Contents

Report of Operations 2 About GWMWater 4 Understanding Our Business 5 Our Board 6 Organisational Structure 9 How We Operate 10 Our Employees 11 Occupational Health and Safety 12 Water Usage 13 Bulk and Environmental Entitlements 16 Recreation Water 21 Statement of Obligations 22 Economic Sustainability 23 Social Sustainability 25 Major Non-Residential Water Users 26 Environmental Sustainability 27 Sustainable and Resilient Water Services Systems 28 Management Strategies 29 Greenhouse Gas and Energy Emissions 30 Performance Reporting 34 Independent Auditor Report 40 Risk Management Compliance Attestation 42 Financial Statements 43 Financial Statutory Certificate 2015 94 Auditors Financial Report 95 Disclosure Index 97 Service Area Map (inside back cover)

GWMWater Annual Report 2014/15 Page 1 Report of Operations

GWMWater has enjoyed another successful year of its post pipeline an innovative relocatable package plant designed and constructed era, further improving its bottom line as well as delivering on the by local contractors. With the completion of these projects, 91 triple bottom line objectives of the Wimmera Mallee region. The percent of our urban customers now receive water that meets the Wimmera Mallee Pipeline is a project delivered by GWMWater that regulatory standards of the Safe Drinking Water Act. carried the economic, social and environmental aspirations of the region. The benefits of the project continued to be realised during In the lead up to the Victorian State election, the then opposition the year. identified Lake Toolondo as a premier trout fishery and sought to identify how the lake could have greater certainty of water supply. The improved security and quality of water continues to provide To provide sufficient time for these issues to be considered, confidence for investment in the region. Luv a Duck has expanded GWMWater facilitated a water trade of 5,000 ML between its operation in Nhill, taking advantage of the upgraded water Iluka Resources and VRFish which ensured that Lake Toolondo quality being supplied to that community. The improved security would have sufficient water to sustain the trout fish population has also been the catalyst for investing in and assuring the for 2014/15. Joe Helper was appointed Chair of the Toolondo viticulture industry of the Landsborough Valley. Commitments Reservoir Recreational Fishing Advisory Group. Under its charter have also been made to expand the rural pipeline network to the the group is responsible for considering options that would enable farming communities of Pella and Quambatook North for stock the lake to have greater certainty of water supply consistent with and domestic purposes. its premier trout fishery status.

The social fabric of the region has been enhanced by a piped Since 2010/11 the Wimmera Mallee region, including the Grampians water supply to nominated recreational lakes. These lakes provide catchment, has returned to a dry climate cycle. 2014/15 was the a point of communal gathering and have considerably enhanced driest year experienced since 2010/11 with the system receiving the liveability of the region. The coverage of recreation lakes only 27 percent of historic average inflows. From July 2014 across the area previously commanded by the channel network very little rainfall was experienced and as at 30 June 2015 the is now complete with the establishment of Walkers Lake as an Grampians reservoirs were holding a combined volume of 156,613 alternative to Lake Batyo Catyo and the success of the Ouyen ML or 28.1 percent. This is their lowest level at the time of this Lake proposal as an alternative to Lake Walpeup. GWMWater report since completion of the physical infrastructure of the has secured sufficient water in its recreation water allocation to Wimmera Mallee Pipeline in 2010. Access to carryover provides supply water at a subsidised rate using funds generated by the considerable certainty about water supply in coming seasons, Recreation Contribution Charge. but medium to long term reliability will be the subject of further assessment using the most recent climate science information. The environment has continued to be enhanced by the environmental watering program. The Wimmera and Glenelg Whilst construction of the Wimmera Mallee Pipeline is complete, Rivers received water in accordance with the environmental GWMWater has been fulfilling its commitment by delivering watering program developed by the Victorian Environmental projects that are agreed by the State and Commonwealth to Water Holder, in consultation with the Wimmera and Glenelg be consistent with the objectives of pipelining initiatives in the Catchment Management Authorities. Whilst the primary objective region. The decommissioning of the Wimmera Irrigation System of this program is environmental, water in the rivers also provides nominated by the Commonwealth government was completed in an environment for events such as the Dimboola Regatta and 2014/15. Contracts were awarded for Stage 1 of the Rural Pipeline the Horsham Fishing Competition. In 2014/15 the economic Intelligence Project that will see low cost telemetry installed on contribution of environmental water was enhanced by a payment all rural meters serviced by the pipeline network. Contracts were for the infrastructure used to deliver the environmental watering also awarded for the completion of the firefighting infrastructure program. project following agreement with the state government that this project was consistent with the original objectives of the Wimmera Donald, Wycheproof, Minyip, Rupanyup and Jeparit were all Mallee Pipeline Project. beneficiaries of water quality upgrades delivered during the year, utilising existing water treatment plant capacity in neighbouring towns. Our water quality improvement program was further enhanced by the upgrade of water quality in Quambatook using

Page 2 GWMWater Annual Report 2014/15 Urban water consumption of 9,345 ML in 2014/15 was consistent with water consumption in 2013/14. This is 30 percent greater than urban consumption prior to the completion of the Wimmera Mallee Pipeline when most urban centres were subject to Stage 4 restrictions. The improved reliability of water supply has significantly enhanced the liveability of the region. This is indicative of the extent that rural domestic and stock customers are more reliant on pipeline water and the return to livestock production as an integral part of rural agricultural activities.

The overall financial viability of GWMWater improved significantly in 2014/15. Free cash flow from operations was $21.6 million, $5.3 million better than the $16.3 million recorded in 2013/14. This result has been influenced by a combination of stronger operating revenue and improved operating efficiency. The improved viability is best demonstrated by the improved interest cover ratio which has increased from 2.8 times in 2013/14 to 3.4 times in 2014/15.

The Wimmera Mallee region has a strong agricultural base that is primarily broad acre cereal production. By virtue of the pipeline solution and the improved reliability of the water supply, there has been a shift back to livestock. The opportunities identified by the business cases for pipelining solutions have started to be realised. Intensive agriculture, particularly in relation to poultry production, has expanded. The mineral sands developments are well advanced and viticulture opportunities have also been secured.

The climate science that underpins the assessments of likely future of the Wimmera Mallee region under climate change will continue to present challenges for water supply management. We will continue to work with government and key stakeholders to ensure that these implications are well understood, and that we develop adaptive strategies to secure supply for the competing demands for water as well as reducing our carbon footprint.

Peter Vogel Chairman

Mark Williams Managing Director

GWMWater Annual Report 2014/15 Page 3 About GWMWater

Who We Are

Grampians Wimmera Mallee Water Corporation (trading as GWMWater) is a government-owned Statutory Corporation established on 1 July 2004 under the Water Act 1989. The Hon Peter Walsh MLA, Minister for Water was the responsible Minister for the period 1 July 2014 to 3 December 2014. The Hon Lisa Neville MP, Minister for Environment, Climate Change and Water was the responsible Minister for the period 4 December 2014 to 30 June 2015.

GWMWater has one of the largest geographic footprints of all Victorian water businesses, covering some 62,000 square kilometres or 25 percent of Victoria. The service area is similar in size to Tasmania and includes thirteen municipalities in full or in part. We service approximately 72,000 people living either on farms or in one of 71 urban centres across western Victoria. What We Do

GWMWater is a vertically integrated water business directly involved in all aspects of the water cycle.

We operate water and wastewater treatment plants in many of our 71 towns, utilise desalination technology, recycle 100 percent of wastewater and run pipelines, major storages, dams, weirs and pump stations to service our customers. We have responsibility under the Wimmera Glenelg Bulk Entitlement Order to perform the functions of resource manager and storage manager. GWMWater is also resource manager for groundwater and surface water and associated licencing.

Our large service area presents major challenges in the provision of water and wastewater services. We harvest water in the Grampians, via groundwater bores or extract water from the Murray River. From these points we store, treat, transfer and distribute water. In sewered urban areas we collect and treat wastewater after which it is completely reused. To deliver these services we manage a significant number of assets including bulk water supply reservoirs, hundreds of smaller storages, tanks, water towers and approximately 14,000 km of pipes.

Our water services are provided for use in and around homes, in business, on farms, for environmental purposes and for recreational and sporting uses for community benefit.

Our wastewater services operate mainly in our larger towns and involve extensive recycling for watering sporting fields, parks and gardens, vineyards and agricultural uses.

Page 4 GWMWater Annual Report 2014/15 Understanding Our Business

GWMWater Strategic Directions Our Sustainability Framework

We operate within a dynamic region in an environment that is very For GWMWater, sustainability means being able to continuously much weather dependant. provide water and wastewater services which support customers, various stakeholders and the region as a whole in balancing social, Our strategic directions document for 2013-18 identifies six key environmental and economic outcomes. themes which are linked together by the organisation’s vision of: We continue to drive sustainable resource management from ‘Sustainable water for regional growth and vibrant communities’. our strategic planning through to our operational practice. Sustainability is also synonymous with the liveability of our region Strategic Themes which is a key focus of our current strategic directions.

These themes are integrated through our corporate and business We welcome the initiatives of the Minister for Environment, planning so that all actions contribute to achievement of our Climate Change and Water to have climate change formally vision. recognised and will continue to evolve initiatives that better adapt to climate variability from a water resource use and carbon Government Framework efficiency perspective.

Our operational framework is strongly influenced by the economic, social and environmental policies of Government.

From a water supply perspective, these policies need to be consistent with the framework of the Murray Darling Basin Plan (MDBP), the Western Region Sustainable Water Supply Strategy Customer (Western Region SWSS) and Our Water Our Future. Focus

The Western Region SWSS outlines the various supply sources Service in Western Victoria and the extent that these are committed Financial Excellence to consumptive water use. For GWMWater, the Western Region Sustainability SWSS recognises the benefit of the Wimmera Mallee Pipeline (WMP) on future water supplies in the Wimmera Glenelg system. Sustainable The Western Region SWSS also embraced the West Wimmera Groundwater Management Strategy developed by GWMWater and Growth provided the framework for GWMWater’s 50 year Water Supply Infrastructure Demand Strategy. and Systems Our People Our Water Our Future is the Policy document of 2004 that substantially set the policy agenda of the past decade. Our Water Environmental Our Future saw the introduction of independent price regulation, Improvement established the framework for better defining water rights and further evolved the development of water markets as a way of enabling water to transfer to higher value use.

GWMWater Annual Report 2014/15 Page 5 Our Board

GWMWater was constituted by Ministerial Order with effect from 1 July 2004, under Sections 98 and 100 of the Water Act 1989 (the Act). Section 124 of the Act provides GWMWater with the powers necessary to perform its functions, however those powers can only be exercised to perform a function given to GWMWater by an Act of Parliament.

Key responsibilities of the Board include: Mary Bignell Mary has a background in capacity building and evaluation, a) Setting the broad strategy, objectives and performance auditing and emergency management in the private and public targets for the Corporation. sector. She has a Bachelor of Agriculture Science and is a member b) Risk management oversight for all key business and of the Australian Institute of Company Directors. operational risks including public health and safety, occupational health and safety and being informed and aware Mary is a member of the GWMWater Audit, Governance and Risk of residual risk levels. Committee and Remuneration Committee. c) Reviewing the Corporation’s progress towards achieving its specific goals. Leo Delahunty d) Reviewing the internal financial and operational controls for Leo is a partner in a family farming business based around Murtoa the Corporation to ensure that they are effective and current in the Wimmera, growing cereal, canola and pulse crops. (including non-compliance, anti-fraud, anti-corruption and critical incident reporting systems). Leo is a member of the Birchip Cropping Group board, a director e) Preparation and approval of strategic plans, corporate plans, of the Bonlac Supply Company and a member of Wheat Quality annual reports, key procedures and policies. Australia’s Wheat Classification Council. He has vast experience on boards having been a former deputy chairman of GrainCorp, Peter Vogel OAM – Chairman former director of Grain Growers Association, PIVOT and Incitec Peter Vogel OAM is a long established primary producer in the Pivot and Wimmera Racing Ltd. He was a co-founder of DIRT Watchem area and has a wealth of knowledge and experience in Management that established and managed the Warakirri the water industry and primary production. Peter is a Director on Agricultural Trusts for ten years, operating grain farms through the VicWater Board and a member of the VicWater Council. eastern Australia. Leo is a fellow of the Australian Institute of Peter is Chairman of the GWMWater Board, the GWMWater Company Directors and a graduate of the Australian Institute of Remuneration Committee and is an ex-officio member on all Board Company Directors Advanced Program. Committees. Leo is Chairperson of the GWMWater Audit, Governance and Risk Chris Hewitt – Deputy Chairman Committee. Chris Hewitt has extensive experience in primary production and business management. He is a Warracknabeal farmer involved in Reid Mather cropping and stud sheep breeding with wide regional interests and Reid Mather is a dry land farmer from Culgoa. He has been a was instrumental in helping the region win Victorian and Australian Buloke Shire Councillor since 2003 and is currently serving his government funding for the Wimmera Mallee Pipeline Project. third term as Mayor. He also held the position of Mayor during Chris is a member of the Country Fire Authority, a public officer of 2004-2009. Reid has served on the Board of the Country Fire SuperBorders Inc. and was past President of the Warracknabeal Authority from 2010-2014 and on the Board of the Municipal Branch of the Victorian Farmers Federation. Chris has a Diploma Association of Victoria from 2009-2013. He is a member of the of Agriculture Science. Birchip Cropping Group and has a Certificate in Farming, Diploma of Applied Science - Agriculture, completed the Australian Institute Chris is Chairperson of the GWMWater Environment and Works of Company Directors course and is a fellow of the Loddon Murray Committee. Community Leadership Program.

Reid is a member of the GWMWater Environment and Works Committee.

Page 6 GWMWater Annual Report 2014/15 Samantha Matthews Samantha Matthews has over 25 years’ experience providing In addition to her current role at GWMWater, Kate is a taxation and accounting services to business. Raised on management consultant specialising in strategy for the water, a farm at St Arnaud, Samantha completed a Bachelor of energy, environment and infrastructure sectors, and a member Business (Accounting) at RMIT. In 1993 she started her own of the Uniting Agewell Victoria and Tasmania Audit and Risk practice, specialising in taxation, superannuation and audit. Committee. Evolving client demands led to a current focus on management accounting. Samantha’s clients include companies in distribution, Kate has an undergraduate degree in civil engineering transportation and agribusiness. She understands the (geotechnical), and masters degrees in economics for development challenges facing farmers and business owners through her and business administration. past management of a grain export business, The Wimmera Grain Co, (est.1994) with her husband David, and their farm She is a Fellow of Engineers Australia, Rhodes Scholar, Williamson at Rupanyup. Samantha has had a long involvement with the Fellow, GAICD and a member of the GWMWater Environment and Bendigo Community Bank network, being the foundation company Works Committee and Remuneration Committee. secretary/accountant/director of Australia’s first Community Bank. Mark Williams – Managing Director She is a Fellow of the Institute of Public Accountants, Graduate Mark has been with GWMWater and the former Grampians Water of the Australian Institute of Company Directors and a member of since 1996. Mark was appointed Managing Director in 2012 and the GWMWater Audit, Governance and Risk Committee. prior to this held the position of Chief Finance Officer. Mark has been responsible for overseeing the commercial implementation Kate Vinot of water reforms in the region that include the delivery of water Kate brings to the GWMWater Board over 25 years’ experience quality upgrades, investments that have improved water security in commercial business, environment and sustainability, strategy and the introduction of independent service and price regulation and risk management including 15 years in senior strategy by the Essential Services Commission. and technical roles in the water industry. She has a deep understanding of the challenges of water management in a Mark brings a wealth of experience to the role beyond his water variable climate across regional, urban domestic and industrial industry experience which includes roles in the power industry, contexts. Her previous roles include General Manager, Environment health and public service where he started his career in 1985. at Visy Industries (including a period with Pratt Water), General Manager Strategy and Acting CEO at South East Water and Mark has served on the Wimmera Health Care Group Board since Technical Director at Veolia Water Australia and New Zealand. 2001 and currently holds the position of President.

Number of NumberA of udit Number of Number of Environment Governance and Remuneration Director Board meetings and Works Risk Committees Committees attended Committees attended attended attended Peter Vogel 11* 7* 6 3 Chris Hewitt 12* 2* 6 - Mary Bignell 12* 7* - 3 Samantha Matthews 12* 7* - - Leo Delahunty 11* 7* - - Reid Mather 11* 2* 6 - Kate Vinot 11* 2* 6 3 Mark Williams 12* 7* 6 3 (Managing Director)

Total number of meetings 12* 7* 6 3

* Includes Special Board and Committee Meetings attended

GWMWater Annual Report 2014/15 Page 7 Standing Committees of the Board Environment and Works Committee Audit Governance and Risk Committee

• Chris Hewitt (Chairman) • Leo Delahunty (Chairman) • Kate Vinot • Mary Bignell • Reid Mather • Samantha Matthews • Peter Vogel (Ex-Officio) • Peter Vogel (Ex-Officio)

The Committee has responsibility for the following: All members of the Committee are independent in character and a) Assessing the quality of GWMWater’s environmental reporting judgement. There are no relationships or circumstances which and management policies and procedures. could affect, or appear to affect, the member’s judgement. b) Monitoring compliance with relevant laws and regulations significantly impacting on GWMWater. The Committee monitors and has oversight over the following: c) Monitoring actual performance against corporate and a) Financial performance and the financial reporting process, operational plans. including the annual financial statements. d) Assessing the adequacy and effectiveness of internal controls. b) The scope of work, performance and independence of internal e) Evaluating the independence, efficiency and effectiveness of audit. relevant audits. c) The engagement and dismissal by management of any chief f) Where appropriate, evaluating internal annual audit plans for internal audit executive. risk assessment, scope, approach and reviewing the d) The scope of work, independence and performance of the coordination of internal audit programs. financial external auditor. g) Reviewing relevant internal audit reports, incorporating e) The operation and implementation of the risk management management responses. framework. h) Reviewing operations, maintenance and capital works f) Matters of accountability and internal control affecting the expenditure against adopted Business Plan budgets. operations of GWMWater. i) Monitoring and providing relevant input into the process g) GWMWater’s process for monitoring compliance with laws of negotiating Environmental Entitlement and Bulk and regulations and its own code of conduct and code of Entitlement Orders applicable to GWMWater. financial practice. h) The Committee shall be committed to continuous Remuneration Committee improvement in Occupational Health and Safety (OHS).

• Peter Vogel (Chairman) • Mary Bignell • Kate Vinot

The Committee has responsibility for the following: a) Determine GWMWater policy and practice for executive remuneration. b) Determine the individual remuneration packages for its executive staff. c) Ensure the state government remuneration principles are observed in relation to remuneration for executives. d) Observe the requirements of the Government Sector Executive Remuneration Panel (GSERP) as varied from time to time.

Page 8 GWMWater Annual Report 2014/15 Organisational Structure

State Government

Directors Peter Vogel, Chris Hewitt, Mary Bignell, Leo Delahunty, Reid Mather, Samantha Matthews, Kate Vinot Environment & Works Committee Chris Hewitt, Kate Vinot, Reid Mather, Peter Vogel Managing Director Remuneration Committee Mark Williams Peter Vogel, Mary Bignell, Kate Vinot People & Culture Audit Governance and Risk Committee Leo Delahunty, Peter Vogel, Mary Bignell, Samantha Matthews Knowledge Systems

Business Planning & Performance Stakeholders & Governance Service Delivery Infrastructure Sally Marshall Andrew Rose Chris Ford Darren Raeck

Finance Planning & Pricing Legal & Corporate Resources Operational Support Systems Assets & Planning

Revenue & Business Development Customer Relations Works Management Project Delivery

Regulation & Assurance Regional Operations Water Regulation

Water Resources

GWMWater Annual Report 2014/15 Page 9 How We Operate

Freedom of Information The Act provides protection to people who make disclosures in accordance with the Act and establishes a system for the matters The Freedom of Information Act 1982 allows the public right of disclosed to be investigated and rectifying action to be taken. access to documents held by GWMWater. The Act enables people to make disclosures about improper There were no Freedom of Information applications received conduct within the public sector without fear of reprisal. It aims during 2014/15. to ensure openness and accountability by encouraging people to make disclosures and protecting them when they do. Applications under the Act should be made in writing to the Freedom of Information Officer, GWMWater, PO Box 481, Horsham GWMWater has established procedures for the protection of 3402 enclosing details of the information requested and payment persons from detrimental action in reprisal for making a protected of the application fee ($27.20 from 1 July 2015). Further charges disclosure about GWMWater or its employees. They can be may be payable depending on the complexity and nature of the accessed on GWMWater’s website www.gwmwater.org.au. request. Reporting procedures Building Act 1993 You can make a protected disclosure about GWMWater or its Board GWMWater conducted an inspection of its buildings and processes members, officers or employees by contacting the Department in relation to compliance with the Essential Safety Measures of Environment, Land, Water and Planning (DELWP) or the provisions of the Building Act 1993. An inspection and reporting Independent Broad-Based Anti-Corruption Commission on the process has been developed and incorporated within the contact details provided below. GWMWater workplace inspection procedure. Please note that GWMWater is not able to receive protected National Competition Policy disclosures.

GWMWater has continued to comply with the legislative Contacts requirements and principles agreed under the National Competition Policy. Department of Environment, Land, Water and Planning PO Box 500, East Melbourne Vic 3002 Information Available on Request Ph: 03 9637 8697 Website: www.delwp.vic.gov.au Information relevant to the headings listed in Financial Reporting Direction 22B of the Financial Management Act 1994 is held at Independent Broad-Based Anti-Corruption the office of GWMWater and is available on request, subject to the Commission Victoria requirements of the Freedom of Information Act 1982. GPO Box 24234, Melbourne Victoria 3000 Compliance with the Protected Disclosure Act Internet: www.ibac.vic.gov.au 2012 (formerly the Whistleblowers Protection Phone: 1300 735 135 Act 2001) Email: see the website above for the secure email disclosure process, which also provides for anonymous disclosures. The Protected Disclosure Act 2012 encourages and assists people in making disclosures of improper conduct by public officers and public bodies.

2014/15 2013/14 number number The number of disclosures made by an individual to GWMWater and notified to the Independent Broad-Based Anti-Corruption Commission Assessable disclosures 0 0

Page 10 GWMWater Annual Report 2014/15 Our Employees

Staff Numbers 2014/15

Fixed term and On Going Employees (Excludes Casuals and Fixed Term) casual employees Employee (headcount) Full Time (headcount) Part Time (headcount) FTE FTE June 2015 167 153 14 161 13 June 2014 180 166 14 175 9

Fixed term Fixed term JUNE 2015 and casual JUNE 2014 and casual employees employees Employee Employee (headcount) FTE Excludes (headcount) FTE Excludes Excludes Casuals and FTE Excludes Casuals and FTE Casuals and Fixed Term Casuals and Fixed Term Fixed Term Fixed Term Gender Male 121 120.74 6.39 131 130.37 4.39 Female 46 41.62 4.21 49 44.64 4.72 Age Under 25 9 9.00 4.00 11 11.00 0 25-35 34 32.13 0 38 36.62 2.51 35-44 39 37.33 2.21 42 39.95 2.21 45-54 47 45.96 2.00 50 49.24 1.00 55-64 36 35.94 2.39 36 35.57 3.39 Over 64 2 2.00 0 3 2.63 0 Group Executive 0 0 5 1 1 5 Business Planning & 22 21.89 1.21 23 22.52 0.21 Performance Service Delivery 87 85.05 1.00 89 87.65 0

Stakeholder & 18 16.76 2.40 20 18.88 3.90 Governance Infrastructure 24 23.03 3.00 30 29.33 0 People & Culture 6 6.00 0 6 6.00 0 Executive Assistants 2 1.63 0 2 1.63 0 Knowledge Systems 7 7.00 0 8 8.00 0

Application of Merit and Equity Principles

GWMWater is committed to ensuring all staff selection decisions are merit based and that equal employment opportunity principles are applied to all staff.

GWMWater Annual Report 2014/15 Page 11 Occupational Health and Safety

GWMWater has an ongoing commitment to provide a safe The number of hazard reports completed has increased workplace and has stated policies and goals for achieving zero substantially, due to the implementation of an improved reporting harm. This is supported by maintaining a certified Occupational system, with this also contributing to the overall reduction of Health and Safety Management System to meet the requirements harm in the workplace. of the relevant Australian Standard- AS/NZS 4801:2001. The overall lowering of injury and harm in the workplace has A highlight for 2014/15 was the continued reduction in workplace resulted in the lowest number of standard workers’ compensation injuries. claims during the past three years. This result was achieved due to a continued high standard of care, support and communication Workplace inspection numbers continued to be at record highs, provided by GWMWater staff and management. due to a continual focus on contractors’ safe work arrangements, completing workplace building asbestos register audits and confined space worksite risk assessments.

Occupational Health and Safety Performance Indicators

Measure KPI 2012/13 2013/14 2014/15 Number of incidents 55 53 44 Incidents Rate per 100 FTE 0.275 0.26 0.22

Number of lost time 3 5 0 Claims claims Rate per 100 FTE 0.015 0.025 0.00 Claim Average cost per $14,922 $25,375 $1,836 Costs standard claim Medical Number of medical 7 6 2 Treatment treatment injuries Injuries Lost time Number of lost time injuries 5 5 2 injuries Total days lost to lost time injuries 153 80 60 Number of workplace Inspections 127 239 232 inspections conducted

Hazards Number of hazard 57 67 164 reports completed

OH&S training completed in the past 12 months has included:

Agvet chemical users course Fall prevention (safe working at heights) Fire extinguisher selection and use Implement traffic management and traffic control Emergency warden Construction induction Mobile plant competency Level one train track safety awareness Drager breathing apparatus equipment Driver safety First Aid level 2 and CPR Duty of care Class B Asbestos removal Due diligence Chlorine handling Incident investigation Confined space entry Bullying and harassment Operate and maintain a chainsaw Conflict resolution

Page 12 GWMWater Annual Report 2014/15 Water Usage

Water Consumption 1 July 2014 to 30 June 2015

Industrial and Non-Residential and Residential Average Concessional Municipal Annual Consumption* ML ML No ML No ML No Total ML Total No Antwerp 0.0 1 0.0 2 2.8 9 2.8 12 3.2 Apsley 0.9 8 6.6 18 22.3 97 29.9 123 26.9 Ararat 138.2 42 277.9 427 689.0 3,701 1,105.1 4,170 1019.2 Berriwillock 2.8 9 4.5 12 18.0 69 25.4 90 21.4 Beulah 2.4 12 4.5 32 39.2 139 46.1 183 40.5 Birchip 1.7 14 20.3 83 101.1 364 123.2 461 101.2 Brim 4.2 7 0.2 5 8.9 47 13.3 59 12.7 Buangor 1.1 3 1.3 4 11.0 32 13.5 39 11.9 Charlton 17.5 17 52.6 131 139.7 558 209.7 706 188.5 Chillingollah - - 0.0 1 1.4 5 1.4 6 1.1 Chinkapook 0.2 1 0.0 2 4.5 14 4.8 17 3.5 Cowangie 0.7 2 0.6 2 0.5 8 1.8 12 3.5 Culgoa 1.1 3 2.5 15 14.0 60 17.6 78 16.4 Dimboola 4.7 23 51.8 98 160.6 772 217.1 893 203.1 Donald 6.9 13 45.6 165 170.1 716 222.6 894 197.6 Dooen - - 0.9 3 3.1 15 4.1 18 3.5 Edenhope 4.1 17 26.8 83 81.4 451 112.3 551 99.6 Elmhurst 0.2 6 2.5 14 14.5 99 17.2 119 16.2 Glenorchy 0.0 2 0.0 3 7.7 57 7.7 62 6.4 Goroke 2.0 13 4.7 31 34.2 139 40.9 183 38.8 Great Western 23.7 7 15.2 17 25.3 114 64.2 138 49.3 Halls Gap 7.1 6 85.1 91 48.2 521 140.3 618 125.0 Harrow 1.4 8 1.2 17 22.4 71 25.0 96 23.9 Hopetoun 11.1 19 19.2 61 84.3 302 114.6 382 99.1 Horsham 15.5 62 358.4 997 1,785.0 7,600 2,158.9 8,659 1981.6 Jeparit 0.9 13 15.1 44 39.9 250 55.9 307 49.5 Jung 0.0 1 0.0 2 10.4 38 10.4 41 9.1 Kaniva 6.4 16 58.5 106 136.4 405 201.3 527 186.4 Kiata - - 0.2 3 2.7 18 3.0 21 2.5 Lake Bolac 13.5 13 13.4 33 34.0 127 60.9 173 55.5 Lalbert 1.7 5 3.3 13 13.3 41 18.3 59 17.1 Lascelles - - 0.9 6 7.0 25 7.9 31 6.2 Lillimur - - 0.0 1 6.0 18 6.1 19 6.4 Manangatang 2.2 9 20.3 29 46.1 131 68.6 169 55.0 Marnoo 0.6 5 2.0 15 13.3 50 15.8 70 13.2 Minyip 3.8 14 5.3 33 41.1 235 50.2 282 47.8 Miram - - 0.0 2 1.0 9 1.0 11 1.5 Moyston 0.3 3 1.0 6 24.0 87 25.3 96 21.6 Murrayville 2.8 9 33.8 34 63.7 155 100.3 198 104.6 Murtoa 1.4 16 16.0 62 81.8 412 99.2 490 89.5 Nandaly 0.9 7 1.3 6 3.4 20 5.6 33 4.4 Natimuk 6.8 14 8.5 31 48.2 227 63.5 272 54.7 Nhill 23.5 25 50.8 156 267.3 972 341.6 1,153 395.1

GWMWater Annual Report 2014/15 Page 13 Industrial and Non-Residential and Residential Average Concessional Municipal Annual Consumption* ML ML No ML No ML No Total ML Total No Nullawil 1.0 4 4.6 14 9.2 30 14.8 48 12.7 Ouyen 26.6 10 97.0 116 206.4 565 330.0 691 307.0 Patchewollock 0.5 5 1.6 14 6.4 37 8.5 56 8.2 Pimpinio 0.2 2 1.2 3 7.5 33 9.0 38 8.0 Pomonal 0.3 2 2.5 9 23.5 120 26.3 131 22.7 Quambatook 13.5 13 16.5 25 33.0 131 63.1 169 50.6 Rainbow 15.0 21 15.6 53 68.0 303 98.6 377 89.2 Rupanyup 3.3 11 9.8 42 37.1 198 50.2 251 42.9 Sea Lake 10.0 9 28.6 72 103.9 345 142.5 426 134.2 Serviceton 1.0 2 0.3 3 4.4 26 5.7 31 5.7 Speed 0.3 3 1.1 7 6.5 29 7.9 39 7.0 St Arnaud 2.5 27 147.4 214 239.7 1,202 389.6 1,443 379.7 Stawell 746.1 30 140.8 378 627.5 2,944 1,514.4 3,352 1319.2 Streatham 0.1 4 0.4 7 5.3 39 5.7 50 5.5 Tarranyurk - - 1.0 4 0.5 4 1.4 8 1.7 Tempy 0.6 6 1.4 5 5.9 19 8.0 30 7.9 Ultima 0.9 6 3.3 11 31.1 82 35.4 99 31.8 Underbool 2.4 8 16.1 18 47.6 107 66.0 133 59.4 Waitchie 0.0 1 0.0 2 0.3 3 0.3 6 0.2 Walpeup 0.4 4 7.5 14 20.4 58 28.3 76 25.5 Warracknabeal 12.9 24 52.2 186 296.8 1,237 361.8 1,447 327.0 Watchem 0.1 5 3.2 10 11.2 72 14.5 87 12.2 Westmere - - 4.2 7 1.0 10 5.2 17 5.1 Wickliffe 0.1 2 2.6 8 16.8 35 19.5 45 19.0 Willaura 2.3 13 42.6 62 48.0 206 92.9 281 86.6 Woomelang 8.2 12 8.3 24 30.4 110 47.0 146 41.8 Wycheproof 11.4 17 29.5 68 92.8 346 133.7 431 110.3 Yaapeet 0.7 1 0.7 6 8.4 28 9.8 35 7.9 1,173.10 687 1,853.20 4,278 6,318.20 27,499 9,344.5 32,464 8,543.0 * Average calculated between years 1 July 2010 and 30 June 2015

GWMWater’s estimated total unaccounted for water in 2014/15 was 1,564.1 ML (13 percent) for the urban system. Unaccounted for water comprises leakages from pipes, mains flushing, fire fighting, unmetered connections, metering errors and illegal connections.

Page 14 GWMWater Annual Report 2014/15 Weekly household drinking water consumption 2014/15

Month Week 1 Week 2 Week 3 Week 4 Week 5 July 2,408 2,408 2,408 2,408 2,408 August 2,408 2,408 2,408 2,408 September 2,408 2,408 2,408 2,408 October 4,293 4,293 4,293 4,293 4,293 November 4,293 4,293 4,293 4,293 December 4,293 4,293 4,293 4,293 January 6,388 6,388 6,388 6,388 6,388 February 6,388 6,388 6,388 6,388 March 6,388 6,388 6,388 6,388 April 4,627 4,627 4,627 4,627 4,627 May 4,627 4,627 4,627 4,627 June 4,627 4,627 4,627 4,627

GWMWater bills residential customers four times a year, once every three months.

The calculated average weekly consumption per residential customer for July to September 2014 is 2,408 litres per week, for October to December 2014 is 4,293 per week, for January to March 2015 is 6,388 and for April to June 2015 is 4,627.

Supply and Distribution

Inflows into the Grampians reservoir system were approximately 58,000 ML for the 2014/15 water year, equivalent to 27 percent of the historic average. This reflects a much drier than average year, which resulted in reservoirs being drawn on heavily to meet consumptive and environmental demands.

Grampians system reservoir volumes steadily declined over the year as water was released to meet entitlement holder demands. The reservoir system peaked at 245,600 ML (44.1 percent) in August 2014, and reached a low of 152,300 ML (27.4 percent) in May 2015, the lowest volume since August 2010.

Despite inflows into the Murray system being below the long term average, seasonal determinations reached 100 percent for the 2014/15 water year, providing added security for GWMWater’s towns and rural pipeline users serviced from the River Murray.

All GWMWater’s urban customers were required to observe Permanent Water Saving Rules during 2014/15, with the only exception being the town of Harrow which transitioned from Stage 1 to Permanent Water Saving Rules on 14 December 2014 as supplies to this town improved.

GWMWater Annual Report 2014/15 Page 15 Bulk and Environmental Entitlements

Bulk entitlements and environmental entitlements grant the As Storage Manager, GWMWater is responsible for the entitlement holder the right to use and supply water. GWMWater management of the water resource on behalf of all entitlement holds bulk entitlements in the Wimmera-Glenelg, Murray, Goulburn, holders, making seasonal allocations where applicable and East Grampians and Pyrenees systems which are used to supply delivering water to entitlement holders. towns along with rural and commercial customers.

GWMWater is also the Storage Manager and Resource Manager for the Wimmera–Glenelg and East Grampians systems.

Reporting for the Bulk Entitlement (Wimmera and Glenelg Rivers – GWMWater) Order 2010 The matters below relate to GWMWater’s reporting requirements in accordance with section 18.1 of this Bulk Entitlement:

BE Clause Item Report (ML) Notes

18.1 (b) Offtake Points Supply to Dad and Dave Weir Mt Zero Channel 3,005 Brimpaen Storages Wimmera Mallee Pipeline, System 6 561 Taylors Lake Outlet WimmeraMallee Pipeline, Systems 1,2,3,4,6 & 7. 60 Note 1 Supply By Agreement customers Licenced diversion Domestic and stock diverters from 0 Note 2 offtakes Rocklands -Toolondo Channel.

Rocklands Offtake Supply By Agreement customers direct 5,461 from headworks Rocklands Offtake Glenelg River Compensation Flow 50

Lake Fyans Outlet Urban systems and Supply By 1,983 Agreement customers

Lake Bellfield Urban systems and Wimmera Mallee 10,842 Pipeline, Systems 1,2,3,4,6 & 7.

Stawell Diversion Stawell urban system Weir 998 Mt Cole Reservoir Ararat urban system and Supply by 177 Agreement Customers Langi Ghiran Urban systems andSupply By 0 Note 3 Reservoir Agreement customers

Panrock Reservoir Urban systems and Supply By 0 Note 3 Agreement customers Total Offtake 23,317

Page 16 GWMWater Annual Report 2014/15

BE Item Clause Report (ML) Notes 18.1 (c) Water supplied to primary entitlements (Schedule 2, Table 1) GWMWater Pipeline and balancing storage losses 1,172 Commonwealth Environmental Water 0 Holder Glenelg Compensation Flow 50 Recreation 3,104 Wimmera MalleePipeline Product 18,811 Reporting for the Bulk Entitlement (Wimmera and Glenelg Rivers – GWMWater) Order 2010 Coliban Water Wimmera MalleePipeline Product 223 The matters below relate to GWMWater’s reporting requirements in accordance with section 18.1 of this Bulk Entitlement: Wannon Water Wimmera MalleePipeline Product 48 Victorian Wetlands 112 Environmental 33,608 Water Holder Wimmera Mallee Pipeline Product Total supplied to primary entitlements 57,128 18.1 (d) Final water allocation toGWMWater Pipeline and balancing storage losses 100% (2,960) Commonwealth Environmental Water Holder 0% (0) GlenelgCompensation Flo w 1.5% (49) Recreation 0% (0) Wimmera MalleePipeline Product 48.1% (21,510) 18.1 (e) Metering Program Pending Note 4 18.1 (f) Transfers of an entitlement or part of this BE None Bulk Entitlement, licence or water right, entitlement or 18.1 (g) assignment transferred to GWMWater supply systems None 18.1 (h) Amendments to this Order Yes Note 5 18.1 (i) New BE granted to GWMWater under this Order None 18.1 (j) BE compliance failures Yes Note 6 18.1 (k) BE compliance difficulties and actions None

Notes to this Table: 1. Volume supplied by agreement from Horsham Weir Pool. 2. No regulated diversion licences are held. 3. Storage was not used for water supply purposes during 2014/15. 4. A metering program for this Bulk Entitlement was submitted to the Minister for Water in October 2011. Amendments to the program are required prior to approval. 5. The Minister for Water approved GWMWater’s application to amend this Bulk Entitlement to address recommendations arising from the Bulk and Environmental Entitlements Operations Review. Amendments became effective on 18 September 2014. 6. GWMWater has not yet implemented an approved metering plan.

GWMWater Annual Report 2014/15 Page 17 Reporting for the Bulk Entitlement (Willaura, Elmhurst and Buangor Systems - GWMWater) Order 2012 The matters below relate to GWMWater’s reporting requirements in accordance with section 11.1 of this Bulk Entitlement:

Report BE Item Notes Clause (ML) 18.1 (b) Annual amount of water taken 229 18.1 (c) Metering program approved under sub- clause 10.4 Pending Note 1 Any temporary or permanent transfer of this bulk None 18.1 (d) entitlement None 18.1 (e) Any bulk entitlement, licence or water right in respect of the waterway transferred to GWMWater 18.1 (f) Any amendment to this bulk entitlement None New bulk entitlement granted to GWMWater with respect 18.1 (g) to the waterway None 18.1 (h) BE compliance failures Yes Note 2 18.1 (i) BE compliance difficulties and actions None

Notes to this Table: 1. A metering program for this bulk entitlement was submitted to the Minister for Water in September 2013. Amendments to the program are required prior to approval. 2. GWMWater has not yet implemented an approved metering plan as required by the Bulk Entitlement approved by the Minister.

Page 18 GWMWater Annual Report 2014/15 Reporting for the Bulk Entitlement (River Murray – Grampians Wimmera Mallee Water) Order 1999 The matters below relate to GWMWaters reporting requirements in accordance with section 21.1 of this Bulk Entitlement.

Report BE Item Notes Clause (ML) 18.1 (b) Offtake Points Supply to Nyah pump station Northern Mallee Pipeline 398 (Nyah andEureka system) Piangil pump station Northern Mallee Pipeline 364 (Piangil andMangangatang system) Swan Hill pump Wimmera Mallee Pipeline 1,341 station (Supply System 5 -Swan Hill and Sea Lake) Liparoo pump station Northern Mallee Pipeline 1,643 (Ouyen system) Annuello pump station Private pipeline scheme 78 Hayesdale pump Private pipeline scheme 66 station Koolonong pump Private pipeline scheme 23 station Total Offtake 3,913 18.1 (c) Any new offtake points None 18.1 (d) Amount of water returned under sub-clause 16.2 None 18.1 (e) Annual amount supplied to primary entitlement holders GWMWater Urban supply systems 1,061 Rural properties 1,838 Community requirements 68 Pipeline operating requirements 779 (excludes private pipeline schemes) Private pipeline schemes 166 Total Supplied to Primary Entitlements 3,913 18.1 (f) Metering program approved under sub-clause 20.2 Pending Note 1 18.1 (g) Any temporary or permanent transfer of this bulk entitlement None 18.1 (h) Transfer of bulk entitlement or assignment of water allocation Note 2 under the Act Yes 18.1 (i) Amendments to this bulk entitlement None 18.1 (j) New bulk entitlement granted to GWMWater with respect to the River Murray None 18.1 (k) BE compliance failures Yes Note 3 18.1 (l) BE compliance difficulties and actions None Notes to this Table: 1. A metering program for this bulk entitlement was submitted to the Minister for Water in November 2011. Amendments to the program are required prior to approval. 2. Net water allocation trade of 100 ML out of this bulk entitlement. 3. GWMWater has not yet implemented an approved metering plan.

GWMWater Annual Report 2014/15 Page 19 Reporting for the Bulk Entitlement (Quambatook–Grampians Wimmera Mallee Water) Order 2006 The matters below relate to GWMWater’s reporting requirements in accordance with section 12.1 of this Bulk Entitlement.

BE Report Item Notes Clause (ML) 18.1 (b) Annual amount of water taken 121 18.1 (c) Metering program approved under sub-clause 11.2 Pending Note 1 Any temporary or permanent transfer of this bulk 18.1 (d) None entitlement 18.1 (e) Any period of restriction imposed on this entitlement None 18.1 (f) Any amendment to this bulk entitlement None New bulk entitlement granted to GWMWater with 18.1 (g) respect to this entitlement None 18.1 (h) BE compliance failures Yes Note 2 18.1 (i) BE compliance difficulties and actions None

Notes to this Table: 1. A metering program for this bulk entitlement was submitted to the Minister for Water in November 2011. Amendments to the program are required prior to approval. 2. GWMWater has not yet implemented an approved metering plan.

Page 20 GWMWater Annual Report 2014/15 Recreation Water

The 2014/15 financial year is the second year the recreation water This supply to recreation lakes was to have greater reliability and pricing policy has been operating. In comparison to 2013/14 there compensate for the loss of open water with the removal of farm was an increase in the volumes of discounted water supplied and dams. also the number of recreation and sporting entities accessing the discounts. In response to customer feedback and support received on the value of the benefits to the region and sustainability issues The availability of recreation water was enhanced in 2014/15 for recreation water users, GWMWater introduced a recreation from the implementation of recommendations from the 2014 Bulk contribution charge to support a discounted pricing policy for and Environmental Entitlements (Wimmera and Glenelg Rivers) recreation water in 2013/14. This pricing policy was supported by Operations Review. These included increasing GWMWater’s the Essential Services Commission in the 2013 Water Price Review Recreation entitlement primarily to secure supplies to Walkers due to the strong community support for the discounted pricing Lake and Lake Marma. The reincorporation of Green Lake into the policy. headworks system to assist with managing water quality is also expected to provide water levels suitable for recreation in about The discounted volumetric charges were established to provide 70 percent of years. greater affordability for these organisations while still sending a price signal to promote the efficient use of water. The discounts A specific objective of the Wimmera Mallee Pipeline (WMP) project are funded through a recreation contribution charge of $16.00 was to provide greater certainty for the provision of recreation per customer with an $8.00 discount applied to concession water and improve the liveability of the region. Following many card holders. The contribution is collected through the service years of drought, the construction of the WMP and two wet years availability charge for urban customers and primary meter charge in close succession in 2010 and 2011, the water resource position for rural customers. of the Grampians headworks system significantly improved. With the introduction of the recreation contribution charge and Community support for the Wimmera Mallee Pipeline was strongly recreation water discounts, GWMWater committed to reporting linked to the ability to have sufficient capacity in the pipeline with annually on the value of contributions collected and discounts a matching water allocation to the supply of water to recreation provided with the Annual Report. lakes previously filled by the Wimmera Mallee stock and domestic channel system. The following table provides a summary of the value of contributions collected and discounts provided in 2014/15.

Number / Volume 2014/15 Note Delivered $ Revenue Rural Recreation Contributions 4,183 63,816 Urban Recreation Contributions 27,043 370,603 Recreation Lake Water Revenue 1 51,089 Total Revenue 485,508 Expenditure Recreation Lake Water Discounts 2 2,554 ML 71,525 Recreational and Sporting Club Rural Volumetric Discounts (71 entities) 221.9 ML 63,071 Urban Volumetric Discounts (244 entities) 363.0 ML 221,736 Distribution Costs 255,133 Public Recreation Facilities 47,201 Total Expenditure 658,666 Net Result for the Year (173,158)

Notes: 1. Includes revenue from supply to Nhill Lake from groundwater bore. 2. Discount value based on reduction from $48 per ML to $20 per ML. The volume reflects the deemed top up volumes for lakes supplied from the River Murray and Grampians headworks system, and, groundwater supply to Nhill Lake.

GWMWater Annual Report 2014/15 Page 21 Statement of Obligations

On 25 March 2015, the Minister for Environment, Climate Change and Water advised a review of the Statement of Obligations (SoO). The main objective of the review is to reintegrate planning for climate change adaptation as an integral part of the water business planning framework. The GWMWater Board has considered and supports the proposed amendments to the SoO with climate variability presenting some significant challenges to water resource management in our region. Dam Safety GWMWater progressively conducts risk assessments on all high risk headworks reservoirs on a priority basis as part of an ongoing dam safety management program.

Specific actions carried out during the year to meet the SoO requirements were: • Submission of a Dam Safety Report for relevant reservoirs managed by GWMWater • Management, operation and surveillance of all headworks reservoirs in accordance with ANCOLD Dam Safety Management guidelines (2003) as part of an ongoing program • A formal Risk Assessment in accordance with ANCOLD Guidelines completed on Bellfield Reservoir • Consequence assessments in accordance with the 2012 ANCOLD Guidelines were completed for the 23 Wimmera Mallee Pipeline reservoirs.

Page 22 GWMWater Annual Report 2014/15 Economic Sustainability

Financial Summary 2010/11 to 2014/15 ($ Million) 2010/11 2011/12 2012/13 2013/14 2014/15 Operating revenue 39.30 46.59 52.98 56.10 61.00 Contribution revenue 1.79 18.94 2.52 4.54 3.69 Other revenue 1.18 0.98 1.00 1.20 0.98 Total Revenue 42.27 66.51 56.50 61.84 65.67

Operating expenditure 27.71 31.26 29.14 30.41 30.63 Environmental Levy 1.32 1.32 1.32 1.68 1.68 Depreciation 24.78 32.92 47.19 32.60 32.85 Channel Decommissioning Provision Expense 1.20 - 4.75 - - Loss on disposal of assets 1.19 0.47 0.15 3.13 0.75 Net fair loss/(gain) on revaluation of investment properties 0.09 - (0.52) - 0.08 Borrowing costs 8.09 8.81 8.74 9.12 9.19 Total Expenditure 64.38 74.78 90.77 76.94 75.18 Net result before tax (22.11) (8.27) (34.27) (15.10) (9.51)

Current assets 14.58 24.98 25.70 17.18 21.64 Non current assets 1,923.29 1,908.84 1,882.54 1,872.33 1,857.68 Total Assets 1,937.87 1,933.82 1,908.24 1,889.51 1,879.32

Current liabilities 34.35 25.63 30.04 30.50 23.23 Non current liabilities 294.84 301.83 295.89 287.15 290.01 Total Liabilities 329.19 327.46 325.93 317.65 313.24

Net cash from operations 4.10 17.50 10.24 16.35 21.62 Payments for property, plant and equipment 23.60 23.68 20.96 26.87 17.02

Financial Performance Performance indicator 2010/11 2011/12 2012/13 2013/14 2014/15 Immediate Liquidity and Debt Servicing (Interest Cash Cover) Cash flow from operations before net interest and 1.8 3.1 2.2 2.8 3.4 tax payments ÷ net interest payments Long Term Financial Viability (Gearing Ratio) Total debt (including finance leases) ÷ total assets 6.3% 6.6% 7.2% 7.3% 7.3% Internal Financing Ratio Net operating cash flow / Capital expenditure 17.4% 73.9% 51.4% 63.8% 127% Current Ratio Current assets/current liabilities (excluding long-term 0.5 1.1 1.0 0.6 1.1 employee provisions and revenue in advance). Long Term Profitability (Return on Assets) Earnings before net interest and tax ÷ Average total assets (0.9%) 0.0% (1.3%) (0.3%) (0.0%) Owner’s Investment (Return on Equity) Net profit after tax ÷ average total equity 1.4% (0.5%) (1.5%) (0.7%) (0.4%) EBITDA Margin Earnings before interest, tax depreciation and 24.2% 50.0% 38.1% 42.9% 49.5% amortisation / total revenue

GWMWater Annual Report 2014/15 Page 23 The net result before interest, tax and depreciation for 2014/15 The trends in financial performance indicators over the five year was a surplus of $32.5 million compared to $26.6 million in period reflect the impact of these activities and events. The 2013/14. The improvement in the net result in 2014/15 was improvement in the interest cash cover ratio from 2.8 times in achieved from higher operating revenue and lower total 2013/14 to 3.4 times in 2014/15 demonstrates the improvement in expenditure compared to 2013/14. financial viability of the business.

Revenue from rates and charges was $4.9 million or 9 percent The overall financial performance of GWMWater remains higher than in 2013/14. Over the five year period increases in consistent with the funding model for the WMPP and the planning consumption levels, environmental water revenue, annual price assumptions applied to Water Plans since independent economic increases and growth in the rural pipeline customer water regulation of the water sector commenced in 2004. allowances have all contributed to the improvement in operating revenue. Victorian Industry Participation Policy

Operating expenditure was contained to $30.6 million in 2014/15 The Victorian Industry Participation Policy (VIPP) applied to three reflecting an improvement in operating efficiency compared to projects during 2014/15. One contract totalling $2.6 million was 2013/14. completed whilst another two projects are ongoing. The three contracts were part of regional projects where the contractors The net cash and borrowings position improved in 2014/15 to committed under the VIPP to include: $133.0 million from $137.8 million in 2013/14. • An overall level of local content of greater than 90 percent of Operating cash flows increased to $21.6 million as a consequence the total value of the contracts. of higher receipts from customers and lower capital payments. • The benefits to the Victorian economy in terms of skills and The capital program in 2014/15 was fully funded from operating technology including retaining local employment and a boost cash flows. to the regional economy.

The financial performance over the past five years has been The projects demonstrated a significant increase in the impacted by a number of different factors. The more significant management and technical skills of suppliers within the region. changes over this period are summarised below: The local content also demonstrates and reinforces that the region has the capability to manage, commission and service large • Impacts in 2012/13 from the commitment to close and technical engineering projects. decommission the Wimmera Irrigation System including increased depreciation from the accelerated write down of Consultancies irrigation assets and provision to decommission redundant irrigation assets. In 2014/15, there were 22 consultancies where the total fees • The impacts, both short and long term, on operations caused payable to the consultants were $10,000 or greater. The from natural events and climate variability including drought, total expenditure incurred during 2014/15 in relation to these flood and fire. consultancies is $410,802 (excl. GST). Details of individual • Sale of growth water entitlements realised from the water consultancies can be viewed at GWMWater’s website www. savings generated by the WMPP. The most significant sale gwmwater.org.au. realised in 2011/12 for $18.7 million. • Changes in customers’ consumption patterns affected by In 2014/15, there were 24 consultancies where the total fees changes in water restriction levels and seasonal variations. payable to the consultants were less than $10,000. The total • The infrastructure asset revaluation to fair value in 2010/11. expenditure incurred during the 2014/15 in relation to these • Increased employee costs in 2011/12 relating to the Vision consultancies is $65,444 (excl. GST). Super defined benefits funding call for $1.4 million. • Flood repairs to the Dimboola and Jeparit Weirs in 2013/14 and transfer of the weirs to Hindmarsh Shire impacting contributions revenue and loss on disposal of assets in 2013/14. • Environmental water revenue realised in 2014/15 for environmental water releases.

Page 24 GWMWater Annual Report 2014/15 Social Sustainability

Urban Water Restriction Levels/Permanent Water Saving Rules

Under our Water Restrictions By-Law No. 105 there were no water restrictions in place at 30 June 2015 in any of the towns we service. Permanent Water Saving Rules, however, apply in all 71 towns. Rural Pipeline Water Restriction Levels

There were no rural pipeline customers subject to water restrictions under the Water Restrictions By-Law No. 105 as at 30 June 2015. Rural pipeline customers are encouraged to comply with the Permanent Water Saving Rules. Exemptions

There were no applications received for exemption for purposes which were outside the provisions of the Permanent Water Saving Plan. Enforcing Water Restrictions and Investigations of Breaches of the Water Act 1989 and Claims for Compensation

GWMWater staff made 84 property visits, with 457 follow up telephone calls, to investigate reports submitted by the public and staff in relation to possible breaches of the Water Act 1989 or our by-laws or in response to claims for compensation.

There were no breach notices issued under the Water Restrictions By-Law No. 105 or Permanent Water Saving Plan. One customer was successfully prosecuted in the Magistrates’ Court for transgressions under the Water Act 1989.

GWMWater Annual Report 2014/15 Page 25 Major Non-Residential Water Users

Under section 122ZJ of the Water Act 1989 GWMWater must include information on any non-residential customer who consumes greater than 200 ML from an urban water supply system.

Customer By Volume Range

Volumetric Range – ML per year Number of Customers Equal to or greater 200 ML less than 300 ML 0 Equal to or greater 300 ML less than 400 ML 0 Equal to or greater 400 ML less than 500 ML 0 Equal to or greater 500 ML less than 750 ML 1 Equal to or greater 750 ML less than 1000 ML 0 Total number of customers 1

Naming Of Customers And Participation In Water Conservation Programs

Name of Customer Information as to customers participation in the water conservation program

Stawell Gold Mines Pty Ltd A water conservation plan has been prepared

Community Service Obligations Value of Community Service Obligation Provided 2013/14 2014/15 Provision of concessions to pensioners $2.391M $2.274M

Rebates paid to not-for-profit organisations under $383,000 $380,000 the water and sewerage rebate scheme Utility Relief Grant Scheme payments $25,000 $33,000 Water concessions on life support machines – $429 $447 Haemodialysis

Hardship Relief Grant Scheme (Sewerage $4,180 0 Connection Scheme)

Page 26 GWMWater Annual Report 2014/15 Environmental Sustainability

Sustainable Water Strategy Water Conservation

The Western Region Sustainable Water Strategy was released Victorian Government Regional Showerhead by the Victorian Government in November 2011 to provide a Exchange Program framework for protecting the needs of water users, rivers and aquifers. GWMWater is implementing key policy directions Customers were invited to swap their old showerhead for a new, from the strategy. A review of the operation of the Wimmera- more efficient showerhead that saves nine litres of water per Glenelg bulk entitlements was completed resulting in increased minute. Two types of water saving showerheads are available opportunities to access water for recreation needs. Groundwater for exchange (wall mounted and hand held) with 53 customers is actively managed in the western areas of our region with the exchanging their showerheads in 2014/15. aim of achieving sustainable utilisation of this resource. Living Victoria Home Rebate Scheme Water Supply Demand Strategy This scheme rewards urban customers for their efforts to GWMWater’s Water Supply Demand Strategy assessed long be water efficient in the home, garden and small business by term water demands under a range of supply scenarios. We are providing rebates on a range of water efficient products and continuing to focus on building our understanding of demand appliances. patterns and the future impact of climate variability. System inflows in 2014/15 were well below the long term average, and A total of 282 applications were processed in 2014/15 with system levels have continued to decline in comparison to both rebates for the purchase of tanks and other water saving products 2012/13 and 2013/14. However, the fully pipelined system meant amounting to $175,882.72. supplies remained secure and no water restrictions were in place for residential, commercial or stock and domestic customers. Water Tariff Reduction

Water Recycling A 15 percent tariff reduction is provided to not-for-profit organisations that conserve water by watering at night via GWMWater achieved its target to reuse 100 percent of reclaimed dedicated timed sprinkler systems. There are currently 28 wastewater generated from its wastewater treatment plants. organisations benefiting from this initiative. A total of 2,232 ML was delivered to reuse customers during 2014/15. Victorian Biodiversity Strategy

Biodiversity is a key consideration in the planning for environmental management plans for major infrastructure projects. Works are located to avoid known sites of ecological significance such as ecological vegetation classes. All projects require appropriate planning approvals to be obtained and any vegetation clearance is offset through appropriate plantings.

GWMWater Annual Report 2014/15 Page 27 Sustainable and Resilient Water Services Systems

Regulated Water Supplies The model, which was introduced to enhance the level of engagement with key stakeholders, is facilitated twice a year GWMWater continued to work closely with Local Government and provides an opportunity for participants to discuss and make Environmental Health Officers to assist their Councils manage the recommendations on important issues put forward by the Board. potential health risks in these towns and meet their obligations in The outcomes are then reviewed by the Board and assist with relation to the Food Act 2004. future policy decisions and strategy development.

Strategies for managing the potential health risks associated with Stakeholder workshops were held in November 2014 and May these water supplies include the issue of an annual untreated 2015. The November 2014 workshop focussed on recreation water supply notice to all customers, untreated water supply water, regional development opportunities and the provision advice on customer accounts and signage on all publicly accessible of drinking water to customers. At the May 2015 workshop, taps in association with local government. stakeholders contributed to discussions about the sale of growth water and assisted in identifying potential future use options for Year 9 and 10 Student Conference consideration.

The annual student conference for Year 9 and 10 students has Due to the new model being implemented the former Grampians, been running for nine consecutive years. The conference provides Wimmera and Mallee customer committees formally finished an excellent opportunity to engage with students living within our operating. There are now four standing customer committees of operating area who are potentially the next generation of customers. the GWMWater Board: • Regional Recreation Water Users Group. Six schools participated in the 2015 conference. Guest speakers • West Wimmera Groundwater Management Area included the Tauranga Girls School in New Zealand, Rempco Implementation Committee. Vlasblom from the Netherlands and local teacher Rachel Farren • Murrayville Water Supply Protection Area Implementation who shared her experiences living in Gambia, in a village without a Committee. reticulated water supply. • Irrigation Diverters Committee. Community Events and Sponsorship The committees, which consist of up to 16 members, met regularly during 2014/15 to address key issues including: GWMWater participates in the Wimmera Machinery Field Days and • Bulk and Environmental Entitlements Operations Review Mallee Field Days each year. GWMWater’s 2015 display featured the (Wimmera and Glenelg Rivers). Rural Pipeline Intelligence Project which generated considerable • Water allocations for recreational lakes. interest from our rural customers. • Sale of additional (unallocated) groundwater. • Groundwater trend analysis project. Community celebrations were held in Donald, Jeparit, Minyip, • Seasonal usage, groundwater levels and quality. Rupanyup and Wycheproof to acknowledge the upgrade of these • Domestic and stock bore survey. towns’ water supplies to drinking water quality. GWMWater also • Irrigation Development Guidelines. visited schools in these towns to promote the benefits of drinking water and present refillable water bottles to students. Rocklands Recreation Management Plan Working Group GWMWater also engages with stakeholders through sponsorships. Sponsorships assist in strengthening relationships while The Working Group was formed in June 2014 to provide advice contributing to the economic and social wellbeing of the to GWMWater about the future management of recreation at community. A great example is the Quambatook Community Rocklands Reservoir, including the development of a recreation Garden Project which acts as a place for the community to come management plan. The group met three times in 2014/15. together and learn about affordable living and healthy eating. GWMWater donated water wise products to support the project. Wimmera Irrigation System Decommissioning Reference Group Stakeholder Engagement The Reference Group held its final meeting in February 2015. Key In December 2014 GWMWater adopted a new stakeholder points of discussion included a channel decommissioning summary workshop model as the basis for engagement with customers and report, fencing summary, Rokeskys Road, project expenditure, key stakeholders. Horsham Rural City Council Memorandum of Understanding, Quantong Reservoir and the process for transfer of land.

Page 28 GWMWater Annual Report 2014/15 Management Strategies

Corporate Management System Environmental Watering

GWMWater is certified under ISO 9001 for quality, ISO 14001 GWMWater engages with the Commonwealth Environmental Water for environment and AS/NZS 4801 for occupational health and Office, catchment management authorities and the Victorian safety. Operational sites continue to be periodically audited and Environmental Water Holder to deliver environmental water in opportunities for improvement raised as needed. accordance with Bulk and Environmental Entitlements.

Regional Catchment Management Strategy During the 2014/15 water year, a total of 19,007 ML (including passing flows) was released to the Wimmera system, including GWMWater is a partner with other agencies in the delivery of the Mackenzie River, Wimmera River, Lower Mount William Creek, regional catchment strategies. Waterway management strategies Burnt Creek and Bungalally Creek. Some 20,667 ML (including have also been developed recently across the region by catchment passing flows) was released to the Glenelg River to provide management authorities. benefits below Rocklands Reservoir. A volume of 112 ML was distributed to multiple wetlands connected to the Wimmera Mallee Pipeline.

VEWH Authorised Volume (ML) Volume Delivered (ML)

Summary - Regulated Releases Lake Lonsdale 1,003 Taylors Lake 12,137 MacKenzie River 4,461 Burnt and Bungalally Creek 412 Upper Mt William Creek 146 Total Wimmera 22,078 18,159 Total Glenelg 18,482 15,449

Summary - Passing Flow Releases Wimmera System - Lonsdale 705 Wimmera System - Huddlestons 143 Glenelg System - Rocklands 5,219

Glenelg Compensation Flow 50

GWMWater Annual Report 2014/15 Page 29 Greenhouse Gas and Energy Emissions

Greenhouse Gas Emissions and Net Energy Office Based Environmental Data Consumption GWMWater’s Sustainability Strategy and Energy and Greenhouse GWMWater aims to minimise greenhouse emissions for the Plan detail actions and outcomes for sustainable practice across whole business and attain zero net emissions for offices, depots the business. All staff contribute to these outcomes and are and vehicle fleet. To achieve this we follow the Environmental encouraged to continually improve on prior performance. Protection Authority carbon management principles of avoid, reduce, recycle, switch to cleaner fuels, sequester and offset. The environmental footprint of workplaces is measured in terms of greenhouse gas emissions and energy, water, waste and paper use. The results of these programs are communicated to staff quarterly and strategies are developed to further reduce GWMWater’s environmental impact

Whole of Business Emissions

Result Result Result Result Result Source of Emissions 2010/11 2011/12 2012/13 2013/14 2014/15 Tonnes Tonnes Tonnes Tonnes Tonnes CO2-e CO2-e CO2-e CO2-e CO2-e Water treatment and pumping 10,665.0 10,157.2 11,898.5 12,184.4 13,141.0 Sewage treatment 5,842.6 8,196.3 5,905.5 (includes fugitive emissions) 1 10,060.0 5,564.6 Non-fleet (plant and equipment) 2 132.7 71.3 79.7 37.0 63.6 Vehicle fleet 1,189.3 1,161.9 1,181.0 1,001.0 1,029.0 Other 950.8 851.1 644.1 629.9 560.2 Offsets purchased (offset fleet emissions) (1,000) (1,000) 0 0 0 Offsets retired (offset emissions applied to offices and (2,000) (1,638) (1,612) depots) 3 (1,000) (1,500) Other activities e.g. renewable energy generated (3.2) (3.4) (3.5) (8.7) (0) Total net emissions 4 20,994.6 15,302.7 17,642.4 20,401.9 19,087.3

1. Fugitive emissions are calculated according to the requirements of the National Greenhouse Accounts Factors Workbook. The formulae and methodology for calculations is based on the National Greenhouse and Energy Reporting System (NGERS) Measurement Technical Guideline 2011. 2. Air travel as a scope three emission was not included for 2011/12. Air travel is included in the 2012/13 to 2014/15 figures. 3. 1,612 voluntary offsets were retired to offset office and fleet emissions in 2014/15. 4. The decrease in greenhouse gas emission figures this year reflects decreased fugitive emissions estimated for the year.

Zero net emissions were achieved for offices, depots and fleet through the surrender of valid Greenhouse Friendly Certificates. Increased emissions from pumping and water treatment and sewage treatment relate to increased volumes of water supplied in 2014/15.

Page 30 GWMWater Annual Report 2014/15 Energy

2011/12 2012/13 2013/14 Indicator 2010/11 2014/15 Target Result Result Result Result Result Total energy use (electricity) (MJ) 2,397,771 2,405,643 1,947,609 1,937,153 1,711,206 No target set Greenhouse emissions associated with energy Zero net emissions for 912.5 808.6 644.3 629.9 560.2 use (tonnes CO2-e) 1 offices and depots Greenhouse emissions associated with energy Zero net emissions for 1,003.2 (1,503.4) (1,003.5) (638.6) (560) use - offset (tonnes CO2-e) offices and depots Energy use per FTE (MJ per FTE) 2 11,679 12,226 10,752.2 10,916.5 10,492.2 No target set Energy per square meter of office space 899 933 643.3 563.5 545.5 No target set (MJ per m2) 2

1. The greenhouse gas emissions conversion factors have varied from year to year. The appropriate factor for each year has been applied. 2. Data is for corporate office only

Energy

Source 2010/11 Result 2011/12 Result 2012/13 Result 2013/14 Result 2014/15 Result Water MJ/ML 4,864.9 3,575.5 3,857.2 4,029.1 2,139.0 Sewage MJ/ML 1,883.0 1,826.9 2,017.9 2,202.8 1,945.0 Water kWh/ML 1,352.4 994.0 1,072.3 1,120.1 594.2 Sewage kWh/ML 523.5 507.9 561.0 612.4 540.3

Zero net emissions associated with energy use for all offices and depots has been achieved through the retirement of 560 Verified Emissions Reduction Units purchased in 2010 and held with the Department of Environment. GWMWater also generates solar energy at the corporate office. Solar energy is no longer included as a greenhouse emissions offset.

A quantified target for the reduction of energy use associated with electricity consumption has not been set. An Energy Efficiency Project is being implemented to establish energy savings through the Greener Government Building Program, a Department of Treasury and Finance initiative.

Waste

2010/11 2011/12 2012/13 2013/14 2014/15 Activity Result Result Result Result Result Target Units of waste generated (kg) 11,948 9,340 4,390 7,238 8,154 No target set Units of waste per FTE (kg) 103.0 89.2 45.3 68.9 77.6 69 Recycling rate (%) 53.5 63.3 71.8 79.5 77.8 85

To improve performance, staff are regularly educated about waste management through staff newsletters and training. Waste audits are conducted quarterly and the results communicated to staff. Strategies to improve our results are continually being sought.

GWMWater Annual Report 2014/15 Page 31 Paper

2014/15 Activity 2010/11 2011/12 2012/13 2013/14 Target Result Result Result Result Result Total units A4 equivalent copy paper used (reams) 1,409 1,464 1,123 1,145 931 No target set Units of A4 equivalent copy paper used per FTE 1 6.9 7.4 6.2 6.5 5.1 6 (reams) Percentage of recycled content of all copy paper 96.0 94.2 96.1 93.9 100 100 purchased (% white copy paper)

Paper use has decreased per FTE in 2014/15. GWMWater is regularly promoting paper saving measures including technology and behaviour change. Much of the operational work allocation process is now paperless.

Water

Activity 2010/11 2011/12 2012/13 2013/14 2014/15 Target Result Result Result Result Result Total water consumption (kL) 943 1,426 1,424 1,326 1,496 No target set Total water consumption 4.6 7.2 7.6 7.6 8.6 9 (kL per FTE)1 Water consumption per unit of office space (corporate office only) (kL per m2) 0.19 0.19 0.17 0.18 0.19 No target set

The increase in our water use per FTE reflects significant increases in consumption at only a few sites.

2010/11 2011/12 2014/15 Activity 2012/13 2013/14 Result Result Result Result Result Energy Consumed by fleet vehicles (MJ) Diesel 8,580,703 9,035,221 9,224,277 7,822,100 8,396,862 LPG 1,293,956 949,403 793,446 422,218 359,181 Unleaded 6,126,880 6,790,750 5,806,520 4,845,433 4,896,648 Total 16,001,539 16,775,374 15,824,243 13,089,751 13,652,691 Distance travelled (km) Diesel 1,924,982 1,913,099 1,900,049 1,849,956 1,732,731 LPG 292,030 187,424 152,944 115,574 47,893 Unleaded 1,733,820 1,793,982 1,517,745 1,271,221 1,312,520 Total 3,950,832 3,894,505 3,570,738 3,236,751 3,093,144 distance travelled by air 35,664 50,610 18,904 13,041 18,992 Greenhouse gas emissions (tonnes CO2-e) Diesel 645.2 631 694 588 631 LPG 85.2 58 52 28 24 Unleaded 458.9 473 436 363 367 Total 1,189.3 1,162 1,182 979 1,022 Total per 1,000 km 0.3 0.3 0.33 0.30 0.33 Commuting to work Percentage of employees regularly using public transport, cycling, walking or carpooling to and 21% 18% 18% 18% 18% from work or working from home

1. GWMWater surrenders voluntary carbon emission certificates to achieve zero net emissions for fleet. 2. No public transport available.

Page 32 GWMWater Annual Report 2014/15 Greenhouse Gas Emissions – tonnes CO2-e

2010/11 2011/12 2012/13 2013/14 2014/15 Activity Result Result Result Result Result Total associated with energy use 13,887.9 13,116.6 14,969.2 15,645.1 16,530.2 Total from vehicle fleet 1,189.3 1,161.9 1,181.0 979.0 1,029.0 Total from air travel 11.7 17.1 2.8 3.9 5.6 Total offsets retired 1 (1,000) (1,500) (2,000) (1,638) (1,612) Total offsets purchased (1,000) (1,000) Total offset from generation of renewable energy (3.2) (3.4) (3.5) (8.7) 03 from solar panels Other sources Fugitive emissions 7,777.0 3,456.4 3,415.9 5,365.5 3,076.5 Registered/unregistered plant and equipment 121.1 71.3 77.0 59.0 58.0 Total net emissions 2 20,983.8 15,319.9 17,642.4 20,405.8 19,3087.3

1. In October 2010, 19,585 Emission Reduction Units (ERU) were purchased and banked with the Department of Energy Efficiency and Climate Change. 1,612 ERUs were retired to offset all office, depot and fleet emissions, based on actual totals. 2. The total net emissions for 2011/12 to 2014/15 are for scopes one and two only. 3. GWMWater is no longer counting renewable energy generation as a carbon offset.

Procurement

GWMWater procurement activities are underpinned by the following principles: • Value for money. • Probity, transparency and fair competition. • Compliance, accountability and risk management. • Safety and environmental sustainability.

Proper consideration of the impact of proposed purchases is undertaken where it is deemed appropriate and practicable to satisfy the underlying principles.

Suppliers that demonstrate responsibility through accredited quality, safety and environmental systems and policies are highly regarded. Consideration is also given to products which minimise environmental impacts through efficient use of raw materials, energy and water, and minimisation of waste and greenhouse gas emissions.

GWMWater Annual Report 2014/15 Page 33 Performance Reporting

Certification of Performance Report for 2014/15

We certify that the accompanying Performance Report of Grampians Wimmera Mallee Water Corporation (trading as GWMWater) in respect of the 2014/15 financial year is presented fairly in accordance with the Financial Management Act 1994.

The Performance Report outlines the relevant performance indicators for the financial year as determined by the Minister for Environment, Climate Change and Water and as set out in the 2014/15 Corporate Plan, the actual and comparative results achieved for the financial year against predetermined performance targets and these indicators, and an explanation of any significant variance between the actual results and performance targets and/or between the actual results in the current year and the previous year.

At the date of signing, we are not aware of any circumstances which would render any particulars in the Performance Report to be misleading or inaccurate.

Peter Vogel Chairman

Mark Williams Managing Director

Dated this 21st day of August 2015.

Page 34 GWMWater Annual Report 2014/15 Financial Performance Indicators

Variance Variance KPI 2013/14 2013/14 2014/15 to Prior Key Performance Indicator Notes to Target Notes Number Result Result Target Year % % F1 Interest Cover (Cash) Net operating cash flows before net interest and tax payments ÷ net 2.8 3.4 2.6 21.4% 1a 30.8% 1b interest payments (times) F2 Gearing Ratio Total debt (including finance leases) 7.3% 7.3% 7.0% 0.0% 4.3% ÷ total assets * 100 F3 Internal Financing Ratio Net operating cash flow / net capital 63.8% 127.0% 73.0% 99.1% 2a 74.0% 2b expenditure * 100 F4 Current Ratio Current assets/current liabilities (excluding long-term employee 0.6 1.1 0.7 83.3% 3a 57.1% 3b provisions and revenue in advance) (times) F5 Return on Assets Earnings before net interest and tax (0.3%) 0.0% (0.2%) (100.0%) 4a (100.0%) 4b ÷ average total assets * 100 F6 Return on Equity Net profit after tax ÷ average total (0.7%) (0.4%) (1.0%) (42.9%) 5a (60.0%) 5b equity * 100 F7 EBITDA Margin Earnings before interest, tax, depreciation and amortisation/total 42.9% 49.5% 47.4% 15.4% 6a 4.4% revenue * 100

Notes: 1a The improvement in the Interest Cover (Cash) ratio in 2014/15 is due to a combination of an increase in operating receipts from customers of $4.5 million from customer growth, price increases and higher consumption, and, increase in GST received from the Australian Tax Office of $2.0 million. 1b The favourable Interest Cover (Cash) ratio result compared to the budget is mainly due to lower interest payments of $1.6 million. The decrease in interest payments is the result of lower borrowings due to higher operating receipts from customers from customer growth, price increases and higher consumption, and, lower payments on the capital program. 2a The improvement in the Internal Financing Ratio compared to 2013/14 is due to a combination of improved operating cash flow resulting from an increase in receipts from customers and lower payments on the capital program. 2b The Internal Financing Ratio result is significantly better than the budget due to lower interest payments, lower expenditure on the capital program and an increase in receipts from customers relative to budget. 3a The Current Ratio result in 2013/14 was impacted by the strategy to utilise cash reserves and the overdraft facility to minimise borrowings and borrowing costs. This strategy was not applied in 2014/15 as there was insufficient short term borrowings. Also adding to the improved results is the borrowings maturity profile with lower current borrowings in 2014/15. 3b The 2014/15 Current Ratio result is favourable compared to budget due to higher cash reserves and lower current borrowings.

GWMWater Annual Report 2014/15 Page 35 4a The Return on Assets ratio results are impacted by operating deficits before net interest and tax. The improvement in 2014/15 reflects stronger operating revenue from increased water consumption and reduced non-operating expenditure with 2013/14 including the loss on the disposal of the Dimboola and Jeparit Weir transferred to Hindmarsh Shire 4b The Return on Assets ratio result improved to budget mainly due to an increase in consumption revenue of $2.9 million due to higher demands 5a The Return on Equity ratio results are impacted by operating deficits after tax. The 2014/15 earnings are an improvement on last year due to the increase in revenue and lower expenditure for the year. Income tax revenue recognised from changes to the deferred income tax relating to temporary differences, reduced from $4.6 million in 2013/14 to $2.9 million, partially offsetting the improvement in the result 5b The improvement in the Return on Equity ratio compared to the budget reflects an overall improvement in the operating deficit resulting from stronger operating revenue, reduced expenditure and income tax revenue recognised for $2.9 million from changes to the deferred income tax relating to temporary differences 6a The EBITDA margin improved in 2014/15 of $5.7 million for earnings before interest, tax, depreciation and amortisation compared to last year. This is due to higher rates and charges revenue and decrease in non-operating expenditure compared to 2013/14

Page 36 GWMWater Annual Report 2014/15 Water and Sewerage Service Performance Indicators

Variance Variance KPI to Prior Key Performance Indicator 2013/14 2013/14 2014/15 Notes to Target Notes Number Year Result Result Target % % WS1 Unplanned water supply interruptions No of customers receiving (5) unplanned interruptions in the year/ total number of water (domestic and 0.53 0.59 0 11.3% 7a (100)% 7b non-domestic) customers * 100 WS2 Interruption time Average duration of unplanned 100 (24.2%) 8b water supply interruptions (minutes) 67.5 75.76 12.2% 8a WS3 Restoration of unplanned water supply Unplanned water supply interruptions restored within 5 98.7 99.36 97 0.7% hours/total unplanned water supply 2.4% interruptions*100 SS1 Containment of sewer spills Sewer spills from reticulation and branch sewers contained within five hours/total sewer spills from 100 99.32 98 (0.7%) 1.3% reticulation and branch sewers *100 SS2 Sewer spills interruptions No of residential sewerage customers affected by sewerage interruptions restored within five 98 97.95 98 0 (0.01)% hours WSR1 Rural water supply deliveries

Number of orders delivered/total number of orders*100 N/A N/A N/A N/A 9a N/A 9b

WSR2 Unavailability of Domestic and Stock supply Duration that domestic and stock service is unavailable in excess of on- 0 0 0 0% 0% property storage WSR3 Groundwater Supply Number of transfers processed

within target period/total number of 100 100 100% 0% 0% transfers processed*100

Notes: 7a A number of power outages in several towns during the year, coupled with reoccurring shutdowns, resulted in a slightly higher number than the prior year. Ongoing analysis to ascertain if problems are reoccurring on the same asset is taking place, the risks considered and where appropriate registered on the asset replacement program. 7b The actual result for 2014/15 is attributed to multiple leaks or bursts on aging water mains and pump asset failures. Assets that result in interruptions to customers multiple times during the year are analysed and prioritised for replacement in the annual renewals program. 8a Although there were less unplanned shutdowns recorded during 2014/15 compared 2013/14, a larger proportion of shutdowns were of duration between three and four hours. GWMWater’s larger service area makes it more logistically difficult to attend and repair within the targeted timeframe. 8b Performance for 2014/15 remains below target and can be attributed to improved system productivity and operational improvements. 9a GWMWater provides a continuous supply and therefore this indicator is not applicable. 9b GWMWater provides a continuous supply and therefore this indicator is not applicable.

GWMWater Annual Report 2014/15 Page 37 Customer Responsiveness Performance Indicators

Variance Variance KPI to Prior Key Performance Indicator 2013/14 2013/14 2014/15 Notes to Target Notes Number Year Result Result Target % % CR1 Water quality complaints No of complaints per 100 customers 10a 5% (no.) 0.29 0.42 0.40 44.8% CR2 Sewerage service quality complaints No of complaints per 100 customers 0.1* (50%) 11a (90%) 11b (no.) 0.02 0.01 CR3 Sewerage odour complaints No of complaints per 100 customers 0.02* 75% 12a 250% 12b (no.) 0.04 0.07 CR4 Billing Complaints

No of complaints per 100 customers 0.07 0.11 0.30* 57.1% 13a (63.3%) 13b (no.)

* Targets in the 2014/15 Corporate Plan were calculated per 10,000 customers. To report on the basis required under the MRD 01 Performance Reporting 2014/15 they have been adjusted to reflect per 100 customers.

Notes: 10a The increase in water quality complaints is attributed to a decrease in the quality of the raw water supply for a number of towns and an organism known to create taste and odour issues in one of the larger towns. The water does however meet the standards of the drinking water regulations and was safe to drink throughout the year. Increased treatment and options to reduce taste and odour are being investigated across a number of water supplies. The commissioning of a new water treatment plant at another location should also have a positive impact on complaints. 11a Only three sewerage service complaints were received during the year. 11b The positive variance relative to the target reflects the prompt level of service provided by GWMWater staff in responding to sewer service interruptions. 12a Sources of sewerage odour complaints occurred from sewer manhole lids and wastewater treatment plants with complaints rising during summer months. Each complaint is investigated and treatment process improvements being investigated at several wastewater treatment plants. 12b A total of 17 odour complaints related to several wastewater treatment plants and sewer manholes. Complaints were generally received from neighbouring residents or people passing by these assets. Complaints were generally made on calmer days where the wind and its direction were unfavourable. An odour management program is in place for wastewater treatment plants where odour complaints have been received. While numbers are above target, GWMWater will continue to monitor each source of complaint closely. 13a The increase in billing complaints from the previous reporting period is a response to an increase in debt collection activity which has increased the number of complaints received on charges raised on accounts. 13b The billing complaint target is set based on previous results. Complaints in this category continue to decline as processes and systems are being improved and optimised.

Page 38 GWMWater Annual Report 2014/15 Environmental Performance Indicators

KPI Key Performance Indicator 2013/14 2014/15 2014/15 Variance to Notes Variance to Notes Number Result Result Target Prior Year Target % % E1 Effluent re-use volume (end use) Percentage recycled for 82.6 100.3 100 20.7% 14a 0.3% each category (%) E2 Total net CO2 emissions

Net tonnes CO2 equivalent 20,300 19,088 19,700 6% 15a 3.1% (tonnes)

Notes: 14a The 2014/15 reporting period has been a drier year with increased reuse customer demand which has led to allocations being fully utilised. 15a A reduction in fugitive emissions has contributed to the lower number of emissions in 2014/15. Other contributions to the reduction include energy efficiency measures and increasing the use of solar power.

GWMWater Annual Report 2014/15 Page 39 Page 40 GWMWater Annual Report 2014/15 GWMWater Annual Report 2014/15 Page 41 Risk Management Compliance Attestation

I, Peter Vogel certify that GWMWater has complied with the Ministerial Standing Direction 4.5.5 – Risk Management Framework and Processes. GWMWater’s Audit, Governance and Risk Committee verifies this.

Peter Vogel Chairman

Dated this 21st day of August 2015.

Page 42 GWMWater Annual Report 2014/15 Financial Statements

Contents

Operating Statement 44 Balance Sheet 45 Statement of Changes in Equity 46 Cash Flow Statement 47 Notes to the Financial Statements 48 Statutory Certificate 94 Auditors Report 95 Disclosure Index 97

GWMWater Annual Report 2014/15 Page 43                                                                                                                                                     

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Page 44 GWMWater Annual Report 2014/15                                                                                                                                                                                                       

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GWMWater Annual Report 2014/15 Page 45

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 

         

      

 

        

      

  



       

       

        

        



             

 



  

 

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                    

Page 46 GWMWater Annual Report 2014/15                                                                                                                                                                                  

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GWMWater Annual Report 2014/15 Page 47                                                                   

 Page 48 GWMWater Annual Report 2014/15                                                                 



GWMWater Annual Report 2014/15 Page 49                                                                    



Page 50 GWMWater Annual Report 2014/15                                                                         



GWMWater Annual Report 2014/15 Page 51                                                                 



Page 52 GWMWater Annual Report 2014/15                                                                      



GWMWater Annual Report 2014/15 Page 53                                                •  •  •  •          

 Page 54 GWMWater Annual Report 2014/15                                                              



GWMWater Annual Report 2014/15 Page 55                                                                

 Page 56 GWMWater Annual Report 2014/15                                    •  •                         



GWMWater Annual Report 2014/15 Page 57                                                     •    •       



Page 58 GWMWater Annual Report 2014/15                •  •   •                                         

 GWMWater Annual Report 2014/15 Page 59                                                                 



Page 60 GWMWater Annual Report 2014/15                                                                                                                        

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GWMWater Annual Report 2014/15 Page 61    

                                                                  

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Page 62 GWMWater Annual Report 2014/15                                       

 GWMWater Annual Report 2014/15 Page 63         

  

           

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

  

           

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

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       

 Page 64 GWMWater Annual Report 2014/15                                       •  •  •   •                   

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GWMWater Annual Report 2014/15 Page 65              

     

     

     

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      

     

     

     

     

           

      

     

           

      

     

     

     

           

      

     

     

     

     

     

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    

 Page 66 GWMWater Annual Report 2014/15              

     

     

     

     

     

     

     

     

           

      

     

     

           

      

     

     

     

           

                 

     

     

     

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     

            

     

     

     

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           



   

     

 GWMWater Annual Report 2014/15 Page 67             

     

         

     

     

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        

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        

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        

     

     

     

     

     

     

     

     

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   

           

           

     

           

     

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                 

     

     

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        

 Page 68 GWMWater Annual Report 2014/15            

            

     

     

     

           

                              

     

           

     

  

     

           

                 

           

 

     

     

           

   

 

     

     

           

   

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GWMWater Annual Report 2014/15 Page 69              

   

     

     

           

   

 

   

     

     

           

   

 

   

     

     

           

   

 

   

     

     

           

   

 

     

     

           

   

 

     

           

   

           

   

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 Page 70 GWMWater Annual Report 2014/15

 

 

                   

      

 

               

  

    

                 

     

   

  

             

          

   

  

                     

     

  

     

                 

   

  

     

                 

    

  

 

                           

       

   

       

   



                                

GWMWater Annual Report 2014/15 Page 71        

    

 

  

      

     

     

     

     

     

     

     

     

          

       

       

    

 

  

      

     

     

     

     

     

     

     

     

          

                        



Page 72 GWMWater Annual Report 2014/15                                                       

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GWMWater Annual Report 2014/15 Page 73

          

               

     

          

               

       

                          

     

          

               

     

                          

     

         

                

     

       

                       

             

                 

  

 

  

 



                             

Page 74 GWMWater Annual Report 2014/15              •      •   •  •      •    •  •         •  •  •         •   •   •   •   •  •   •    •  •    •  •   •  •  •    •  •    •  •   •  •  •  •    •  •    •  •   •  •  •  

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GWMWater Annual Report 2014/15 Page 75          

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    

         

         

         

                     

     

     

     

     

     

           

     

 

     

   

           

                            

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Page 76 GWMWater Annual Report 2014/15    

    

 

  

      

     

     

     

       

       

    

 

  

      

     

     

     

                   

     

     

     

     

     

     

     

     

     

     

     

     

           

     

 

           

     

     

     

           

   

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GWMWater Annual Report 2014/15 Page 77                 

     

     

     

     

     

     

     

   

       

     

     

           

     

     

   

           

   

            

     

     

        

     

     

           

     

           

 

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Page 78 GWMWater Annual Report 2014/15              

           

     

     

     

     

     

     

           

           

     

     

     

     

     

           

           

                    

     

     

     

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     

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     

     

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     

             

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GWMWater Annual Report 2014/15 Page 79              

     

     

     

     

     

     

     

     

         

                

     

        

     

   

    

    

    

           

     

     

          

     

           

           

     

     

     

     

     

           

     

     

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Page 80 GWMWater Annual Report 2014/15              

     

      

           

         

     

     

     

    

     

     

     

     

     

     

     

     

     

     

        

   

   

           

   

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GWMWater Annual Report 2014/15 Page 81

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        

   

      

              

   



      

     

    



       

    

     

             

    



          

         

   

     

       

 

            

 

    

              

     

                      

            

          



                           

Page 82 GWMWater Annual Report 2014/15

      

    

         

       

       

      

        

       

     

       

       

      



        

           

     

         

   



               

     

          

          



        

               



                          ancial liabilities

             



 Interest rate exposure and maturity analysis of fin of analysis maturity and exposure rate Interest                         

GWMWater Annual Report 2014/15 Page 83               

     

     

     

     

     

     

     

     

     

     

     

     

     

           

          

     

     

     

     

         

               

     

      

     

          

   

  

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Page 84 GWMWater Annual Report 2014/15           

         

     

     

     

     

     

     

     

     

        

                 

                  

     

     

     

        

          

     

     

        

    

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GWMWater Annual Report 2014/15 Page 85                                                                  

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Page 86 GWMWater Annual Report 2014/15         

           

        

        

        

        

        

        

                             

           

       

       

        

        

        

        

        

     

     

     

 

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GWMWater Annual Report 2014/15 Page 87         

           

           

     

     

     

           

                  

       

 

           

        

         

       

       

       

       

       

       

        

                        

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Page 88 GWMWater Annual Report 2014/15                                •   •   •                     



GWMWater Annual Report 2014/15 Page 89          •   •                    •   •   •                  



Page 90 GWMWater Annual Report 2014/15                    •  •                    •   •                           

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GWMWater Annual Report 2014/15 Page 91                            

           

           

    

     

     

                                               

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Page 92 GWMWater Annual Report 2014/15              

           

           

 .          

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GWMWater Annual Report 2014/15 Page 93 Financial Statutory Certificate 2015

We certify the attached financial statements for the Grampians Wimmera Mallee Water Corporation (trading as GWMWater) have been prepared in accordance with Standing Directions 4.2 of the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards, Interpretations, and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the Comprehensive Operating Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2015 and financial position of the Corporation at 30 June 2015.

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.

Peter Vogel Chairman

Mark Williams Managing Director

Sally Marshall Executive Manager Business Performance and Planning (Chief Finance and Accounting Officer)

Dated this 21st day of August 2015.

Page 94 GWMWater Annual Report 2014/15 GWMWater Annual Report 2014/15 Page 95 Page 96 GWMWater Annual Report 2014/15 Disclosure Index

The Annual Report of GWMWater has been prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the corporation’s compliance with statutory disclosure requirements.

Legislation Requirement Page Reference Charter and Purpose FRD 22FManner of establishment and relevant Minister 4 FRD 22F Purpose, functions, powers and duties 4 FRD 22F Initiative and key acheivements 2 FRD 22FNature and range of services provided 4 Management and Structure FRD 22EOrganisational structure 9 FRD 22E Names of Board Directors 9 Financial and Other Information FRD 10 Disclosure index 97 FRD 12A Disclosure of major contracts 24 FRD 15B Executive officer disclosures 86 FRD 22F Operational and budgetary objectives and performance against objectives 23 FRD 22F Employment and conduct principles 11 FRD 22FOccupational health and safety policy 12 FRD 22F Summary of the financial results for the year 23 FRD 22F Significant changes in financial position during the year 23 FRD 22F Major changes or factors affecting performance 2,23 FRD 22F Subsequent events 34 FRD 22FApplication and operation of Freedom of Information Act 1982 10 FRD 22FCompliance with building and maintenance provisions of Building Act 1993 10 FRD 22FStatement on National Competition Policy 10 FRD 22FApplication and operation of Protected Disclosure Act 2012 10 FRD 22FDetails of consultancies over $10,000 24 FRD 22FDetails of consultancies under $10,000 24 FRD 22FStatement of availability of other information 10 FRD 24C Reporting of office-based environmental impacts 30 FRD 25 Victorian Industry Participation Policy disclosures 24 FRD 27CPresentation and reporting of performance information 34 FRD 29AWorkforce data disclosures 11 SD 4.5.5 Risk management and compliance attestation 42

Ministerial Reporting Directions MRD 01 Performance reporting 34 MRD 02 Reporting on water consumption and drought response 13 MRD 03 Environmental and social sustainability reporting 25, 27 Disclosure of information on bulk entitlements, transfers of water entitlements, irrigation water MRD 04 16 usage and licence entitlements MRD 05 Annual reporting of major non-residential water users 26

GWMWater Annual Report 2014/15 Page 97 Financial statements required under Part 7 of the Financial Management Act 1994 SD 4.2(a) Statement of changes in equity 46 SD 4.2(b) Operating statement 44 SD 4.2(b) Balance sheet 45 SD 4.2(b) Cash flow statement 47 Compliance with applicable Australian Accounting Standards and other authoritative SD 4.2(c) 48 pronouncements SD 4.2(c) Compliance with ministerial directions 48 SD 4.2(d) Rounding of amounts 48 SD 4.2(c) Accountable Officer’s declaration 94 SD 4.2(f) Compliance with model financial report 94 Other disclosures in notes to the financial statements FRD 03A Accounting for dividends 60 FRD 17A Long service leave, wage inflation and discount rates 57 FRD 19 Private provision of public infrastructure 85 FRD 21B Responsible persons and executive officer disclosures 86 FRD 102 Inventories 52 FRD 103D Non-current physical assets 53 FRD 104 Foreign currency 63 FRD 105A Borrowing costs 67 FRD 106 Impairment of assets 54 FRD 109 Intangible assets 55 FRD 107A Investment properties 76 FRD 110 Cash flow statements 47 FRD 112D Defined benefit superannuation obligations 88 FRD 120Accounting and reporting pronouncements applicable from 2009/10 reporting period 61 FRD121 Infrastructure assets 26

Legislation Page reference Freedom of Information Act 1982 10 Building Act 1993 10 Protected Disclosure Act 2012 10 Victorian Industry Participation Policy Act 2003 24

Page 98 GWMWater Annual Report 2014/15