Murray Irrigation Annual Report 2015 Murray Irrigation Change in action Murray Irrigation Annual Report 2015 Murray Irrigation Limited Banker 2015 Murray Irrigation Limited (ABN 23 067 197 933) is a company Commonwealth Bank of Australia Annual Report limited by shares, incorporated and 241 Cressy Street The 2015 Murray Irrigation Limited Annual domiciled in Australia. Its registered office Deniliquin NSW 2710 Report is a summary of operations and and principal place of business is: financial performance of the company from 1 July 2014 to 30 June 2015. 443 Charlotte Street Engineering Consultant Operations and performance for this period PO Box 528 Kellogg Brown and Root have been measured against key reporting Deniliquin NSW 2710 186 Greenhill Road areas in addition to meeting our statutory Telephone: 1300 138 265 Parkside SA 5063 Facsimile: (03) 5898 3301 financial reporting responsibilities. www.murrayirrigation.com.au The 2015 Murray Irrigation Limited [email protected] Solicitor Annual Report provides a concise and Norton Rose Fulbright Australia comprehensive summary. The objective Board of Directors Grosvenor Place of this report is to provide information 225 George Street to our shareholders to demonstrate The following people were directors of the Sydney NSW 2000 our transparency, accountability and company at the end of the financial year: performance. B.P. Simpson Taxation Advisor The 2015 Murray Irrigation Limited Annual C.D. Badger Report is published electronically and can R. Clubb Ernst & Young be accessed via the Murray Irrigation Limited M.L. Hughes 680 George Street website www.murrayirrigation.com.au T.W. McKindlay Sydney NSW 2000 R.E. Reynoldson ISBN 978-0-9923511-2-0 D.M. Robertson Annual General Meeting Copyright 2015 J. Sides Will be held at 7.00pm on Thursday 19 November 2015 Chief Executive Officer at the RSL Club, 72 End Street Michael Renehan Deniliquin NSW 2710 Company Secretary Further information Ross Mallett For further information about Murray Irrigation go to the company’s website at www.murrayirrigation.com.au Auditor Grant Thornton Audit Pty Ltd Design and photography The Rialto Level 30, 525 Collins Street Design langdonlorraine Melbourne VIC 3000 www.langdonlorraine.com.au Photography Nick Robinson CreativeProof Photography www.creativeproof.com.au Photography Nathan Holohan Murray Irrigation Cover: Murray Irrigation Customer Consultation Officer, Emily Pearse, discusses on-farm water delivery requirements with Wakool landholder David May. Murray Irrigation will engage with our customers and be ready to meet the challenge to reshape the company. We will ensure we can capture the opportunities that will present themselves and deliver value to our customers and shareholders. It is our responsibility as custodians of vitally important assets to ensure the long-term viability of our infrastructure and operations. Contents At a glance 2 Chairman’s report 4 Chief Executive Officer’s report 6 Year in review 10 01 Customers and community 13 02 Water availability, usage and efficiency 19 03 Infrastructure and works 23 04 Ancillary activities 29 05 People 33 06 Safety 39 07 Financial performance 41 08 Governance 45 Directors 50 Company profile and management team 52 Directors’ report and financial statements Directors’ report 58 Financial statements 62 Directors’ declaration 91 Auditor’s independence declaration 92 Independent audit report 93 Murray Irrigation Limited Annual Report 2015 1 At a glance Corporate structure Established 1995 (formerly government owned) Unlisted public company 2015 delivery Head office Deniliquin efficiency Regional offices Finley and Wakool 88.2% Water access licences 84.3% last year NSW Murray Regulated River 1,029,417 units general security at 30 June 297,060 units conveyance Irrigation customers profile 121,704 units supplementary water 3,287 units high security (as at June 2015) Landholdings supplied 2,037 Staff 154 Area of operations 748,000ha 1,299 2,037 Regional population farm businesses landholdings Approximately 33,000 1,112 last year 2,023 last year Infrastructure replacement value Over $800m Gross value agriculture production Over $500m (farm gate) Supply system 2,944km gravity-fed earthen channels Supply points 301 extra-large outlets 20% 29% 3,002 large outlets of farm of farm 325 small outlets businesses businesses 1,164 unmetered pipes grew rice grew cereals Five year average water use on farm 36% last year 45% last year 738GL Drainage catchment 259,000ha Drainage system 1,421km gravity-fed earthen channels Sub-surface drainage catchment 25,000ha Sub-surface drainage system 115 km pipes, 54 pumps, 2,100ha evaporation basins 17% 30% of farm of farm Accredited escapes Capacity 3,350ML/day (four escapes) businesses grew businesses permanent grew annual pasture pasture 26% last year 50% last year Sam Armytage with his son Will and his 2 Murray Irrigation Limited Annual Report 2015 father Neville on their property at Conargo. Higher flows achieved From the moment local farmer Sam Armytage bought his Conargo property, he knew he’d require higher water flows on-farm. “We wanted to be able to command more water when we’re irrigating so when we were told about PIIOP, we were straight on board. A consultation officer came and sat down with me, and it wasn’t long before the new outlets were installed. We used to get about 13ML per day out of each of the old (Dethridge) wheels. Now we have the ability to irrigate up to 30ML a day from each new outlet. The next step is remote control. It would be good to put order changes in twice daily.” Mr Armytage farms winter cereals on his two Murray Irrigation-serviced properties, near Conargo. The two landholdings cover about 1,538 hectares. Murray Irrigation Limited Annual Report 2015 3 Chairman’s report In opening the 2014/15 Chairman’s We are now at a point, however, where The Company developed a six point plan, report I want to say Murray Irrigation we need to take a fresh perspective to which was outlined at last year’s Annual has a positive future where it will continue reshape our company in preparation for General Meeting, designed to prepare to make a significant contribution to the next 20 years. Murray Irrigation for the future. It included: irrigated agriculture; and irrigated To be successful we need to harness the 1. Improving our safety culture. agriculture will deliver positive growth wisdom of those who have gone before to the national economy. 2. Ensuring decision making is based us and capture the aspirations and ideas on facts and data, not emotion. The challenge for the Board and of the next generation. It is wonderful to Management is to reshape the company see many younger people contributing. 3. Progressive irrigation engineering to ensure we can capture the opportunities needing increasing investment in that are starting to present themselves, Industry evolution technology, research and development, intellectual property and information delivering value to our customers and The irrigation industry today is vastly technology. shareholders. For this to happen we must different to 20 years ago. Technology has respond more effectively to the implications made farmers more sophisticated, while 4. Invest in skills as technology intensity of water reform. Government water reform and policies are increases. changing the way we think about water and 5. Manage projects and seasonal business Twenty years on we are challenged by the fact less water by schedule. Murray Irrigation is in its 20th year since is available to our farming customers to be privatisation in 1995. delivered through the system. 6. Stakeholder unity when working outside the region. In preparing Murray Irrigation for the In response, Murray Irrigation is also going next 20 years, and in order to capture through a process of change. We have Upon completion of his tenure, the interim the opportunities, we must recognise embarked on our PIIOP project to upgrade CEO presented the Board with a report of the achievements and learnings of the our systems, improve our delivery efficiency his business health check which identified last 20 years and build on them. and ensure our customers will be compliant key issues that need to be addressed by with new regulations. This evolution also the Board and the Company to secure our Over the last 20 years, the company and future. These include: its shareholders have confronted significant means our fundamental business structure challenges and changes, including must also evolve. • Our long-term stewardship of successive waves of government regulatory Following the departure of former Chief multigenerational assets, including reform and what is now referred to as the Executive, Anthony Couroupis, Murray considering maintenance and ‘millennium drought’. Irrigation appointed Dr Stephen Gumley as reinvestment; Despite these challenges, both the interim CEO for a six-month tenure to bring • Continuing to recognise the cyclic company and its shareholders have fresh eyes to the company and conduct nature of our water sales and improving collectively achieved many things, which a broad corporate review. the capacity of our business to respond we should all be proud of. While it has The interim CEO’s strengths included to this; not always been easy, it has shaped what working with, and leading, organisational • Identifying opportunities to innovate Murray Irrigation is today; a leader in the change and motivation and he identified how we work so we are more effective delivery of irrigation water and water- some key priorities in order to ensure and efficient. related products and services. Murray Irrigation’s long-term sustainability A key part of this work was the and financial wellbeing. His review was development of improved financial the first step along the pathway to ready modelling which is providing the Board Murray Irrigation for the implications of with more comprehensive and robust water reform. information to assist their decision making. The business health check, combined with financial modelling, has highlighted medium and long-term issues, which need to be considered in consultation with our shareholders.