfocus Super Super Guarantee 9.00% 2 1 RND Superannuation Fund Super Guarantee 9.00% 3 1 Contributions to all funds 1,294 1,307

As at the reporting date, there were no outstanding contributions payable to the above funds. As at the reporting date, there were no loans to or from CHW to any of the above funds.

74 ANNUAL REPORT 2012/13 Note 18 Responsible Persons Disclosures (a) Responsible Persons The names of persons who were Responsible Persons at any time during the financial year are:-

The Hon Peter Walsh MLA, Minister for Water (1 July 2012 to 30 June 2013) J. Johnson – Board Chair T. Blood – Director (1 July 2012 to 30 September 2012) I. Coles – Director V. Coltman – Director (1 July 2012 to 30 June 2013)* S. Howe – Director R. Nicholson – Director J. Plummer – Director G. Mason – Director (Appointed 1 October 2012) P. O’Donohue – Managing Director**

*Vicki Coltman resigned as Director effective 30 June 2013. **Paul O’Donohue was appointed Managing Director - Interim on 22 May 2012 and as Managing Director 24 July 2012.

Remuneration of Responsible Persons Remuneration paid to ministers is reported in the Annual Report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members’ Interests which each member of the Parliament completes. The number of Responsible Persons are shown below in their relevant income band.

2013 2012 Income Band ($) Number Number

$1 – $9,999 1 4 $10,000 – $19,999 1 4 $20,000 – $29,999 5 2 $40,000 – $49,999 1 1 $180,000 – $189,999 - 1 $280,000 – $289,999 1 - $330,000 – $339,999 - 1 9 13

2013 2012 $’000 $’000

Remuneration received, or due and receivable from the Corporation in conncetion with the 443 676 management of the Corporation (includes termination payments and bonuses paid).

There were no amounts paid by the Corporation in connection with the retirements of responsible persons of the Corporation during the financial year. There were no amounts paid by the Corporation to other related parties during the year.

ANNUAL REPORT 2012/13 75 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 18 Responsible Persons Disclosures (cont’d)

(b) Executive Officer’s Remuneration The number of executive officers, other than ministers and accountable officers, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits. All of the Corporation’s executive officers have been employed on a full time basis during the reporting period.

Total Base Remuneration1 Remuneration

2013 2012 2013 2012 Income Band ($) Number Number Number Number

$120,000-$129,999 - - 1 - $150,000-$159,999 1 - 1 - $160,000-$169,999 - - 2 1 $170,000-$179,999 3 1 - 2 $180,000-$189,999 - 1 1 - $190,000-$199,999 - 1 - 1 $200,000-$209,999 - 1 - - $210,000-$219,999 1 - - - 5 4 5 4

1 Total Remuneration includes base remuneration paid plus performance bonus paid

2013 2012 $’000 $’000

Total remuneration received or due and receivable, by executive officers from the Corporation 731 786 amounted to:

Base remuneration received or due and receivable, by executive officers from the Corporation 660 705 amounted to:

Loans to Responsible Persons No loans have been made, guaranteed or secured by CHW, on behalf of the Responsible Persons or Responsible Persons’ related entities, during the financial year. Other Transactions between Responsible Persons and Responsible Persons’ Related Entities As a matter of Board policy all such dealings are conducted on normal commercial or employee terms at arm’s length.

No such transactions occurred during the year.

76 ANNUAL REPORT 2012/13 Note 19 Cash Flow Information

2013 2012 $’000 $’000 a) Reconciliation of Net Cash Provided by Operating Activities to Net Result

Net Result for the period after income tax 3,863 (4,261) Add/(less) Non-Cash Flows in Net Result Depreciation and Amortisation 22,305 19,881 (Profit)/Loss on Sale of Fixed Assets 1,173 519 Provision for Impaired Receivables (14) - Gifted Assets Income (6,074) (4,227)

Changes in Assets and Liabilities Decrease/(Increase) in Receivables (2,148) (1,045) Decrease/(Increase) in Inventory and Biological Assets (33) 34 Decrease/(Increase) in Prepayments (65) (54) (Decrease)/Increase in Payables and Accruals (213) 780 (Decrease)/Increase in Provisions (5,149) 5,134 (Decrease)/Increase in Deferred Tax Liabilities 1,678 (1,806)

Net Cash (Outflow) / Inflow from Operating Activities 15,323 14,955 b) Financing Facilities CHW has an overdraft facility with the Commonwealth Bank, the current limit is $150,000 with the facility subject to annual review. These facilities are secured over the General Revenue of CHW.

ANNUAL REPORT 2012/13 77 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 20 Financial Instruments

Table 20.1 Ageing analysis of financial assets

Past due but not impaired Not past Impaired Carrying due financial Amount and not Less than 1-3 3 1-5 impaired months assets 30 June 2013 1 month months - 1 year years $’000 $’000 $’000 $’000 $’000 $’000 $’000 Receivables Trade Receivables 17,807 16,489 526 204 679 69 (161) Other Receivables 4,427 3,727 29 93 366 211 - Investments and other financial assets Cash 5,872 5,872 - - - - - Investments 1,019 1,019 - - - - - Total 29,125 27,107 555 297 1,045 281 (161)

30 June 2012 Receivables Trade Receivables 16,593 15,205 500 304 522 209 (147) Other Receivables 3,909 3,022 6 18 729 134 - Investments and other financial assets Cash 418 418 - - - - - Investments 2,301 2,301 - - - - - Total 23,221 20,946 506 322 1,251 343 (147)

Table 20.2 Maturity analysis of financial liabilities

Maturity Dates Carrying Nominal 3 Amount Amount Less than 1-3 months 1-5 5+ years 30 June 2013 1 month months - 1 year years $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial Liabilities Payables 8,672 8,672 8,604 - 68 - - Loans from TCV 147,000 147,000 - - 13,000 48,000 86,000 Finance Lease Liabilities* 32,598 32,598 - - 1,347 7,242 24,009 Total 188,270 188,270 8,604 - 14,415 55,242 110,009

30 June 2012 Financial Liabilities Payables 13,401 13,401 12,612 - 789 - - Loans from TCV 138,000 138,000 14,000 - 14,000 44,000 66,000 Finance Lease Liabilities* 33,789 33,789 - - 1,190 6,469 26,130 Total 185,190 185,190 26,612 - 15,979 50,469 92,130

*Finance lease liabilities relate to BOOT contracts as disclosed at Note 1.12

78 ANNUAL REPORT 2012/13 Table 20.3 Interest rate risk exposures The following sets out the Corporation’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 the Corporation intends to hold fixed rate liabilities to maturity.

Weighted Average Carrying 30 June 2013 Interest rate exposure Interest Amount Rate

Fixed Fixed Fixed Variable interest rate interest rate interest rate interest Non-interest 0-1 yr 1-5 yr over 5 yrs rate bearing $’000 $’000 $’000 $’000 $’000 $’000

Receivables Trade Receivables 6.9% 17,807 883 69 - - 16,855 Other Receivables - 4,427 - - - - 4,427 Investments and other financial assets Cash 0.00% 5,872 - - - 5,872 - Investments 2.75% 1,109 - - - 1,019 - Total Financial Assets 29,125 883 69 - 6,891 21,282

Financial Liabilities Payables - 8,672 - - - - 8,672 Borrowings 5.72% 147,000 14,000 44,000 75,000 14,000 - Finance Lease Liabilities 7.77% 32,598 1,347 7,242 24,009 - - Total Financial Liabilities 188,270 15,347 51,242 99,009 14,000 8,672

Weighted Average Carrying 30 June 2012 Interest rate exposure Interest Amount Rate

Fixed Fixed Fixed Variable interest rate interest rate interest rate interest Non-interest 0-1 yr 1-5 yr over 5 yrs rate bearing $’000 $’000 $’000 $’000 $’000 $’000

Receivables Trade Receivables 10.5% 15,205 826 209 - - 14,170 Other Receivables ------Investments and other financial assets Cash 0.00% 418 - - - 418 - Investments 3.48% 2,301 - - - 2,301 - Total Financial Assets 17,924 826 209 - 2,719 14,170

Financial Liabilities Payables 13,401 - - - - 13,401 Borrowings 5.89% 138,000 14,000 44,000 66,000 14,000 - Finance Lease Liabilities 7.77% 33,789 1,190 6,469 26,130 - - Total Financial Liabilities 185,190 15,190 50,469 92,130 14,000 13,401

ANNUAL REPORT 2012/13 79 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Note 21 Events occurring after 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, of the state of affairs of the Corporation in future financial years.

Note 22 Jointly Controlled Assets

On 6 May 2008, CHW established with Coliban Water, an unincorporated joint venture for the development, operation and maintenance of the pipelines and infrastructure associated with the Goldfields Superpipe. Under the agreement, both parties to the joint venture will own all Joint Venture assets as tenants in common in their respective percentage interests. Central Highlands Water’s capital share has been determined by the total expenditure incurred on the Sandhurst Reservoir to the White Swan Reservoir portion of the Goldfields Superpipe, as well as expenditure incurred on the upsizing of the Waranga Channel to Lake Eppalock and the Lake Eppalock to Sandhurst Reservoir upgrade. The construction and operation of these jointly controlled assets are embedded in CHW’s core operations, and as such there are no separately identifiable borrowings, borrowing costs or depreciation charges. There are no contingent liabilities. Operational costs are to be calculated on a combination of fixed component based on capacity share, a variable component based on volumes of water pumped and an energy charges share based on volumes stored or pumped from Lake Eppalock.

Operational Costs Principal Activity Interest % $’000

Operation and maintenance of pipelines As detailed below and associated infrastructure

Waranga Channel to Lake Eppalock, 100% funded by CHW. 490 Bendigo pipeline and associated pumps 1/3 operations and maintenance costs and works

Lake Eppalock to Sandhurst Reservoir, 100% funded by CHW. 174 Bendigo pipeline and associated pumps 1/3 operations and maintenance costs and works

Sandhurst Reservoir, Bendigo to White 100% funded by CHW. 83 Swan Reservoir, Ballarat pipeline and 100% operations and maintenance costs associated pumps and works

2013 2012 Capital Commitments $’000 $’000 Commitments for capital expenditure entered into but not yet recognised as liabilities, payable for Sandhurst Reservoir, Bendigo to White Swan Reservoir, Ballarat pipeline and associated pumps and works: Within one year - 300 Later than one year but not later than - - 5 years Later than 5 years - - Total - 300

80 ANNUAL REPORT 2012/13 ACCOUNTABLE OFFICERS’ AND CHIEF FINANCE AND ACCOUNTING OFFICER DECLARATION

The attached financial report for the Central Highlands Region Water Corporation have been prepared in accordance with Standing Directions 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards including Interpretations, and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2013 and financial position of the Corporation at 30 June 2013. At the time of signing, we are not aware of any circumstance which would render any particulars included in the financial statements to be misleading or inaccurate. We authorise the attached financial statement for issue on 27 August 2013. Signed in accordance with a resolution of the Board:

Richard Nicholson Chair (Acting) Central Highlands Region Water Corporation

Paul O’Donohue Managing Director Central Highlands Region Water Corporation

Anthony O’Brien General Manager Business Services Central Highlands Region Water Corporation

27 August 2013

ANNUAL REPORT 2012/13 81 VAGO REPORT

82 ANNUAL REPORT 2012/13 ANNUAL REPORT 2012/13 83 BULK ENTITLEMENT COMPLIANCE REPORT

2012/13 General CHW holds 17 Bulk Entitlement Conversion Orders which define its legal rights to extract water to supply its 15 water supply systems. The Orders require CHW to report on various aspects in their annual report which are summarised below. The Minister approved CHW’s Bulk Entitlement Metering Plan in 2011. Installation of required site infrastructure is complete and an ongoing program for repairs, replacements and operation is in place. This plan has been prepared by CHW in consultation with DSE to meet all of CHW’s BE metering requirements. The program provides for some additional metering sites as well as improved operation methods of data control.

Annual Amount Volume Transfers of BE or Failures or Taken from remaining in to Supply System, Difficulties with specified Reservoirs Amendments, complying with Bulk Entitlement point(s) under at 30 June New Entitlements requirements of Order Order (*) 2013 (*) or Credits (*) BE (*) Comment (*) Bulk Entitlement 5187.2 ML Beales - None None (Upper West (14.1 (e)) 54 ML (14.1(g),14.1(h), (14.1,(k),(l)) Moorabool System) Wilsons - 14.1(i), 14.1 (j)) Conversion Order 317 ML 1995 Moorabool - 4039 ML (14.1 (d)) Bulk Entitlement 4390.7 ML CHW share None None Total net gain to CHW’s share of the (Lal Lal – CHW) (CHW) of Lal Lal (18.1(l),18.1(m), (18.1(p), 18.1 (q)) reservoir was 1156.9 ML. (18.1(f),(j). Conversion Order 2399 ML (enviro) Reservoir - 18.1(n),18.1(o)) No water was taken from any point 1995 1522 ML 31092.8 ML other than the specified point( 18.1(i)). (Barwon Water) (18.1(e)) (18.1(g)) Bulk Entitlement 0 ML Colbrook None None Reservoir remained out of service for (Ballan) Conversion (12.1 (c)) 151.9 ML (12.1(e)) (12.1(i)) 2012/13. Order 1998 (12.1(f)) (12.1(j)) (12.1(g)) (12.1(h)) Bulk Entitlement 42.28 ML Not None None (Blackwood and (11.1(e)) Applicable (11.1(g)),(11.1(h)) 11.1(k)) Barry’s Reef)) (11.1(i)), 11.1(j)) (11.1(l)) Conversion Order 1998 Bulk Entitlement 6980.74 ML White Swan None None Gong Gong Reservoir refilled after (Yarrowee- White (14.1(e)) 9457 ML (14.1(g)),(14.1(h)) (14.1(k)),(14.1(l)) dam safety works. Swan System) Gong (14.1(i)), 14.1(j)) Conversion Order 1767 ML 2002 Kirks 265 ML Pincotts 168 ML (14.1(d)) Bulk Entitlement 0 ML 84.8 ML None None No surface water used during (Landsborough/ 12.1(d)) (12.1(c)) (12.1(f)) (12.1(j)) 2012/13. Reservoir is now offline. Navarre) Conversion (12.1(g)) (12.1 (k) order 2003 (12.1 (h) (12.1(i)) Bulk Entitlement 23.4 ML 54.1 ML None None (Lexton) Conversion (12.1(c)) (12.1(b)) (12.1(e)) (12.1(i)) order 2004 (12.1(f)) (12.1(j)) (12.1(g)) (12.1 (h) Bulk Entitlement 3.3 ML 17.9 ML None None Groundwater added to reservoir (Redbank) Conversion 12.1(d)) (12.1(c)) 12.1(f)) (12.1(j)) during 2012/13. Order 2003 (12.1(g)) (12.1 (k) (12.1 (h) (12.1(i))

84 ANNUAL REPORT 2012/13 Annual Amount Volume Transfers of BE or Failures or Taken from remaining in to Supply System, Difficulties with specified Reservoirs Amendments, complying with Bulk Entitlement point(s) under at 30 June New Entitlements requirements of Order Order (*) 2013 (*) or Credits (*) BE (*) Comment (*) Bulk Entitlement 80.1 ML Sugarloaf None None (Avoca) Conversion 12.1(d)) 87 ML 12.1(f)) (12.1(j)) Order 2003 (12.1(c)) (12.1(g)) (12.1 (k) (12.1 (h) (12.1(i)) Bulk Entitlement 671.3 ML Wombat None None (Daylesford- Hepburn 12.1(c)) 273 ML 12.1(e) (12.1(i)) Springs) Conversion Bullarto 12.1(f)) (12.1(j)) Order 2004 69 ML (12.1(g)) Hepburn (12.1 (h) 30 ML (12.1(b)) Bulk Entitlement 11.9 ML Cosgrave None None Minor usage only due to pipe and (Creswick) (12.1(c)) 558 ML (12.1(e)) (12.1(i)) pump maintenance. Conversion order Russells (12.1(f)) (12.1(j)) 2004 25 ML (12.1(g)) Dean (12.1 (h) 79 ML (12.1(b)) Bulk Entitlement 178.1 ML Musical Gully None None (Beaufort) Conversion 12.1(d)) 175 ML 12.1(f)) (12.1(j)) order 2005 Troys 17 ML (12.1(g)) (12.1 (k) (12.1(b)) (12.1 (h) (12.1(i)) Bulk Entitlement 13.59 ML 49.8 ML None None (Amphitheatre) (12.1(c)) (12.1(b)) (12.1(e)) (12.1(i)) Conversion order (12.1(f)) (12.1(j)) 2003 (12.1(g)) (12.1 (h) Bulk Entitlement 0 ML None None This reservoir remained out of service (Skipton) Conversion (12.1(c)) (12.1(e)) (12.1(i)) for 2012/13. order 2004 (12.1(f)) (12.1(j)) (12.1(g)) (12.1 (h) Bulk Entitlement 1116.3 ML Not None None Tullaroop main source of Maryborough (Loddon System – (14.1(b)) applicable (14.1(c)) (14.1(i)) water for 2012/13. Part Maryborough (14.1(e)) (14.1(j)) –CHW) Conversion (14.1(g)) Order 2005 (14.1(h))

Bulk Entitlement 1358.4 ML Evansford None None Total amount taken = Water (Evansford-Talbot (17.1(b)) 890 ML (17.1(d)) (17.1(k)) Leaving Centenary Reservoir – Any System – Part Talbot (17.1(f)) (17.1(l)) Groundwater Extracted. Maryborough – CHW) 656 ML (17.1(g)) Conversion Order Centenary (17.1(h)) 2006. 165 ML (17.1(i)) (17.1(c)) (17.1(j)) Bulk Entitlement 17.5 ML Not None Not applicable Minor usage only due to pipe and (Bullarook System- (12.1(b)) applicable (12.1(f)) (12.1(h)) pump maintenance. No temporary or CHW) Conversion (12.1(g)) (12.1(i)) permanent transfer of all or part of this Order 2009 BE during 2012/13. A full allocation was available for the Bullarook and Loddon (Tullaroop) systems in 2012/13. *Note : The numbers in brackets refer to the relevant clause of the Bulk Entitlement Order

ANNUAL REPORT 2012/13 85 GROUNDWATER INFORMATION

Annual Groundwater RWA Licence Volume Licence Licence Volume Extracted in Water Supply System Bore Name Number Authority (ML) 2012/13

Amphitheatre Amphitheatre Bore 800903 GWM 20.0 0

Avoca Bung Bung Bore BEE014154 GWM 250.0 109.2

Ballarat Ballarat West 9026895 SRW 1700.0 375.6

Beaufort Raglan 9038227 SRW 200.0 0

Blackwood Barrys Reef Bore 4005988 SRW 50.0 0

Clunes Clunes (UW usage) 8003269 GMW 350.0 209.2

Daylesford Coomora Bore 8042620 GMW 273.0 6.6

Dean Dean Bore 9030898 SRW 30.0 21.6

Forest Hill Forest Hill (UW usage) 8001175 GMW 350.0 173

Landsborough / Navarre Navarre Bore 8003328 GWM 150.0 34.5

Learmonth Bankin Hill 8002471 GMW 100.0 54.8

Maryborough Moolort Bores* 8034730 GMW 0.0 40.8

Stoney Creek Bore* BEE049134 GMW 0.0 0

Redbank Redbank Bore (Tank Flow) 8003329 GWM 50.0 9.6

Waubra Waubra Bore 902225 GMW 100.0 25.9

*Note: No permanent licence at these bores but allocation transferred to licence on a temporary basis.

86 ANNUAL REPORT 2012/13 NOTES

ANNUAL REPORT 2012/13 87 Central Highlands Region Water Corporation 7 Learmonth Road Wendouree VIC 3355 PO Box 152 Ballarat VIC 3353 P: 1800 061 514 F: 03 5320 3299 chw.net.au

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