Yarroweyah Strathmerton Cobram Picola Katunga Barmah Katamatite Nathalia Numurkah Yarrawonga
Echuca Wunghnu Treated Supply Tongala Katandra West Rivers / Streams Tallygaroopna Kyabram Channels Congupna Mooroopna Dookie Corporation Storages Merrigum Shepparton Girgarre Groundwater Supply (Bore) Stanhope Tatura Corop Toolamba Non Drinking Supply Rivers / Streams Rushworth Benalla Channels Murchison Colbinabbin Violet Town Supply Line Baxters Road Kirwans Bridge Euroa Nagambie Strathbogie Longwood
Avenel Shepparton Administration Bonnie Doon Seymour 104 - 110 Fryers Street, Shepparton, 3630 Mansfield PO Box 185, Shepparton, 3632 Tallarook Merrijig Pyalong Molesworth Sawmill DX 63036 Alexandra Settlement Telephone: 03 5832 0400 Broadford Yea Facsimile: 03 5831 1467 Eildon Kilmore Thornton Email: [email protected] Waterford Park Website: www.gvwater.vic.gov.au Wandong
Heathcote Junction Buxton Design & Production: KMD Creative Printing: Goulburn Valley Printing Services Marysville Woods Point Cover: ecoStar 300g Text: ecoStar 120g ecoStar is 100% Recycled
Melbourne
ISSN 2202-6754
© State of Victoria, Goulburn Valley Water, 2013. This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968. GVW ANNUAL REPORT 2012|2013 | p1
contents
Overview Customers and Community About us 2 Customer Reference / Advisory Committees 39 Chairman | MD Report 3 Customer Service 39 Snapshot of Performance 4 Management of Social and Economic Impacts 40 Profile 4 Community Service Obligations 41 Corporate Goals 6 Energy and Water Ombudsman (Victoria) 41 Corporate Governance Business Performance and Organisational Structure 10 Compliance Directors of the Board 11 5 Year Performance 42 Executive Management Team 13 Significant Changes 43 Role of the Board 14 Capital Works 43 Board Composition 14 Consultancies 43 Board Meetings and Committees 14 Disclosure of Major Contracts 43 Organisational Capability Freedom of Information Act 1982 43 Employee Statistics 16 Government Contributions 44 Learning and Development 16 Building Act 1993 44 Equal Employment Opportunity and Diversity 17 Information Prepared and Available 44 Safety, Health and Well-Being 17 National Competition Policy 44 Health and Safety Training 18 Risk and Emergency Management 44 Occupational Health and Safety Statistics 19 Risk Management Compliance Attestation 45 Environmental Sustainability Victorian Industry Participation Policy 45 Protected Disclosures Act 2012 45 Statement of Obligations 20 Water Quality 20 Performance Regional Catchment Strategy 22 Financial Performance 46 Victorian River Health Strategy 22 Service & Environmental Performance 47 Victorian Biodiversity Strategy 23 Statutory Certification 49 Greenhouse and Energy Reporting 24 Independent Auditor’s Report 50 Wastewater Management 26 Bulk Water Entitlement 30 10: Financial Statements Water Restrictions / Drought Response Plans 32 Comprehensive Operating Statement 54 Community Awareness 32 Balance Sheet 55 Water Consumption Statement of Changes in Equity 56 Cash Flow Statement 57 Water Consumption 34 Major Water Customers 36 Notes to the Financial Statements 58 Corporate Water Consumption 36 Certification of Financial Statements 95 Independent Audit Report 96 Assets and Infrastructure Assets 37 11: Notes & Appendices Water Main Replacements 37 Disclosure Index 98 Sewer Main Inspection and Rehabilitation 37 Asset Protection 37 Development 38 p2 | GVW ANNUAL REPORT 2012|2013
Overview ABOUT US
Vision
To be a leader in sustainable water management, providing quality water services and improved liveability for our regional communities.
Core purpose
Our core purpose is to deliver safe, reliable and affordable water services to our residential, commercial and industrial customers.
Key themes
Customer Service: We will strive for excellence in the delivery of water and wastewater services, and in our business and operational interactions with customers.
Corporate Performance: We will responsibly manage our assets, risks and financial performance in line with government and regulator expectations.
Capability: We will enhance our strategic, operational and business capability through innovation and continuous improvement.
Communities: We will be a responsible steward of land, water and corporate resources to enhance environmental, social and economic outcomes for our communities.
Values
Service Excellence: Delivering quality service to our internal and external customers, within a culture of excellence.
Our People: Developing our people’s capacity, resourcefulness and creativity, and encouraging life-balance.
Safety: A total commitment to health and safety.
Teamwork: Working together positively, respecting individual contributions and having some fun along the way.
Open Communication: Sharing information and knowledge while fostering trusting relationships that encourage honest conversations. GVW ANNUAL REPORT 2012|2013 | p3
Overview Chairman | MD report
We are pleased to present the Report of The Corporation delivered social outcomes Operations for Goulburn Valley Water (GVW) for including expanding its education program to the year ending 30 June 2013. facilitate the ResourceSmart schools program and refurbishing the disused Mooroopna water During 2012/13, GVW continued to invest in capital treatment plant as a Learning Centre. works across our region, delivering around $19 million of key projects to strengthen our reliable During the year GVW’s Chairman, Mark Lawlor, asset base, increase our network capacity and was appointed as the Chair of VicWater, the service delivery capability. Projects included a new peak industry association for water corporations raw water storage in Numurkah, Mansfield reservoir in Victoria. We farewelled two Directors from upgrades, replacement of the Campbell’s rising our Board, Bruce Nicholls and Denis Flett, and main in Shepparton, and improvement of water we welcomed new Directors Stephen Bubb and quality in a number of small towns. Geoff Dobson. The new appointees are valuable additions to the Board, and are already making GVW continued its proactive maintenance program significant contributions to the governance of the and introduced new software to manage and organisation. optimise the replacement of water mains as well as improve the function of the Asset Register. Since focusing on the Corporation’s future around Improvements from these investments were evident priorities set by our customers, Water Plan 3 with excellent water quality performance. was submitted to the ESC and a final decision was handed down in June. The plan articulates Water consumption across the region was up by the service levels, programs and initiatives to be 13% from 2011/12 due to a drier summer and achieved, as well as prices for water services for autumn period, with customers using around the next five years. I’m pleased to say that GVW 26,000 ML for the year. Water restrictions were customers will continue to receive at or near the introduced in Pyalong during February, due to lowest water bills in Victoria over the Water Plan 3 low flows in the town’s supply system however period, from 2013-2018. restrictions were lifted at the end of June. All other towns continued to abide by our Permanent Water The good planning and effective execution from Saving Rules. our dedicated staff has ensured that the business successfully delivered against our key business The operating result for the year is a Profit before objectives. The Board has again provided excellent Income Tax of $2.6 million compared with an leadership, governance and strategic direction Operating Loss of $6.8 million in 2011/12. The which is acknowledged and appreciated. Together operating result was impacted by two significant we will continue to provide safe, reliable services to changes from 2011/12. The 2011/12 operating our customers and undertake our core functions in Loss included an unfunded superannuation a way that protects and enhances the environment liability of $3.1 million and water sales were below and liveability of our regional communities. expectations due to the wetter than average year. Water sales revenue was above target in In accordance with the Financial Management Act 2012/13 due to the very dry summer and autumn 1994, we are pleased to attest that the Goulburn period. Cash inflows from operations were above Valley Water Annual Report is compliant with all budget for the year (due to strong water sales) statutory reporting requirements. and a further $19 million was invested in new or upgraded water and wastewater infrastructure across the region. We achieved our five year Water Plan targets for investment in capital projects.
Mark Lawlor Peter Quinn Chairman Managing Director p4 | GVW ANNUAL REPORT 2012|2013
Overview SNAPSHOT OF PERFORMANCE
Asset base $792 million
Number of employees (FTE) at 30 June 2013 208
Residential Properties 52,061
Non-residential properties 6,762
Water consumption 26,220 ML
Wastewater Received 13,057 ML
Recycled Water Produced 9,136 ML
Recycled Water Reused 7,344 ML
Water Treatment Plants 37
Wastewater Management Facilities 26
Water Mains 1,793 km
Pressure and gravity sewers 1,232 km
Pumping stations 322
Tanks and reservoirs 123
Profile
Our profile Our region
Goulburn Valley Water is a state-owned COBRAM Government Business Enterprise (GBE). The Katunga Picola Corporation operates under the Water Act 1989 and Barmah Numurkah Katamatite Nathalia the Water Industry Act 1994. Goulburn Valley Water is Wunghnu Tongala Katandra Tallygaroopna governed by a Board of Directors appointed by the Hon Peter Kyabram Congupna Dookie Walsh MLA, Minister for Water. Mooroopna SHEPPARTON CoC rop Tatura Stanhope Toolamba Our services RushworthRus Colbinabbinlb Murchison Violet Town Goulburn Valley Water provides urban water and wastewater Euroa Nagambie Strathbogie services in accordance with the powers, functions and duties Longwood
under the provisions of Part 8 – Water Supply, and Part 9 – Avenel Mangalore Sewerage, of the Water Act 1989. The Corporation services SEYMOUR Bonnie Doon Mansfield a population of over 129,000 in 54 towns and cities, from Pyalong Merrijig Sawmill Tallarook Settlement the outskirts of Melbourne in the south to the Murray River Broadford Yea ALEXANDRAA Kilmore Eildon in the north. Bulk water supply is sourced principally from the Clonbinane Thornton Goulburn/Broken, Murray, Steavenson, Rubicon and Delatite Wandong Buxton River systems and a number of smaller local streams such as Marysvilleysvil Woods Point Sunday Creek and Seven Creeks. GVW ANNUAL REPORT 2012|2013 | p5
Overview Corporate goals
Corporate Goals
Goulburn Valley Water’s business objectives for 2012/13 were categorised into four areas:
• Customer service
• Corporate performance
• Capability
• Communities
Customer Service We will strive for excellence in the delivery of water and wastewater services and in our business and operational interactions with customers.
Business Objective Measure/Target Status Comment Water and Wastewater Services 98% compliance with E.coli standard Compliance with 95th %ile upper Achieve compliance confidence limit of the mean for with Safe Drinking Turbidity Water Act and regulations 100% compliance with THM, chloro- 100% compliant for THM, chloro-acetic acetic acid, dichloro-acetic acid, partially acid, dichloro-acetic acid and trichloro- trichloro-acetic acid and aluminium met acetic acid. Aluminium standards 98% standards for fully treated systems compliant Meet the requirements of 100% compliance commitments COBRAM the EPA corporate consistent with the Corporate Plan Katunga Picola licence Barmah Numurkah Katamatite Nathalia Wunghnu Comply with relevant 100% compliance water and partially Minor exceedences for unplanned Tongala Katandra ESC water and wastewater reliability and complaints Tallygaroopna Kyabram met events Congupna Dookie wastewater targets targets for unplanned events Mooroopna SHEPPARTON CoC rop Tatura Stanhope Toolamba
RushworthRus
Colbinabbinlb Murchison Violet Town
Euroa Nagambie Strathbogie Longwood
Avenel Mangalore SEYMOUR Bonnie Doon Mansfield Pyalong Merrijig Sawmill Tallarook Settlement Broadford Yea ALEXANDRAA Kilmore Eildon Clonbinane Thornton
Wandong Buxton
Marysvilleysvil Woods Point p6 | GVW ANNUAL REPORT 2012|2013
Overview Corporate goals
Business Objective Measure/Target Status Comment Customer Interactions Increase number of instalment plans Instalment plans increased by 36% Produce accurate by 5% for the year and clear bills, and Implement Aquarate Aquastat provide responsive Reporting Module advice and guidance Increase number of customers taking 215 applications approved in 2012/13, to help customers up Government assistance programs compared to 93 approved in 2011/12. manage their water accounts Reduce number of estimate reads for Estimated reads down 15% this the year financial year Provide responsive 100% compliance with the ESC Minor non compliance, one report partially advice and guidance measure for response to planning delayed and one report required met to customers in feasibility reports within 45 days further analysis regard to property, 100% compliance with responses connection and land to Planning & Environment Act development issues applications within 14 or 28 days Configure Aquatact and commence collection of customer service operational contacts Review the backflow management action plan Review the small town sewerage Provide professional connection action plan service to customers on operational 0.6 complaints per 1000 were received, Compliance with ESC customer exceeding the target of 0.43 per 1000. matters partially service performance targets for The increase is due to actions taken to met EWOV complaints implement outstanding private water supply agreements Compliance with ESC cutomer service performance targets for time to answer telephone calls Priority actions were confirmed and adopted in August 2012. Some Confirmation of priority actions for initiatives were completed, others were 2012/13 by 30 September 2012. Level partially partially completed, one was redirected Achieve high of achievement of priority actions for met to the Workforce Capability Plan performance 2012/13 period. development and some are yet to be customer service by completed. implementing the Implement a 'customer survey/ actions developed feedback mechanism' across all GVW in GVW's Customer operations systems to establish the Service Action Plan level of external customer satisfaction with their services, and an increased understanding of what is 'valued' by these customers about GVW services GVW ANNUAL REPORT 2012|2013 | p7
Overview
Corporate Performance We will responsibly manage our assets, risks and financial performance in line with government and regulator expectations.
Business Objective Measure/Target Status Comment Ensure the health, Meet the targets and objectives partially Two outstanding actions will be safety and welfare established in the 2012/13 OH&S met considered in the 2013/14 plan. of employees and Action Plan the community in Corporation target of zero Lost Time Goulburn Valley 1 Lost Time Injury Water activities Injury (LTIs) Implementation of the relevant commitments in the Corporate/ Strategic Risk Action Plan Effectively manage the Implementation performance of the risks associated with Water Quality Risk Plan our operations Review the Risk Management Framework Review and revise the Water Quality Risk Action Plan Manage our assets Update the Asset Management Policy, to deliver high Strategy and Improvement Plan quality water and wastewater services to our customers, and partially Project is behind schedule but within Cutover from Hansen to the new AMS minimise risk to the met budget. community and the environment Deliver the 2012/13 Capex program delivered in infrastructure accordance with timeframes and investment program budgets set out in the Corporate Plan to achieve the overall and Water Plan program set out in the 2008-13 Water Achieve the 2008-13 Water Plan Plan expenditure target Manage the financial Report actual operating results versus performance of the budget to the Board business consistent with the Water Plan Financial performance indicators and Corporate Plan consistent with targets Ensure timely preparation and audit Maintain performance (unqualified audit opinion) of annual management and financial statements reporting procedures Ensure Treasury Management policies that ensure and procedures are complied with accountability to the Board and external Ensure compliance with taxation stakeholders legislation and the timely lodgement of returns (income tax, GST and FBT) Submit the final Final Water Plan completed and Water Plan for the lodged with ESC 2013-18 regulatory period to the Essential Services Negotiate a successful Price Commission in Determination for Water Plan 3 September 2012 p8 | GVW ANNUAL REPORT 2012|2013
Overview Corporate goals
Capability We will enhance our strategic, operational and business capability through innovation and continuous improvement.
Business Objective Measure/Target Status Comment Utilise Goulburn Organisational self-assessments Valley Water’s completed by 1 October 2012 Sustainable and integrated with business and Excellence corporate planning process Framework to facilitate continuous improvement and Improvement projects undertaken and innovation across the implemented business
Enhance the Implement the scheduled actions in capability and the Operations Strategy performance of our Workforce Capability Plan refined Workforce Capability Plan review partially workforce through and aligned with Operations Strategy complete. Revised plan in draft form met the implementation Objectives. with priority actions for 2013/14. of the Operations Some actions implemented, other Completion of confirmed actions from Strategy and partially actions on hold pending updated Workforce Capability Plan for 2012/13 Workforce Capability met Workforce Capability Plan and budget year Plan support Improve control, reliability and efficiency of operation through the staged Complete Stage 2 of the SCADA replacement, Infrastructure Upgrade upgrade and integration of the Supervisory Control and Data Acquisition System (SCADA) Develop 'ready to act' capability to Progress the following projects to service expanding 1. Tatura tender delayed to August tender document stage 1. Tatura WTP and new industries partially 2013 2. Mansfield tender delayed augmentation, 2. Mansfield WMF through preparation met to August 2013 3. Numurkah tender reuse augmentation 3. Numurkah of detailed plans completed. WTP augmentation for infrastructure augmentation GVW ANNUAL REPORT 2012|2013 | p9
Overview
Communities We will be a responsible steward of land, water and corporate resources to enhance environmental, social and economic outcomes for our communities.
Business Objective Measure/Target Status Comment To operate within a Lead the Goulburn Broken Water community context Quality Working Group to establish a to shape and foster Strategic Action Plan sustainable regional development Participate in the Hume Regional and resource Growth Planning Committee management To effectively Participate in the Hume Region manage, conserve Strategy Environmental Sub- and reuse water committee resources within a regional integrated Implement the scheduled actions in water cycle context the Water Conservation Action Plan Manage Goulburn Valley Water’s greenhouse emissions Implement the scheduled actions in implementing the Geenhouse Action Plan initiatives that have a net sustainable benefit Utilise Goulburn Redevelop the sustainability Valley Water's assessment tool established Estabilsh a measure to assess sustainability sustainability performance of each principles to improve business area our business, the regional economy, the natural Commence monitoring the environment and the application of the TBL decision tools communities in which across business areas and guide usage we operate To effectively engage with local Community engagement plans communities about developed and implemented for all specific projects and/ relevant projects or operational issues. p10 | GVW ANNUAL REPORT 2012|2013
Corporate Governance Organisational Structure
Organisational Structure
STATE GOVERNMENT OF VICTORIA
Hon Peter Walsh MLA, Minister for Water
BOARD
Chairman Deputy Chair Anne Larkins Stephen Bubb David Rutledge Geoff Dobson Sue O’Connor Mark Lawlor David McKenzie
Peter Quinn Managing Director
EXECUTIVE MANAGEMENT TEAM
Steve McKenzie Graeme Jolly Danny Hogan General Manager - Technical Services General Manager - Finance General Manager - Corporate Services
Operations Financial Management Corporate Secretary Development Accounting Services Communications/PR Major Projects Accounts Payable Legal & Property Asset Management Billing Services Human Resources Planning Treasury Information Systems Sustainability Community Education Environmental GVW ANNUAL REPORT 2012|2013 | p11
Corporate Governance DIRECTORS OF THE BOARD
Chairman: Mark Lawlor Anne Larkins
Mark Lawlor lives in Merrigum and is Managing Anne Larkins is a full time director of Dench Director of a successful contract fencing company. McClean Carlson (2003 - current) and has extensive Mark has been involved in the Victorian water experience providing consultancy services to the industry since 1991 and served on the boards of state government and statutory authorities. She Goulburn Valley Water from 1994 until 2000, and is a member of the Victorian Government Probity Goulburn-Murray Water from 2001 until 2004. Practitioners panel and has previously held board He holds a Graduate Diploma in Environmental positions with Gas Services Business Ltd and Management from La Trobe University with a Mingara Services Pty Ltd. She has been a member particular focus on issues relating to the Murray of the Essential Services Commission Appeal Board. Darling Basin, and a Company Directors Course Ms Larkins has a Bachelor of Science, a Graduate Diploma from the Australian Institute of Company Diploma of Librarianship and a Master of Business Directors. Mark returned to the Board at Goulburn Administration. Valley Water in 2007, was appointed Chairman in 2008, and is also currently serving as Chairman of Sue O’Connor VicWater. Sue O’Connor is an experienced Non-Executive Director and Senior Business Executive in the Deputy Chair: David McKenzie information technology, utilities, infrastructure, David McKenzie lives in Shepparton and is a sport and consulting sectors. Sue is an experienced Director of Opteon Goulburn North East and Board Member and is currently Chair of YMCA the HMC Property Group, who are active in Victoria and a long term facilitator on the Australian providing independent property advice through Institute of Company Directors Diploma. Sue is also Victoria, New South Wales and Tasmania. He has a Industry Director, Utilities, with SMS Management Bachelor of Business in Property and is a qualified & Technology, an ASX 200 company. Previously valuer. David is an Accredited Specialist Water Sue was Managing Director of her own consulting Valuer by the Australian Property Institute, and business and before that she was a Group General he has extensive experience in commercial and Manager at Telstra Corporation. Sue holds a rural property matters, particularly in regard to Bachelor of Applied Science, a Graduate Diploma compulsory acquisition and compensation. David of Business Management and has attended Harvard is a Director of Shepparton Retirement Villages, Business School. Sue is Chair of the Goulburn Valley the largest not for profit aged care provider in Water Audit and Compliance Committee. the Hume Region. David also has interests in several land development companies active in regional areas. David is the Vice President of the Victorian Division of the Australian Property Institute and a member of the Australian Institute of Company Directors, and he has a strong interest in regional development and sustainable regional communities. p12 | GVW ANNUAL REPORT 2012|2013
Corporate Governance DIRECTORS OF THE BOARD
David Rutledge
David Rutledge is employed part-time in the operation of a mixed farming business in the Euroa district. Dr Rutledge previously held senior roles in the financial industry in Australia, New York and Dubai. For ten years, he was the Chief Executive of the Queensland Sugar Corporation (1988 – 1999). He is Chairman of Watermove Pty Ltd. Dr Rutledge has a Bachelor of Arts, Masters of Arts (Economics) and Science (Statistics) and Doctor of Philosophy (Economics).
Geoff Dobson
Geoff Dobson was involved in the real estate industry for 35 years before retiring in 2008. He was a Director of the Real Estate Institute of Victoria (REIV) for nine years and previously held the role of President of the REIV. Mr Dobson was a Councillor with the City of Greater Shepparton, serving as Mayor from 2008 to 2011.
Stephen Bubb
Stephen Bubb is the Managing Director of Dawes and Vary, a large legal firm in the Goulburn Valley. He was a Director of Statewide Secured Investments Ltd for 24 years and President of Goulburn Valley Law Association. Mr Bubb holds a Bachelor of Economics and a Bachelor of Law. GVW ANNUAL REPORT 2012|2013 | p13
Corporate Governance Executive Management Team
Peter Quinn Danny Hogan Managing Director General Manager - Corporate Services
Peter joined Goulburn Valley Water in 1996 and was Danny joined Goulburn Valley Water in 2008. He appointed to the role of Managing Director in 2008. has a Bachelor of Business (Local Government) with He has extensive experience in strategic planning, 31 years of experience in the local government organisational capacity building, risk management industry, including 8 years as Chief Executive and governance. He holds an Executive MBA from Officer of Murrindindi Shire Council. Danny also the Australian Graduate School of Management, has a background in the water industry. He was and has undertaken a Churchill Fellowship project Secretary of the former Broadford Water Trust on water resource management. Peter is a member and Sewerage Authority and managed the former of the Australian Property Institute, the Australian Alexandra/Thornton/Eildon/Marysville Water Trusts Institute of Company Directors, and is a Fellow and Sewerage Authorities. Danny is currently and past President of the Institute of Water convenor of the Institute of Water Administration Administration. Peter sits on the Boards of the Governance Special Interest Group. Smart Water Fund, Goulburn Ovens Institute of TAFE, and WaterAid Australia. Graeme Jolly General Manager - Financial Services
Graeme joined Goulburn Valley Water in 1995. He has a Diploma of Business – Accountancy and is a member of the Institute of Chartered Accountants in Australia, the Australian Institute of Company Directors, and is a Fellow of the Institute of Water Administration. Graeme is Chair of the VicWater Finance Issues Steering Committee, and is an active member of various VicWater industry task groups including Price Determination and Asset Valuations. Graeme was awarded the 2012 John Robbins Memorial Award by the Institute of Water Administration for distinguished service to the Institute and the Victorian water industry. Graeme completed a ten year term as a member of the Board of Management and Chairman of the Audit Committee of Goulburn Valley Health in June 2008.
Steve McKenzie General Manager - Technical Services
Steve was appointed General Manager Technical Services of Goulburn Valley Water in March 2013. Steve has almost 30 years’ experience working in the water industry and has held Executive Management roles in Victoria at Central Highlands Water and Western Water and more recently in the Northern Territory at Power and Water Corporation. Steve has a degree in Civil Engineering, Diploma of Management and is a member of the Australian Water Association p14 | GVW ANNUAL REPORT 2012|2013
Corporate Governance ROLE OF THE BOARD
The Directors of the Board of Goulburn Valley Lawlor (Chairman), David McKenzie (Deputy Chair), Water operate under the provisions of the Anne Larkins, Sue O’Connor, David Rutledge, Water Act 1989 and have responsibility for Stephen Bubb and Geoff Dobson. the corporate governance of the Corporation. The Board is responsible for setting strategic Board Meetings and Committees direction, establishing goals and objectives for executive management and monitoring the Board meetings are scheduled for the first business on behalf of its customers and the Wednesday of each month except January, March, Victorian Government. Key corporate governance July and September. Additional meetings are responsibilities include: convened as circumstances arise and periodic infrastructure inspections and consultation • The adoption and monitoring of Goulburn meetings are undertaken throughout the year. The Valley Water’s Corporate Plan, Water Plan and Managing Director and General Managers attend Statement of Obligations; Board Meetings. The General Manager - Corporate Services is the nominated Board Secretary and • Monitoring operational and financial provides advice to the Board on governance performance; matters. • Ensuring that risk management systems are in The Board has established three Committees place to cover environmental, operational and to assist in carrying out its functions and financial risks; responsibilities. The Chairman convenes the • Appointing, establishing objectives of, and Remuneration and Performance Committee and reviewing the performance of, the Managing is an ex-officio member of all other Committees. Director; The Managing Director attends meetings together with senior executives as required. Minutes of • Ensuring that Goulburn Valley Water has policies Committee meetings are presented to the full and procedures to satisfy its legal and ethical Board. responsibilities; and • The Audit and Compliance Committee is • Reporting to and communicating with the delegated the task of overviewing all financial Victorian Government and other stakeholders on matters including appointment of auditors, the financial and operational performance of the review of audit programs, adequacy of internal Corporation. financial controls, operating and accounting policies and controls. The Victorian Auditor- Board Composition General is responsible for the audit of the Corporation’s financial records. Johnsons MME The Board comprises seven non executive (Chartered Accountants) were appointed by the directors appointed by Peter Walsh, MLA and the Auditor-General as his Agent for the year ended Managing Director. For the period 1 July 2012 to 30 June 2013. Pitcher Partners are engaged as 30 September 2012, the non-executive Directors the Corporation’s internal auditors. The current of the Board were Mark Lawlor (Chairman), Denis Audit and Compliance Committee members Flett (Deputy Chair), Anne Larkins, David McKenzie, are Sue O’Connor (Chair), Anne Larkins, Bruce Nicholls, Sue O’Connor and David Rutledge. Stephen Bubb and Mark Lawlor (ex-officio). The For the period 1 October 2012 to 30 June 2013, Committee Secretary is the General Manager – the non-executive Directors of the Board were Mark Financial Services, Graeme Jolly. GVW ANNUAL REPORT 2012|2013 | p15
Corporate Governance
• The Remuneration and Performance • The Operations, Environment and Safety Committee reviews the performance and Committee is responsible for ensuring remuneration of senior executives within the the effective management of operational policy parameters issued by the Government risks, reviewing operational/environmental Sector Executive Remuneration Panel (GSERP). performance and compliance with water quality The Committee, on behalf of the Board, strives guidelines and the Environmental Management to attract, retain and motivate senior executives System, and ensuring the fulfillment of of the quality required to provide sound obligations and responsibilities relating to performance and leadership of the Corporation. Occupational Health and Safety. The current The current Remuneration and Performance Operations, Environment and Safety Committee Committee members are Mark Lawlor (Chair), members are David Rutledge (Chair), David David McKenzie, Sue O’Connor and Stephen McKenzie, Geoff Dobson and Mark Lawlor (ex- Bubb. officio). The Committee Secretary is the General Manager – Technical Services, Steve McKenzie.
Board meeting attendance 2012/13
Operations, Special Audit & Environment Board Board Compliance Remuneration & Safety Name Meetings Meetings Committee Committee Committee
Mark Lawlor 7/7 1/1 3/3 * 2/2 2/2 *
Anne Larkins 7/7 1/1 5/5
Denis Flett 1/1 1/1 1/1 1/1 (retired 30/9/2012)
Bruce Nicholls 1/1 1/1 1/1 1/1 (retired 30/9/2012)
Sue O’Connor 7/7 1/1 5/5 1/1
David McKenzie 7/7 1/1 2/2 2/2 3/3
David Rutledge 7/7 1/1 4/4
Stephen Bubb 5/6 2/3 1/1 (appointed 1/10/2012)
Geoff Dobson 6/6 3/3 (appointed 1/10/2012)
* ex officio member of Audit & Compliance Committee, and Operations, Environment & Safety Committee
Note: The full Board attended the special Audit Committee meeting held on 22/8/2012 to consider financial statements for the year ending 30 June 2012. p16 | GVW ANNUAL REPORT 2012|2013
Organisational Capability employee statistics
208.2 people are employed directly by Goulburn Valley Water. In addition to this as at June 30 2013, there were four vacancies.
Employee figures
30 June 2012 30 June 2013
Female FTE Male FTE Total Female FTE Male FTE Total
Executive Management 0 4 4 0 4 4
Managers 0 12 12 1 13 14
Administrative/Technical 42.5 60 102.5 42.8 60 102.8
Operations 5 72.8 77.8 3.7 77.6 81.4
Customer Service Centre 0 5 5 0 6 6
TOTAL 47.5 153.8 201.3 47.5 160.6 208.2
Learning and Development
In 2012/13, Goulburn Valley Water continued Learning and Development highlights for 2012/13 to foster a Learning and Development culture included: within the organisation to advance leadership • The completion of phase I of a competency and technical skills. The culture also promotes framework for Goulburn Valley Water; innovation and responsiveness within the
Corporation in meeting all community and business • The Certificate II in Water Industry Operations to requirements. GVW does this by: one employee;
• Developing a multi-skilled workforce that • The Certificate III Water Industry Operations to responds to all organisational needs; six employees;
• Ensuring Executive Management support for the • On-going participation in Certificate IV in Water on-going development of all employees; and Industry Operations by ten employees; and
• Annually reviewing each employee’s learning • Study assistance for four employees in relevant needs through the Personal Appraisal and post-graduate studies. Coaching Planning process. GVW ANNUAL REPORT 2012|2013 | p17
Organisational Capability Equal Employment Opportunity and Diversity
Goulburn Valley Water is committed to the Employees must ensure that they: employment principles as outlined by the State • Act with impartiality; Services Authority in the Public Administration Act 2004. • Display integrity, without real or perceived conflict of interest; Employers must ensure that: • Show accountability for all actions; and • Decisions are based on merit; • Provide a responsive service to customers. • Employees are treated fairly and reasonably;
• Equal employment opportunity is provided; and
• Reasonable avenues of redress are available for unfair or unreasonable treatment.
Safety, Health and Well-being
The Goulburn Valley Water Workforce Capability • Securing WorkSafe Workplace Health Grant Plan, adopted in March 2012, continues to provide ($10K) to provide staff with information sessions the overarching framework for the Corporation’s relating to exercise and healthy eating; approach to safety, health and well-being. • Maintaining a Safety Management System In 2012/13 Goulburn Valley Water maintained its accredited to AS4801. commitment to continually improve safety, health Goulburn Valley Water also focused on health and and well-being outcomes and culture by: well-being through the following programs: • Regular OH&S committee meetings with • Employee Assistance Programs revisited with a strategic and operational discussion for OH&S new launch program set for July 2013 with PPC throughout the workplace; Worldwide; and • Promoting GVW’s “TAKE 5” approach by placing • General health and fitness programs. prominent stickers on buildings, workstations, plants and equipment, to ensure the message is “front of mind”;
• Monitoring and communicating learnings from incidents and near incidents;
• Communicating the Board’s commitment to safety, health and well-being to employees via quarterly newsletter articles;
• Organising special events during WorkSafe Week in October; p18 | GVW ANNUAL REPORT 2012|2013
Organisational Capability Health and Safety Training
In 2012/13, Goulburn Valley Water continued to Occupational Health and Safety focus on the importance of OH&S training for Policy employees to develop their knowledge and skills in various Occupational Health and Safety (OH&S) In accordance with Goulburn Valley Water’s OH&S fields including: Policy the Corporation is committed to continual improvement of OH&S management to prevent • Asbestos Removal (60 people); work related injuries and illness and to provide a safe and healthy work environment for employees, • Emergency Management and Fire Safety (4 contractors, customers, visitors and the general people); public. • Confined Space Entry (95 people); This was achieved in 2012/13 through: • OH&S Representative - five day (4 people); • Developing programs which aim toward a goal • OH&S Representative – refresher training (4 of “Zero Harm” to our employees, contractors, people); visitors and the general public;
• OH&S Construction Induction Training; • Consultation and cooperation between management, employees and health and safety • Traffic Control and Management (47 people); representatives;
• Chainsaw training (12 people); • The fostering of mutual responsibility for health and safety at all levels of the organisation; • CPR (9 people); • Complying with the legislative requirements and • Crisis and Incident Management (41 people); current industry standards; • Fire Safety (19 people); • Maintaining an OH&S Management System • Manual Handling (24 people); and which embraces the principles of the standard AS 4801; and • OH&S Hazards and risk assessments (11 people) • Regularly reviewing and updating the corporate Some of these opportunities resulted from the Safety, Health and Well-being objectives and Corporation’s OH&S Refresher Training Program. targets. Implemented in October 2007, the program aims to run two refresher training sessions annually. During 2012/13 employees undertook the following refreshers:
• First Aid Level II Update;
• Cardiopulmonary Resuscitation (CPR); and
• Breathing Apparatus (BA) Refresher (for employees who have a Confined Space Entry qualification). GVW ANNUAL REPORT 2012|2013 | p19
Organisational Capability Occupational Health and Safety Statistics
Whilst the Corporation has a firm commitment to “Zero Harm”, a result of one Lost Time Injury (LTI) for the 2012/13 equals the best result in ten years. The injured employee returned to work after losing four days of work. Lost time incident frequency
Number of incidents (per million hours worked) 40
35
30
25
20
15
10
5
0 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
2008/09 2009/10 2010/11 2011/12 2012/13
Lost time hours
Number of hours lost (per million hours worked)
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
2008/09 2009/10 2010/11 2011/12 2012/13 p20 | GVW ANNUAL REPORT 2012|2013
Environmental Sustainability STATEMENT OF OBLIGATIONS
Goulburn Valley Water, in addition to the key role • Principles to establish the Environment of customer service, must meet a wide range of Protection Authority Environmental Obligations regulatory obligations. The key drivers include: for Water Businesses for the 2008-2013 Pricing Determination, November 2006 • Water Act 1989 • The Public Heath and Wellbeing Act 2008, Safe • Water Industry Act 1994 Drinking Water Act 2003, Food Act 1984 and
• The Victorian Government Living Melbourne, Fluoride Act 1973 Living Victoria – Plan for Water • Regulatory obligations administered by the
• The Water Industry Regulatory Order Department of Health for the purpose of preparing water plans for the regulatory period • The Statement of Obligations 2007 commencing 1 July 2008
• The Customer Code and key performance • Bulk entitlement orders indicators • Occupational Health and Safety Act 1985 and • The Environment Protection Act 1970, associated legislation, regulations and codes. associated regulations, policies and licences
Water quality
Risk Management In April 2012, Goulburn Valley Water engaged NCS International, a Registrar Accreditation Board Goulburn Valley Water continually reviews its Quality Society of Australia (RABQSA) Certified Risk Management Plan and Drinking Water Auditor to conduct compliance audits for the Quality Management System (DWQMS) to ensure Corporation’s new DWQMS. The Corporation once compliance with Victoria’s Safe Drinking Water again met the obligations imposed by the Safe Act 2003 (SDWA) and the Australian Drinking Drinking Water Act and as a result received its third Water Guidelines (ADWG) - Framework for the Risk Management Plan Certificate of Compliance. Management of Drinking Water Quality 2011. The next round of audits is scheduled to be The DWQMS is based on the ADWG framework completed by April 2014. and was developed to provide a structured and
systematic approach for the management of drinking water quality from catchment to consumer, and to assure its safety and reliability. The framework also provides alignment with the Risk Management Plan requirements of Victoria’s Safe Drinking Water Act. GVW ANNUAL REPORT 2012|2013 | p21
Environmental Sustainability
Safe Drinking Water Compliance All drinking water supplies complied with the regulatory standard for trihalomethane disinfection Goulburn Valley Water achieved a high level of by-products. Six hundred potable reticulation performance against the requirements of Victoria’s samples were collected during 2012/13. Safe Drinking Water Act 2003 and Safe Drinking Water Regulations 2005 during 2012/13. The majority of drinking water supplies complied with the regulatory standard for acid soluble aluminium. The majority of drinking water supplies complied Of the 568 potable reticulation samples collected, fully with the regulatory standard for E.coli. Of the only one sample exceeded the regulatory limit. The 2,764 potable reticulation samples collected, only Shepparton locality returned one result exceeding four samples returned a positive E.coli result. The the regulatory limit. This was attributed to a minor first positive result was detected in the Barmah process issue associated with an instrument used locality. The presence of E.coli in the Barmah for online monitoring. Following investigation it was locality was detected at threshold levels and the considered that the limited public health exposure source unknown. The other positive results during did not warrant public action. The Department of 2012/13 were detected at Picola, Strathmerton Health was notified of the incident. and Yarroweyah localities. Investigations concluded that the presence of E.coli was most likely due to a All drinking water supplies complied fully with the sampling error. regulatory standard for turbidity. A total of 2,764 potable reticulation samples were collected for All drinking water supplies complied with the turbidity analysis. regulatory standards for haloacetic acid disinfection by-products. Six hundred potable reticulation Full details of Goulburn Valley Water’s performance samples were collected during 2012/13. and related improvements to safe drinking water will be available in the Corporation’s Water Quality Annual Report, published in November each year and available on the Goulburn Valley Water website. p22 | GVW ANNUAL REPORT 2012|2013
Environmental Sustainability Regional Catchment Strategy
Goulburn Valley Water plays a key role in partnering The Corporation is also actively involved in State with the Goulburn Broken Catchment Management level catchment working groups. In particular, Authority (GBCMA) in the development and Goulburn Valley Water is engaged in regional implementation of its Regional River Health policy discussions related to land use and septic Strategy. In addition to addressing customer tank management in open potable water supply interests to protect water quality, the protection catchment areas. It is anticipated that these and maintenance of environmental values discussions will be ongoing over 2013/14 and addressed by the strategy benefit the region as a will lead to the development of local municipal whole. and regional strategies to deal with these issues. To date these discussions have included many Goulburn Valley Water actively participates catchment partners including municipal councils, in the Goulburn Broken Catchment Regional the Department of Health, the Department of Water Quality Group and continues to promote Environment and Primary Industries and the water quality protection and improvement in the Environment Protection Authority. catchment. Initiatives include riparian improvement actions like tree planting and fencing for stock management, and working with partner Goulburn- Murray Water to address catchment water quality risks.
Victorian River Health Strategy
The Victorian Strategy for Healthy Rivers, Estuaries A focus of the VSHREW is to collectively address and Wetlands (VSHREW) establishes the policy issues associated with environmental flows, framework for managing the health of Victorian declining water quality and degraded riverine rivers, floodplains and estuaries. A focus of the habitats. During 2012/13, Goulburn Valley Water strategy is to restore stressed rivers and improve continued to work on reducing the impact of its water quality by integrating government and operations regarding the return of water to rivers. community programs. Goulburn Valley Water plays Past droughts have highlighted that dry climatic an important role in contributing to the success conditions and other factors can reduce natural of this strategy, in particular by partnering with river flows and returning appropriately treated the Goulburn Broken Catchment Management recycled water back to waterways can contribute to Authority (GBCMA) to understand and develop waterway health. regional catchment priorities and ensuring that the Corporation’s on-stream works and activities do not impact adversely on river health. GVW ANNUAL REPORT 2012|2013 | p23
Environmental Sustainability Victorian Biodiversity Strategy
Goulburn Valley Water manages significant areas Valley Water conducted a number of projects of land that support a range of ecosystems and is in partnership with community groups aimed committed to sustainable resource management. to improve the communities understanding of The Corporation has ongoing initiatives that biodiversity in the region and improve the quality support and enhance ecosystem values including and aesthetics of our waterways for recreational native tree planting programs, fencing of remnant users. native vegetation and pest control management. Goulburn Valley Water’s Environmental Stewardship During 2012/13, Goulburn Valley Water re- Framework was established in 2010/11 and established local native vegetation at various continues to guide the Corporation’s strategic operational sites, and completed protective environmental management initiatives. fencing projects at the Bonnie Doon and Nathalia A snapshot of biodiversity actions undertaken by Wastewater Management Facilities. Goulburn Goulburn Valley Water during 2012/13 follows.
Biodiversity Actions 2012/13
Objective Target Progress during 2012/13
Weed spraying programs implemented at Weed free Corporation Weed control all GVW facilities and properties managed properties by GVW
Control of fox, rabbit and Fox control measures undertaken at rodent numbers to prevent Murchison, Stanhope-Rushworth and Vermin control negative impacts on native Shepparton Wastewater Management habitat and crops Facilities
Protective fencing of native vegetation completed at Bonnie Doon and Nathalia Management of native flora Manage native habitat on Wastewater Management Facilities and fauna Corporation properties Management of habitat areas at wastewater management facility sites to improve flora and fauna species gain
Indigenous trees, understory low shrubs and grass species were planted at various GVW Encourage a net gain of Increase native vegetation sites including Nathalia, Shepparton and Yea native flora and fauna cover Wastewater Management Facilities and the Tallygaroopna Water Treatment Plant p24 | GVW ANNUAL REPORT 2012|2013
Environmental Sustainability Greenhouse and Energy Reporting
Goulburn Valley Water produces greenhouse gas The Corporation adopted a baseline year for emissions from activities such as electricity use comparison and greenhouse gas emissions for pumping and aeration, wastewater treatment reporting in 2001/02. The table below shows processes, combustion of fuel to provide energy for the emissions for the baseline year, 2011/12 and vehicles, generators and diesel pumps, and the use 2012/13 in units of equivalent tonnes of carbon
of chemicals such as soda ash. dioxide (t CO2-e).
Total Greenhouse Gas Emissions
Greenhouse gas emissions (t CO2-e)
Activity NOTES 2001/02 2011/12 2012/13
Water treatment 17,272 12,539 15,429
Sewage treatment 51,543 29,025 30,889
Transport 1,032 1,096 1,177
Offices 448 435 493
Fugitive emissions from livestock have been excluded since 2007/08 in keeping with the Livestock 1,446 0 0 current National Greenhouse and Energy Reporting System (NGERS) guidelines.
Subtotal 71,741 43,095 47,988
Tree offsets -654 -642 -642
Net emissions 71,087 42,453 47,346 GVW ANNUAL REPORT 2012|2013 | p25
Environmental Sustainability
The increase in greenhouse gas emissions during at the Mooroopna, Shepparton and Tatura 2012/13 compared with 2011/12 can be attributed Wastewater Management Facilities. Biogas to an increase in electricity usage due to higher (methane) previously released to the atmosphere total customer water consumption compared to is now captured and generated into electricity or 2011/12. flared at high temperature.
Overall, a significant reduction of around 35% The following chart shows Goulburn Valley Water’s in greenhouse gas emissions has been achieved annual greenhouse gas emissions since the baseline since the baseline year and is primarily the result year of 2001/02. of ongoing improvements in biogas management
Net emissions trend
Net emissions (t CO2-e) / year
100,000
80,000
60,000
40,000
20,000
0 ‘01/’02 ‘02/’03 ‘03/’04 ‘04/’05 ‘05/’06 ‘06/’07 ‘07/’08 ‘08/’09 ‘09/’10 ‘10/’11 ‘11/’12 ‘12/’13
The Corporation has significantly reduced In July 2012 the Federal Government’s carbon price emissions since the baseline year reflecting a strong commenced and is applicable to businesses that ongoing commitment to improved environmental have direct emissions greater than 25,000 t CO2–e performance. per facility. The Corporation’s per facility emissions are well under this threshold. In 2011/12, Goulburn Valley Water reviewed its Greenhouse Action Plan to address the evolving regulatory framework and consider additional means to avoid, reduce, switch, contain or offset emissions, where it is sustainable to do so. The plan noted the Corporation’s emissions are forecast to be around 50,000 t CO2–e in 2028 and is currently investigating cost effective methods to reduce power consumption and emissions. p26 | GVW ANNUAL REPORT 2012|2013
Environmental Sustainability Wastewater Management
Goulburn Valley Water operates 26 wastewater Sewer Odour Management Strategy management facilities throughout the region. The facilities vary, but predominately utilise lagoon type Goulburn Valley Water made provision in the Water treatment processes capable of treating water to a Plan 2008-13 to undertake odour monitoring and Class C standard suitable for agricultural irrigation. control studies across all sewerage reticulation systems. Three of the facilities treat recycled water to a As part of this initiative, Consulting Environmental tertiary standard to facilitate return to waterways at Engineers (CEE) were engaged to prepare a strategy designated times of the year. for managing odour risk associated with the sewer Over the past five years Goulburn Valley Water, on networks. Under the commission, which commenced average, used more than 78% of the recycled water in 2009, CEE worked closely with Corporation staff to produced for irrigated agriculture. Relatively small undertake a range of tasks to develop a strategy that volumes are also used to irrigate golf courses. covered and reflected all of Goulburn Valley Water’s sewerage systems and local conditions. These tasks Due to above average rainfall during the 2011/12 involved: summer, Section 30A discharge licences were sought and approved by the Environment • A desktop review of existing practices and policies; Protection Authority to facilitate controlled • An assessment of odour risk and categorisation; emergency discharges from facilities. These carried over into 2012/13 however a dry summer provided • Odour monitoring; and excellent conditions for irrigation and lagoons were reduced to a more acceptable operating level. • Preparation of options and estimated costs for odour management.
Recycled Water Reuse The strategy, which was adopted in October 2011, included the following key recommendations: Goulburn Valley Water is one of the largest regional producers of recycled water in Australia. In 2012/13 • To revise guidelines and standards for design, a total of 7,344 ML, or 80%, of recycled water from construction and operation of sewage pump Goulburn Valley Water’s wastewater management stations, rising mains and odour control facilities; facilities was reused. • To implement an annual monitoring program to Although the use of recycled water was less assess performance of odour control facilities and than expected due to a number of facilities still reassess odour risk for other assets in the networks; recovering from above average rainfall in 2011/12, this was slightly above the 5 year rolling average of • To prepare an annual monitoring report; and 78%. • To make provision for a program of capital works in the current and future Water Plan periods to address odours within reticulated sewerage systems.
In line with these recommendations, allowances have been provided in the respective recurrent and capital works budgets in the 2013-18 Water Plan. Under the strategy, works at high priority sites in Cobram, Kyabram, Mansfield and Shepparton were either completed or commenced in 2012/13. GVW ANNUAL REPORT 2012|2013 | p27
Environmental Sustainability
Biosolids Major Spills
In 2012/13 the Corporation has continued to 10 major (Priority 1) sewer spills were recorded deliver against its Biosolids Management Strategy. during 2012/13. The dry summer has allowed the Corporation to • Mooroopna – Echuca Road reduce the biosolids stockpiles by approximately A spill occurred during July 2012 from the 14,000 dry tonnes this year. At the end of 2012/13 Corporation’s sewer reticulation system in the Corporation biosolids reuse is slightly ahead Mooroopna, resulting in wastewater entering of the annual rolling five year target of 4,700 dry agricultural stormwater infrastructure. The tonnes. spill was due to a structural failure within the The reduction of stockpiles is primarily attributed reticulation system which was rectified soon after to redevelopment at the Tatura Wastewater the event. Equipment was utilised to remove the Management Facility where old evaporation spilled wastewater from the stormwater system. lagoons were turned into dry land farming. • Seymour – Beta Street Approximately 14,000 dry tonnes of biosolids were A partial blockage within the sewer reticulation used as a soil conditioner/fertiliser to assist in the system contributed to a sewer spill to enter establishment of pasture for sheep grazing. the stormwater system during July 2012. The The benefits of using biosolids on agricultural land Corporation subsequently cleared the blockage include improved soil moisture holding capacity and conducted an immediate clean-up. The and increased organic matter. Research in Australia Environment Protection Authority was notified as has confirmed that this improves agricultural it was expected that some wastewater entered productivity. These research findings are expected Whiteheads Creek. to lead to greater volumes of biosolids being used • Cobram – Moorkaii Street in the future. A blockage within the sewer reticulation system resulted in a sewer surcharge within a residential Wastewater Spills property and dwelling during December 2012. Many of the sewer spill events which occurred The Corporation subsequently cleared the during 2012/13 were due to a combination of blockage and conducted an immediate clean-up. factors including tree root intrusion, blockages from • Seymour – Tarcombe Road foreign debris, restricted sewer pipe diameters and A partial blockage within the sewer reticulation stormwater infiltration. Following the notification system contributed to a sewer spill from a of a sewer spill, the Corporation seeks to ensure 300 mm sewer main within an agricultural that wastewater services are re-established within stormwater drain during December 2012. Works a short timeframe causing minimal impact to were conducted to repair the asset and avoid customer properties and the environment. recurrence. Spilled sewage was immediately returned to the sewer reticulation system.
• Cobram – Racecourse Road Substantial ground movement caused a 300 mm sewer rising main to burst during January 2013. Spilled sewage was contained and returned to the sewer reticulation system. The burst sewer main was repaired and surrounding soil stabilised. p28 | GVW ANNUAL REPORT 2012|2013
Environmental Sustainability Wastewater Management
• Seymour – The Esplanade • Mansfield – Malcolm Street Preventative sewer main maintenance caused Tree root intrusion into the sewer reticulation a sewage surcharge event within a residential system resulted in a sewer surcharge event dwelling in February 2013. The spill was within a residential property and dwelling during immediately cleaned up and the sewer main April 2013. The Corporation subsequently inspected to avoid reoccurrence. repaired the backflow prevention system on the service line to avoid recurrence and • Wandong – Dry Creek Road conducted an immediate clean-up. Temporary A blockage within the sewer reticulation system accommodation was provided for the owner and caused sewage to enter Dry Creek Wandong. tenants. The spill coincided with high creek flows, and monitoring results confirmed no environmental • Seymour – Abdullah Street impact occurred. Sewer monitoring was A blockage in the sewer reticulation system conducted following the spill event to identify contributed to a sewer surcharge event and address sewer integrity issues. The in Abdullah St Seymour in May 2013. The Corporation responded to the spill in accordance spill event was considered to have entered with its spill response procedure and notification Whiteheads Creek and the Environment of the incident was provided to the Environment Protection Authority was appropriately notified Protection Authority. of the spill in accordance to the Corporation’s reporting requirements. • Mooroopna – Echuca Road A small leak from a 300 mm sewer rising main occurred in April 2013. The leak was quickly identified and repaired, and spillage was returned to the Mooroopna sewer reticulation system.
Wastewater spills
Spill Type 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Priority 1 (Major) 4 4 3 4 4 5 10
Priority 2 (Minor) 55 50 67 36 35 30 27
Total 59 54 70 40 39 35 37
To assist in reducing the number of wastewater • Tree root foaming, removes the presence of spills in comparison to previous years, Goulburn tree roots within the sewer system which may Valley Water implemented the following contribute to blockages or bursts; and management program during 2012/13: • Sewer relining, this is used to restrict tree root • Sewer preventative jetting, removes tree roots intrusion and possible leaks within the sewer which have the potential to cause blockages system. within the sewer reticulation system;
• Closed Circuit Television (CCTV) inspections of the sewer system assists to identify sewer mains which require additional maintenance; GVW ANNUAL REPORT 2012|2013 | p29
Environmental Sustainability
Trade Waste
On 1 July 2012 Goulburn Valley Water published its Trade Waste Customer Charter. The purpose of the Trade Waste Customer Charter is to inform customers about trade waste services provided by Goulburn Valley Water and the rights and responsibilities of the Corporation and our customers.
During 2012/13 Victorian water corporations worked with the Department of Environment and Primary Industries (DEPI) to develop Trade Waste Regulations. These regulations will replace the many different by-laws that the regional water corporations currently have in place. Goulburn Valley Water will continue to play a lead role in the development of the Trade Waste Regulations.
During the year the roll out of barcoding of grease interceptor traps was completed, with approximately 100 new businesses identified. This represents a 10% increase in the commercial trade waste customer base. The barcoding of grease interceptor traps is proving to be a very useful tool in tracking the regular cleanout of grease traps which is essential in minimising the blockages of sewers due to fats, oils and greases. p30 | GVW ANNUAL REPORT 2012|2013
Environmental Sustainability Bulk Water Entitlements
The Corporation has converted its rights to water to Bulk Entitlements under section 47 of the Water Act 1989 for its water supply systems.
Bulk Water Entitlements 2012/13
Bulk Raw Entitlement Water Bulk Available Volume Total Entitlement Allocation Taken Transfers NOTES Supply System SOURCE (ML) (ML) (ML) (ML)
Barmah Murray River 82 106 59 0
Broadford/ Kilmore/ Waterford Park/ 10 Sunday Creek 2,875 2,875 1,136 0 Clonbinane/ Wandong/ Heathcote Junction
Buxton Steavenson River 110 110 0 0
Cobram Murray River 3,525 4,342 3,014 -900
Seven Creeks and Euroa 1,990 1,990 738 0 Mt Hut Creek
Goulburn Channel 14 Channel 7,191 7,630 5,199 -1,650 System
Goulburn River and 3, 14 Goulburn River 7,679 7,970 3,395 -4,371 Eildon
Goulburn River and Lower Goulburn 3, 14 18,620 19,232 11,986 -6,950 Eildon River
12 Katamatite Channel 84 107 746 760
Longwood Nine Mile Creek 120 120 78 0
8 Mansfield Delatite River 1,300 1,300 576 0
Marysville Steavenson River 462 462 158 0
Nathalia Broken Creek 652 1,344 450 -720
12 Numurkah/Wunghnu Broken Creek 1,206 2,253 600 -1,260
Picola Channel 44 59 24 0
Pyalong Mollisons Creek 75 75 36 0
Strathbogie Seven Creeks 23 23 12 0
Thornton Rubicon River 120 120 0 0
Upper Delatite Delatite River 235 235 91 0
Honeysuckle Violet Town 20 20 0 0 Creek
Woods Point Brewery Creek 30 30 9 0
Yea Yea River 438 438 227 0
Total 46,881 50,842 28,534 -15,091 GVW ANNUAL REPORT 2012|2013 | p31
Environmental Sustainability
Notes to Bulk Entitlement Table 9. All Bulk Entitlement conditions were met during 2012/13. No difficulties were 1. The Corporation’s Bulk Entitlements on the experienced in meeting these conditions. regulated Goulburn and Murray systems were not restricted in 2012/13. 10. Raw water volume taken for Broadford/ Kilmore/Waterford Park/Clonbinane/Wandong/ 2. The volume of water taken for each Bulk Heathcote Junction relates to the Sunday Entitlement is shown in the table together Creek Bulk Entitlement only. A further 408 with transferred volumes. A negative value ML was pumped from the Goulburn River to in the ‘Total Transfers’ column indicates supplement supply to Broadford. The 408 ML an assignment of water allocation out of is included in the total volume taken from the the system; a positive value indicates an Goulburn River and Eildon Bulk Entitlements. assignment of water allocation into the system. The total transfers figure includes temporary 11. The column heading (Bulk Entitlement water trading, internal transfers and transfers Available Allocation (ML)) is the entitlement to third party irrigators to mix with recycled allocation plus carryover minus 5% evaporation water. and spillable water write-off.
3. The Corporation did not seek any credit for 12. During 2012/13 the Corporation constructed a recycled water returned to the Goulburn River 280 ML raw water storage to supply Numurkah at Shepparton, Alexandra or Eildon during on the Murray Valley 6/6 channel. A new 2012/13. diversion point for Numurkah was granted by Goulburn Murray Water and the Corporation 4. No permanent transfers of water entitlements transferred 760 ML from the Numurkah Bulk occurred during 2012/13. Entitlement to the Katamatite Bulk Entitlement 5. All Corporation diversion points are metered to supply water for the new storage. and accord with metering plans approved 13. No new Bulk Entitlements were granted to by Peter Walsh, MLA. Environmental and Goulburn Valley Water in 2012/13. monitoring plans are in place where required. No changes to these plans occurred in 14. The Goulburn system Bulk Entitlements were 2012/13. consolidated in 2012/13. Changes have been made to conform to Goulburn–Murray 6. Kirwans Bridge and Goulburn Weir (Baxters Water operational policies. The original Bulk Road) were supplied from water shares issued Entitlements on the Goulburn system were by Goulburn-Murray Water. The water used by revoked and two new Bulk Entitlements were these communities (Kirwans Bridge, 18 ML and granted by Peter Walsh, MLA. Baxters Road, 4 ML) was within the available seasonal allocation, and is not shown in the • The first Bulk Entitlement Order replaced table. the nine Bulk Entitlements on the Goulburn River and Eildon system. This Order is titled 7. Katunga is supplied with groundwater under a Bulk Entitlement (Goulburn River and Eildon groundwater licence. The total volume taken - Goulburn Valley Water) Order 2012. under this licence (52 ML) in 2012/13 is not shown in the table. • The second Bulk Entitlement Order replaced the eleven Bulk Entitlements on 8. The total volume diverted from the Delatite the Goulburn Channel system. This Order is River for Mansfield over the period of 2011/12 to 2012/13 was 871 ML. This is below the bulk titled Bulk Entitlement (Goulburn Channel entitlement limit of 2,600 ML over two years. system - Goulburn Valley Water) Order 2012. p32 | GVW ANNUAL REPORT 2012|2013
Environmental Sustainability Water Restrictions / DROUGHT RESPONSE PLAN
GVW invoked its Drought Response Plan for All other Goulburn Valley Water towns have been Pyalong in February 2013, due to minimal flow in on Permanent Water Saving Rules during 2012/13. Mollison’s Creek which supplies Pyalong. Stage 1 The rules promote efficient and sensible use of water restrictions were introduced to Pyalong on water without significantly restricting customer 22 February 2013 and were escalated to Stage 2 choice and flexibility. on 15 March 2013. Water carting was utilised to Allocations on the Murray and Goulburn systems provide supply during this period. With rain events reached 100% of the bulk entitlement volume for occurring during May and June, flows returned to 2012/13. Storages held satisfactory volumes of the Mollison Creek and restrictions were removed water for large parts of the year. by the end of June 2013.
COMMUNITY AWARENESS
Community Education Working with Schools in 2012/13
Goulburn Valley Water promotes the sustainable General activities provided by GVW for students use of water in our region through our patronage throughout 2012/13 consisted of school visits, of educational programs based on integrated excursions to waterways and tours of GVW facilities: resource management. Our education program is • Water quality testing: 897 students comprehensive and covers a range of water-related issues from conservation and sustainable usage • Water treatment plant and wastewater to water quality and biodiversity. The corporation management facility tours and related activities: works with a number of resource management 2,819 students from 44 schools agencies to embed sustainability into community organisations, particularly schools. • Macro-invertebrate surveys: 1,820 students
a. With the Goulburn Broken Catchment • 19 new schools have been recruited into the Management Authority and local government, ResourceSmart AuSSI Vic project, while 12 GVW facilitates the Waterwatch water quality actively participating schools have re-engaged monitoring and awareness program. This during 2012/13. program aims to raise awareness of water quality Student involvement in National Water Week in issues in waterways upstream of our raw water October 2012 totalled almost 4,400. off-takes.
• 2,200 entries were received for the school b. Our partnerships with Sustainability Victoria ‘Something Fishy activity, where students and the Department of Education and Early decorated fish scales with native fish themes. All Childhood Development (DEECD) have provided scales were assembled by class into 70 large fish. effective support for our regional schools
to introduce the ResourceSmart AuSSI Vic • 91 macro-invertebrate models were received for framework into their everyday school life and the Create-a-Critter project from 4 participating make real savings in water and energy usage. schools;
c. A long-standing partnership with other resource • Over 50 students and 2 classes created management and community organisations Japanese fish kites with a native fish twist; and has made possible an annual activity-based community education program during National Water Week in October. GVW ANNUAL REPORT 2012|2013 | p33
• Over 1,850 students attended the “Fabulous Living Victoria Water Rebate Fish Show’ and “Murray the Fish” performances Program during school visits, which focused on water quality in the Goulburn River. Goulburn Valley Water actively promotes the Living Victoria Water Rebate Program.The table below • 255 participants enjoyed twilight fishing and outlines the number of rebates that Goulburn Valley Catch a Carp events at Nagambie and Tatura. Water processed for its customers in 2012/13.
Overall, more than 12,300 students from 108 schools participated in some way in Goulburn Valley Rebates Processed 2012/13
Water’s education and awareness programs. NO. OF Product REBATES Working with the Community in 2012/13 Dual Flush Toilet ($50) 17 A Waterwise conservation campaign was delivered Rainwater Tank ($500 - $1,500) 9 to customers and the wider community through the print and electronic media during 2012/13. As well, Shower Rose ($10, $20) 3 a new initiative called the Tap Water Tykes Club, Washing Machine ($150) 7 encouraged sound water conservation practices Pool Cover with Roller/Wheel ($200) 37 in young community members and their families. Membership of the club reached 200 during the Basket Offer ($30) 45 year. Small Business Rebate (<=$2000) 29
Goulburn Valley Water has recently refurbished TOTAL 147 a disused water treatment plant office building as a Learning Centre. The facility will be used to promote sustainable use of water by students and the general community.
Community participation in other water-related activities included:
• 565 people visiting water conservation and water quality stands at markets, Expos and agricultural shows;
• 128 community members taking part in water quality monitoring training workshops and meetings. p34 | GVW ANNUAL REPORT 2012|2013
Water Consumption water consumption
Water Resources The Corporation’s Water Conservation Strategy and Water Supply Demand Strategy were reviewed The water resource position continued at good in 2011/12. The next review for both strategies levels in 2012/13 as above average summer rainfall is planned for 2017/18. The Water Conservation provided resultant runoff to supplement storage Strategy retains a focus of efficient water use levels. and savings over the residential, industrial and Bulk entitlements from the Goulburn and Murray commercial sectors. irrigation systems reached 100% for the year and Progress on the strategy initiatives has been very storages servicing unregulated systems maintained good, with consumption by customers within above average levels. 2020 target levels. The system losses have slightly increased on the previous year. Water Consumption During 2012/13, leak detection investigations were In 2012/13 the number of water customers undertaken in Seymour, Mangalore, Tallarook and serviced by Goulburn Valley Water grew by 0.8% in Avenel. Of the 139 km of reticulated water main comparison with 2011/12. The total annual water involved in the investigation, six medium and 35 consumption increased from 22,910 ML to 26,220 minor leaks were located and repaired. The water ML, an increase of 13%. This increase was due to a savings from this program are estimated at 21 ML drier summer and autumn period. Both residential per annum. and ‘other’ (non-revenue water) categories increased. Water Conservation Strategy Water diversions increased by 3,397 ML to 28,608 Targets specified for 2020 in the Corporation’s ML. Again, this increase was related to the drier Water Conservation Strategy are compared to autumn conditions. current performance levels in the table below.
Target vs. Performance - Water Conservation Strategy
Target 2020 NOTES 2012/13
Includes groundwater extraction Overall water diversions < 31,000 ML 28,608 ML at Katunga
Residential target < 336 L per person per day 290 L
Residential target < 15,410 ML per year 13,555 ML
Commercial and industrial target < 10,540 ML per year 10,465 ML
Distribution losses < 8% 8.39% GVW ANNUAL REPORT 2012|2013 | p35
Water Consumption
Water consumption 2012/13 Actual Annual Consumption (ML) and Number of Assessments (No.)
Water Supply NON Total AVERAGE Water Supply Retail Urban REVENUE Annual Annual Retail Urban Residential Non-Residential WATER Consumption Consumption* Water District NO. ML No. ML ML ML ML Alexandra 1,262 238 203 99 58 396 324 Barmah 158 38 17 8 7 53 44 Bonnie Doon 242 27 15 14 5 46 41 Broadford, Clonbinane 1,919 368 115 107 70 545 497 Cobram, Yarroweyah, 2,762 715 479 1,814 141 2,671 2,626 Strathmerton Colbinabbin 77 12 17 9 2 23 21 Corop 33 4 4 1 1 6 5 Dookie 136 58 19 30 7 95 92 Eildon 597 77 66 38 20 135 134 Euroa, Strathbogie, Violet 2,105 493 268 167 152 811 648 Town Girgarre 116 32 14 5 4 41 37 Katamatite 118 32 21 10 3 45 36 Katandra West 118 30 15 8 2 40 34 Katunga 85 40 17 7 1 48 46 Kilmore, Wandong/ 3,527 629 292 105 88 822 697 Heathcote Junction Kyabram, Merrigum 3,004 888 424 342 249 1,479 1,213 Longwood 120 40 14 11 8 59 48 Mansfield 1,807 354 326 158 110 622 479 Marysville, Buxton 722 65 99 27 79 171 147 Murchison 397 105 55 36 23 164 151 Nagambie, Baxters Road, 1,024 196 121 249 43 488 478 Kirwans Bridge Nathalia 754 215 118 83 45 344 336 Numurkah, Wunghnu 2,072 577 299 354 14 945 807 Picola 67 14 9 2 3 19 15 Pyalong 153 41 18 3 5 49 35 Rushworth 572 162 91 53 32 247 209 Seymour, Avenel, 3,653 916 505 493 197 1,606 1,306 Mangalore, Tallarook Shepparton, Congupna, Mooroopna, Tallygaroopna, 20,440 6,176 2,594 4,143 657 10,976 9,866 Toolamba Stanhope 240 75 64 11 9 94 75 Tatura 1,775 551 204 1,536 37 2,123 2,049 Thornton 104 25 17 14 7 46 43 Tongala 557 158 93 452 70 680 573 Upper Delatite, Sawmill 545 50 14 17 15 82 59 Settlement, Merrijig Woods Point 67 7 13 1 1 9 13 Yea, Molesworth 733 150 122 57 38 244 210 TOTAL 52,061 13,555 6,762 10,465 2,201 26,220 23,390 * Average Annual Consumption 2009/10 - 2012/13 p36 | GVW ANNUAL REPORT 2012|2013
Water Consumption Major Water Customers
During 2012/13, Goulburn Valley Water had 23 The Corporation’s largest water users are the food customers that used 50 or more megalitres of processing industries and Goulburn Valley Water water at any one site (four more customers than in continues to work closely with these customers to 2011/12) with four customers using more than reduce the water used per unit of production. 200 ML.
Customer by volume range 2012/13
Volumetric Range - ML per year Number of Customers
Equal to or greater than 200 ML and less than 300 ML 0
Equal to or greater than 300 ML and less than 400 ML 0
Equal to or greater than 400 ML and less than 500 ML 0
Equal to or greater than 500 ML and less than 750 ML 1
Equal to or greater than 750 ML and less than 1,000 ML 0
Greater than 1,000 ML 3
Total Number of Customers 4
Major customers participating in water conservation programs in 2012/13 developed an Environment and Resource Efficiency Plan (EREP) in 2011/12. These customers are continuing to implement their plans even though the Environmental Protection Authority (EPA) announced that the EREP program was voluntary for Victorian businesses in February 2013.
Major customer participation in water conservation programs
Customer Water Conservation Program
SPC Ardmona Ltd (Shepparton) Yes, currently implementing EREP
Tatura Milk Industries Ltd Yes, currently implementing EREP
Murray Goulburn Co-op Pty Ltd Yes, currently implementing EREP
Campbell Australasia Pty Ltd (Shepparton) Yes, currently implementing EREP
Note: Customers listed use equal to or greater than 200 ML of water
Corporate Water Consumption
The Shepparton Regional Administration Office used 428 kL of water in 2012/13. This was below the annual target of 1,070 kL, and the result for 2011/12 (1,708 kL).
The water consumption equates to 5.22 kL per Full Time Equivalent (FTE) employee and 276 litres per square metre of office space. GVW ANNUAL REPORT 2012|2013 | p37
Assets & Infrastructure assets
Goulburn Valley Water operates 1,793 km of water The Asset Register and maintenance management mains, 1,232 km of gravity and pressure sewers, system, along with consultation with District 322 pumping stations, 123 tanks and reservoirs, Managers and Operations and Maintenance 37 water treatment plants and 26 wastewater staff, are used to identify water mains that are management facilities. Details of these facilities in need of replacement and to formulate a are recorded in the Asset Register which is also sewer inspection program. During the year the the primary asset database for management of the Corporation continued with the implementation of maintenance and operation of the Corporation’s new asset management software that will improve assets. functionality for both the Asset Register and asset management.
Water Main Replacements
Goulburn Valley Water identifies water mains To enhance the Corporation’s ability to manage and for replacement by their failure history, the optimise the replacement of water mains, Goulburn consequence of failure and pipe material. During Valley Water commenced working with the CSIRO 2012/13 the Corporation replaced 3,881 m of water in 2012/13 to implement PARMS software. The mains in Broadford, Kilmore, Mansfield, Kyabram, software was developed by the CSIRO with the Numurkah, Marysville, Rushworth and Euroa. water industry for this purpose.
Sewer Main Inspection and Rehabilitation
During 2012/13 approximately 25 km of sewer Based on the CCTV inspections, 4 km of sewer mains were cleaned and inspected by Closed mains were relined in Tatura, Seymour, Kilmore, Circuit Television (CCTV) in Broadford, Cobram, Cobram and Shepparton during 2012/13. Kyabram, Mooroopna, Shepparton, Numurkah, Seymour, Tongala and Wandong. Based on these inspections sewers requiring further maintenance or relining are identified and programed for further action to ensure the ongoing operational integrity of the sewer network. asset protection
Major activities completed or initiated in the past • Ongoing development of the Pump Inspection year as part of Goulburn Valley Water’s Asset Program and preparation for the letting of a new Management Improvement Plan include: contract with enhanced specifications;
• Specialist Condition Assessments of low • Further refinement of site specifications and condition and high criticality water tanks revised cost estimates for the replacement of and towers identified in the Corporate-wide bulk flow meters; assessment conducted in 2011/12; p38 | GVW ANNUAL REPORT 2012|2013
Assets & Infrastructure asset protection
• The adoption of the Sewer Odour Management Major initiatives planned for 2013/14 include: Strategy and the subsequent logging and • Completing the Criticality Reviews for the monitoring of sewer odours as well as Above-Ground asset classes including the improvement works at priority sites; remaining water treatment plants and all of the • The endorsement of criticality framework for the wastewater management facilities; assessment of all asset categories endorsed; • Reviewing the Asset Management Priority • The commencement of a Corporation wide Decision Manual; condition assessment of earthen storages using • Commencing a review of dam safety emergency a criticality and risk-based approach; plans for significant and high consequence • The completion of the four yearly, Water dams; Services Association of Australia Asset • Specialist criticality assessment of high priority Management Benchmarking Exercise and follow earthen storages; and up of the improvement opportunities identified;
• The scheduling of the remainder of the high • The endorsement of the Asset Management priority sewer odour works as well as ongoing Policy, Framework and Strategy including the monitoring and data collection. Asset Maintenance Strategy; and
• The completion of 22 Site Operator Reviews, 4 Septage Receival Site Reviews and 12 Technical Reviews of Operations and Maintenance Manuals.
development
In accordance with Goulburn Valley Water’s the Corporation’s region. The table below indicates statutory obligations and policies, new the distribution of these lots across the ten major developments in the region are provided with growth areas and compares 2012/13 results with reticulated water and sewerage services at the time those for the previous five years. The dominant of development wherever it is possible to do so. growth area continues to be Shepparton which During 2012/13, 642 new lots were created across accounts for 32% of all new lots followed closely by Kilmore with 27% of all new lots.
Development of new lots (top ten major growth areas) GROWTH AREA 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Broadford 21 16 58 35 44 36 Cobram 66 28 30 10 13 54 Euroa 19 4 4 23 29 12 Kilmore 106 133 57 126 64 174 Mansfield 43 55 32 96 39 33 Merrijig 2 0 0 9 0 16 Mooroopna 46 13 85 21 5 20 Nagambie 38 2 45 20 135 13 Shepparton 517 349 220 291 374 203 Tatura 4 8 15 60 22 18 Total 862 608 546 691 725 579 GVW ANNUAL REPORT 2012|2013 | p39
Customers & Community Customer Reference / Advisory Committees
Stakeholder engagement is an integral part of of topics including Water Plan 3 (2013-18), pricing Goulburn Valley Water’s business activities. tariffs and water rebate programs. The members of the current committee bring a diverse range of To enhance the Corporation’s commitment skills and experience in business and community to better understand its customers and the involvement to the Corporation. community, Goulburn Valley Water established a Corporate Community Reference Committee In addition to the CCRC, stakeholder engagement (CCRC) in August 2008. During 2012/13 the was also undertaken for a variety of capital works committee met four times with members providing projects. important feedback to the Corporation on a range
Customer Service
Goulburn Valley Water has two main customer Technical Customer Service service teams, the Customer Accounts and Service The Technical Customer Service team consists team and the Technical Customer Service team. of three groups: the 24 hour Customer Service These teams are trained to assist customers Centre team, Property Services team and Land and make the customer experience with the Development team. Corporation simple and positive.
24 hour Customer Services Customer Accounts and Services Goulburn Valley Water operates a 24 hour, 7 day The Customer Accounts and Service team is a week, Customer Service Centre, receiving all responsible for issuing accurate accounts, managing customer calls related to service difficulties and tenancies and account collection activities. In faults. Each call is logged into the Corporation’s 2012/13 the team continued to deliver a high level customer service register and dispatched to the of customer service and met performance targets in relevant district office for attention. The actions the Corporation’s Water Plan. This performance was taken and outcomes of the service request are also also reflected in high levels of customer satisfaction recorded. recorded in the annual customer satisfaction survey. In 2012/13 the team received an average of 17 calls In 2012/13 the Customer Accounts and Services per day, similar to 2011/12. team distributed 204,000 bills, compared to Property Services 203,000 in 2011/12. On average they received 124 The Property Services team assists customers with calls from customers daily (up from 113) and dealt asset locations, connections to water and sewer, with a wide range of enquiries, such as change and other technical property servicing enquiries. of address, billing and metering enquiries, and This can include supplying properties located inside payment assistance. and outside water and sewerage districts, structures over Corporation works and metering enquiries.
During 2012/13 the Property Services team processed 645 new water connections and handled 30 customer calls per day, compared to 791 new connections and 37 per day in 2011/12. p40 | GVW ANNUAL REPORT 2012|2013
Customers & Community Customer Service
Land Development period, the assets are formally transferred to the The Land Development team works with Corporation which then assumes ongoing operation consultants and property developers to provide and maintenance responsibility. water and sewerage assets for new subdivisions. In 2012/13 the Land Development team completed The land developer engages a consultant to design new water and sewer works for 40 projects and construct the assets to the Corporation’s involving the creation of 373 new allotments. A standard. In addition to meeting the costs of further 269 allotments were created by subdividing servicing the subdivision, the developer is required properties already serviced by existing Goulburn to pay new customer contributions towards the Valley Water infrastructure. This compares to major water and sewerage assets that service 56 projects, resulting in 586 new allotments, the property. At the end of the maintenance with a further 311 created by utilising existing infrastructure during 2011/12.
Management of Social and Economic Impacts
Goulburn Valley Water has a hardship policy in During 2012/13, 215 customers accessed place to assist customers experiencing financial Government assistance programs and 191 hardship. The Corporation’s Customer Accounts customers accessed Goulburn Valley Water’s and Service team is trained to encourage customers internal assistance program. The team also to discuss their personal circumstances surrounding provided a range of payment options to assist non-payment of accounts. The team can then customers in working out the best option for determine if there are any Government or internal their situation. The hardship policy is reviewed assistance programs the customers may qualify for and updated annually and can be viewed on the to assist them with their financial hardship. Corporation’s website. GVW ANNUAL REPORT 2012|2013 | p41
Community Service Obligations
Goulburn Valley Water is required to provide a range of concessions and rebates on behalf of the Victorian Government. In 2012/13 the combined total of these concessions and rebates was $4.193 m.
Community Service Obligations
Type 2010/11 2011/12 2012/13
Pension concessions $3,107,593 $3,621,257 $3,823,207
Water & Sewerage Rebate Scheme $266,404 $276,443 $289,733
Utility Relief Grant Scheme $37,838 $25,568 $79,441
Life support machines $951 $684 $643
Hardship relief grants $0 $0 $0
Total $3,412,786 $3,923,952 $4,193,024
Energy and Water Ombudsman (Victoria)
The Energy and Water Ombudsman (Victoria) (EWOV) is an independent body, funded by member utilities, to assist customers who are dissatisfied with some aspect of service or interaction with utilities around the state. The number of cases closed by EWOV for 2012/13 for Goulburn Valley Water compared with all relevant water industry cases is set out in the table below.
Number of EWOV contacts 2012/13
Goulburn Valley Water All Relevant Industry Type of Contact 2012/13 Cases 2012/13
Enquiries 1 101
C1 - Unassisted Referral 7 534
C2 - Assisted Referral 22 1,276
Real Time Resolution 1 96
C3 - Complaint Stage 1 1 79
C4 - Complaint Stage 2 109
Complaint Stage 3 10
TOTAL 32 2,205 p42 | GVW ANNUAL REPORT 2012|2013
Business Performance & Compliance 5 year PERFORMANCE
Summary of Financial Results
2008/09 2009/10 2010/11 2011/12 2012/13 Financial Result ($,000) ($,000) ($,000) ($,000) ($,000)
Core Business Revenue 49,642 53,467 54,219 62,751 69,875
Government Contributions 0 0 563 0 1,230
Other Revenue 5,230 2,630 2,460 2,053 2,577
Total Revenue 54,872 56,097 57,242 64,804 73,682
Operating Expenditure 32,899 32,556 34,411 38,701 38,997
Depreciation Expenditure 13,683 13,824 14,668 24,480 23,376
Finance Costs 3,991 5,031 5,977 6,525 6,822
Environmental Contribution 1,915 1,915 1,915 1,915 1,915
Total Expenditure 52,488 53,326 56,971 71,621 71,110
Net Result Before Tax 2,384 2,771 271 -6,817 2,572
Current Assets 16,892 19,187 19,855 25,670 27,379
Non-Current Assets 524,708 547,159 791,407 799,314 764,712
Total Assets 541,600 566,346 811,262 824,984 792,091
Current Liabilities 16,850 15,901 14,294 25,327 23,469
Non-Current Liabilities 95,411 118,788 202,372 209,820 176,832
Total Liabilities 112,261 134,689 216,666 235,147 200,301
Net Cash Flows from Operations 10,383 13,218 12,003 14,967 20,474
Payments for Property, Plant & 28,840 30,312 20,073 23,283 19,354 Equipment (incl Infrastructure)
Summary of Financial Performance
Performance Indicator 2008/09 2009/10 20010/11 2011/12 2012/13
Internal Financing Ratio 36.00% 43.60% 59.80% 64.30% 105.80%
Gearing Ratio 11.70% 14.30% 11.10% 12.20% 12.80%
Interest Cover (EBIT) (times) 1.70 1.60 1.00 -0.10 1.40
Interest Cover (Cash) (times) 4.30 4.00 3.20 3.50 4.30
Return on Assets 1.10% 1.30% 0.80% -0.10% 1.10%
Return on Equity 0.40% 0.50% 0.00% -0.80% 0.30% GVW ANNUAL REPORT 2012|2013 | p43
BUSINESS PERFORMANCE & Compliance
Significant Changes Disclosure of Major Contracts
The Corporation has recorded an operating profit During 2012/13 the Corporation did not enter into after tax of $1.795 million. This favourable result is any contracts valued over $10 million. Eighteen attributed to water sales revenue being more than contracts were entered into with a value of less expected, due to a very dry summer period, as well than $10 million. as unbudgeted Government contributions received to assist with fluoridation works. Freedom of Information Act 1982
Goulburn Valley Water is considered to be a Capital Works “Government Agency” under the terms of the Goulburn Valley Water continued its significant Freedom of Information Act 1982. Accordingly, it is capital works program in 2012/13, with expenditure required to comply with procedures that have been of $19.4 million on 121 projects. This expenditure prescribed under which members of the public included capital works in response to upgrading may gain access to information held by agencies. water supply facilities at a number of townships, A decision to release information is made by an and the ongoing renewal of SCADA and reticulation Authorised Officer and an application fee of $25.70 networks. applies.
The following officers have been appointed in Consultancies accordance with the provisions of the FOI: A number of consultants were engaged to carry • Principal Officer: Managing Director out specific tasks during the year. There were two consultancies costing over $10,000 engaged during • Authorised Officer: General Manager - 2012/13. Details of these individual consultancies Corporate Services are listed below. During 2012/13 no engagements of less than $10,000 were entered into. In this reporting period there were no written requests for information under the FOI. There were no hearings or appeals in relation to FOI matters for 2012/13.
Consultancies Total Approved Expenditure Future Project Fee 2012/13 Expenditure Consultant Purpose of Consultancy (ex GST) (ex GST) (ex GST) $'000 $'000 $'000 Marsden Jacob Associates Water Plan 3 Review 30 13 0 Pty Ltd Michael Entwisle & Information Systems Disaster 11 11 0 Associates Recovery Plan validation TOTAL 41 24 0 p44 | GVW ANNUAL REPORT 2012|2013
Business Performance & Compliance BUSINESS PERFORMANCE & Compliance
Government Contributions A replacement risk database was implemented which allows for improved recording and Government contributions from the Department management of risks and their treatment actions of Health totalling $1.23 million were received across the Corporation. Risks are reviewed by risk in 2012/13. This contribution is in support of the owners quarterly with higher level risks reviewed ongoing fluoridation project in Cobram and for the for risk trend and the status of treatments by senior proposed fluoridation project in Kilmore. management.
Building Act 1993 As a regional essential service provider, the Corporation is represented on a number of During the reporting period the Corporation met emergency planning, response and recovery relevant compliance provisions of the Building Act committees. Representatives also participate in 1993 in building and maintenance activities. local municipal emergency planning committee meetings which are held regularly within each of Information Prepared and the seven local government areas serviced by the Available Corporation.
The information listed in Appendix 1 of Financial In May 2013 the Corporation conducted its annual Reporting Direction 15B of the Financial security exercise with representatives from the Management Act 1994, is held at Goulburn Department of Environment and Primary Industries Valley Water’s office in Fryers St. Shepparton and (DEPI) and Victoria Police in attendance. The is available on request to the relevant Minister, exercise is an obligation under the Terrorism Members of Parliament or the public, subject to the (Community Protection) Act 2003 and examines the FOI and the Information Privacy Act 2000. Corporation’s preparedness for a security incident and testing of its emergency response plans and National Competition Policy processes.
Neutrality is a guiding principle of the National Goulburn Valley Water continued to develop Competition Policy. It requires that Government its planning for emergencies through ongoing owned businesses should compete with private training of employees in the Australasian Inter- sector businesses on the same footing. Goulburn service Incident Management System. A schedule Valley Water has operated in a manner that meets of emergency exercises has been developed to the National Competition Policy compliance facilitate preparedness at the operational level. requirements. Each of the Corporation’s four districts participates in up to three exercises annually which test emergency procedures and response arrangements Risk and Emergency Management to a range of emergency scenarios. Goulburn Valley Water has a robust risk management system developed and improved over many years of application. For Corporate and Strategic Risks, a cost based and loss of life quantitative “Monte Carlo” analysis methodology is used. This allows comparison between risks and informs investment decisions on mitigation strategies. Corporate risk workshops which identify, assess and evaluate higher level corporate risks are carried out three yearly. Workshops involving senior managers, board directors and subject matter experts were carried out in May 2013. GVW ANNUAL REPORT 2012|2013 | p45
Risk Management Compliance The new law enables people to make disclosures Attestation about improper conduct within the public sector without fear of reprisal. It aims to ensure openness I, Mark Lawlor, certify that Goulburn Valley Water and accountability by encouraging people to make has risk management processes in place consistent disclosures and protecting them when they do. A with the Australian/New Zealand Risk Management protected disclosure is a complaint of corrupt or Standard and an internal control system is in place improper conduct by a public officer or a public that enables the executive to understand, manage body. Goulburn Valley Water is a “public body” for and satisfactorily control risk exposures. the purposes of the Protected Disclosure Act 2012.
The audit committee verifies this assurance and that Goulburn Valley Water has established procedures the risk profile of Goulburn Valley Water has been for the protection of persons from detrimental critically reviewed within the last 12 months. action in reprisal for making a protected disclosure about GVW or its employees. You can access GVW’s procedures on the Corporation’s website. Disclosures of improper conduct or detrimental action by Goulburn Valley Water or its employees may be made by contacting DEPI or IBAC on the contact details below. Please note that GVW is not able to receive protected disclosures.
M. G. Lawlor Department of Environment and Primary Industries Chairman Jennifer Berensen, Senior Advisor, Privacy & 27 August 2013 Ombudsman Department of Environment and Primary Industries Address: PO Box 500, East Melbourne Vic 3002 Victorian Industry Participation Phone: 03 9637 8697 Policy (VIPP) Website: www.depi.vic.gov.au
Goulburn Valley Water has implemented Independent Broad-Based Anti-Corruption procedures in accordance with Section 9 of the Commission Victoria Victorian Industry Participation Policy (VIPP) Act Address: Level 1, North Tower, 459 Collins Street, 2003. The VIPP forms part of Goulburn Valley Melbourne Victoria 3001. Water’s consultancy handbook which is issued Mail: IBAC, GPO Box 24234, Melbourne VIC 3000 to all consultants undertaking projects for the Internet: www.ibac.vic.gov.au Corporation. The handbook requires consultants Phone: 1300 735 135 to ensure the VIPP forms part of all tender Email: see the website above for the secure documentation. There were no contracts that were email disclosure process, which also provides for entered into by Goulburn Valley Water where VIPP anonymous disclosures. applied. During 2012/13 there were no disclosures made under the Whistleblowers Protection Act 2001 (up Protected Disclosures Act 2012 to February 9 2013) or the Protected Disclosures On 10 February 2013, the Protected Disclosure Act Act 2012 (February 10 2013 – June 30 2013). 2012 replaced the Whistleblowers Protection Act 2001. As the change of legislation occurred midway through the 2012/13 year, this disclosure complies with the requirements of the Protected Disclosure Act 2012 and section 104 of the Whistleblowers Protection Act 2001, for each of the relevant time periods. p46 | GVW ANNUAL REPORT 2012|2013
Statement of Performance financial performance
Financial Performance Indicators 2012/13
Performance 2011/12 2012/13 2012/13 Variance indicator NOTES Result Result Target (%)
The Internal Financing Ratio is favourable year over year and to budget because in 2012/13 Water Volumetric sales have increased due to a very dry F1 Internal Financing Ratio 64.3% 105.8% 98.0% 8.0% summer, and the Corporation received unbudgeted Government Contributions of $1.230m for fluoridation works. F2 Gearing Ratio 12.2% 12.8% 12.7% 0.8% The Interest Cover (EBIT) Ratio is favourable year over year and to budget as Earnings Before Interest and Tax is above budget due to revenue being over budget. F3 Interest Cover (EBIT) -0.1 1.4 1.0 40% Water Volumetric sales are above budget due to a very dry summer and the Corporation received unbudgeted Government Contributions of $1.230m for fluoridation works. The Interest Cover (Cash) Ratio is favourable year over year and to budget as Cash from Operations is above budget due to receipts from revenue being over budget. F4 Interest Cover (Cash) 3.5 4.3 4.0 7.5% Water Volumetric sales are above budget due to a very dry summer and the Corporation received unbudgeted Government Contributions of $1.230m for fluoridation works. GVW ANNUAL REPORT 2012|2013 | p47
Statement of Performance service & ENVIRONMENTAL performance
Service and Environmental Performance Indicators 2012/13 (Whole of Business)
2011/12 2012/13 2012/13 variance Indicator NOTES result result target (%)
S1 Water Supply Interruptions The Corporation’s ongoing water main Number of customers receiving replacement program has continued to S1.1 (5) unplanned interruptions in the be effective in eliminating water mains 0 0 85 100% year that may have resulted in more than five unplanned interruptions in a year. S2 Interruption time indicators The higher result in 2012/13 is primarily Average duration of unplanned attributed to three interruptions in the S2.1 water supply interruptions (in Seymour township, two of which were 97 128 100 28% minutes) associated with the failure of a main constructed within a VicRoads bridge. S3 Restoration of water supply Unplanned water supply S3.1 interruptions restored within (5) 100% 97% 98% 1% hours S4 Reliability of sewerage collection services In 2012/13 the Corporation experienced Sewer spills from reticulation and a slight increase in priority spills, which S4.1 35 37 * n/a branch sewers (priority 1 and 2) comprised a doubling in the priority 1 and a reduction in priority 2 spills. S5 Containment of sewer spillages Sewerage spills contained within S5.1 100% 97% 100% -3% (5) hours S6 Customer complaints indicators Water quality complaints were lower compared to 2011/12 and target as we Water quality complaints per 1000 S6.1 did not experience the flooding and 5.05 3.3 5.2 -37% customers associated poor raw water quality as in the previous year. Sewer complaints were down in 2012/13 with the Corporation only experiencing three complaints compared with eight in 2011/12. Sewerage service quality and S6.2 reliability complaints per 1000 The implementation of the Corporation’s 0.17 0.06 * n/a customers Sewer Management Strategy, which includes planned maintenance and sewer renewal, continues to assist the Corporation in reducing the number of blockages. Billing complaints returned to pre- Billing complaints per 1000 2011/12 numbers following last year’s S6.3 0.93 0.58 * n/a customers 0.93 result which was high due to a billing printing error. The Corporation has continued its sewer odour management strategy Sewage odours complaints per and performance is again well within S6.4 0.52 0.61 1.0 -39% 1000 customers the target. The Corporation continues to actively seek improved sewer odour performance.
* No targets set for the 2012/13 Corporate Plan p48 | GVW ANNUAL REPORT 2012|2013
Statement of Performance service & ENVIRONMENTAL performance
Service and Environmental Performance Indicators 2012/13 (Whole of Business for EPA corporate licence holders)
2011/12 2012/13 2012/13 variance Indicator NOTES result result target (%)
E1 Reuse Indicators
E1.1 Effluent Reuse (Volume) 79% 80% * n/a The result was significantly higher than the previous year due to more favourable E1.2 Biosolids Reuse (Dry Mass) 64% 298% 100% 198% weather conditions that have allowed much greater reuse opportunities. E2 Sewerage Treatment Standards Number of analyses complying E2.1 with licence agreements as % of 100% 100% 100% 0% samples
* No targets set for the 2012/13 Corporate Plan GVW ANNUAL REPORT 2012|2013 | p49
Statement of Performance service & ENVIRONMENTAL performance Statutory Certification
In our opinion, the accompanying Statement of Performance of Goulburn Valley Region Water Corporation in respect of the year ended 30 June 2013 is presented fairly in accordance with the Financial Management Act 1994.
The Statement outlines the relevant performance indicators as determined by the responsible Minister, the actual results achieved for the year against pre-determined performance targets, 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 Statement to be misleading or inaccurate.
M. G. Lawlor P. A. Quinn Chairman Managing Director
Date: 27 August, 2013 Date: 27 August, 2013
p52 | GVW ANNUAL REPORT 2012|2013 GVW ANNUAL REPORT 2012|2013 | p53
Financial Statements year ended 30 june, 2013
Table of contents
Comprehensive Operating Statement 54
Balance Sheet 55
Statement of Changes in Equity 56
Cash Flow Statement 57
Notes to the Financial Statements 58 - 94
Certification of Financial Statements 95
Independent Audit Report 96 - 97
p54 | GVW ANNUAL REPORT 2012|2013
Financial Statements
Comprehensive Operating Statement for the year ended 30 June, 2013 2013 2012 Note $’000 $’000
Revenue from Operating Activities Fees and Charges 3 64,703 56,173 Developer and Landowner Contributions 4 5,172 6,578 Government Contributions 5 1,230 - Interest Revenue 6 519 449 Other Revenue 7 2,058 1,604 Total Revenue 73,682 64,804
Expenses from Operating Activities Operating Expenses 8 50,692 50,469 Administration Expenses 9 11,681 12,712 Environmental Contribution 1(c) 1,915 1,915 Borrowing Costs 10 6,822 6,525 Total Expenses 71,110 71,621
Profit / (Loss) before Income Tax 2,572 (6,817) Income Tax Expense / (Credit) 11 777 (2,058) Profit / (Loss) for the Year 1,795 (4,759)
Other Comprehensive Income Net gain on revaluation adjustment of Property, Plant and 1(m), 16 226 - Equipment Income Tax relating to components of Other Comprehensive 1(g), 11(e) (68) - Income Other Comprehensive Income for the period, net of Income Tax 158 - Total Comprehensive Income for the period 1,953 (4,759)
The above Comprehensive Operating Statement should be read in conjunction with the accompanying notes. GVW ANNUAL REPORT 2012|2013 | p55
Financial Statements
Balance Sheet as at 30 June, 2013 2013 2012 Note $’000 $’000
ASSETS Current Assets Cash and Cash Equivalents 12 9,453 7,754 Receivables 13 15,285 15,153 Prepayments 1(j) 555 412 Inventories 14 1,113 1,140 Biological Assets 15 973 1,211 Total Current Assets 27,379 25,670
Non-Current Assets Receivables 13 2,989 3,667 Property, Plant and Equipment 16 758,402 760,437 Deferred Tax Assets 11(d) 3,321 3,204 Total Non-Current Assets 764,712 767,308 Total Assets 792,091 792,978
LIABILITIES Current Liabilities Payables 17 8,099 12,082 Interest Bearing Liabilities 18 11,000 9,000 Employee Benefits 19 4,370 4,245 Total Current Liabilities 23,469 25,327
Non-Current Liabilities Interest Bearing Liabilities 18 90,000 92,000 Employee Benefits 19 471 415 Deferred Tax Liabilities 11(e) 86,361 85,399 Total Non-Current Liabilities 176,832 177,814 Total Liabilities 200,301 203,141 Net Assets 591,790 589,837
EQUITY Contributed Capital 20 234,704 234,704 Reserves 21 186,168 186,010 Retained Profits 22 170,918 169,123 Total Equity 591,790 589,837
The above Balance Sheet should be read in conjunction with the accompanying notes. p56 | GVW ANNUAL REPORT 2012|2013
Financial Statements
Statement of Changes in Equity for the year ended 30 June, 2013
Contributions Accumulated by owners Reserves funds Total Note $’000 $’000 $’000 $’000
Balance at 1 July 2011 234,704 186,010 173,882 594,596 Total Comprehensive Income for the year as - - (4,759) (4,759) reported in the 2012 financial report Balance at 30 June 2012 234,704 186,010 169,123 589,837
Total Comprehensive Income for the year - 158 1,795 1,953 Balance at 30 June 2013 234,704 186,168 170,918 591,790
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes. GVW ANNUAL REPORT 2012|2013 | p57
Financial Statements Financial Statements
Cash Flow Statement for the year ended 30 June, 2013 2013 2012 Note $’000 $’000
Cash Flows from Operating Activities Receipts from Customers (inclusive of goods and services tax) 72,597 62,442 Grants from Government Departments 1,230 - Payments to Suppliers and Employees (inclusive of goods and services tax) (47,095) (41,587) Interest and Bill Discounts Received 512 452 Interest and Other Costs of Finance Paid (6,770) (6,340) Net Cash Inflow from Operating Activities 23 20,474 14,967
Cash Flows from Investing Activities Proceeds from Sale of Property, Plant and Equipment 579 730 Payments for Property, Plant and Equipment (19,354) (23,283) Net Cash (Outflow) from Investing Activities (18,775) (22,553)
Cash Flows from Financing Activities Proceeds from Borrowings 9,000 14,000 Repayment of Borrowings (9,000) (3,000) Net Cash Inflow from Financing Activities - 11,000
Net Increase in Cash held 1,699 3,414 Cash at the beginning of the Financial Year 7,754 4,340 Cash at the end of the Financial Year 12 9,453 7,754
Financing arrangements 18
The above Cash Flow Statement should be read in conjunction with the accompanying notes. p58 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
1. summary of Significant Accounting Policies
1(a) Basis of Accounting
General The financial report includes separate financial statements for Goulburn Valley Region Water Corporation as an individual reporting entity. This financial report is a general purpose financial report that consists of a Comprehensive Operating Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes accompanying these statements. The general purpose financial report has been prepared in accordance with Australian Accounting Standards (AAS’s), Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board, and the requirements of the Financial Management Act 1994 and applicable Ministerial Directions. In particular, they are presented in a manner consistent with the requirements of the AASB 1049 Whole of Government and General Government Sector Financial Reporting.
Goulburn Valley Region Water Corporation is a not for-profit entity for the purpose of preparing the financial statements. Where appropriate, those AAS’s paragraphs applicable to not-for-profit entities have been applied.
This financial report has been prepared on accrual and going concern bases. The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.
The Annual Financial Statements were authorised for issue by the Board on 27 August, 2013.
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 accord with current presentation and disclosure. In Note 11 Tax Losses previously appeared as a Deferred Tax Asset. Tax losses are now brought to account as an offset to the Deferred Tax Liability. There have been no other material changes to comparatives in this report.
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 statements are 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 the Corporation’s operational cycle – see 1(q) for a variation in relation to Employee Benefits.
Rounding Unless otherwise stated, amounts in the report have been rounded to the nearest thousand dollars.
Historical cost convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and certain classes of property, plant and equipment. GVW ANNUAL REPORT 2012|2013 | p59
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Accounting estimates The preparation of financial statements in conformity with AAS’s requires the use of certain accounting estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. It also requires management to exercise its judgement in the process of applying the entity’s accounting policies.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. It is expected that the estimates and assumptions adopted are not likely to cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
As described in Note 1(e), the Corporation reviews the estimated useful lives of property, plant and equipment each year. During the current year the Corporation determined that the useful lives of certain Infrastructure assets should be extended based on asset condition and performance. The financial effect of this reassessment, assuming the assets are held until the end of their estimated useful lives, is to decrease the depreciation expense in the current financial year by $1.630m and an equivalent amount for each of the next 4 years.
Financial statement presentation The entity has applied the revised AASB 101 Presentation of Financial Statements and AASB 1054 Australian Additional Disclosures which became effective for reporting periods beginning on or after 1 July, 2011.
1(b) revenue Recognition
Revenue is brought to account when services have been provided or when tariffs and fees have been levied.
Water and sewerage charges by measure are recognised as income when the service has been used. Meter reading is cyclical and, therefore, estimation is made at the end of each accounting period for water services used by customers and recorded on meters which have not yet been read.
Gains or losses on disposal of non-current assets are calculated as the difference between the gross proceeds on sale and their written down value.
Contributions for capital works from all sources are normally treated as revenue and are disclosed in the Notes to the Financial Statements as Landowner Contributions and Headworks Fees.
Landowner Contributions represent assets acquired at no cost to the Corporation. The fair values of these assets are recognised as revenue upon their acceptance by the Corporation for maintenance in perpetuity.
Developers are required to make fair and reasonable contributions towards the cost of developing the Corporation’s water supply distribution and sewerage disposal systems. These contributions are recorded as Headworks Fees and are recognised as revenue upon receipt.
Government grants are recognised as revenue on receipt or when the entity obtains control of the contribution and meets certain criteria as outlined by AASB 1004, whichever is the sooner, and disclosed in the Comprehensive Operating Statement as Government Grants and Contributions. However, grants received from the Victorian State Government for specific capital projects where the Minister for Finance and Peter Walsh, MLA have indicated the grant is in the nature of owners’ contributions are accounted for as Equity and disclosed in the Balance Sheet as Contributed Capital.
Interest and rental are recognised as revenue when earned or the service is provided. p60 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
1(c) Environmental Contribution
The Water Industry (Environmental Contributions) Act 2004 amended the Water Industry Act 1994 to make provision for Environmental Contributions to be paid by water supply Corporations.
The Act establishes an obligation for Corporations to pay into the consolidated fund annual contributions in accordance with a pre-established schedule of payments, which sets out the amounts payable by each Corporation. The purpose for the Environmental Contribution is set out in the Act, and the funds may be used for the purpose of funding initiatives that seek to promote the sustainable management of water or address water-related initiatives. This schedule of payments has been set for the period 1 July, 2012 to 30 June, 2016. This Environmental Contribution commitment for future periods has been included in Note 27 Capital and Other Commitments.
The Environmental Contributions are disclosed separately within expenses in the Comprehensive Operating Statement.
1(d) Borrowing Costs
Borrowing costs are recognised as an expense in the period in which they are incurred. Borrowing costs include interest on bank overdrafts, interest on borrowings and finance lease charges.
1(e) depreciation of Property, Plant and Equipment
All non-current physical assets with the exception of Land are depreciated using the straight line method to write off the cost or revalued amount of each item, net of residual values, over its estimated useful life to the Corporation. Where assets have separate identifiable components that have distinct useful lives and/or residual values, a separate depreciation rate is determined for each component. The estimated useful lives of each group of assets have been reviewed during the year, and adjustments made where required.
The estimated useful lives are listed below and are consistent with the prior year, unless otherwise stated:
• Buildings 30 to 50 years
• Infrastructure Assets 5 to 200 years
• Plant and Equipment 1 to 20 years
1(f) Leases
Operating Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Comprehensive Operating Statement on a straight-line basis over the period of the lease, in the periods in which they are incurred, as this represents the patterns of benefits derived from the leased assets. GVW ANNUAL REPORT 2012|2013 | p61
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
1(g) income Tax
The Corporation is subject to the National Tax Equivalent Regime (NTER), which is administered by the Australian Taxation Office.
The Income Tax expense or revenue for the period is the expected tax payable or receivable on the current period’s taxable income based on the current income tax rate of 30% adjusted by changes in Deferred Tax Assets and Liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred Tax Assets and Liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the Deferred Tax Asset or Liability. Deferred Tax Assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in Other Comprehensive Income or directly in Equity. In this case, the tax is also recognised in Other Comprehensive Income or directly in Equity, respectively.
1(h) Cash and Cash Equivalent Assets
Cash and Cash Equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and Bank Overdrafts. Bank Overdrafts are shown within Interest Bearing Liabilities on the Balance Sheet, but are included within Cash and Cash Equivalents for Cash Flow Statement presentation purposes.
1(i) Receivables
Receivables are recognised initially at fair value less allowance for impairment. Current Receivables are due for settlement no more than 28 days from the date of recognition for water, sewerage and trade waste receivables. Non- Current Receivables relate to trade waste customers for charges raised to meet the cost of extending our wastewater treatment and re-use facilities. These receivables are due for settlement by instalments over terms remaining of no more than 10 years. Commercial interest charges apply to outstanding balances.
Collectability of receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off. An allowance for impaired receivables is established when there is objective evidence that the Corporation will not be able to collect all amounts due according to the original terms of receivables. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amounts credited to the allowance are recognised as an expense in the Comprehensive Operating Statement.
1(j) Prepayments
Prepayments represent payments in advance of receipt of goods or services or that part of expenditure made in one accounting period covering a term extending beyond that period.
1(k) Inventories
Inventories consist of stores and materials used by the Corporation in construction, repairs and maintenance of works. Stores and materials are measured at the lower of cost and net realisable value. Costs are assigned to stores and materials on the basis of weighted average cost. p62 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
1(l) Biological Assets
Biological assets consist of Livestock held on the Corporation’s wastewater re-use facilities. Livestock is measured at net market value.
1(m) recognition and Measurement of Property, Plant and Equipment
Property, Plant and Equipment represent non-current physical assets comprising land, buildings, water and sewerage infrastructure, plant, equipment and motor vehicles, used by the Corporation in its operations. Items with a cost or value in excess of $1,000 and a useful life of more than one year are recognised as an asset. All other assets acquired are expensed.
Acquisition All non-current physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment in accordance with the requirements of Financial Reporting Direction (FRD) 103D. Cost is measured as the fair value of the assets at the date of exchange, plus costs directly attributable to the acquisition.
Where assets are constructed by the Corporation, the cost at which they are recorded includes an appropriate share of fixed and variable overheads. Assets acquired at no cost or for nominal consideration by the Corporation are recognised at fair value at the date of acquisition.
Repairs and Maintenance Routine maintenance, repair costs and minor renewal costs are expensed as incurred. Where the repair relates to the replacement of a component of an asset and the cost exceeds the capitalisation threshold, the cost is capitalised and depreciated.
Measurement of Non-Current Physical Assets Revaluations are conducted in accordance with FRD 103D. Scheduled revaluation is undertaken every five years with an annual assessment of fair value to determine if it is materially different to carrying value. If the difference to carrying value is greater than 10 per cent, a management revaluation is undertaken while a movement greater than 40 per cent will normally involve an Approved Valuer (usually the Valuer-General of Victoria) to perform detailed assessment of the fair value. If the movement in fair value since the last revaluation is less than or equal to 10 per cent, then no change is made to carrying amounts.
Water infrastructure assets are measured at fair value less accumulated depreciation and impairment in accordance with FRD 103D. These assets comprise substructures or underlying systems held to facilitate harvesting, storage, treatment and transfer of water to meet customer needs. They also include infrastructure assets that underlie sewage and drainage systems.
The initial fair value assessment for water infrastructure at 30 June, 2011 was undertaken with involvement from the Valuer-General of Victoria (VGV) and under the instructions of Department of Treasury and Finance (DTF). The assessment was performed on a portfolio basis for various categories of water infrastructure. Further details of the valuation exercise are provided in Note 16. GVW ANNUAL REPORT 2012|2013 | p63
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Carrying Amount Land and Buildings are measured at the amounts for which assets could be exchanged between knowledgeable, willing parties, in an arm’s length transaction. Infrastructure is measured at fair value. As there is no market-based evidence of Infrastructure valuation (as assets are rarely traded) depreciated replacement cost has been used as an estimate of fair value. Plant, equipment and vehicles are measured at fair value.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Comprehensive Operating Statement.
All assets must be tested for impairment on an annual basis. Such assets are tested to ascertain whether the carrying amounts exceed their recoverable amounts.
Revaluations Land, Buildings and Infrastructure are revalued with sufficient regularity to ensure that the carrying amount of each asset does not differ materially from its fair value. This revaluation process occurs at least every five years. Revaluation increments or decrements arise from differences between an asset’s carrying amount and fair value at the date of the valuation. These assets are subject to an interim fair value assessment during the five year revaluation cycle. The assessment of these assets is done by way of reference to industry prescribed and Valuer-General indexation factors.
Revaluation increments are credited directly to equity in the Revaluation Reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously recognised as an expense in determining profit or loss, the increment is recognised as revenue in determining profit or loss.
Revaluation decrements are recognised immediately as an expense in the net result, except that, to the extent that a credit balance exists in the revaluation reserve in respect of the same class of assets, they are debited to the revaluation reserve.
Revaluation increases and revaluation decreases relating to individual assets within a class of assets are offset against one another, within that class, but are not offset in respect of assets in different classes. Revaluation reserves are not transferred to accumulated funds on derecognition of the relevant asset.
Impairment of Assets Property, Plant and Equipment are assessed annually for indicators of impairment. If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying amount exceeds its recoverable amount, the difference is written-off by a charge to the Comprehensive Operating Statement except to the extent that the write-down can be debited to an Asset Revaluation Reserve amount applicable to that class of asset.
The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained 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 benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.
An impairment loss on a revalued asset is recognised directly against any revaluation reserve in respect of the same class of asset to the extent that the impairment loss does not exceed the amount in the revaluation reserve for that same class of asset.
A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading revaluation reserve. However, to the extent that an impairment loss on the same class of asset was previously recognised in the Comprehensive Operating Statement, a reversal of that impairment loss is also recognised in the Comprehensive Operating Statement. p64 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
1(n) Payables
Payables consist predominantly of Trade and Sundry Creditors. These amounts represent liabilities for goods and services provided to the Corporation prior to the end of the financial year, which are unpaid. The amounts are unsecured and are usually paid within 60 days of recognition.
1(o) interest Bearing Liabilities
Interest Bearing Liabilities are initially recognised at fair value, net of transaction costs incurred. They are subsequently measured at amortised cost. Any difference between the initial amount recognised (net of transaction costs) and the redemption amount is recognised in the Comprehensive Operating Statement over the period of the borrowings, using the effective interest method.
Interest Bearing Liabilities are classified as current liabilities unless the Corporation has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
1(p) Provisions
Provisions are recognised when the Corporation, as a result of a past event, has a legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
The amount recognised as a Provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
1(q) Employee Benefits
Wages and Salaries, Annual Leave and Sick Leave Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.
Provisions made in respect of Employee Benefits expected to be settled within 12 months are measured at their nominal values, using the remuneration rate expected to apply at the time of settlement.
Provisions made in respect of Employee Benefits which are not expected to be settled within 12 months are measured at the present value of estimated future cash outflows to be made by the Corporation, in respect of services provided by employees up to the reporting date. Regardless of the expected timing of settlements, provisions made in respect of Employee Benefits are classified as a current liability, unless there is an unconditional right to defer the settlement of the liability for at least 12 months after the reporting date, in which case it would be classified as a non-current liability.
Long Service Leave (LSL) Current Liability – unconditional LSL, representing 7 or more years of continuous service, is disclosed as a current liability even when the Corporation does not expect to settle the liability within 12 months because it does not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.
The components of this current LSL liability are measured at:
• Present value – component that the Corporation does not expect to settle within 12 months; and
• Nominal value – component that the Corporation expects to settle within 12 months. GVW ANNUAL REPORT 2012|2013 | p65
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Non-Current Liability – conditional LSL, representing less than 7 years of continuous service, is disclosed as a non- current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. Conditional LSL is measured at present value.
In calculating present value, consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Superannuation The amount charged to the Comprehensive Operating Statement in respect of superannuation represents the contributions made by the Corporation to the superannuation plan in respect to the current services of entity staff. Superannuation contributions are made to the plans based on the relevant rules of each plan and additional contributions are required to fund any unfunded liability in the defined benefit plan. Refer to Note 25.
Employee Benefit On-Costs Employee Benefit on-costs, including Payroll Tax and Workcover, are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.
Performance Payments Performance Payments for the Corporation’s Executive Officers are based on a percentage of the annual salary package provided under their contracts of employment. A liability is recognised and is measured as the aggregate of the amounts accrued under the terms of the contracts to balance date.
1(r) goods and Services Tax
Revenues, expenses and assets are recognised net of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense.
Receivables and Payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Balance Sheet.
Cash flows arising from Operating Activities are disclosed in the Cash Flow Statement on a gross basis – i.e. inclusive of GST. The GST component of cash flows arising from Investing and Financing activities which is recoverable or payable to the ATO is classified as operating cash flows.
1(s) financial Instruments
Recognition Financial instruments are initially measured at fair value, plus in 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 asset or liability. Subsequent to initial recognition, the financial instruments are measured as set out below:
Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets. Loans and receivables are included in Receivables in the Balance Sheet. Loans and receivables are recorded at amortised cost less impairment. p66 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.
Impairment At each reporting date, the Corporation assesses whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised in the Comprehensive Operating Statement.
1(t) Provision for Dividend
An obligation to pay a Dividend only arises after consultation between the Board, Peter Walsh, MLA and the Treasurer. Following this consultation a formal determination is made by the Treasurer. Although this process has not yet been completed at the reporting date, the Board’s preliminary Dividend estimate in respect of the current year is nil. Dividends are prescribed by the State Government in accordance with the Public Authorities (Dividend) Act 1983 based on a prescribed percentage of the previous year’s adjusted net profit.
1(u) new Accounting Standards and Interpretations issued that are not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2013 reporting period. As at 30 June 2013, the following standards and interpretations had been issued but were not mandatory for financial year ending 30 June 2013. The Corporation has not and does not intend to adopt these standards early.
Applicable for annual Standard / reporting periods Impact on financial Interpretation Summary beginning on or after statements
AASB 9 Financial AASB 9 Financial Instruments 1 January 2013 The entity is yet to assess its Instruments, AASB addresses the classification, full impact. However, initial 2010-7 Amendments to measurement and derecognition indications are that it may Australian Accounting of financial assets and financial affect the entity’s accounting Standards arising from liabilities. The standard is not for any available-for-sale AASB 9 (December applicable until 1 January 2015 financial assets, since AASB 9 2010) and AASB 2012-6 but is available for early adoption. only permits the recognition Amendments to Australian The derecoginition rules have been of fair value gains and losses Accounting Standards – transferred from AASB 139 Financial in other comprehensive Mandatory effective Date Instruments: Recognition and income if they relate to equity of AASB 9 and Transition Measurement and have not been investments that are not held Disclosures changed. The Corporation has not for trading. Fair value gains yet decided when to adopt and losses on available-for- AASB 9. sale debt investments, for example, will therefore have to be recognised directly in profit or loss. GVW ANNUAL REPORT 2012|2013 | p67
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Applicable for annual Standard / reporting periods Impact on financial Interpretation Summary beginning on or after statements
AASB 1053 Application On 30 June 2010 the AASB 1 July 2013 The entity is yet to assess its of Tiers of Australian officially introduced a revised full impact. The Corporation Accounting Standards, differential reporting framework in will apply amended standard AASB 2010-2 Australia. Under this framework, from 1 July 2013. Amendments to Australian a two-tier differential reporting Accounting Standards regime applies to all entities that arising from Reduced prepare general purpose financial Disclosure Requirements, statements. Tier 1 is the Australian AASB 2011-2 Accounting Standards as currently Amendments to Australian applied and Tier 2 is the reduced Accounting Standards disclosure regime which retains arising from the Trans- the recognition and measurement Tasman Convergence requirements of Australian Project – Reduced Accounting Standards but with Disclosure Requirements reduced disclosure requirements. and AASB 2011-6 AASB 2011-6 extends the relief for Amendments to Australian intermediate parent entities from Accounting Standards consolidation, equity accounting – Extending Relief from and proportionate consolidation to Consolidation, the Equity parent entities that report under tier Method and Proportionate 2, where the parent higher up the Consolidation – Reduced group is reporting either under tier Disclosure Requirements 1 or tier 2.
AASB 119 Employee These standards require the 1 July 2013 The Corporation will apply Benefits, AASB 2011-10 recognition of all remeasurements amended standard from 1 Amendments to Australian of defined benefit liabilities/ July 2013. Accounting Standards assets immediately in other arising from AASB 119 comprehensive income (removed and AASB 2011-11 of the so-called ‘corridor’ method) Amendments to AASB 119 and the calculation of a net interest (September 2011) arising expense or income by applying the from Reduced Disclosure discount rate to the net defined Requirements. benefit liability or asset.
AASB 2011-4 Removes the individual key 1 July 2013 This amendment is expected Amendments to Australian management personnel disclosure to have a limited impact. Accounting Standards to requirements from AASB 124 remove Individual Key Related Party Disclosures, to Management Personnel achieve consistency with the Disclosure Requirements. international equivalent standard and remove a duplication of the requirements with the Corporation Act 2001.
The amendments cannot be adopted early. p68 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Applicable for annual Standard / reporting periods Impact on financial Interpretation Summary beginning on or after statements
AASB 13 Fair Value It explains how to measure fair 1 January 2013 The Corporation has yet Measurement and AASB value and aims to enhance fair value to determine which, if any, 2011-8 Amendments to disclosures. of its current measurement Australian Accounting techniques will have to Standards arising from change as a result of the new AASB 13 guidance. It is therefore 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 Corporation 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.
AASB 2013-1 This Standard removes the 1 July 2014 The impact of this Amendments to AASB requirements relating to the standard will depend on 1049 - Relocation of disclosure of budgetary information instructions provided by Budgetary Reporting from AASB 1049 (without DTF on its applicability Requirements substantive amendment). All to the Corporation. The budgetary reporting requirements Corporation will assess applicable to public sector entities its impact once DTF has are now located in a single, provided guidance on this topic-based, Standard AASB 1055 standard. Budgetary Reporting.
AASB 2012-11 The Standard makes various 1 July 2013 This amendment is expected Amendments to Australian editorial corrections to Australian to have a limited impact. Accounting Standards Accounting Standards – Reduced - Reduced Disclosure Disclosure Requirements (Tier Requirements and Other 2). These corrections ensure that Amendments the Standards reflect decisions of the AASB regarding the Tier 2 requirements. GVW ANNUAL REPORT 2012|2013 | p69
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Applicable for annual Standard / reporting periods Impact on financial Interpretation Summary beginning on or after statements
AASB 2012-7 This Standard adds to or amends 1 July 2013 The impact of this Amendments to Australian the Australian Accounting standard will depend on Accounting Standards Standards – Reduced Disclosure instructions provided by - Reduced Disclosure Requirements for AASB 7 Financial DTF on its applicability Requirements and Other Instruments: Disclosures, AASB to the Corporation. The Amendments 12 Disclosure of Interests in Other Corporation will assess Entities, AASB 101 Presentation its impact once DTF has of Financial Statements and AASB provided guidance on this 127 Separate Financial Statements. standard. 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 This Standard applies to annual 1 July 2013 The Corporation does not Amendments to Australian reporting periods beginning on or plan to adopt these standards Accounting Standards – after 1 July 2013. Earlier application until their effective date. Fair Value Measurement is permitted for annual reporting The Corporation will adopt – Reduced Disclosure periods beginning on or after 1 the new standard from its Requirements [AASB 3, July 2009 but before 1 July 2013, operative date, which means AASB 7, AASB 13, AASB provided that the following are also that it will be applied in the 140 & AASB 141] adopted for the same period: annual reporting period (a) AASB 1053 Application of Tiers ending 30 June 2014. of Australian Accounting Standards; (b) AASB 13 Fair Value Measurement; and (c) AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13. p70 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Applicable for annual Standard / reporting periods Impact on financial Interpretation Summary beginning on or after statements
AASB 2012-2 This Standard amends the required 1 January 2013 The Corporation does not Amendments to Australian disclosures in AASB 7 to include plan to adopt this standard Accounting Standard - information that will enable users until its effective date. The Disclosures - Offsetting of an entity’s financial statements Corporation will adopt Financial Assets and to evaluate the effect or potential the new standard from its Financial Liabilities effect of netting arrangements, operative date, which means including rights of set-off associated that it will be applied in the with the entity’s recognised financial annual reporting period assets and recognised financial ending 30 June 2014. liabilities, on the entity’s financial position.
AASB 2012-3 This Standard adds application 1 January 2014 The Corporation does not Amendments to Australian guidance to AASB 132 to address plan to adopt this standard Accounting Standard - inconsistencies identified in until its effective date. The Offsetting Financial Assets applying some of the offsetting Corporation will adopt and Financial Liabilities criteria of AASB 132, including the new standard from its clarifying the meaning of “currently operative date, which means has a legally enforceable right that it will be applied in the of set-off” and that some gross annual reporting period settlement systems may be ending 30 June 2014. considered equivalent to net settlement. GVW ANNUAL REPORT 2012|2013 | p71
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Applicable for annual Standard / reporting periods Impact on financial Interpretation Summary beginning on or after statements
AASB 2012-4 This Standard adds an exception 1 July 2013 This amendment is expected Amendments to Australian to the retrospective application of to have a limited impact. Accounting Standard - Australian Accounting Standards Government Loans to require that first-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 These amendments are a 1 January 2013 This amendment is expected Amendments to Australian consequence of the annual to have a limited impact Accounting Standard improvements process, which arising from Annual provides a vehicle for making non- Improvements- 2009-2011 urgent but necessary amendments Cycle to Standards.
AASB 2012-9 This Standard makes an amendment 1 July 2013 This amendment is expected Amendments to AASB to Australian Accounting Standard to have a limited impact. 1048 arising from the AASB 1048 Interpretation of Withdrawal of Australian Standards. Interpretation 1039 The amendment arises from the withdrawal of Australian Interpretation 1039 Substantive Enactment of Major Tax Bills in Australia.. p72 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Applicable for annual Standard / reporting periods Impact on financial Interpretation Summary beginning on or after statements
AASB 1055 Budgetary AASB 1055 extends the scope 1 January, 2014 This Standard is not Reporting of budgetary reporting that is applicable as no budget currently applicable for the whole disclosure is required. of government and general government sector (GGS) to NFP entities within the GGS, provided that these entities present separate budget to the parliament. GVW ANNUAL REPORT 2012|2013 | p73
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2. Financial Risk Management Objectives and Policies
The Corporation’s activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and defined benefits superannuation fund risk (refer to Note 25). This note and Note 25 presents information about the Corporation’s exposure to each of these risks, and the objectives, policies and processes for measuring and managing risk.
The Corporation’s Board has the overall responsibility for the establishment and oversight of the Corporation’s risk management framework. The Corporation’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Corporation. The Corporation uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and other price risks and ageing analysis for credit.
Risk management is carried out by the Corporation’s Executive Management Team under policies approved by the Board of Directors. The Finance department identifies, evaluates and manages financial risks in line with the Corporation’s objectives. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments and investment of excess liquidity.
2.1 risk Exposures
The main risks the Corporation is exposed to through its financial instruments are as follows:
(a) Market risk Market risk is the risk that changes in market prices will affect the fair value or future cash flows of the Corporation’s financial instruments. Market risk comprises of interest rate risk and other price risk. The Corporation’s exposure to market risk is primarily through interest rate risk, with no exposure to foreign exchange risk and other price risks.
Objectives, policies and processes used to manage these risks are as follows:
(i) interest Rate Risk The Corporation’s exposure to market interest rates relates primarily to the Corporation’s long term borrowings and funds invested on the money market.
The interest rate on the Corporation’s long term borrowings is fixed and therefore the Corporation is not exposed to short term risk as a result of fluctuating interest rates. In addition, the maturity dates for these long term borrowings are staggered to further minimise interest rate risk in any given year.
The Corporation has minimal exposure to interest rate risk through its holding of cash assets and other financial assets. Other financial assets include non-current receivables. These receivables are of fixed terms with fixed interest rates.
(ii) foreign Exchange Risk Foreign exchange risk arises when financial instruments are recognised in a currency that is not the entity’s functional currency. The Corporation’s exposure to foreign exchange risk is nil with no instruments held in foreign currencies.
(iii) Other Price Risk The Corporation has no significant exposure to other price risk. p74 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Market Risk Sensitivity Analysis
The sensitivity analysis below has taken into consideration past performance, future expectations, economic forecasts and management’s knowledge and experience of the financial markets. The Corporation believes that a movement of 1.0% in interest rates is reasonable over the next 12 months;
Interest rate risk
Carrying ‑1.0% (100 bp) +1.0% (100 bp) amount Result Equity Result Equity 30 June 2013 $’000 $’000 $’000 $’000 $’000
Financial assets Cash and Cash Equivalents 9,453 (95) (95) 95 95 Receivables 18,274 - - - -
Financial liabilities Payables 8,099 - - - - Interest Bearing Liabilities 101,000 110 110 (110) (110) Total increase / (decrease) 15 15 (15) (15)
Interest rate risk
Carrying ‑1.0% (100 bp) +1.0% (100 bp) amount Result Equity Result Equity 30 June 2012 $’000 $’000 $’000 $’000 $’000
Financial assets Cash and Cash Equivalents 7,754 (78) (78) 78 78 Receivables 18,820 - - - -
Financial liabilities Payables 12,082 - - - - Interest Bearing Liabilities 101,000 90 90 (90) (90) Total increase / (decrease) 12 12 (12) (12)
Interest rate risk analysis is applied to Cash and Cash Equivalents and Interest Bearing Liabilities as they are exposed to market fluctuations. GVW ANNUAL REPORT 2012|2013 | p75
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
(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 cash and receivables and other financial assets.
The Corporation’s exposure to credit risk is influenced by the individual characteristics of each customer. The receivable 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. The Corporation has in place policies and procedures to assist customers who may be experiencing financial hardship and for the collection of overdue receivables.
An analysis of the ageing of the Corporation’s receivables at reporting date has been provided in Note 13.
(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 60 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 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 18.
2.2 fair Value Measurement
The carrying value of Current Receivables less impairment provision and of Payables is a reasonable approximation of their fair values due to their short-term nature.
The fair values of Non-Current Receivables and other financial liabilities for disclosure purposes is determined by discounting the future contractual cash flows at the current market interest rate that is available to the Corporation for similar financial instruments.
The carrying amounts and aggregate net fair values of financial assets and financial liabilities at reporting date have been provided in Note 24.
2013 2012 Note $’000 $’000
3. Fees and Charges
Tariffs and Charges 31,331 29,095 Metered Charges 28,180 21,953 Trade Waste Charges 4,471 4,313 Licences and Fees 721 812 64,703 56,173 p76 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000
4. Developer and Landowner Contributions
Landowner Contributions 4,122 5,039 Headworks Fees 1,050 1,539 5,172 6,578
5. Government Contributions
Capital Project Grant - Water 1,230 -
6. Interest Revenue
Interest on Investments 154 52 Interest on Tariffs, Schemes and Charges 365 397 519 449
7. other Revenue
Rent/Lease 570 473 Farm Revenue 1,133 832 Miscellaneous 355 299 2,058 1,604
8. operating Expenses
Purchase of Raw Water 1,034 949 Maintenance 9,778 8,173 Water Treatment 8,979 9,203 Sewage Treatment and Pumping 9,603 9,672 Depreciation Infrastructure 16 20,991 22,495 (Profit) / Loss on Sale or Disposal of Property, Plant and Equipment 307 (23) 50,692 50,469 GVW ANNUAL REPORT 2012|2013 | p77
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000
9. Administration Expenses
Employee Benefits 6,156 7,389 Bad Debts 13 61 51 Audit Fees - External Audit (Auditor-General, Victoria) 29 47 46 Internal Audit Services (Pitcher Partners) 52 61 Depreciation 16 2,385 1,985 Professional/Consulting Services 611 682 Office Expenses 781 846 Conservation and Consultation 344 358 Computer Expenses 671 657 Corporation and Associated Expenses 573 637 11,681 12,712
Employee Benefit Expenses Employee Benefit Expenses 17,304 19,561
These expenses have been allocated to: - Operating Expenses (i) 11,148 12,172 - Administration Expenses (i) 6,156 7,389 17,304 19,561
(i) Unfunded Superannuation Contribution Employee Benefit Expenses for 2012 include $3.064m being the Corporation’s contribution to the Vision Superannuation Scheme Defined Benefit Plan unfunded superannuation liability – Refer to Note 25.
10. Borrowing Costs
Interest on Bank Overdraft, Loans & Bank Charges 6,822 6,525 p78 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000 11. Income Tax Income tax expense for the financial year differs from the amount calculated on the net result. The differences are reconciled as follows:
a. income tax expense Current tax payable - - Deferred tax relating to temporary differences 777 (2,058) 777 (2,058)
Deferred income tax(revenue) expense included in income tax expense comprises: (Increase) in deferred tax assets 11(d) (117) (1,415) Increase / (Decrease) in deferred tax liabilities 11(e) 894 (643) 777 (2,058)
b. reconciliation of income tax expense to prima facie tax payable Profit before income tax expense 2,572 (6,817) Tax at the Australian tax rate of 30% (2012: 30%) 772 (2,045)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income: - Investment Allowance deductions - - - Sundry items 5 (13) Income tax expense 777 (2,058)
c. amounts recognised directly in Equity
Aggregate current and deferred tax arising in the reporting period and not recognised in profit for the year but directly debited to equity: Current Tax - - Net deferred tax – debited directly to Equity 11(e) (68) - (68) - GVW ANNUAL REPORT 2012|2013 | p79
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000 d. deferred Tax Assets
The balance comprises temporary differences attributable to: Amounts recognised in the Comprehensive Operating Statement: Impaired Receivables 30 30 Employee Benefits 1,452 1,398 Accrued Expenses 53 55 Depreciation 1,786 1,721 Total Deferred Tax Assets 3,321 3,204
Movements: Opening balance at 1 July 3,204 1,789 Charged to the Comprehensive Operating Statement 117 1,415 Closing balance at 30 June 3,321 3,204 e. deferred Tax Liabilities
The balance comprises temporary differences attributable to: Amounts recognised in the Comprehensive Operating Statement: Unearned Receivables 1,831 1,641 Depreciation 46,544 44,583 Tax Losses (33,263) (32,006) Amounts recognised directly in Equity: Revaluation of Property, Plant and Equipment 71,249 71,181 Total Deferred Tax Liabilities 86,361 85,399
Movements: Opening balance at 1 July 85,399 86,042 Charged to the Comprehensive Operating Statement 894 (643) Charged to Other Comprehensive Income 68 - Closing balance at 30 June 86,361 85,399
12. cash and Cash Equivalents
Cash at Bank and on hand 9,453 7,754 p80 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000
13. Receivables
Current Receivables 15,385 15,253 Less Provision for Doubtful Debts (100) (100) Total Current Receivables 15,285 15,153 Non-Current Receivables 2,989 3,667 Total Receivables 18,274 18,820
a. Provision for Doubtful Debts
As at 30 June 2013, Current Receivables of the Corporation with a nominal value of $338,000 (2012: $227,000) were impaired. The amount of the provision was $100,000 (2012: $100,000). The individually impaired Receivables mainly relate to tenant accounts and a number of identified Trade Receivables, which are in unexpectedly difficult economic situations. It was assessed that a portion of the Receivables is expected to be recovered.
The ageing of these Receivables is as follows: Current 15 18 1-2 months 29 40 3-4 months 9 - Over 4 months 285 169 338 227
As at 30 June 2013, Receivables of $1.922m (2012: $1.583m) were past due but not impaired. These relate to a number of customers for whom there is no recent history of default. The ageing analysis of these Receivables is as follows:
The ageing analysis of these Receivables is as follows: 1-2 months 1,067 846 3-4 months 302 207 Over 4 months 553 530 1,922 1,583
Movements in the Provision for Impaired Receivables are as follows: Balance at 1 July 100 100 Provision for impairment recognised during the year 9 61 51 Receivables written off during the year as uncollectible (61) (51) Balance at 30 June 100 100 GVW ANNUAL REPORT 2012|2013 | p81
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000
The creation and release of the Provision for Doubtful Debts has been included in Administration 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.
Other amounts within Receivables do not contain impaired assets and are not past due. Based on credit history, it is expected that these amounts will be received when due.
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.
The maximum exposure to credit risk at the reporting date is the higher of the carrying value and fair value of each class of Receivables mentioned above. The Corporation holds collateral as security on some Receivables. The collateral is a charge over property. Refer to Note 2 for more information of the risk management policy of the Corporation and to Note 24 for further analysis of Receivables.
14. Inventories
Stores and Materials – at cost 1(k) 1,113 1,140
15. Biological Assets
Livestock – at net market value: Sheep 773 1,016 Cattle 200 195 1(l) 973 1,211
Represented by: 2013 2012 2013 2012 Quantity Quantity $’000 $’000 Carrying amount at 1 July 8,516 6,330 1,211 1,071 Increases due to: Purchases 933 1,393 204 383 Natural Increase 4,854 4,906 464 414 Market value adjustment - - (22) (34) Decreases due to: Sales (8,243) (3,686) (847) (551) Deaths (261) (427) (37) (72) Carrying amount at 30 June 5,799 8,516 973 1,211
All Livestock Biological Assets of the Corporation were independently valued as at 30 June 2013 by the following Livestock Agents: Robson Donaldson Pty. Ltd., Landmark & Corcoran Parker Pty. Ltd. Livestock is valued at net market value. p82 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000
16. Property, Plant and Equipment
Land and Buildings Freehold Land At Fair Value 30,150 30,150 At Cost 1,387 - 31,537 30,150
Buildings At Fair Value 5,374 5,374 Less: Accumulated Depreciation (333) (167) 5,041 5,207 At Cost 127 - Less: Accumulated Depreciation (2) - 125 - Total Land and Buildings 36,703 35,357
Infrastructure Assets At Fair Value 673,058 673,040 Less: Accumulated Depreciation (41,523) (21,425) 631,535 651,615 At Cost 53,366 38,254 Less: Accumulated Depreciation (1,736) (985) 51,630 37,269 683,165 688,884 Infrastructure Assets in the course of construction 28,263 29,606 Total Infrastructure Assets 711,428 718,490
Plant and Equipment At Fair Value 20,295 14,980 Less: Accumulated Depreciation (10,024) (8,390) Total Plant and Equipment 10,271 6,590
Total Property, Plant and Equipment 758,402 760,437 GVW ANNUAL REPORT 2012|2013 | p83
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Valuation of Property, Plant and Equipment Land & Buildings of the Corporation were valued at the 30th June, 2011 by the Valuer-General of Victoria (using Egan National Valuers Pty. Ltd.) at their fair value.
Infrastructure assets of the Corporation were valued at the 30th June, 2011 by the Valuer-General of Victoria (using AECOM Australia Pty. Ltd.) at their fair value.
In relation to Plant and Equipment management has determined that in accordance with FRD 103D depreciated replacement cost represents a reasonable approximation of fair value at 30th June, 2013.
Reconciliations Reconciliations of the carrying amounts of each class of Property, Plant and Equipment at the beginning and end of the current financial year and the previous financial year are set out below.
Freehold Infrastructure In Course of Plant & Land Buildings Assets Construction Equipment Total 2013 $’000 $’000 $’000 $’000 $’000 $’000
Carrying amount at 1 July, 2012 30,150 5,207 688,884 29,606 6,590 760,437 Additions 1,387 127 15,288 (1,343) 6,542 22,001 Disposals - - (242) - (644) (886) Revaluation adjustment - - 226 - - 226 Depreciation Expense - (168) (20,991) - (2,217) (23,376) Carrying amount at 30 June, 2013 31,537 5,166 683,165 28,263 10,271 758,402
Freehold Infrastructure In Course of Plant & Land Buildings Assets Construction Equipment Total 2012 $’000 $’000 $’000 $’000 $’000 $’000
Carrying amount at 1 July, 2011 30,152 5,373 673,210 40,788 6,813 756,336 Additions - 1 38,254 (11,182) 2,215 29,288 Disposals (2) - (85) - (620) (707) Depreciation Expense - (167) (22,495) - (1,818) (24,480) Carrying amount at 30 June, 2012 30,150 5,207 688,884 29,606 6,590 760,437
2013 2012 $’000 $’000
Depreciation Charge for the Year Buildings 168 167 Infrastructure 20,991 22,495 Plant and Equipment 2,217 1,818 23,376 24,480
Non-Current Assets Pledged as Security The Corporation has not pledged any of its non-current assets as security. p84 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000
17. Payables
Trade Creditors (i) 7,471 11,440 Sundry Creditors 628 642 8,099 12,082
(i) 2012 includes Vision Superannuation Scheme Defined Benefit Plan unfunded superannuation liability of $3.064m. Refer Note 25.
Foreign currency risk and interest rate risk for trade and other Payables The carrying amounts of the Corporation’s trade and other payables are denominated in Australian dollars. For an analysis of the sensitivity of trade and other payables to interest rate risk refer to Note 2.
18. Interest Bearing Liabilities - Secured
Current Other Loans 11,000 9,000 11,000 9,000
Non-Current Other Loans 90,000 92,000 90,000 92,000 Total Interest Bearing Liabilities 101,000 101,000
Credit standby arrangements Total facilities 24,000 9,000 Unused at balance date 24,000 9,000
Loan facilities Total facilities 101,000 101,000 Used at balance date 101,000 101,000 Unused at balance date - -
Loans are secured by a guarantee from the Treasurer of Victoria.
Off‑balance sheet The Corporation does not have any liabilities classed as off-balance sheet. As per Note 26, the Corporation is not aware of any Contingent Liabilities as at balance date. GVW ANNUAL REPORT 2012|2013 | p85
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000
On‑balance sheet
The fair value of current borrowings equals their carrying amount, as the impact of discounting is not significant. The fair values of non-current borrowings are based on cash flows discounted using current borrowing rates varying from 2.91% to 4.81%, depending on the type of the borrowing (2012 – 3.33% to 4.32%). Fair values are disclosed at Note 24.
The Corporation’s loans are held with the Treasury Corporation of Victoria. These loans are taken out on fixed terms at fixed interest rates and are staggered in terms of maturity to minimise interest rate risk.
Risk exposures The exposure of the Corporation’s borrowings to interest rate changes and the contractual re-pricing dates at the balance dates are as follows: 6 months or less - 3,000 6 – 12 months 11,000 6,000 1 – 5 years 41,000 41,000 Over 5 years 49,000 51,000 Total Interest Bearing Liabilities 101,000 101,000
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 refer to Note 2.
19. employee Benefits
Current Employee Benefits expected to be settled within 12 months, measured at nominal value 1,357 1,251 Employee Benefits expected to be settled after 12 months, measured at present value 3,013 2,994 Total Current 4,370 4,245
Non-Current Conditional Long Service Leave, measured at present value 471 415 Total Non-Current 471 415 Total Employee Benefits 4,841 4,660
The following assumptions were adopted in measuring the present value of Long Service Leave entitlements: Weighted average increase in employee costs 4.50% 4.31% Weighted average discount rates 3.79% 3.06% Weighted average settlement period 14 years 18 years p86 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
2013 2012 Note $’000 $’000
20. contributed Capital
Opening balance at 1 July 234,704 234,704 Capital transactions with the State in its capacity as owner - - Closing balance at 30 June 234,704 234,704
21. Reserves
Opening balance at 1 July - Asset Revaluation Reserve 186,010 186,010 Revaluation of Property, Plant and Equipment 226 - Deferred Tax Liability (68) - Closing balance at 30 June – Asset Revaluation Reserve 186,168 186,010
22. retained Profits
Opening balance at 1 July 169,123 173,882 Profit / (Loss) for the year 1,795 (4,759) Closing balance at 30 June 170,918 169,123
23. Reconciliation of Profit for the Year to Net Cash Inflow from Operating Activities
Profit / (Loss) for the Year 1,795 (4,759)
Add/(Less) Non Cash Flows in Profit for the Year Contributed Assets (3,812) (4,691) Depreciation 23,376 24,480 (Profit) / Loss on Sale of Property, Plant and Equipment 307 (23) Bad Debts 61 51
Change in Operating Assets and Liabilities (Increase) / Decrease in Receivables 485 (1,522) (Increase) / Decrease in Inventories 26 (188) (Increase) / Decrease in Biological Assets 239 (140) (Increase) / Decrease in Prepayments (143) 40 (Increase) in Deferred Tax Assets (117) (1,415) Increase / (Decrease) in Payables (2,817) 3,277 Increase in Employee Benefits 180 500 Increase / (Decrease) in Deferred Tax Liabilities 894 (643) Net Cash Inflow from Operating Activities 20,474 14,967 GVW ANNUAL REPORT 2012|2013 | p87
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
24. Financial Instruments
(i) interest Rate Risk Exposures The Corporation’s exposure to interest rate risks, including the contractual repricing dates and the effective weighted average interest rate by maturity, is recorded in the table below.
Contractual Repricing or Maturity Periods
Non Floating Over Over Over Over Interest interest 1 year 1 to 2 2 to 3 3 to 4 4 to 5 Over Bearing rate or less years years years years 5 years Total 2013 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial Assets Cash 5 9,448 ------9,453 Receivables 14,609 - 676 697 744 795 638 115 18,274 Total Financial Assets 14,614 9,448 676 697 744 795 638 115 27,727 Weighted Average Interest Rate - 2.55% 6.87% 6.86% 6.86% 6.86% 6.91% 6.07% -
Financial Liabilities Payables 8,099 ------8,099 Interest Bearing Liabilities - - 11,000 11,000 13,000 6,000 11,000 49,000 101,000 Total Financial Liabilities 8,099 - 11,000 11,000 13,000 6,000 11,000 49,000 109,099 Weighted average interest rate - - 5.86% 5.69% 5.92% 6.96% 6.78% 4.33% - Net Financial Assets / (Liabilities) 6,515 9,448 (10,324) (10,303) (12,256) (5,205) (10,362) (48,885) (81,372)
Contractual Repricing or Maturity Periods
Non Floating Over Over Over Over Interest interest 1 year 1 to 2 2 to 3 3 to 4 4 to 5 Over Bearing rate or less years years years years 5 years Total 2012 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial Assets Cash 5 7,749 ------7,754 Receivables 14,513 - 640 674 699 746 797 751 18,820 Total Financial Assets 14,518 7,749 640 674 699 746 797 751 26,574 Weighted Average Interest Rate - 3.22% 6.88% 6.87% 6.86% 6.86% 6.86% 6.78% -
Financial Liabilities Payables 12,082 ------12,082 Interest Bearing Liabilities - - 9,000 11,000 11,000 13,000 6,000 51,000 101,000 Total Financial Liabilities 12,082 - 9,000 11,000 11,000 13,000 6,000 51,000 113,082 Weighted average interest rate - - 6.78% 5.86% 5.69% 5.92% 6.96% 5.62% - Net Financial Assets / (Liabilities) 2,436 7,749 (8,360) (10,326) (10,301) (12,254) (5,203) (50,249) (86,508) p88 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
(ii) fair Value of Financial Assets and Liabilities The carrying amounts and fair values of financial assets and financial liabilities at balance date are:
2013 2012 Carrying Carrying Amount Fair Value Amount Fair Value $’000 $’000 $’000 $’000
Financial Assets Cash and Cash Equivalents 9,453 9,453 7,754 7,754 Receivables 18,274 18,649 18,820 19,291 Total Financial Assets 27,727 28,102 26,574 27,045
Financial Liabilities Payables 8,099 8,099 12,082 12,082 Interest Bearing Liabilities 101,000 108,411 101,000 110,371 Total Financial Liabilities 109,099 116,510 113,082 122,453
Cash, cash equivalents and non-interest bearing Financial Assets and Financial Liabilities are carried at cost which approximates their fair value. The fair value of other Financial Assets and Financial Liabilities is based upon market prices, where a market exists or by discounting the expected future cash flows at current interest rates.
The carrying amounts of interest bearing Receivables are less than their respective fair values. The Corporation intends to allow these Receivables to run in accordance with their maturities and, accordingly, has decided not to write them up to their fair values.
The carrying amounts of Interest Bearing Liabilities are less than their respective fair values. The Corporation intends to repay these borrowings in accordance with their maturities and, accordingly, has decided not to write them up to their fair values. GVW ANNUAL REPORT 2012|2013 | p89
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
25. Superannuation
The Corporation contributes in respect of its employees to 30 superannuation schemes. Contributions to superannuation schemes expensed during the financial year were as follows:
Contributions Paid Outstanding 2013 2012 2013 2012 Scheme $’000 $’000 $’000 $’000 Basis of Calculation 3.25% of member employee’s Vision Super Superannuation Fund 378 403 - - salary plus the equivalent of the (Defined Benefits) employee’s own contribution rate Vision Super Superannuation Fund Contribution to the unfunded 3,064 - - 3,064 (Defined Benefits) liability of the Fund Vision Super Saver Superannuation 812 777 96 88 9% of member employee’s salary Fund Varying percentage of member State Superannuation Board New Fund 52 64 - 14 employee’s salary Varying percentage of member Australian Superannuation Fund 54 55 - - employee’s salary Varying percentage of member Other Funds 250 270 1 - employee’s salary 4,610 1,569 97 3,166
Vision Super Superannuation Fund and State Superannuation Board New Fund are Defined Benefits funds. Any unfunded liability in respect of Vision Super Superannuation Fund is recognised in the financial statements of the Corporation. Any unfunded liability in respect of State Superannuation Board New Fund is recognised in the financial statements of the State Government of Victoria. The Corporation makes employer contributions to these defined benefit funds at rates determined by the Trustees on the advice of the Fund’s Actuaries.
The other funds are Accumulation funds. No further liability accrues to the employer for those funds as the superannuation benefits accruing to the employees are represented by their share of the net assets of the funds. Effective from 1 July, 2013 the Superannuation Guarantee contribution rate will increase to 9.25%, and will progressively increase to 12% by 2019.
As at the reporting date there were no loans to or from the Corporation to any of the above funds.
The Vision Super Superannuation Fund 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 reliably allocate benefit liabilities, assets and costs between employers. As provided under Paragraph 32 (b) of AASB 119, the Corporation does not use defined benefit accounting for these defined benefit obligations.
The Corporation makes employer contributions to the defined benefit category of the Fund at rates determined by the Trustee on the advice of the Fund’s Actuary. On the basis of the results of the most recent full actuarial investigation conducted by the Fund’s Actuary as at 31 December 2011, the Corporation makes the following contributions:
• 9.25% of members’ salaries (same as previous year);
• the difference between resignation and retrenchment benefits paid to any retrenched employees, plus contribution tax (same as previous year). p90 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
Pursuant to the actuarial review conducted by the Trustee in 2012 as at 31 December 2011, a funding shortfall of $406 million (excluding contributions tax) for the defined benefit Fund was determined.
The Corporation recognised the sum of $3,064,167 as its share of the unfunded liability as an expense in the Comprehensive Operating Statement as at 30 June, 2012. As at 30 June, 2013 the Corporation’s contribution has been paid to the Fund in full.
The Fund surplus or deficit (the difference between fund assets and liabilities) is calculated differently for funding purposes (calculating required contributions) and for the calculation of accrued benefits as required in AAS 25 to provide the values needed for the AASB 119 disclosure in the Corporation’s financial statements. AAS 25 requires that the present value of the defined benefit liability be calculated based on benefits that have accrued in respect of membership of the plan up to the measurement date, with no allowance for future benefits that may accrue.
Accounting Standard Disclosure The Fund’s liability for accrued benefits, which includes the defined benefit and accumulation funds, was determined by the Actuary at 31 December 2011 pursuant to the requirements of AAS 25 as follows:
31 Dec 2011 $’000
Net Market Value of Assets 4,315,324 Accrued Benefits (per accounting standards) 4,642,133 Difference between Assets and Accrued Benefits (326,809) Vested Benefits (Minimum sum which must be paid to members when they leave the fund) 4,838,503
The financial assumptions used to calculate the Accrued Benefits for the defined benefit category of the Fund were:
• Net Investment Return 7.50% p.a.
• Salary Inflation 4.25% p.a.
• Price Inflation 2.75% p.a. GVW ANNUAL REPORT 2012|2013 | p91
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
26. contingent Liabilities and Contingent Assets
2013 2012 notes $’000 $’000
Site restoration costs On the 6 August, 2012 the Corporation was issued with a clean-up notice from the Environment Protection Authority regarding a stockpile of spoil located at the Shepparton Operations Centre. The clean-up notice has been complied with and this matter is now closed.
Other At balance date, the Corporation is not aware of any other material Contingent Liabilities or Contingent Assets not recorded or disclosed in the accounts.
27. capital and Other Commitments
Capital Commitments These commitments are GST inclusive.
Commitments for the acquisition of Property, Plant and Equipment contracted for at the reporting date, but not recognised as liabilities, payable:
Within one year 2,449 2,636
2,449 2,636
Other Commitments The Corporation is committed to making Environmental Contributions as per the Water Industry (Environmental Contributions) Act 2004 (see Note 1(c)). This commitment is exclusive of GST. The commitments for the Corporation’s contribution to the consolidated fund at the reporting date, but not recognised as liabilities, are as follows:
Within one year 2,422 1,915
One to five years 4,844 7,266
7,266 9,181
These commitments will be met by revenue raised in those periods. p92 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
28. responsible Persons and Executive Officers of the Corporation
(i) responsible Persons The names of persons holding the position of Responsible Person of the Goulburn Valley Region Water Corporation during the financial year were:
Peter Walsh, MLA Minister for Water M. Lawlor Chair D.W. Flett Director (retired 30 September, 2012) B. Nicholls Director (retired 30 September, 2012) S. O’Connor Director D. McKenzie Director A. Larkins Director D. Rutledge Director G. Dobson Director (appointed 1 October, 2012) S. Bubb Director (appointed 1 October, 2012) P.A. Quinn Managing Director D. Hogan Acting Managing Director (21 - 28 January, 2013)
(ii) remuneration of Responsible Persons The numbers of Responsible Persons are shown below in their relevant income bands:
2013 2012 Income bands No. No.
$0-$9,999 2 2 $10,000-$19,999 2 2 $20,000-$29,999 4 4 $40,000-$49,999 1 - $50,000-$59,999 - 1 $280,000-$289,999 - 1 $300,000-$309,999 1 -
The total remuneration of Responsible Persons (excluding Peter Walsh, MLA) including superannuation contributions and retirement benefits referred to in the above bands was $478,317 (2012: $461,923).
The relevant amounts relating to Ministers are reported in the Annual Report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members’ Interest which each member of the Parliament completes. GVW ANNUAL REPORT 2012|2013 | p93
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
(iii) remuneration of Executives The number of Executive Officers, other than Responsible Persons included under “Remuneration of Responsible Persons” above, whose annualised total remuneration exceeded the financial reporting direction threshold of $141,667 during the reporting period is shown below in their relevant income bands:
Total Remuneration Base Remuneration 2013 2012 2013 2012 Income bands No. No. No. No. $60,000 - $69,999 1 - 1 - $90,000 - $99,999 - - 1 - $100,000 - $109,999 - - - 2 $110,000 - $119,999 - - - 1 $120,000 - $129,999 1 - - - $140,000 - $149,999 2 2 2 2 $150,000 - $159,999 3 1 3 - $160,000 - $169,999 1 2 1 - $170,000 - $179,999 - - - 1 $180,000 - $189,999 - 1 2 1 $190,000 - $199,999 2 1 - 1 $200,000 - $209,999 - 1 - - Total Number of Executives 10 8 10 8 Annualised Employee Equivalent 8.7 7.3 8.7 7.3 Total Remuneration $1,503,290 $1,370,963 $1,447,610 $1,180,369
Base Remuneration excludes any bonus payments, long service leave and redundancy or retirement benefits paid to Executive Officers. One Executive Officer resigned during 2012/13 whilst three Executive Officers retired or resigned during the 2011/12 year. This has had an impact on Total Remuneration due to the inclusion of annual leave and long service leave payments.
The Annualised Employee Equivalent is based on working 38 ordinary hours per week over the reporting period.
There were no contractors with significant management responsibilities. p94 | GVW ANNUAL REPORT 2012|2013
Financial Statements NOTES TO THE FINANCIAL STATEMENTS
(iv) Other Transactions of Responsible Persons and their Related Entities Transactions between related parties are on normal commercial terms and conditions.
Land Development Companies, in which Responsible Persons hold an interest, contract to Goulburn Valley Region Water Corporation for the provision of land development works from time to time. The companies involved and the amount of works during the year are listed below:
2013 2012 Company Director Involved $ $
The Boulevard Corporation Pty Ltd D. McKenzie 718,883 538,277 Northlinks Tatura Pty Ltd S. Bubb 209,884 -
Other D. McKenzie is a Director of Opteon (Goulburn North East Victoria) Pty Ltd which provided property valuation services to the Corporation during the year on normal terms and conditions. The aggregate amount for the year of these services is $7,480 (2012: $19,250).
There have been no related party transactions with the Minister during the reporting period.
(v) retirement Benefits of Responsible Persons There were no retirement benefits paid during the year by the Corporation in connection with the retirement of responsible persons of the Corporation.
29. remuneration of Auditors
2013 2012 $’000 $’000
Amounts received, or due and receivable, by the Victorian Auditor-General for 47 46 auditing the accounts of the Corporation.
47 46
There were no other services provided by the Victorian Auditor-General in the reporting periods.
30. events Occurring After Balance Date
No matters or circumstances have arisen since the end of the reporting period which significantly affect or may significantly affect the operations of the Corporation, the results of those operations, or the state of affairs of the Corporation in future financial years. GVW ANNUAL REPORT 2012|2013 | p95
Financial Statements statutory certification
The attached financial statements for Goulburn Valley Region Water Corporation have been prepared in accordance with Standing Direction 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 the 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 statements for issue on the 27 August, 2013.
Signed on behalf of the Corporation
M. G. Lawlor P. A. Quinn G. D. Jolly
Chairman Managing Director General Manager – Financial Services
27 August 2013
p98 | GVW ANNUAL REPORT 2012|2013
Notes & Appendices disclosure index
Ministerial Directions Report of Operations – FRD Guidance Legislation Requirement Page Reference
Charter and purpose FRD 22D Manner of establishment and the relevant Ministers 4 FRD 22D Objectives, functions, powers and duties 2-9 FRD 22D Nature and range of services provided 4
Management and structure FRD 22D Organisational structure 10
Financial and other information FRD 10 Disclosure index 98 FRD 12A Disclosure of major contracts 43 FRD 15B Executive officer disclosures 92 FRD 22D Operational and budgetary objectives and performance against objectives 5-9 FRD 22D Employment and conduct principles 17 FRD 22D Occupational health and safety policy 18 FRD 22D Summary of the financial results for the year 42 FRD 22D Significant changes in financial position during the year 43 FRD 22D Major changes or factors affecting performance 43 FRD 22D Subsequent events 94 FRD 22D Application and operation of Freedom of Information Act 1982 43 FRD 22D Compliance with building and maintenance provisions of Building Act 1993 44 FRD 22D Statement on National Competition Policy 44 FRD 22D Application and operation of the Protected Disclosures Act 2012 45 FRD 22D Details of consultancies over $100 000 43 FRD 22D Details of consultancies under $100 000 43 FRD 22D Statement of availability of other information 44 FRD 25A Victorian Industry Participation Policy disclosures 45 FRD 27B Presentation and reporting of performance information 46-50 FRD 29 Workforce Data disclosures 16 FRD 30A Standard requirements for the design and print of the annual report All FRD 121 Infrastructure Assets (Water/Rail) 37 SD 4.5.5 Risk management compliance attestation 45 SD 4.2(g) General information requirements 2-5 SD 4.2(j) Sign-off requirements 49, 95
Ministerial Reporting Directions MRD 01 Performance Reporting 46-50 MRD 02 Reporting on water consumption and drought response 34-36, 32 MRD 03 Environmental and social sustainability reporting 20-29, 32-34, 36 Disclosure of information on bulk entitlements, transfers of water entitlements, MRD 04 30-31, 26 allocations and licences, irrigation water usage and licence entitlements MRD 05 Annual reporting of major non-residential water users 35-36 GVW ANNUAL REPORT 2012|2013 | p99
Notes & Appendices
Financial Statements Financial statements required under Part 7 of the FMA SD4.2(a) Statement of Changes in Equity 56 SD4.2(b) Comprehensive Operating Statement 54 SD4.2(b) Balance Sheet 55 SD4.2(b) Cash Flow Statement 57
Other requirements under Standing Directions 4.2 Compliance with Australian accounting standards and other authoritative SD4.2(c) 58, 66-72 pronouncements SD4.2(c) Compliance with Ministerial Directions 58 SD4.2(d) Rounding of amounts 58 SD4.2(c) Accountable officer’s declaration 95 SD4.2(f) Compliance with Model Financial Report All
Other disclosures as required by FRDs in notes to the financial statements FRD 03A Accounting for Dividends 66 FRD17A Long service leave wage inflation and discount rates 64, 85 FRD 21B Responsible person and executive officer disclosures 92-94 FRD 102 Inventories 55, 81 FRD 103D Non current physical assets 55, 79, 82-83 FRD 105A Borrowing costs 54, 60 & 77 FRD 106 Impairment of assets 63 FRD 110 Cash flow statements 57, 86 FRD 112C Defined benefit superannuation obligations 89-90 Financial Instruments – General Government Entities and public non financial FRD 114A 73-76, 87-88 corporations FRD 119 Contributions by owners 55, 86 Accounting and reporting pronouncements applicable from 2011/12 reporting FRD 120G 66-72 period FRD 121 Infrastructure assets 55, 61-63, 82-83
Legislation Freedom of Information Act 1982 43 Building Act 1993 44 Protected Disclosures Act 2012 45 Victorian Industry Participation Policy Act 2003 45 Financial Management Act 1994 58 p100 | GVW ANNUAL REPORT 2012|2013 Yarroweyah Strathmerton Cobram Picola Katunga Barmah Katamatite Nathalia Numurkah Yarrawonga
Echuca Wunghnu Treated Supply Tongala Katandra West Rivers / Streams Tallygaroopna Kyabram Channels Congupna Mooroopna Dookie Corporation Storages Merrigum Shepparton Girgarre Groundwater Supply (Bore) Stanhope Tatura Corop Toolamba Non Drinking Supply Rivers / Streams Rushworth Benalla Channels Murchison Colbinabbin Violet Town Supply Line Baxters Road Kirwans Bridge Euroa Nagambie Strathbogie Longwood
Avenel Shepparton Administration Bonnie Doon Seymour 104 - 110 Fryers Street, Shepparton, 3630 Mansfield PO Box 185, Shepparton, 3632 Tallarook Merrijig Pyalong Molesworth Sawmill DX 63036 Alexandra Settlement Telephone: 03 5832 0400 Broadford Yea Facsimile: 03 5831 1467 Eildon Kilmore Thornton Email: [email protected] Waterford Park Website: www.gvwater.vic.gov.au Wandong
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