HUNTER WATER CORPORATION CONSOLIDATED FINANCIAL STATEMENTS FOR … · · 2016-02-16HUNTER WATER...

HUNTER WATER CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED

31 DECEMBER 2012

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HUNTER WATER CORPORATION AND CONTROLLED ENTITY

Contents

Directors' Report

Income Statement

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Cash Flow Statement

Notes to and forming part of the Financial Statements

Directors' Declaration

Company Particulars Directors Mr T Mr K Mr J Ms B Mr R Ms C Ms S Prof M

Lawler Wood Eather Crossley Chappel Cifuentes Ivens Gleeson

Company Secretary MrS Phillips

Auditors

Chair Managing Director Deputy Chair

(to 31 December 2012)

(from 1 January 2013)

Audit Office of New South Wales

Bankers Commonwealth Bank of Australia

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DIRECTORS' REPORT

The Directors submit the following report made in accordance with a resolution of the Directors of the Parent Entity and Controlled Entity for the half year ended 31 December 2012.

DIRECTORS

The names and details of the Directors of the Parent Entity at any time during or since the end of the half year are:

Mr T Lawler Chair Mr K Wood Managing Director Mr J Eather Deputy Chair Ms B Crossley Mr R Chappel (to 31 December 2012) Ms c Cifuentes Ms s Ivens Prof M Gleeson (from 1 January 2013)

INFORMATION ON DIRECTORS

T LAWLER B Com, FCA, FAlCO, FAIM Terry Lawler was appointed as Chairman of Hunter Water Corporation and its subsidiary in January 2012. Mr Lawler is Chairman of Lawler Chartered Accountants and Lawler Partners Pty Limited, a national award winning accounting and business advisory firm. He is also Chair of Life Without Barriers Limited. Mr Lawler is a Director of Ampcontrol Pty Ltd, Powerdown Australia Pty Ltd, peoplefusion Pty Ltd and is an advisory board member of Urban Purveyor Group Pty Limited . He has previously been the Chairman of National Rail Corporation Limited, Newcastle Knights Ltd and a director of Newcastle Port Corporation.

KWOOD B Eng, MBA, FIE (Aust), FAIM Kim Wood was appointed as Managing Director of Hunter Water Corporation in November 2011 and is also a Director of Hunter Water Australia Pty Limited. He was previously the CEO of Queensland's Allconnex Water, which he helped establish in 2010. He has extensive utility experience as a CEO, having led a number of power and water utilities across Australia. Mr Wood was the inaugural CEO of City West Water and then went on to head the Victorian electricity transmission business, GPU PowerNet. Other CEO roles have included the Northern Territory Power and Water Corporation, and Queensland power generator Stanwell Corporation. His experience includes past private sector leadership roles in the telecommunications industry, firstly as Managing Director of GEC Plessey Telecommunications and later with publicly listed company, DataFast. Mr Wood has also had extensive experience as a company director, including several industry association directorships. He has prior senior management experience with the Australian operations of both Hewlett Packard and Bell South. He originally commenced his working career as an engineer with Victoria's State Electricity Commission.

JR EATHER B. Com (Newcastle), CPA, FCIM, MAICD Mr Eather was appointed as a Director on 1 January 2008 and is also a Director of Hunter Water Australia Pty Limited. Mr Eather is the Managing Director of The Callaghan Institute, a business and economic research and advisory practice he established in 2007. Previously he was CEO Media for the SOUL Group, where he was directly responsible for the running of NBN Television. During his 27 years with the NBN and SOUL Groups, he was actively involved in the expansion of the Group from its media base to the converging world of telecommunications. Mr Eather has previously been Chairman of the University of Newcastle Foundation and is currently a Director of The Heal for Life Foundation ,which operates a healing centre for survivors of child abuse.

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BL CROSSLEY B. Nat. Res. (Hons), MEIA, MAICD Ms Crossley was appointed as a Director on 1 February 2004. Ms Crossley is a Director of Umwelt (Australia) Pty Ltd, a locally based environmental consultancy firm, with over 100 professionals providing services across Australia from offices in Newcastle, Canberra and Perth. Ms Crossley is a former Chairperson of Hunter Environment Institute. She has extensive knowledge of relevant environmental issues, and has managed numerous project approvals and environmental programs for major industry and infrastructure. Ms Crossley has a strong business and marketing focus.

RA CHAPPEL BE (Civil) , Dip T & RP, Hon FIE Aust, FTSE Mr Chappel was appointed as a Director on 1 February 2004 and is a Director of Hunter Water Australia Pty Limited. Mr Chappel is a former Managing Director of Connell Wagner and former Chairman of the Australian Underground Construction & Tunnelling Association. He has vast experience in managing large technical projects involving water and wastewater.

C CIFUENTES B Ec (Sydney), LLB (UTS) (Hons) Ms Cifuentes was appointed as a Director on 1 February 2011. She is a public policy and investment markets professional, with over 25 years experience in economics, policy and finance. She is currently a Board Member of the Australian Energy Regulator, a Trustee Director of First State Super, an Independent Member of Perpetual Multi Manager Investment Committee, a Member of the Australian Institute of Superannuation Trustees Governance Committee and former Director of the NSW Treasury Corporation (the State's central borrowing authority). She has extensive experience as a non-executive director with a strong background in corporate governance; strategic and budget planning; audit and risk management and compliance. Ms Cifuentes is a member of the Institute of Company Directors and is a member of a number of NSW audit and risk committees. Ms Cifuentes has spent many years in the public sector formulating and implementing government policy across a range of areas including regulated utilities, superannuation, corporations law and finance.

M GLEESON BSc, PhD, FAlCO Professor Gleeson was appointed as a Director on 1 January 2013. Professor Gleeson is a health, education, science and medical research professional, with 35 years experience and is currently a Director of the Hunter Valley Research Foundation , the Central Coast Local Health District Board , the Special Olympics Asia Pacific Games Trust and a member of the National Health and Medical Research Council Principal Advisory Committee on Preventative & Community Health. She has extensive experience as a non-executive director with a strong background in corporate governance, strategic planning, capital developments, risk management and compliance.

MEETINGS OF DIRECTORS BOARD MEETINGS COMMITTEE MEETINGS

Audit& Corporate Risk Governance

A B A B A B

T Lawler 4 5 2 2 2 KWood 5 5 2 2 J Eather 5 5 2 2 2 2 B Crossley 4 5 1 2 2 2 R Chappel 4 5 * * C Cifuentes 4 5 2 2 2 2 Slvens 4 5 * * * * M Gleeson

A = Number of meetings attended B = Number of meetings held during the time the Director held office or was a member of the committee

during the year * = Not a member of the relevant committee

PRINCIPAL ACTIVITIES

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The principal activities of the Economic Entity in the course of the year were the harvesting, distribution and preservation of water; the provision of sewerage facilities; and the construction, control and maintenance of certain stormwater channels.

RESULTS AND DIVIDENDS

The operating profit before income tax for the half year ended 31 December 2012 was $32.07m compared with $30.22m for the previous half year.

REVIEW OF OPERATIONS

FINANCIAL

The terminology used in reporting the results is as follows:

- The Group, ie. Hunter Water Corporation and Hunter Water Australia Pty Limited are referred to as the Economic Entity

- The Parent or Hunter Water Corporation is referred to as the Parent Entity

- The Subsidiary, Hunter Water Australia Pty Limited is referred to as the Controlled Entity

The year to date profit before tax is favourable to budget by $7.76m.

SUBSEQUENT EVENTS

There were no matters or circumstances that have arisen since the end of the half year which significantly affected or may affect the operations of the Economic Entity, the results of those operations, or the state of affairs of the Economic Entity in future financial years.

DIRECTORS INDEMNIFICATION

Hunter Water Corporation has an agreement to indemnify the Directors and secretary of the Corporation and its controlled entity.

The indemnity relates to:

- any civil liability to a third party (other than Hunter Water Corporation or a related entity) unless the liability arises out of conduct involving lack of good faith,

- any costs or expenses of defending proceedings in which judgement is given in favour of the officer.

No liability has arisen under these indemnities as at the date of this report.

CHANGE IN STATE OF AFFAIRS

Other than matters reported in the Directors' Report, in the opinion of the Directors there were no significant changes in the state of affairs of the Economic Entity during the half year ended 31 December 2012.

AUDIT AND RISK COMMITTEE

Hunter Water Corporation has an Audit and Risk Committee, which meets five times per year and (at reporting date) was comprised of:

Mr J Mr T Ms B Ms C

Eather Lawler Crossley Cifuentes

Director- Committee Chair Board Chairman Director Director

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The committee's main objectives are to:

Review the integrity and quality of the financial information to be provided to the shareholders and the public;

Review the systems and processes that management has in place to identify and manage areas of significant risk, including financial risk;

Review the effectiveness of both the internal audit function and the Corporation's external auditors; and

Oversee Hunter Water's fraud and corruption control policies and plans.

CORPORATE GOVERNANCE AND NOMINATIONS COMMITTEE

The Parent Entity has a Corporate Governance and Nominations Committee with its primary objective to overview Board strategic direction and business performance. This Committee, formerly known as the Corporate Governance Committee, includes duties required by Treasury processes for a Board Nominations Committee.

The committee's main objectives are to:

To review the development and implementation of principles, policies and practices of Corporate Governance, Risk Management and Internal Controls.

To make recommendations to the Board , in relation to the above, as appropriate.

Review the skills of Directors and make recommendations, where required, to Treasury as part of Nominations to Boards of State Owned Corporations process.

The Membership of the Committee at reporting date was as follows:

Mr T Ms B Mr J Ms C Mr K

Lawler Crossley Eather Cifuentes Wood

DIRECTORS' BENEFITS

Chair Director Director Director Director

During or since the end of half year no Director of the Economic Entity has received or become entitled to receive a benefit by reason of a contract entered into by the Parent Entity or the Controlled Entity with:

- a Director, or - a firm of which a Director is a member, or - an Entity in which a Director has a substantial financial interest.

CODE OF CONDUCT

Hunter Water Corporation has a Code of Conduct that must be adhered to by all employees. All employees are required to maintain high standards of ethical behaviour in the execution of their duties and comply with all applicable laws and regulations in Australia.

ENVIRONMENTAL REGULATION

Operations of the Parent Entity are subject to licences issued under the Protection of the Environment Operations Act 1997. During the financial year the Parent Entity materially complied with all requirements in respect to these licences and associated legislation.

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T Lawler Chair

Newcastle 31 January 2013

KWood Managing Director

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INCOME STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2012

Economic Entity Parent Entity

31-Dec 31 -Dec 31-Dec 31-Dec 2012 2011 2012 2011 $'000 $'000 $'000 $'000

Revenue Services 157,772 147,993 151 ,170 141 ,928 Other income 681 1,263 4,503 662 Total Revenue 158,452 149,256 155,673 142,590

Expenditure Operational costs (65, 125) (59,602) (60,306) (56,196) Depreciation and amortisation (22,104) (26,533) (21 ,694) (26,148) Finance costs (36,032) (32,901) (36,117) (33,017) Other (3, 125) (3,327) (186) Total Operating Expenditure (126,386) (119,036) (1 21 ,444) (115,547)

Profit Before Income Tax Expense 32,066 30,220 34,228 27,043

Income tax expense (8,855) (7,009) (7,934) (5,848)

Net Profit for the Half Year From Continuing Operations 23,211 23,211 26,294 21,195

Profit is attributable to: Members of the entity 23,211 23,211 26,294 21 ,195

23,211 23,211 26,294 21,195

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STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2012


31-Dec 31-Dec 31-Dec 31-Dec 2012 2011 2012 2011 $'000 $'000 $'000 $'000

Profitfor the half year 23,211 23,211 26,294 21,195

Other comprehensive income Net increase/( decrease) in property plant and equipment revaluation

(593) (2,51 0) (593) (2,51 0) reserve Reallocation of revaluation reserve to retained earnings on asset

647 647 retirements Total other comprehensive income 54 (2,510) 54 (2,51 0)

Total comprehensive income for the half year 23,265 20,701 26,348 18,685

Total comprehensive income for the half year is attributable to: Members of the entity 23,265 20,701 26,348 18,685

23,265 20,701 26,348 18,685

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STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012


31 -Dec 30-Jun 31-Dec 31-Dec 30-Jun 31 -Dec 2012 2012 2011 2012 2012 2011 $'000 $'000 $'000 $'000 $'000 $'000

Current Assets Cash and cash equivalents 16,152 10,724 8,727 14,699 3,377 4,495 Trade and other receivables 58,994 42,188 61 ,501 59,169 43,763 59,563 Inventories 2,533 2,504 2,580 2,533 2,504 2,580 Assets held for sale 3,619 13,360 20,228 3,619 13,360 20,228 Other assets 2,205 1,464 968 335

Total Current Assets 83,503 68,776 94,500 80,986 63,004 87,201

Non-Current Assets Other financial assets 900 900 900 Property, plant & equipment 2,955,918 2,891 ,250 3,497,247 2,963,461 2,897,753 3,503,066 Intangible assets 9,501 19,645 8,909 9,198 19,332 8,633

Total Non-Current Assets 2,965,419 2,910,895 3,506,156 2,973,559 2,917,985 3,512,599

Total Assets 3,048,922 2,979,671 3,600,656 3,054,545 2,980,989 3,599,800

Current Liabilities Trade and other payables 52,862 53,694 43,210 55,942 57,327 46,527 Current tax liabilities 6,121 4,800 7,819 7,430 4,800 6,093 Borrowings 66,669 75,072 15,080 72,724 75,072 15,080 Provisions 24,264 43,676 25,901 20,261 40,262 22,510

Total Current Liabilities 149,916 177,243 92,010 156,356 177,460 90,210

Non-Current Liabilities Borrowings 917,156 843,296 881 ,313 917,156 848,296 886,313 Provisions 104,341 104,341 48,957 93,807 93,807 44,410 Deferred tax liabilities 293,311 293,859 506,084 297,519 298,067 510,466

Total Non-Current Liabilities 1,314,808 1,241 ,496 1,436,354 1,308,482 1,240,170 1,441 '189

Total Liabilities 1,464,724 1,418,739 1,528,364 1,464,838 1,417,630 1,531,399

Net Assets 1,584,198 1,560,932 2,072,292 1,589,707 1,563,359 2,068,401

Equity Contributed equity 100,000 100,000 100,000 100,000 100,000 100,000 Reserves 815,693 816,286 1,277,139 815,693 816,286 1,277,139 Retained profits 668,505 644,646 695,153 674,014 647,072 691 ,262 Total Equity 1,584,198 1,560,932 2,072,292 1,589,707 1,563,359 2,068,401

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STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2012

Economic Entity Contributed

Reserves Retained Total

Equity Profits Equity $'000 $'000 $'000 $'000

At 1 July 2012 100,000 816,286 644,646 1,560,932

Net Profit for the Half Year From Continuing Operations 23,211 23,211 Other comprehensive income {593) 647 54 Total comprehensive income for the half year (593) 23,859 23,265

Transaction with owners in their capacity as owners: Dividends provided for Balance at 31 December 2012 100,000 815,693 668,505 1,584,198

Balance at 1 July 2011 100,000 1,279,649 671,943 2,051,592

Net Profit for the Half Year From Continuing Operations 23,211 23,211 Other comprehensive income {2,510) {2,51 0) Total comprehensive income for the half year {2,510) 23,211 20,701

Transaction with owners in their capacity as owners: Dividends provided for Balance at 31 December 2011 100,000 1,277,139 695,154 2,072,292

STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2012

Parent Entity Contributed

Reserves Retained Total

Equity Profits Equity $'000 $'000 $'000 $'000

Balance at 1 July 2012 100,000 816,286 647,072 1,563,359

Net Profit for the Half Year From Continuing Operations 26,294 26,294 Other comprehensive income {593) 647 54 Total comprehensive income for the half year {593) 26,941 26,348

Transaction with owners in their capacity as owners: Dividends provided for Balance at 31 December 2012 100,000 815,693 674,014 1,589,707

Balance at 1 July 2011 100,000 1,279,649 670,067 2,049,716

Net Profit for the Half Year From Continuing Operations 21,195 21,195 Other comprehensive income {2,51 0) {2,510) Total comprehensive income for the half year {2,51 0) 21 ,195 18,685

Transaction with owners in their capacity as owners: Dividends provided for Balance at 31 December 2011 100,000 1,277,139 691,262 2,068,401

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STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2012


31-Dec 31-Dec 31-Dec 31-Dec 2012 2011 2012 2011 $'000 $'000 $'000 $'000

Cash Flow from Operating Activities Receipts from customers (inclusive of goods and 142,879 134,291 133,208 128,372 services tax) Payments to suppliers and employees (inclusive of

(65,029) (79,021) (57,933) (75,676) goods and services tax)

77,850 55,270 75,275 52,696

Dividends received 6,893 3,558 Interest received 133 218 81 100 Proceeds from environmental levy and developers 4,515 3,140 4,515 3,140 Borrowing costs (42,220) (31 ,867) (42,319) (31 ,927) Income taxes paid {8,080) {5,909) {6,772) {4,888) Net Cash Flows from Operating Activities 32,198 20,852 37,673 22,679

Cash Flow from Investing Activities Purchases of property, plant and equipment (70,694) (78,732) (71 ,332) (79,717) Proceeds from sales of property, plant and equipment 4 554 4 554 Net Cash Flows from Investing Activities (70,690) (78,178) (71 ,328) (79,163)

Cash Flow from Financing Activities Proceeds from borrowings 123,011 80,831 124,068 80,831 Repayment of borrowings (58,271) (5,000) (58,271) (5,000) Dividends paid (20,820) (16,600) (20,820) (16,600) Net Cash Flows from Financing Activities 43,920 59,231 44,977 59,231

Net Increase I (Decrease) in Cash Held 5,428 1,905 11 ,322 2,748 Cash at beginning of financial period 10,724 6,822 3,377 1,747 Cash at the End of the Financial Period 16,152 8,727 14,699 4,495

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented , unless otherwise stated. The financial report includes separate financial statements for Hunter Water Corporation as an individual entity and the economic entity consisting of Hunter Water Corporation and its wholly-owned subsidiary.

a) Basis of preparation

The financial statements are general purpose financial statements, which have been prepared in accordance with applicable Australian Accounting Standards (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB), mandates issued by NSW Treasury and other mandatory and statutory reporting requirements, including NSW Treasury Circulars adopted in the Corporation's Statement of Corporate Intent, Part 3 of the Public Finance and Audit Act 1983 and the associated requirements of the Public Finance and Audit Regulation 2010. in preparing the financial statements, the accounting policies described below are based on the requirements applicable to for-profit entities in these mandatory and statutory requirements.

Proper accounts and records for all of the Corporation's operations have been kept as required under Section 41 (1} of the Public Finance and Audit Act 1983.

Historical cost convention The financial statements have been prepared on an accruals basis using the historical cost convention, except for the non-current physical assets which are shown at valuation, and assets held for sale which are measured at the lower of the carrying amount and fair value less selling costs.

Rounding to the nearest $000 The amounts contained in this report have been rounded off to the nearest thousand dollar.

Currency of amounts in report The amounts contained in this report are Australian Dollars unless otherwise stated.

b) Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of the Parent Entity (Hunter Water Corporation} and the wholly-owned Controlled Entity, Hunter Water Australia Pty Limited, as at 31 December 2012 and the results of the Parent Entity and Controlled Entity for the half year then ended. The Parent Entity had the capacity to dominate the decision making in relation to the financial and operating policies of the Controlled Entity so that the Controlled Entity operated with the Parent Entity to achieve its objectives.

Inter-company transactions, balances and unrealised gains or losses on transactions between entities in the Economic Entity are eliminated.

c) Revenue recognition Revenue is recognised when the entity has passed on control of the good, where it is probable that the economic benefits will flow to the entity and the amount of revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised for the major business activities as follows:

(i) Tariff income Reflects revenue raised for the provision of core water and sewer services and includes both fixed service charges and volumetric charges for water. Prices are determined by the Independent Pricing and Regulatory Tribunal (!PART}.

Revenue is recognised in respect of these services on an accrual basis as the services are provided. Estimated water usage recorded in unread meters is brought to account at 31 December. The estimate is derived by calculating revenue based on water supply that has left water sources (using system flow data}, less a component for non-revenue generating supply.

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(ii) Contributions for capital works Contributions for capital works include Environmental Levy receipts and contributions from developers.

In accordance with Australian Accounting Interpretations 18, where physical asset contributions are received from developers in return for connection to a service delivery network, contributions are recognised as revenue and assets at their assessed fa ir value on receipt.

Cash contributions received from developers are recogn ised as revenue on receipt. Environmental levy receipts are considered revenue in nature and are shown at their cash value.

(iii) Property sales Revenue is recognised on the signing of an unconditional contract of sale.

(iv) Investment income Represents earnings on surplus cash invested in the Economic Entity's bank accounts and NSW TCorp Deposits.

Interest revenue is recognised as the interest accrues using the effective interest method.

(v) Dividends Dividends are recognised as income when the right to receive payment is established.

d) Income tax Hunter Water Corporation and its wholly-owned Australian Controlled Entity, Hunter Water Australia Pty Limited, are subject to the National Tax Equivalent Regime (NTER). An "equivalent" or "notional income tax" is payable to the NSW Government through the Office of State Revenue. The liability for income tax is primarily assessed in accordance with the Income Tax Assessment Acts of 1936 and 1997 (ITAA) and is administered by the Australian Taxation Office.

The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or the liabilit ies are settled. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Current and deferred tax balances attributable to amounts recognised in other comprehensive income or directly in equity, are similarly recognised in other comprehensive income or directly in equity.

Tax consolidation legislation Hunter Water Corporation and its wholly-owned Australian entity Hunter Water Australia Pty Limited decided to implement the tax consolidation legislation as of 1 July 2003.

The head entity, Hunter Water Corporation, and Hunter Water Australia Pty Limited continue to account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand alone taxpayer in its own right.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the group.

e) Cash and cash equivalents For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and bank overdrafts. Bank overdrafts are shown within borrowings as current liabilities in the Statement of Financial Position.

f) Trade receivables Trade receivables are recognised at original invoice amount less allowance for impairment. Recognition of original invoice amount is adopted as this is not materially different to amortised cost, given the short-term nature of receivables.

Trade debtors for service availability and usage charges receivable are required to be settled within 21 days. Other trade debtors receivable are generally required to be settled within 30 days.

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Collectability of receivables is reviewed on an ongoing basis and debts which are known to be uncollectible are written off. An allowance for impairment is established when there is objective evidence that the entity will not be able to collect all amounts due. All customer debts, other than those provided for, are considered collectable.

g) Inventories Inventories are valued at the lower of cost and net realisable value using the weighted average basis of valuation for the purposes of determining cost. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs necessary to make the sale.

External contracts work in progress External contracts work in progress is stated at the aggregate of costs incurred to date plus recognised profits less recognised losses and progress billings. Cost includes all costs directly related to specific contracts, and an allocation of overhead costs attributable to contract activity in general.

h) Assets held for sale Assets held for sale are stated at the lower of their carrying amount and fair value less costs to sell. Non-current assets are not depreciated while they are classified as held for sale.

i) Property, plant and equipment Acquisitions and Capitalisation All items of property, plant and equipment are recognised initially at the cost of acquisition. Subsequent to initial recognition, certain classes of assets are revalued in accordance with the Parent Entity's revaluation policies (see Valuation below).

Cost is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire the asset, including costs that are directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended.

Items costing greater than $500 individually and having a minimum expected operational life of one year are capitalised.

In respect of system assets constructed by the Economic Entity for it's own use, cost includes:

}> costs associated with the detailed design of the asset; }> materials used in construction; }> direct labour and an appropriate proportion of overhead costs; }> contractors' services; }> major inspection costs; and }> an estimate where relevant of the costs to dismantle, decommission and remove the assets and restore

the site on which it is located.

System assets are capitalised as completed assets when each facility, or operating unit within a facility, becomes operational and available for use.

In accordance with AASB 123, the entity capitalises borrowing costs which are directly attributable to the acquisition or construction of a qualifying asset. The interest rate which has been used to capitalise borrowing costs is currently 7.6% (8.3% at December 11 ).

Valuation The Parent Entity has valued its non current assets in accordance with AASB 116 Property Plant and Equipment and NSW Treasury's accounting policy TPP07-1"Valuation of Physical Non-Current Assets at Fair Value". Land and buildings are valued at fair value whilst system assets are valued at gross replacement cost using the modern engineering equivalent replacement asset methodology (MEERA). Valuations are performed with sufficient regularity to ensure that the carrying amount does not differ materially from the asset's fair value at reporting date.

The Parent Entity's policy is to revalue assets, except land, over a 5 year cycle by selecting assets according to a predetermined schedule of five sub asset groups. Other than the asset sub group scheduled for revaluation, the remaining four groups are indexed annually to maintain current va lues.

While the estimated written down current replacement cost is used in the asset revaluation process, the carrying amount of the total asset set is assessed against their net cash inflows. Where the carrying values exceed the recoverable amount, assets are written down. (Refer note 1 (k))

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When revaluing systems assets at MEERA the gross amount and the related accumulated depreciation are separately restated. When valuing land and buildings at fair value, any balances of accumulated depreciation at the revaluation date in respect of those assets are credited to the asset accounts to which they relate. The net asset accounts are then increased or decreased by the revaluation increments or decrements.

In recent years with increased focus on asset management and improved technology such as camera inspections, both the Parent Entity and the water industry have greater knowledge of the condition and performance of infrastructure assets. The revaluation process requires the determination of a modern equivalent reference asset at the productive unit or component level. This valuation is an assessment of the lowest cost at which the service potential or future economic benefit could currently be obtained in the ordinary course of business. The written down valuation is then determined taking into account the relative age and life expectancy of each unit or component.

Land owned by the Parent Entity is valued by registered valuers every 3 years. Land, upon which the Parent Entity's system assets are located, is valued at its value in use by the expert valuer, which is considered to be the highest and best use. The written down value of all other property, plant and equipment is considered a surrogate for their fair value.

For each asset subject to valuation, revaluation increments are cred ited to the asset revaluation reserve within the Statement of Comprehensive Income. Where a revaluation decrement or impairment loss reverses a revaluation increment previously credited to the asset revaluation reserve, the revaluation decrement or impairment loss is debited to that reserve. In other cases the decrement or impairment loss is recognised in the Income Statement.

Where assets have been revalued, the potential effect of the capital gains tax on disposal has not been taken into account in the determination of the revalued carrying amount. Where it is expected that a liability for capital gains tax will arise, this expected amount is disclosed by way of note.

Any gain or loss on the disposal of revalued assets is determined as the difference between the carrying value of the asset at the time of disposal and the proceeds from disposal, and is included in the Income Statement. It is policy to transfer any residual amounts included in the revaluation reserve in respect of those assets to retained earnings.

Depreciation Depreciation is calculated using the straight line method on all property, plant and equipment, other than freehold land, at rates ca lculated to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives.

It is the Parent Entity's policy to recognise a 'residual value' in respect to assets which can be practically rehabilitated to 'as new' service potential at a cost that is less than construction of a complete new asset. This reflects the reality of economic decision making. Consequently, a residual value is recognised for example, in respect of gravity sewer mains and some large gravity water mains for which it is economical to implement relining technologies, as well as in respect of a civil component of dams/ treatment plants etc.

The estimated useful lives for each class of assets are as follows:

Class of fixed asset

System assets Sewer

- Sewermains - Sewer Pump Stations -Wastewater Treatment Works

Water - Watermains -Water Chlorinators - Water Pump Stations -Water Resources - Water Treatment Works -Meters

Stormwater Recycled Water General support

-Fleet -General equipment

Buildings

Useful life (yrs)

80-120 10-100 10-100

80-150 10-50 10-100 10-50 10-80 15 100-150 80-150

3-10 3-15 20-100

The assets' residual values and useful lives are reviewed and adjusted if appropriate at each balance date.

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j) Intangible assets Intangible assets consist of easements, software and other intangible assets (including some development projects). Research expenditure is recognised as an expense as incurred. Costs incurred on development projects whereby research findings are applied to the development of substantially new or improved products or processes (for example, relating to the design of new improved systems) are capitalised when it is probable that the project will result in future economic benefits, the project is technically or commercially feasible, its costs can be measured reliably and there are sufficient resources to complete development. If development costs are capitalised they are recorded as intangible assets and amortised from the point at which benefits are recognised on a straight-line basis over their useful life which is generally 5 years.

Consistent with NSW Treasury policy, easements (the right of access over land) are recognised as intangible assets and are not amortised. Software is also classified as an intangible asset and is amortised (generally over 5 years).

k) Impairment of assets Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash inflows (cash generating units). The Economic Entity has assumed that one cash generating unit exists for the purposes of impairment due to the integrated nature of the systems in use. This cash generating unit excludes land and non operational buildings as a market value exists for these assets.

Impairment losses are recognised as an expense in the Income Statement unless an asset has been previously revalued through the asset revaluation reserve. In this case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised in the Income Statement.

I) Leases Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease, over the term of the lease.

m) Trade and other payables These amounts represent liabilities for goods and services provided to the entity prior to the end of the reporting period which are unpaid. Payables are recognised at cost, which is considered to approximate amortised cost due to the short-term nature of payables. They are not discounted as the effects of discounting would not be material for these liabilities.

Trade accounts payable are normally settled according to terms (usually within 30 days).

n) Borrowings The Parent Entity borrows through the NSW Treasury Corporation in the form of liquid and marketable TCorp Stocks. As part of its debt management activities, NSW Treasury Corporation is contracted to actively manage the Parent Entity's debt portfolio.

Borrowings are measured initially at cost, being the fair value of consideration received less any transaction costs associated with the borrowing. Subsequent to initial recognition, borrowings are stated at amortised cost using the effective interest method. Additionally, all borrowing costs that have been assessed as eligible for capitalisation have been capitalised in line with AASB 123.

o) Employee benefits (i) Wages and salaries, annual/eave and sick leave Liabilities for salaries and wages including annual leave and vested sick leave as well as all unconditional employee benefits are recognised as current employee benefits in respect of employees' services up to the reporting date are recognised as current liabilities. They are measured at the nominal undiscounted carrying value. The provision for sick leave represents 50% of the value of untaken leave accrued by wages employees prior to 15 February 1993. This requirement to provide for untaken sick leave ceased from 15 February 1993 with amendments to the Industrial Relations Act 1991.

(ii) Long service leave The liability for long service leave is recognised as an employee benefit and is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future salary and wage levels, trends of employee departures and periods of service. Non current expected future payments are discounted using the applicable Commonwealth Government bond rate.

16

117


(iii) Superannuation Employees of the entities within the Economic Entity are members of either defined benefit superannuation funds or defined contribution superannuation funds. The defined benefit superannuation funds provide defined lump sum benefits based on years of service and final average salary. The defined contribution plan receives fixed contributions from the Economic Entity and the Economic Entity's legal or constructive obligation is limited to these contributions.

A liability or asset in respect of the defined benefit plans is recognised in the Statement of Financial Position. It is measured as the present value of the defined benefit obligation at the reporting date less the fair value of the superannuation fund's assets at that date and any past service cost. Actuarial gains and losses are recognised in equity via the Statement of Comprehensive Income in the year in which they occur. The assessment of these liabilities and assets is undertaken by the funds' administrator, Pillar Administration. Contributions to the defined contribution fund are recognised as expenses as they become payable.

p) Dividends Provision is made for any dividend declared, being authorised via the Economic Entity's Statement of Corporate Intent, on or before the end of the financial year but not distributed at balance date.

q) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables in the Statement of Financial Position are shown inclusive of the GST receivable or payable. The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included with other receivables or payables in the Statement of Financial Position.

Cash flows are included in the Statement of Cash Flows on a gross basis. The GST of cash flows from investing and financing activities that are recoverable from the Australian Tax Office are classified as cash flows from operating activities.

Commitments are disclosed inclusive of GST where applicable.

r) Foreign Currency Transactions and Balances Foreign currency transactions are translated into Australian currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currency are recognised in the Income Statement.

s) Accounting Standards and Australian Accounting Interpretations Issued but not yet Operative Certain new accounting standards and interpretations applicable to Hunter Water Corporation and its Controlled Entity have been published that are not mandatory for the half year ended 31 December 2012 period. The Economic Entity and Controlled Entities' assessment of the impact of these new standards and interpretations is set out below:

(i) AASB 9 Financial Instruments (effective from 1 July 2013)

The standard replaces the multiple classification and measurement models in AASB 139 Financial Instruments: Recognition and Measurement with a single model that has only two classifications: amortised cost and fair value. There is no anticipated impact on the Economic Entity as all financial instruments are already recognised at amortised cost or fair value.

(ii) AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian Accounting Standards arising from reduced disclosure Requirements (effective from 1 January 2013)

On 30 June 2010 the AASB released a revised differential reporting framework in Australia. Under this framework, a two-tier differential reporting regime applies to all entities that prepare general purpose financial statements. Tier 1 requirements comprise the full range of AASB recognition, measurement, presentation and disclosure requirements that are currently applicable to reporting entities in Australia. The only difference between the tier 1 and tier 2 requirements is that tier 2 requires fewer disclosures than tier 1. AASB 2010-2 sets out the details of which disclosures in standards and interpretations are not required under tier 2 reporting.

The Economic Entity is a government owned corporation and it is likely that NSW Treasury will mandate adoption of tier 1 reporting. As a consequence, it is anticipated that the two standards will have no impact on the financial statements of the Economic Entity.

17

118


(iii) AASB 2011-9 Presentation of items of other comprehensive income (effective 1 July 2012)

Under the revised presentation requirements entities are required to separate items disclosed as Other Comprehensive Income (OCI) into two groups based on whether or not they may be recycled through the profit or loss in the future. Given the entity historically records only items that cannot be recycled (i.e. asset revaluation reserve movements), there is no expected impact on the Economic Entity.

(iv) AASB 10 and AASB 12 (effective 1 January 2013)

AASB 10 replaces all of the guidance on control and consolidation in AASB 127 and Interpretation 12. AASB 10 introduces a single definition of control. AASB 12 sets out the required disclosures for entities reporting under AASB 10. There is no expected impact on the Economic Entity.

(v) Revised AASB 119 Employee Benefits (effective 1 January 2013)

Removal of the corridor method of accounting for defined benefit plans means that all actuarial gains and losses are to be recognised immediately in other comprehensive income. Immediate recognition in the profit or loss is no longer permitted. There is no expected impact on the Economic Entity

(vi) AASB 2012-5 Amendments arising from the 2009-0211 annual improvements project (effective 1 January 2013)

The annual improvements project makes minor but necessary annual amendments to Australian Accounting Standards. Amendments this year affect AASB 1, AASB 101 , AASB 116, AASB 132 and AASB 134. The amendments are applicable for annual periods beginning after 1 January 2013.

119

18


DIRECTORS DECLARATION

In accordance with a resolution of the Directors of the Parent Entity, Clause 14 of the Public Finance and Audit Regulation 2010, and pursuant to Section 41 C(1 B) and 41 C(1 C) of the Public Finance and Audit Act 1983, in the opinion of the Directors:

1) The accompanying consolidated financial statements (pages 7 to 18) exhibit a true and fair view of the financial position of Hunter Water Corporation and its controlled entity as at 31 December 2012, and transactions for the half year then ended.

2) The accompanying consolidated financial statements have been prepared in accordance with the Public Finance and Audit Act 1983, the State Owned Corporation's Act 1989, Public Finance and Audit Regulation 2010, applicable Accounting Standards and other mandatory professional reporting requirements and Treasurer's directions.

We are not aware of any circumstances, which would render any particulars included in these statements to be misleading or inaccurate.

On behalf of the Directors

T Lawler Chair

Newcastle 31 January 2013

KWood Managing Director

19

120

HUNTER WATER CORPORATION

Quarterly Report

1 October - 31 December 2012 02

69

Address: 36 lloneysuCJ<Je Dwe Newcast e NSW 2300

Telephone· 1300 657 657

Fax: 02 4lJ•l9 94 14

TTY: 13\ <150

Website: www 11unterwarercorn.au

C HLmter Water Corpcra;ron October 20' 2

ISSN: 1836·3253

ABN: 46228513446

Disclaimer

fhr ~ rer;.or; IS CONFIDENTIAL and prepared fo1 Internal use by l lunter Water Corporation (Hunter Water} .

It conta1ns 1nforrnatron whrch relates to tile trndP. anrJ commercml Interests of Hunter Water and IS NO~ ~a BE DISCLOSED to any third party w1thout the express wntten consent of the company Where suc11 consent has been granted by ;he company, rec1prero:s of t"lrs

report are adVISed that rt rncl.ldes t naooal 1nfof'111at10n whch IS unaUd,·ed and •hat Hunter Water makes -,o representation as to the accuracy or compieteness ot any or such 1nformauon

All persons access:ng thrs report are responstble for Mak1ng thetr own enqu :ies 1n relatton to assesstng tl'le relevance completeness and accuracy of 1ts contents

To tile lull extent perrnr;ted by aw. HUNTER WATER ACCEPTS NO LIABILITY FOR LOSS OR DAMAGE of any kulCI to tilly person ans1ng tram or related to tile use ot t111s repor1 (llowever such loss or damage is coused. Hlclurirng

by negligence)

T111s report IS the property of Hunter Water Corporat on

and retarPS ail copy•1ght comrols and ownershrp pnvtleues under law

U• a NctU(t.ll f r\,; ' I w,•.• S 'Ltl:S Clffl•lot~. SS·. lfi~Y ,hnJ iJ01 Ph.l · Sl.lnl 1

·~, ~ 1 urn. ! !:,)(') H001 ~ om~fl\.11 Cci~•IWliOn.l:loiiHt!•: ll Cl1k>1111 '•

70

Contents

I

Summary 2

Financial Summary 3

Key Performance Indicators 6

Strategic Initiatives Progress 10

Planned Projects Update 16

Operating Ucence Performance 21

Appendix 23

I

71

1. Summary

Key events and milestones of quarter two of the 2012-13 financ1al year 1nclude:

• Commencement of the Ellipse Upgrade pro1ect.

• Commencement of the Debt Recovery prOJect.

• Participation in Safe Work Australia Week.

The APESMA (Hunter Water Corporation) Agreement 2012 and Hunter Water Corporat1on Employees Enterprise Agreement 2012 were registered by Fa1r Work Australia and came 1nto effect 1n quarter two.

Atk1ns Cardno (I PART appotnted consultants) conducted il detailed rev1ew of the business past and proposed cap1tal

and operat1ng expenditure as part of the review of future pnces. The feedback from the consultants was pos1tive and those 1nvolved were commended on their profess10nulism and t1111ely responses.

The public hearing for the pnce submssion was held on 13 November 2012. The heanng was successful with the price submission generally well received

Tile report detailing Atk1ns Cardno findings was published on !PART's webs1te on 14 December 2012.

72

2. Financial Summary

Hunter Water Corporation has generated a year to date net profit before tax of $32.07m, aga1nst a budgeted prof1t or $24 30m. Th1s represents a 31 gqo favourable vanance of $7.76rn.

Hunter Water Year to Date Profit Waterfall 31 December 2012

34.0

32.0

30.0

28.0

26.0

24.0

22.0

20.0 24.30 1.76 0.46 2.03

$m Budget NetTariff Other Operating Income Income Costs

Key drivers of this variance include:

• Favourable depreciation and amortisation of $3.09m. T111s is due to an additional Impairment processed at 30 June 2012 be1ng hrgher than budget. reduc1ng the open1ng value of assets.

Favourable operat1ng costs of $2.03m due to; a lower level of bulk matenals purchased year to elate, lower labour costs as a result of a number of positions being left vacant while a restructure was finalised. and tim1ng of stud1es relating to the Lower Hunter Water Plan.

Favourable net regulated income of $1 . 76m. This IS primarily due to year to date consumption being 1 .304ML above budget. Year to date weather conditions have been seasonally hot and cfry when compared to a typ1cal year.

Full year torecast prof1t before tax IS $58.90m or $1 0.53m favourable to budget. The full year forecast column IS 1ncluded below to prov1de the latest v1ew of full year results.

Hunter Water Financial Snapshot at 31 December 2012

Actual

Total Income $m 158.45

Total Expenses $m 126.38

EBITDA $m 90.06

EBIT Sm 67.95

Operatrng Profit Betore Income Tax Expense $m 32.07

Income Tax Expense $m 8.85

Operating Profit After Income Tax Expense Sm 23.21

3.09 -0.34 0.38 0.39 32.07

Depree& Net Amort onterest

Other Non-op Capital Actual Income Contributions

YTD Line Item Variance as a % of Budget

Net Tariff Income 1 .3%

Other Income 3.0%

Operating Costs -3.3%

Depreciation & Amortrsat1on 12.3%

Net Interest -1.0%

Other Non-op Income 1 0.8%

Capital Contributions 3.1%

Net Profit Before Tax 31.9%

Year to Date Full Year

Budget Variance Forecast Budget Variance

155.77 2 68 311.95 309.46 2.50

131.46 5.08 253.05 261.09 8.03

85.04 5.02 174.85 170.88 3.97

59.85 8.11 130.06 120.49 9.57

24.31 7.76 58.90 48.37 10.53

7.26 (1.59) 17 76 14 53 (3.24)

17 04 6.17 41 14 33.84 7.29

73

Key drivers of this $7.76m favourable result for profit before tax include:

• Favourable full year deprec1at1on and amortisation of SS 59m. As discussed above th1s is due to an acld1tional

1mpamnent processecl at 30 June 2012 be1ng l11gher than ant1c1pated. reduc1ng tile value of assets

Favourable operat1ng costs o f S1.68m primarily due ro lower expenditure relating to timing of work relating to the Lower Hunter Water Plan, as well as favourable salaries and wages.

Favourable net regulated 1ncome of $1.76m A h1gl1er yearly consumption forecast resulting in favourable usage charges IS 1n line w1th experience year to date Thrs 1S partially offset by unfavourable service charges as forecast Meter Equivalent numbers and growth are lower than budget,

Favourable capital contributions of $I .35m due to increased contributrons from the final 1nstalment o f the Gosford Wyong pipeline.

• Full year income tax expense is $3.24m unfavourable 1n line w1t11 profit movements

Earnings Before Interest, Taxes, Depreciation and Amortisation Year to Date Performance $m

180

160

140

120

100

80

60

40

20

Jul 12 Aug '12 Sep '12 '2 N;)ll •2 Dec '12 Jan !., heb ' 13 MaJ 13 Apr 11 M,<y 1.., J•,n 13

EBITDA 15.13 27.38 42.94 58.67 75.76 90.06

EBfTDABudget 13.41 23.10 37.79 53.72 68.82 85.04 101.28 116.46 13.1.85 147.08 160.94 170.88

Earn1ngs Before Interest, Taxes Depreciation and Amort1sat1on (EBITDA) is presented to show a snapshot of the operational profitability of Hunter Water. Hunter Water IS currently tracking above budget. w1th a favourable year to date EBITDA var1ance of $5.02111. TI11s 1s prunarily due to favourable net regulated 1ncome $1 .76m, operating expenses S1.09m and other non operating income $2.97m as discussed above

Key Ratios

All of Hunter Water's linanc1al ratJo targets are on or above SCI targets except for the gearing rat1o Th1s IS •iue to tt1e asset impa1nn ent at 30 June 2012 reduc1ng eqLuty to below the level estimated for 30 June.

Full Year Financial Ratios

888* SCI Full year Forecast v Target forecast SCI

FFO Interest Cover 2.5- 4.5x 1.8 2.0 v"

FFO/Net Debt 10 ·15% 5.6% 6.g% v"

Net Debt'RAB 55.70% 47.0% 46.2%

RCF/Capex 1.0- 1.5x 0.2 0.3 v"

Geanng nla 37.5% 38.4% ~

Return on Average Equ1ty nta 2.0% 26% v"

Return on Average Assets n/a 3.8% 4 2°o v"

Return on RAB nla 5.t"'o 6.3% v"

'lvh)ooy s cr.:;r11t '311119 r diJges r01 BBB 111• es: llem 91 ad~

74

Distributions

Target :l1v1dend 1s h1gl1er than the SCI targel due to

favourable forecast profit result

lnccme tax payable IS on SCI target. This is due to a

reVIsion of the deferred component of tax due to the

Target Dividend $m

Income Tax Payable $m

Forecast

28.87

19.52

Budget

23.71

19.05

Variance

5.16

0.48

full year forecast now recogn1s1ng the upfront deduction for capitalised borrow1ng costs: and tax depreciation l1as 1ncreased to reftect the actual asset base from the 2011-12 financ1al year. Without the combined 1mpact of these revis1ons. tax payable would be more reftechve of profit movements above.

Capital Expenditure

Year to date cap1tal expenditure is $58.76m or $1.29m over budget. Full year forecast IS currently $21.10iT1 under budget.

At the end of December 2012. the forecast end of year expenditure is $143.79m compared to a budget of $164.55m (13% under budget).

$9.2m of tillS decrease is a reflection of the rev1ew of uncommitted capital expenditure. The rema1n1ng $11.5m IS the net effect of project delays, savings, cost increases and carry over from 2011 -12. TI1e forecast for the four year price path expenditure commitment is expected to be w1th1n 4% favourable

HWA and HWC have entered into a Deed of Agreement to enable some of the delayed projects to be expedited under HWA's systems. TI1e first suite of projects has been prov1ded to HWA for the submiSSIOn of upper fee limit proposals for the delivery of these projects.

Year to Date Financial Year

Actual Budget Variance Actual Budget Variance

Program by Component of Works·

Growth Requirements $m 16.22 13.71 2.51 29.17 39.18 (10.00)

Regulatory/Statutory Standards $m 26.27 29.83 (3.56) 68.82 84.60 (15.77)

Business Decis1ons $m 8.18 7.14 1.04 26.28 19.75 6.53

Government Programs $m 8.1 0 6.80 1.29 17.31 19.16 (1.85)

Total Program by Component of Works $m 58.76 57.47 1.29 141.48 162.68 (21.10)

Program by Source of Funds

Budget Funding $m

Borrowings $m 35.55 40.43 (4.87) 89.74 106.90 (17.16)

Other Sources $m 23.21 17.09 6.17 51.84 55.78 (3.94)

Total Program by Source of Funds $m 58.76 57.47 1.29 141.48 162.68 (21.1 0)

·Excludes capitalised borrow1ng costs.

Further details relanng to the cap1tal program are conta1ned 111 appendiX 7.1 ·MaJor Capital Projects report'

75

3A. Key Performance Indicators

3A.1

Measure Year to Date Year Forecast

Units Act Bud/ .rt~ Act/ Bud Var Var For

9'o % %

Effective Governance

Lost Time InJUry Frequency Rate No 0 v Vacancy Rate % 5.65 5 v 5

EBITDA $000's 90,058 85,043 5.9% v 174.853 170,879 2.3%

Net Profit-After-Tax $OOO's 23.211 17 042 36.2% v 41,138 33,844 21.6%

Operating Revenue $OOO's 145,131 142,763 1.7% v 284,815 283,449 0.5%

Operating Costs $000's 59,041 61,069 3.3% v 121,310 122,989 14%

Financially Responsible

Ftnancing Funds From multiple N/A N/A N/A N/A 2.0 1.8 0.2% Operations tnterest cover

Retatned cash flow-to-capex ratio N/A N/A N/A N/A 0.3 0.2 0.1%

Return on Assets (ROA) % N/A N/A N/A N/A 4.2% 3.8% 0.4%

Return on Equity (ROE) % N/A N/A N/A N/A 2.6% 2.0% 0.6%

Right Infrastructure & Resources

Recycled Water o/o 44 50 (12%) ~ 50 50

Water Main Breaks per 1 OOkm No 14.3 22.0 (35%) v N/A N/A N/A

Sewer Matn Breaks and Chokes No 21.1 36.0 (41.4) v N/A N/A N/A per100km

Satisfied Community

Customer Complaints No 1153 1280 (10%) v 2305 2560 (9.9%)

3 Unplanned Interruptions > 1 No 106 2.500 (95.8%) v 3,091 5,000 (38.2%) I10Ur

Water pressure <20m for No 1306 2,400 (456%) v 2.586 4,800 (46.1%) >30mins

Dry Weather Sewage Overflows No 1,231 2,500 (50.8%) v 3. 170 5,000 (63%)

Dry Weatl1er Sewage Overflows No 3 22 (86.4%) v 24 45 (46.7%) >=3 times per year

Compliance with EPA No 99.3% 97% 2.3% v 98% 97% 1% Wastewater Treatment Plant Condtlions

Unplanned lnterrupttons >5hrs No 2900 5,000 (42%) v 5,470 10,000 63%

Compliant Wastewater No 16 15 6'l-o v 15 15 0% Treatment Plants

Legend

v = Withtn X target

~ = Oulstde X target

= Comparable

76

38. Additional Information

38.1 Workplace Health and Safety

Hunter Water's key focus 1s workplace 11ealth and safety. Strong performance cont1nued througt1out quarter two and Hunter Water has now worked for 21 montt1s Injury free.

Safety Incident Report

Quarter Two YTD

Incident Type Contractors Employees Total Contractors Employees Total

Lost Time Injury 2 0 2 2 0 2

Medical 6 7 6 2 8 Treatment 1njury

Rrst Aid Injury 1 2 2 3

Near Miss 10 6 16 21 16 37

High Potential 2 4 5 Near Miss

Hazard 3 26 29 9 117 t26

Definitions

Lost Time Injury Injury that results in the injured person being unfit for one full shift or more.

Medical Treatment Injury Injury t11at requires medical treatment by a medical doctor.

Rrst A1d Injury Injury that requires first aid treatment. eg bandaid

Near Miss Event occurs with the potential for injury, but no first aid or medical treatment was required.

H1gh Potential Near Miss Event occurs with the potential for a serious injury or fatality, but no first aiel or medical treatment was required.

Hazard No event has occurred, but there is a potential for Injury or property damage.

38 .2 Water and Environmental Incidents

Summary of quarter two performance and key results.

Incidents Reported Incident October Classification

Water quality Dirty Water 37

Chlorine 2

Air/White 4

Taste/Odour 5

Environmental Very minor 2

Minor 2

Moderate 2

Major 0

77

November

22

0

2

5

3

0

December

20

0

7

2

1

3

1

0

YTD

212

13

21

41

16

21

13

1

38.3 Our Customers

Hunter Water's pnmary purpose is to supply dependable and hrgh quality water and wastewater servrces to the people of the lower Hunter regron Metrics for quarter two and compared to results for the past five years are cletailed below.

Customer Statistics

2007-08 2008-09 2009-10 2010-11

Total complaints per 35 7.4 8.3 9.1 1 000 properties

Total number of water nla n/a nla 2217 and sewer complaints

Average frequency 225 271 256 273 unplanned rnterruptions per 1 000 properties

38.4 Our People

Employee Statistics

The below summarises Hunter Water's employee statistics for quarter two.

Headcount

Ongoing Full time

Ongoing Part time

Fixed-Term Full trme

Rxed-Term Part time

Total Hunter Water FTE

Approved positions in 2012/13 Budget (FTE)

Headcount by Division

Managrng Director & Support

Strategy, Governance & Corporate

Customer Service

Rnance

Information Services

Planning & Operations

Total

No. of Employees

2

55

84

33 48

259

481

Full Time Equivalents Approved FTEs Actual FTEs

Managrng Drrector & Support 2 2

Strategy, Governance & Corporate 59 52.7

Customer Servrce 70.2 71.5

Rnance 32 31.4

Information Services 51 .9 45.8

Planning & Operations 267.1 252.8

Total 482.2 456.2

78

2011-12 Quarter YTD

9

2077

206

Two

1 7 3.7

403 862

16 58

380

56

34

11

456

482

% of Workforce

0.4%

11.4%

17.5%

6.9%

10.0%

53.8%

FTE Vacancies FTE Vacancy %

0 0%

4 6.8%

4 5.7%

3.1 q,o

5 9.6%

18.5 6.9%

32.5 6.7°•o

Contractors and Agency Temporaries

Note. Data under development


Customer Service

Finance

lnformatton Services

Planning & Operations

Hunter Water Australia (HWA)

Leave/Exit Stat istics

Annual Leave Accruals

Headcount

Total number of employees with AL accruals ::>35 and >50 days and average leave clay balance for employees wtth leave balances greater than 50 days.

Division

Planntng & Operations

Information Services

Customer Service

Finance


Sick Leave

>35 days

44

6

4

2

Percentage of avatlable work days lost per quarter.

Quarter Two

12 mth Rolling Average

Industry Average

Staff Exits by Reason

Number of extts by reason

Contract Complete

Retirement

Restgnation

Dismtssal

Ill Health

Voluntary Redundancy

Deceased

Restructure

Transfer

79

>50 days Average balance

45 55.5

1 49.9

2 46 4 51.9

3 74.5

December

2.1%

21%

2.7%

YTD 2011 -12

4 7

5 9

17 47

0 6

0 0

1 7

0 2

0 2

3 0

30 80

4. Strategic Initiatives Progress

4.1 Water Sustainability

Target Develop the Lower Hunter Water Plan for the Minister and public release in December 2013

Status On track.

Hunter Water has been work1ng collaboratively with Metropolitan Water Directorate to develop the Lower Hunter Water Plan. Milestones achieved in quarter two were:

Tl1e Cornmun1ty Engagement Plan was endorsed by the Independent Water Advisory Panel and f1nalised. Over 100 people participated in the first series of engagement activ1ties

• The short list of water supply and demand measures for detailed ana1ys1s was endorsed by the Metropolitan Water Chief Execut1ve Officers

Option lllvestigatlons were substanllally completed for storrnwate1 use, recycling, non-res1dent1al water efficiency,

water loss mn1m1sation and Upper Chichester Dam. Investigations commenced for ra1nwater tanks, transferring treated water from Lostock Darn and Hunter alluv1al aqu1ier

Hunter Water's water restrictions policy was updated to reflect lessons from recent droughts in other JUrisdictions and to align Wltll the most recent modelling of wl1ere water is used in the l1ome. TI1is would enable rapid 1mplementat1on should El Nino conditions emerge prior to idenllfy1ng tile preferred drought response portfolio through the LHWP

• Hunter Water's demand forecast unde1went an independent peer review procured by the Metropolitan Water Directorate.

Hunter Water provided 1ts base case source model to tile Metropolitan Water Directorate for rev1ew

Initial modelling water system performance aga1nst potential levels of serv1ce showed that demand is not forecast to exceed y1eld until the 2030s or 2040s Drought response measures could extend th1s penocl by a further 1 0 to 15 years.

4.2 Affordability

Target Implementation of Centrepay by July 2013

Status On track

Target Development of the Expenditure Review Committee and Planning Review Committee

Status Complete

I PART held the public hearing for Hunter Water's price subm1ssion on 13 November 2012. Members of the public and representatives of special1nterest groups were present. Generally the pnce suiJITliSSIOn was wellrece1ved and 111 partrcular PIAC acknowledgecl Hunter Water's focus on affordabihty as demonstrated lJy tile commitment to 1mplement1ng the Centrepay fac1hty by i July 2013.

4.3 Cost Structure

Target Eliminate expwed contracts by 30 June 2013

Status On track

Target Reduce temporary labour by 80% on 2011 -12 financial year

Status On track

A rnnge of llllliatlves are 111 progress 111 support ot rhe strategies llighlighted for adopnng a commercial approach to rnnriTllSing bus1nass costs lllCILiding

Progressron or a rav1ew oi cost performance 111dicators ancl busrness 1eports to the Board and management A detailecl revrew or the chart of occounts IS in progress with a preliminary structure almost f1nahsed. Til1s chart oi

accounts revrew rs being undertal~en to e11Sure tl1at the cosr structures IJerng used are !llosa besr SLuted to business needs tor ar 11vs1s.

80

• The use of temporary labour is being managed and minimised w1th any labour or contractor related activities requ1ring sign off by Human Resources. the Ch1ef Finance Officer and also the Manag1ng Director pnor to the recruitment or engagement of any employees of contractors. The 2012-13 budget Incorporated a contract labour allowance of $0.27m wh1ch was a reduction of $1m from the budget allowance for 2011-12. The target for 2012-13 is to manage contract labour w1ihin the budgeted amounr which would be a reduction of around 80% on last year's actual expenditure of $129m.

• All ex1sting contracts have been rev1ewed and those pend1ng renewal or overdue have been 1den11hed The Procurement team are working with the bus1ness experts 1n each area to develop the relevant spec1ficat1ons and issue tenders A forward calendar of contracts expiring has also been developed. The target for 2012-13 1s to reduce the number of exp1red contracts from ten to zero by 30 June 2013

• The Expenditure Rev1ew Committee, chaired by the Chief Finance Officer is continu1ng to meet at least once per month and is reviewing and endorsing the issUing of tenders and award of tenders for operating costs over $50,000 and cap1tal

expenditure over 8100.000 along w1th other activities such as review1ng bus1ness cases.

4.4 Capital Structure

Target Progress investigations of off balance sheet financing for KIWS and establish a plan by March 2013

Status Preliminary rev1ew commenced

Target Report on the long term ownership of HWA by March 2013

Status Preliminary review commenced

Target Complete a review of Hunter Water's property and asset portfolio by March 2013

Status On track

The ongo1ng financ1al susta1nability of the business is a key 1ssue. 111 part1cular tl1e maintenance of an Investment grade credit rating. Action undertaken to date inclucles.

High level modelling of the impact on debt and credit metncs of reducing debt through the potential realisation of asset sales. Indications are that the current potential options will stabilise the credit metrics but not unprove tl1em enough to result 111 an upgrad1ng of rhe credit rat1ng.

• A draft credit rating report has been received from Moody's for the 2012-13 year with the cred1t 1·ating being mainta1ned but w1th a negat1ve outlook (the rating from June 2011 had a "stable" outlook). Correspondence has been sent to

Moody's request1ng further clarification of the reasons bel11nd the deterioration 1n outlook.

New Credit Management and Account Ass1stance policies have been approved published and Implemented 1nto business process. Data cleans1ng or customer informat1on w1th1n the billing system IS 111 the final stages ot completion Tile focus IS now on Improving the billing system credit paths and business processes wl1ich align to t11e goals of debt prevention

and supporting customers experiencing l1ardship and making these processes more effic1ent. A discrete prOJeCt has been

endorsed to focus on the h1stonc aged debt collection strategy and w1ll commence in January 2013.

4.5 Community Trust

Target Hold the Consultative Forum three times per year

Status On track

Hunter Water delivers a range or community focused act1vines to engage and consult w1th the commun1ty to 1ncrease tlleir confidence 1n Hunter Water Dunng quarter two key act1vnies 1nclude

• New des1gn of Mak1ng Waves customer news letter promot1ng six kev areas - communny, customer serv1ce. water efficrency. operation eclucation ancl Lower Hunter 1/Vater Plan.

llun1er Water'.s attendance at t11e f1r:;:; "Oillll1llillty engage.rl\ent NOrksllOOS tor tile Lower IILmte V/ate1 Plan

81

4.6 Safety

Target

Status

Target

Status

Target

Status

Target

Status

Lost Time Injury Frequency Rate of 4

On track - currently 0

Medical Treatment Injury Frequency Rate of 1 0

On track- currently 7.35

WHS Training compliance 1 00% - ie staff compliance with mandatory WHS training

Currently tracking at 94%

Safety equipment inspection 1 00% - 1e percentage of investigations completed in 30 days of incident occurring

Currently at 64% - awaiting results of the recent audit

Hunter Water employees have now worked for 21 months lost t1me 1njury free. Th1s IS the f1rst I me 1n the history of the organ1sation that this has been achieved. Key actiVIties in quarter two 1nclurle:

• Safe Work Australia Week was celebrated in the quarter w1th a large percentage of staff tak1ng part in activities.

• Work commenced on updat111g the Work Healtl1 and Safety Management System and processes to enable th~rd party certification 111 2013.

4.7 Business Improvement

Target WHS certification by December 2013

Status On track

Target Environment system certification by September 2014

Status On track

Target Quality system certification by June 2015.

Status On track

Target HACCP certification by December 2015

Status On track

The ream IS cont1nu1ng to work on achiev1ng th1rd party certification of our quality enwonment and Work Health and Safety (WHS) systems. Current focus 1s on achiev1ng cert1ficat10n of rile WHS System to AS 4801 bv December 2013. Progress for quarter two Includes:

Complenng a gap analysis of tile WHS System and an act1on plan to achieve certification by December 2013.

Development of Hunter Water's safety nsk profile. holding 2 workshops with key f1eld and off1Ce based staff.

Documentation of key compliance report1ng processes.

Draft1ng amendments to WHS documentatiOn relat1ng to 11lduct1on and tra1ning

• Conduct1ng a gap analys1s of tile Enwonmental Management System.

82

4.8 Information Technology

Target

Status

Target

Status

Target

Status

Target

Status

Target

Status

Target

Status

Target

Status

GIS implementation by December 2012

Complete in warranty period

Disaster recovery by March 2013

On track

I PART billing changes by July 2013

On track

Transition of network and telecommunications contracts by December 2013

On track

SCADA remediation by December 2013

On track

ERP upgrade by June 2014

On track

AOMS replacement by September 2014

On track

Quarter two of 2012-13 has been accompanied by a number of significant ICT initiatives:

The new GIS is now live and rollout of the mobile modules will be complete early in the new year.

• The 1mplementat1on plann1ng phase of the Ellipse upgrade is almost complete. Tile design phase is due to commence early February.

Tenders for the Strategic CommunicatiOns Consultancy and CIS I PART changes I platform migrat1on are expectecl to be awarded by late January.

Interactive have commenced as our pnme ma1ntenance contractor and we are expecting significant benefits from this arrangement.

• Disaster Recovery capability for core systems is neanng completion. A test is being scheduled to coinc1de with a build1ng shutdown 1n February.

• Bus1ness ContJnu1ty Planning work IS continuing w1th the ICT BCP approacl11ng maturity. Provisions for alternat1ve sites w1ll be scoped as part of the Corporate BCP and Communications review activities

• Delivery of the Ellipse upgrade and CIS migrat1on will be accompanied by a new infrastructure platform that is expected to bring benefits througtl Simplification. consolidation and rationalisation.

• Tile Head Office network Infrastructure has been replaced wtthout inc1dent. Tile SCADA network segregatton is almost complete

• 75% of aud1t actions have been completed. Tl11s is expected to pass 90% early tn early 2013.

4.9 Culture

Target

Status

Target

Status

Vacancy rate of 5%

Vacancy rate of 5.65% with 24 open positions

Annual leave management - baseline performance to reduce those with excess leave balances by a minimum of one week per employee per year

On track

83

Target

Status

Target

Status

Mandatory staff tra~ning - baseline 85% with a stretch target of 1 00%

• Safe Work near Powerlines 84%

• Traffic Control 92%

• Confined Spaces 97%

CPR 82%

Mandatory business compliaJlce training:

Code of conduct 7 4%

• Discrimination. Bullying & Harassment 60%

• Fraud & Corruptcon 53%

Staff turnover- baseline target 12% with a stretch target of 10%

Turnover 12.4%

Tl1e People & Safety Team have commenced a number of key initiatives in thcs area to cmprove organisational performance in alignment with the Statement of Corporate Intent:

A review of the performance revcew framework to align workplace behaviour with the performance drivers underp1nning the Statement of Corporate Intent such as affordability. water sustainability, capital structure. community trust. safety, buscness cmprovement. safety. IT, culture and focus. This has resulted cn December 2012 changes being macle to the mid-term review process wcth a simplified. more user fnendly process to drive staff goal settcng

• New starter feedback via facilitated workshops to review the recruitment, cnduction and on boarding processes. These activities will help cmprove organcsateonal practeces en engagcng wct11 new starters and dnvcng 11igl1er retentcon levels and alignment wcth Statement of Corporate Intent objectcves. These worksl1ops have started from December 2012.

• Manager feedback vca online survey to revcew and refine recognitcon and rewards programmes across the organcsation. Further workforce data will be gathered as part of a comprehensive campaign to improve organisational efforts in rewarding good work performance en line with the Statement of Corporate Intent.

4.10 Focus

Service Levels

Target

Status

Target

Status

Target

Status

95% of development assessment applicatcons completed wcthin 30 days

On track - currently at 98%

90% of major customers receive two annual significant contacts per year

On track - high actively en quarter two with 1 0 visits undertaken in October. Visits expected to increase from February 2013 as customers recommence commercial activity following holiday shutdown.

90% customer satisfaction results

On track

• Customer satesfactJon performance connnues to exceed 90% A Call Quality Assurance Program was implemented 1n November 2012 ro ensure servece standards are macntacned.

• Call Centre performance cndicators are on target with over 80"o of calls being answeced we thin 30 seconds. 95"'o of cus•omers surveyed say rhat Hunter Warec c:all takers are bener tl1an or tile same) as ctt1er organesatcons.

De,,eluper act11.1'y rematns relatevely steady but ltJwer t11an t11at <:'Xf'enenced l)efore rilE- global nnancial cns1s tGFCL Developer assessment tUIIlarouc,,j tcmes are greater than 95°c Gompleted h!th1n 30 cJays Pertonnance results are re,- -,""'J o ''le EMT Boar:l n10nt11•

84

• A key performance ind1cator has been established for major customer relationships - at least 90% to be v1s1ted two t1mes each year.

Recycled Water

Target

Status

Target

Status

Total recycled water target 6000ML for the financial year

Not on track -total recycled water has dropped in quarter two due to large customers not taking recycled water, 111 particular Eraring.

Rfty percent of recycled water used for potable substitute

Currently at 45% - year to date is track1ng close to target, however because of the reduced supply to Eraring (who are a big potable substitute customer) quarter two supply was down and has reduced the year to date figure.

Improved customer contact with recycled water customers.

• Business rules and processes developed to improve stakeholder engagement.

• Focus on development of Recycled Water Management System.

Dual reticulation schemes- a greater than before focus 111 develop1ng a sustainable water solution.

• Recycled water usage - 1800ML of water has been recycled year to date.

Community Support

Target 75% of media be favourable and/or neutral

Status 73.5% of media was favourable and/or neutral

Dunng Quarter two, 162 news stones were reported. Tl11s is 10 more than quarter one. The ma1n topics tl1at feature 1n 72% of the news stories were Operations - Including the water main break at Maryland (21 %). Tillegra land and dam (19%}, Infrastructure NSW Report- Privatisation (13%}, CTGM Lead Management 1995 Board report (10%) and !PART submission (9%}. This data 1s shown in Appendix 8.3.

• Favourable

• Unfavourable

• Neutral

85

5. Planned Projects Update

5.1 Major Projects

Farley Stage 3a WWTW Upgrade

ConstructiOn commenced on t11e Farley W#TW upgrade in early 2012 Work tncludes. a new rnlet worl<s: odour control facrlity, modificatrons to clanfrers. a new UV distnfectron facility: conversion oi one oi the matLtration ponds 1nto a wet weather storage; a new storm bypass and effluent discharge pipeline.

The Farley upgrade is proceeding on time and budget Pre-commissioning of the upgrade will commence 1n January

2013.

Financial Performance

Whole of prOJeCt budget rs $29.50m.

Expected Completion Dates

Work Package % Completion

Farley Stage 3a 85%

Achievements for the Quarter

• Inlet works structural work complete.

• Clanfier Modifications complete.

• DN 1500 bypass pipeline is complete

Expected Date of Commissioning

June 2013

Expected Date of Project Completion (End Defects Liability)

June 2015

• Wet weather pond conversion 70% complete. Pond clean-out and desludging largely complete and no scope change required.

Kooragang Industrial Water Scheme

The design of the Advanced Wastewater Treatment Plant component of the Kooragang Scheme is complete and construction IS due to start 1n January 2013. The scheme will produce of 9 MUd of htgh quality. recycled water to tndustnal customers on Kocragang lslancl. The scheme includes: constructton of a new recycled water facility at Steel

Rtver to treat effluent from the Sl1ortland Wastewater Treatment Works fY'/WTW): construction of a 8 km of ptpeline to deliver the recyclecl water to Kooragang Island. and: Infrastructure to divert addittonal sewage from the Burwood Beach catcl1ment to the Shortland catchment to provtde SLtffictent wastewater for the new treatment facility.


Wl1o1e ot pro1ect budget is $72 95m.


Work Package % Completion Expected Date of Expected Date of Commissioning Project Completion

(End Defects Liability)

Product Water Pipeline Design 100% May 2014 May 2015

Hunter River HDD Crosstng Design 100% May 2014 May 2015

Newcastle 1 0 Dtversion Design 100% October 2013 October 2014

HTA Steel River Advancecl Water Treatment Plant Design 95% December 2014 December 2016

Construction

1%

86


Deta1led des1gn completed tor all packages

Trenchless panel established tor work package 1 .

HAZOP completed successfully w1th part1C1pat1011 and endorsement of Orrca.

High Voltage Network Upgrade

Th1s project comprises three packages of H1gh Voltage (HV) asset upgrades at numerous sites to meet current standards for reliability. Package 1 1nvolves upgrade of critical Hunter Wamr HV assets within the Tomago headworks area Package 2 involves upgrade of HVassets at numerous wastewater treatment works, water pump stat1ons and Lemon Tree Passage

water treatment plant. Package 3 rnvolves upgrades at Burwood Beach wastewater treatment works.


Whole of proJect budget is $50.50m. Expenditure to date is approxrmately $5m


Work Package % Completion

Whole of Project 1 0%



June 2014


June 2015

• A Desrgn Development and Construct contract was awarded for Package 1 of tile Hrgh Voltage Upgrades prOJect for $23.4m to UGL Infrastructure Pty Ltd (UGL). Constructron commenced 1n October 2012.

Tenders have been called for Package 2 wrth an antrcrpated award date of January 2013

Package 3 concept design is progressrng

Adamstown Wastewater System Upgrade

This project aims to reduce the frequency and volume of wet weather sewer overflows that are frequently experrenced

by customers rn Adamstown to meet regulatory conditrons. The scope of work rnvolves construc!lon of infrastructure t11at will transport excess wet weather flows from a problem area rn Adamstown to the network near the Burwood Beach Wastewater Treatment Works (WWTWl. This Infrastructure rncludes:

• A network of gravity sewers througl1 t11e problem area of Adamstown.

• A pump station that 1s desrgned to only operate dunng wet weather.

• A 2km pressure p1peline to connect to another prpeline that was previously constructed under Merewether He1ghts us1ng horizontal cl1rectronal drill technology ('the HOD')

Gravity sewers from the HOD to a po1nt of drscharge at the Burwood Beach WWTW rnlet collect1on chamber.


Whole of project budget 1s $14.90m.

87


Work Package % Completion Expected Date of Expected Date of Project Commissioning Completion (End Defects

Liability)

Civil Works

Separable Port1on 1 99% Commissioned during 23 December 2013 December 2012

Civil Works

Separable Port1on 2 100% PC reached 1 0 October 2012 10 October 2013

HOD commissioning

5% 28 February 2013 14 March 2014

Pump stat1on preliminary commissioned Works as constructed 1nformat1on in progress.


Completion of construcTion of pump sra11on. ris;ng main and gravity mains.

Prelim nary comm1SS10n1ng of works (subject to constra1nts witl1 HDD).

• Tenders called for removal of bentonite from HDD.

Maitland North Rothbury Water Distribution Stage 3 Upgrade

This project comprises a staged capital works program to address current operational issues and provide capacity for predicted growth within the system. Stage 3 of the works Includes the construction of a water pump station at Telara!1. a

reservoir at Lochinvar and a watermain at Ruthertorcl


Whole of proJect budget Js $14. 137m


Work Package

Telarah WPS

Locl1invar Reservoir

Rutherford Watermain

% Completion

5%

75%

100%



March 2014

April2013

December 2012

Tenders for construc11on of TelaraJ1 WPS closed on i 9 December 2012.


March 2015

April2014

December 2013

• Construction of Loch1nvar Reservo1r proceeded on program. Dunng the quarter the reservo1r walls and roof were

constructed and the watertightness test1ng commenced The rernain1ng work includes roadworks. landscaping and cornmisSIOillng.

• Construction of the Rutherrord Watermain was completed 111 November and rhe new pipeline was commiss1oned 111 December.

88

5.2 Capital Portfolio Update

The four year capital portfolio IS forecast to IJe 3 .9% favourable aga1nst tile !PART approved regulated expenditure

target.

The regulated Expenditure Target (RET) for the price path IS $635 4m as adv1sed to the Board 1n March 2012. Since the March 2012 Board meetJng major funding has been approved w1th a net impact on the price path of an increase of

$8.5m

A rev1ew of uncommttecl capital expenditure has identified $9.2m oi deferrals. An 1ndependem rev1ew of uncommitted capital expenditure was conducted by Hunter Water Australia and the results presented to the Board 1n October 2012.

Subsequently the Board endorsed $9.2m of deferrals.

As part of the ongo1ng review of projects W1th1n the portfolio, $5.5rn in sav1ngs have been identified predom~rlantly in the Adamstown Wastewater Upgrade and the Barefield Earth1ng projects. Delays in progress1ng projects accounts for approximately $18m (11% of OBUD) 1n reduced expenditure 1n the pnce path. The delays have been predominantly due to greater time to review and develop business cases The expenditure is forecast to carry over into 2013·14.

Over the first three years of the price path, the average carryover from one year to the nexT was $8. 7m (6% of OBUD), peak1ng at $11 .8m carryover frorn 201 0-11 in 2011 -12. The projects accoun!lng for the carryover have been endorsed as

prudent and efficient by Atkins Cardno ancl are currently receiving funding support through user charges.

Forecast Expenditure Compared to I PART Target Expenditure ($'000 nominal)

IPART Finding (exc. Tillegra &

Kooragang Island)

October 2012

Forecast $m

Baseline regulated expenditure (BRE) 635.4 635.4

Add. Cumulative approvals since March 2012 Board including this meeting 8.5

Less: Savings ancl deferrals identified as part of ongoing portfolio monitoring -9.2

ReVised regulated expenditure -24.1

Forecast % Revised Regulated Expenditure (March 2012 Board) 610.6

Expenditure Price Path to date -24.8 (-3.9%)

Rema1n1ng baseline regulated expenditure 531

Regulated expenditure in price path to date as % of BRE 83.6%

5.3 Hunter Treatment Alliance Update

Tile Hunter Treatment Alliance is entenng 1ts fifill year in 2013. During tile last quarter, significant success was achieved in the final commss1oning of tl1e Burwood ABF tower upgrade, the completion of maJor civil works at Farley and the

comple!lon of the des1gn phase tor KIWS

Safety

T111s table sl1ows the statist1cal 1nformation for quarter two.

Performance Indicator Occurrences Including Subcontractors & Employees

Current Period Total to Date (October - December 2012) on Contract

Lost Tirne Injury 0 1

Medical Treatment Injury 3 21

Rrst Aid Injuries 4 959

Total Hours Worked by Contractor 25,996 521,046

Total Hours Worked by Sub-contractors 23,643 361,523

89

Projects

Branxton & Paxton WWTW Upgrades

The Branxton and Paxton VWVTW upgrades were commrssroned by the Alliance rn Marct1 2011 .

The Branxton recycled warer prpehne is now deliverrng water directly to 1he Vtntage and all HWC's contractual commrtments to the Vtntage have been met. Full comrntsstonrng of the pipeline and transfer pumps has been delayed until early 2013 due to problems Wtth tile delivery pumps wl1ich are currently operat1ng at 75% capacrty.

The defects liability penod for Branxton and Paxton will exp1re at the end of March 2013.

Burwood Beach ABF Tower Upgrade

Generally botl1 t11e Treatment Plant and the ABF Tower upgrade are perforrntng well. Tile Defects Liabtlity Penod for tile

Burwood Beach VWVTW upgrade will end tn March 2013. The maJOnty ot defects are mtnor and close to close out Oi note ts a recently identified defect with the RAS pumping system Failures of the RAS pumping system mechanical seals have requrred the 8 RAS pumps to be potenttally taken down for marntenance every 3 months as opposed to t11e expected 2 year marntenance cycle. HTA, HWC and the pump manufacturer Xylem are 1nvestigat1ng the cause of the problem. The cost of rectificatton works will be covered by the Alliance prior to handing the asset over detect free.

Farley WWTW Stage 2 Upgrade

Farley Stage 3A upgrade 1s progressing on t1me and budget All major structural work ts now largely complete, wtth the exception of the conversion of the effluent panels to a storm pond whrch is progressing well


Detailed Des1gn of the Kooragang Industrial Water Scheme IS now complete. Construct ron Will start on the Steel River Site rn February.

Shortland Inlet Works and PLC Upgrade

The Shortland upgrade tS performrng well in Defects Liability. with no major issues to report.

90

6. Operating Licence Performance

Hunter Water reports on compliance w1th key standards under the Ooeratlng L1cence every quaner In quarter two. Hunter Water ach1eved 1 00% compliance w1tl1 the Operating Ucence.

Compliance with Water Guidelines- Microbiological

Requi rement: more than 98'30 of samples have a zero e-coli count. Measured on a rol ling bas1s over 12 months.

Compliance: full compliance achieved ior quarter one

12 Month Rolling

July Aug Sep Oct Nov Dec

100% 100% 100% 100% 100% 100%

Jan Feb

Compliance with Water Quality Guidelines- Physical/ Chemical

Requirement: results for 12 key parameters fall with1n a specified range or below.

Compliance: 100% compliance achieved for quarter two.

Parameter

pH

Colour

Turbidity

Chlorine

Aluminium

Copper

Ruoride

Iron

Lead

Manganese

Zinc

THMs

Key:

Ucence compliance: v Ucence breach: X

91

Mar Apr May June

Impact Result

Aesthetic v Aesthetic v Aesthetic v

Health v Aesthetic v Aesthetic v

Health v Aesthetic v

Health v Health v

Aesthetic v Health v

Water Continuity Standard

Requirement 1: no more U1an 10.000 properties 1n a i1nancial year expeflence an unplanned water 111terruption exceed1ng

5 r1ours.

Compliance: 456 properties affected in quarter two and 100% compliance year to date.

July Aug

210

Sep

525

Oct

549

Nov Dec Jan Feb Mar Apr May June

12 Month 15 2890 2900 Rolling

'Maryland 500 break resultecl 1n large 1ncrease 111 quarter two Over 2000 propert1es were affected.

Requirement 2: no more than 5.000 propertieS experience 3 or more unplanned water 1nterrupt1ons of more than i hour 1n a financ1al year.

Compliance: 27 properties affected In quarter two and i 00% compliance year to date

July

12 Month 46 Rolling

Aug

79

Water Pressure Standard

Sep

79

Oct

79

Nov

79

Dec

106

Jan Feb Mar Apr May

Requirement: no more than 4,800 properties should experience a water pressl1re failure 1n a financial year.

Compliance: 671 properties affected 1n quarter two and 100°-o compliance year to date

June

July Aug

493

Sep

635

Oct

1109

Nov

1305

Dec

1306

Jan Feb Mar Apr May June

12 Month 466 Rolling

'A greater than usual 1ncrease was experienced 1n October due to hotter weather resulting 111 increased clemand.

Wastewater Overflow Standard

Requirement 1: No more than 5.000 properties experience an uncontroHed dry weather sewage overflow in a financial year.

Compliance: 607 properties affected 1n quarter two and 1 00% compliance year to date.

July

12 Month 228

Rolling

Aug

443

Sep

624

Oct

820

Nov Dec

1018 1231


Requirement 2: no more than 45 properties expenence 3 or more uncontrolled dry weather sewage overflows in a f1nanc1al year.

Compliance: 1 properties affected in quarter two and 100% compliance year ;o elate

12 Month Rolling

July

0

Aug

0

Sep

2

Oct

2

Nov

3

Dec

3

92


7. Appendix

7.1 Capital Portfolio Update

Major Funding Requests Authorised Since Board Approval of the 12-13 Portfolio1 ($'000 Nominal)

CAP No.

298400

Project

Aberglasslyn WWSystem

Stage 2 Upgrade

Various IT

Funding Type(2)

Variation

Stage Provtsions revision

Authorised By

Board

ICTSC

Funding Authorised

6.402

8.127

Approvals for October to December 2012 (quarter three) 14,529

Add· Approvals for pnor reporttng periods (Apnl 2012 to 253,695 October 2012)

Total Approvals for April 2012 to December 2012

Add: Approvals sought for January 2013 (as per table 3)

Total estimated approvals to end of January 2013

Notes:

Price Path PP Forecast Allowance at at Time of March Board Authorisation

2012

5,118 6,281

1,783 1,783

6,901 8,064

253,695 261,026

260,596 269,090

0 0

260,596 269,090

Variance (price path)

1,163

0

1,163

7,331

8,494

0

8,494

( 11 Under delegat1ons approved by the Board 1n Febn,ary 2010. General 1\~anagers have delegailon "~' to S0.5m ancl tre MD has delegation up to SJm where fund1ng is w1thin 30% of thO! presented to tile Board 111 the Annual Capital Portfolio BudgQ.t.

12J Funding Types:

al A stage rev1sion is a request lor funrls to commence Ire next ph'!& ol U "' r rOJ~l ~.g. Construction

bl A new rroject is one that1s yet to rece1ve authorised fllnding lor any stage. 11 may ha•,e been present eo as par: of 111e c.>pital portfolio budg~t or be totally flew to 111e portfolio.

Summary of Funding Requests ($1000 Nominal)

Project Board Cap No. Funding Price Path Price Path Variance Paper Type Allowance @ Forecast (price Item March 2012 path)

Stockton Water Main TBC TBD New 0 0 0

Total Approvals Sought for 0 0 0 January 2013

93

Major Capital Projects 2012/13

Project Description Current Total Within LTD Project OBUD Forecast Variance YTD Project Project Authorised Project Authorised Expenditure

2012/13 Expenditure Forecastv Expenditure Completion On

Amount Forecast Amount ($Million) ($Million)

2012/13 OBUD Date Time ($Million) ($Million) ($Million) ($Million)

Farley WWTW - Stage 29.50 29.50 • 18.18 18.48 19.27 0.80 9.82 31/12/2013 • Project on time and budget. 3a

High Voltage Network 50.50 50.50 • 4.89 13.00 11.69 -1.31 1.88 30/06/2014 • Project on time and budget. Tenders Upgrade for package 2 are currently under

assessment and the contract 1s anticipated to be awarded early 2013 .

Adamstown 14.90 14.90 • 13.02 8.38 5.95 -2.43 4.19 11/11/2013 • Project on time and budget. Variance Wastewater System against OBUD due to higher than Upgrade expected productiVIty last year.

Maitland North 14.14 14.14 • 7.34 5.99 5.66 -0.33 3.56 30/06/2013 • Project on time and budget. Rothbury Water Commencement was delayed due to Distnbution land matters, which resulted in some Stage3 re-desiQn. Tenders have closed and

are currently under revteW.

Cessnock Water 20.25 20.25 • 14.46 4.80 5.19 0.39 2.88 20/0312013 • Project on time and budget. Distribution Stage 1

\0 Upgrade

A Williamtown/ 17.20 17.20 • 9.30 3.05 6.40 3.35 5.17 30/06/2013 • Project on t1me and budget. Forecast Raymond Terrace expenditure is high due to delays last Wastewater financial year. Pre-commissioning of Transportation Scheme stage 1 is underway.

Mayfield to 27.70 26.00 • 25.62 2.25 1.62 -0.63 1.20 30/06/2012 • Project on time and budget. Broadmeaclow Practical completion has been Wastewater Upgrade issued. Expert determination of

$450,000 claim is expected in January.

Lower Hunter 2.00 2.00 • 0.44 2.23 1.26 -0.97 0.22 30/12/2014 • Project on time and budget. Recycled Waler Initiative-Tree Planting Carbon Offset

Borefields Earth1ng 2.76 1.20 • 0.93 2.10 0.28 -1.82 0.00 30/06/2013 • MaJority of works are complete. Upgrade Project scope has been reduced.

Subtotal - Major 178.94 175.68 94.17 60.27 57.34 -2.93 28.91 • Projects


KIWS - Kooragang 72.95 72.81 • 17.48 15.00 14.27 -0.73 7.61 31/10/2014 • Project on time and budget. Industrial Water Scheme Stage 1

Other Current Total Within LTD Project OBUD Forecast Variance

Projects Authorised Project Authorised Expenditure

2012/13 Expenditure Forecast

Amount Forecast Amount ($Million) ($Million)

2012/13 vOBUD ($Million) ($Million) ($Million) ($Million)

Other Projects 65.91 54.08 • 25.71 28.61 15.10 -13.51 - OBUD$1 - $2million (budgeted in 2012/13)

Other Projects 179.33 163.12 • 148.78 25.62 22.38 -3.24 - OBUD < $1million (budgeted in 2012/13)

Price Path 110.68 102.43 • 70.54 33.19 35.42 2.23 Provision Projects (budgeted 1n 2012/ 13)

Carry Over 462.40 425.90 • 418.87 0.00 7.67 7.67 Projects (unbudgeted in 2012/13)

New ProJects 0.65 0.21 • 2.55 0.00 0.82 0.82 (unbudgeted in 2012113)

Subtotal- 818.98 745.75 • 674.42 87.41 69.98 -17.44 Ot11er Projects

Total 997.92 921.43 • 768.59 147.68 127.31 -20.37 (excluding Kooragang Industrial Water Scheme)

GRAND 1070.87 994.38 • 786.07 162.68 141.58 -21 .10 TOTAL

Capitalised 5.77 5.38 • 3.62 2.75 2.79 0.04 Borrowing Costs

Within Authorised Amount Project On Time:

• Forecast less than or equal to Current Authorised Amount • Comptet1on anticipated pnor to target 8 Forecast greater than Current Aut11orised Amount 8 Completion date passed and project not yet complete

95

7.2 Financials Group Income Statement for the Quarter Ended 31 December 2012 ($000)

Year to date Financial year

Actual Budget Variance Forecast Budget Variance

Tariff Income

Serv1ce Charge 68.'36 68, 1'0 25 135.496 36.259 (763)

Usage Charge 64,047 62 625 1,422 1 25,249 123.433 1.816

Other Regulated Income 2.945 2.660 285 5,820 5,320 500

Total Tariff Income 135. '27 133,3g5 1,732 266.565 265.011 1.554

Less:

Pens1oner & Exempt Properties Rebate (6.751) (6,777) 26 ('3.390) (13.526) 136

Payment Assistance Scheme (43) (56) 14 (72) (113) 41

Customer Contract Reoat<: '100) (' 13) 13 (240) (226) ('4)

Community Serv1ce Obligation (CSOJ Rece1pts 6,751 6.77- (26) '3.390 '3,526 (136)

Net Tariff Income 134,985 133,226 1,759 266,254 264,673 1,581

Add:

Other Non Regulated Income 2,81 1 1.751 1,060 4.204 3.503 701

External Sales 6.802 7,786 (984) 14.357 15,273 (917)

WIP movemem - HWA External Sales 533 533

Total Income 145,131 142,763 2,368 284,815 283,448 1,366

Less:

Total Operat•ng Costs 59,041 61,069 2,028 121,310 122,989 1,679

Other Expenditure

Deprec•ation and Amort1sat1on 22,104 25,194 3,090 44,797 50.389 5,592

Cost of External Sales 6,084 5.935 (149) 12.369 11,642 (727)

Total Other Expenditure 28.188 31,129 2,941 57,166 62.031 4,864

Total Expenditure 87,230 92,198 4,969 178,476 185,019 6,543

Profit Before Interest, Abnormal Items, 57,902 50,565 7,337 106,339 98,429 7,910 Contributions & Tax

Interest

Interest Expense 26,971 26,733 (238) 53.432 54,509 1,077

Investment Income (144) (218) (74) (226) (445) (220)

Govemment Guarantee Fee 9,061 9.029 (32) 17,949 18,058 109

Total Net Interest 35.888 35,543 (344) 71,155 72.122 966

Profit Before Abnormal Items

Contributions & Tax 22 014 15,021 6,992 35,183 26.307 8,876

Abnormal Items

Proflt/(loss) on disposal of Assets (3, 121) (3,500) 379 (3,195) (3,500) 305

Total Abnormal Items (3,121) (3.500) 379 (3,195) (3,500) 305

Profit Before Contributions & Tax 18,893 11 ,521 7,371 31,988 22,807 9,181

Contributions fo r Capital Works

Enwonmental Charge 3,086 3.069 17 6,136 6.133 3

TI11rc1 Party Contnbut:ons 1.429 564 865 2,J76 1' 127 1 349

Developer Assels 8,658 9,150 (492) 18,300 18.300 (0)

ToiJI Cor •out.ens '3,""4 12.783 391 26.913 .5.561 1,352

Total Profit Before Tax 32,066 24,304 7,762 58,901 48,368 10,533

Tax

"ICOI ~e T1x Expense d,85 -.263 (1 .5921 1-: 7f.J .. ) , -.525 13 237

Net (Profit)/Loss 23,211 17,041 6,170 41 ,138 33,843 7,295

96

Group Balance Sheet as at 31 December 2012 ($000)


Actual Budget Variance Forecast Budget Variance

Cash anct Investments 16, 52 1' ,918 4.234 '. 37 10.061 1,310

Accounts Rece1vable 59,251 69.764 (10,513) 46,496 52.536 (6,040)

LESS Provis1on ror Doubtful Debts (257) (280) 23 (257) (280) 23

Inventories 2,533 2,575 (42) 2.565 2,608 (43)

WIP BU External WorkS 810 8'0

Assets Held for Sale 3,61 9 3,619 18,000 3,500 14,500

Prepayments 1.371 848 523 1,808 1,335 473

Accrued Interest on Investment 24 13 1 24 13 11

Total Current Assets 83,503 84,838 (1 ,335) 80,007 69,772 10,234

WDV of F1xed Assets • Propeny, Plant & Equ1p 2,722,798 2,780,930 (58,132) 2.817,362 2,922,845 (105,484)

Work •n Progress Prop. Plant & Equip 233.120 240,735 (7,615) 261,975 251,622 10.353

WDV of lmang1ble Assets 9,501 8.330 I P1 2,647 1 ,301 I ,345

Total Non-Current Assets 2,965,419 3,029,994 (64,575) 3,091,983 3,185,769 (93,786)

Total Assets 3,048,922 3,114,832 (65,910) 3,171,990 3,255,541 (83,551)

Overdraft

Crectltors 11,970 6.451 (5,519) 21,613 26.644 5,031

Borrow1ngs 66,669 124,939 58,270 49,868 49,867 (1)

Accrued Financ1al Charges 25,295 25.442 147 35.170 35,191 21

DepoSits for Serv1ce 1,574 1,031 (543) il574 1,031 (543)

Prepatd Income 12.393 14.836 2 443

Deferred lncom1 1,630 1,630 6.600 8.500 1 900

Provis1on for Restoration 435 117 (318) 435 1j7 (318)

Prov1S10n for Employee Entitlements 22.954 23,372 418 23,226 23,843 617

Prov1sion ior 01V1dend to State Govt 28.870 23.7 1 0 (5.160)

Prov1S10n for Income Tax 6.887 7,393 506 8,079 8.434 355

OU1er ProVis1ons 875 (875) 875 (875)

Total Current Liabilities 150,682 205,211 54,529 176,310 177,337 1,027

Long Term Borrowings 917,156 866,323 (50,833) 958.957 975.343 16.386

Provis1on for Restorat,on 140 578 438 140 578 438

Prov1sion for Employee Enl1tlements 104.201 48.282 (55,9'9) 104.236 48,285 (55.951)

Deferred Tax L1ab1 ry 293,834 323 754 29,920 3 ' 2.949 342.113 ?.9.154

Total Non-Current Liabilities 1,315,331 1,238,938 (76,393) 1,376,283 1,366,319 (9,963)

Total Liabi lities 1,466,013 1,444,149 (21,864) 1,552,593 1,543,656 (8,936)

Net Assets 1,582,909 1,670,683 87,774 1,619,397 1.71 1,885 92,488

Issued CaPital '00,000 100.000 100,000 100.000

Asset Revaiuat;on Reserve 815.593 866.903 51,210 863, 125 9'5.013 51.889

Accumulated Fur•os 644.005 686,739 42,734 615,135 663.029 -17,894

Currem Yea1 Earn1ngs 23,2 1 1 17.041 (6. ·~o) 4' '38 33.843 c.zr-sJ

Total Equity 1,582,909 1,670,683 87,774 1.61 9,397 1,711,885 92,488

97

Group Cash Flow Statement for the Quarter En ded 31 December 2012 ($000)


Cash Flows from Operating Activities Actual Budget Vanance Forecast Budget Vanance

Rece1pts from Ct.;:,iO<''lers 10765 13'.616 31''q 285.781 287,564 (1,783)

Payments to suppliers and employees (62,915) (72 225) 9,310 P29,76n (135,990) 6.224

Interest received 133 2 8 (85) 215 445 (231)

Interest paid (42,220) (42.515) 296 (69.350) (70,947) 1.597

Income taxes pa1d (8,080) (15, 100) 7,021 117.008) (23.582) 6.574

Enwonmenta levy ~nd developer contnbutions 4.5'5 3,633 882 8,61 3 7,261 1.352

Net Operating Cash Flows 32,199 11,626 20,573 78,482 64,751 13,732

Cash Flows from Investing Activities

P•Jrchases ot prop~>rty, plant and equipment (70.694) (69.614) (1,080) (148.834) (158.543) 9,709

Sales ot property, plant and equipment 4 8.000 (7.997) 2,079 8,000 (5,922)

Foreign ExchangF• Ga1n/(Loss)

Net Investing Cash Flows {70,691) (61,614) (9,077) (146,756) (150,543) 3,788

Cash Flows from Financing Activities

Borrow1ngs 123,011 72.911 50,100 164.812 181,931 (17, 11 9)

Repayment of borrowings (58.271) (58,271) (75,072) (75.072)

Overdraft · Drawn down/ (repaid)

D1v1dends pa1d (20,820) ,23.070) 2,250 (20.820) :23.070) 2,250

Net Financing Cash Flows 43,920 49,841 (5,921) 68,920 83,789 (14,869)

Net lncrease/(Decrease) in Cash Held 5.428 (146) 5.574 6117 (2.003) 2.650

Gash and investments at beg1nn1ng ot period '0,724 12,0611 '.340) 10,724 12,064 (1.340)

Cash & Investments at End of Period 16,152 11,918 4,234 11,371 10,061 1,310

98

7.3 Media Coverage

Topic Favourable

Capital Works Projects 3

Ctgm Lead Management

Crime

Dam Levels

Dividends

Neutral Unfavourable

16

7

4

% of total stories

2.5%

10.1%

4.4%

0.6%

3.1%

Infrastructure NSW Report - Pnvatisat1on 20 1 13.2%

I PART submiSSIOn

Tillegra Land

Tillegra Dam

Lower Hunter Water Plan

Operations

Community Funding

Showerhead Exchange

Water and Energy Efficiency

Other

Month

October

November

December

Total Quarter

Total Percentage Quarter

Total Year to Date

Total Percentage Year to Date

7.4 Events

Date

5-7 October

20 October and 27

October

27 October

12- 16 November

Event

Bikefest Newcastle

Showerhead Exchanges

Showerhead Exchange

6 9 9.4%

2 13 9.4%

7 8 9.4%

1 0.6%

11 22 3 22.6%

7 4.4%

3 1.9%

4 2.5%

2 5 2 5.7%

Favourable Neutral Unfavourable Month

8

20

7

35

21.5%

Location

Honeysuckle, Newcastle

63

20%

Wallsend Library and Cessnock Library.

Cessnock Library, Vincent Street

Cessnock

Lake Macquarie City Council's Customer Service Centre

49 10 66

22 29 70

13 4 21

84 43 162

52% 26.5%

183 68 314

58% 22%

Summary

As part of the Community Funding Program, distributing chilled tap water to the attendees.

Hosted in partnership with the local councils, over 300 showerheads exchanged

Hosted 1n partnership with the Lake Macquarie Council, 100 showerheads were exchanged.

99

1-2 December

6 to 13 December

Wasteknot AJt Exhibition

Lower Hunter Water Plan

7.5 Half Year Report

See full report on next page.

Horeysuckle, Newcastle

Vanous locat1ons across the Lower llunter

The Waste Knot exhibition is an art ana sculpture trail that has a water theme and requirement for artists to "Rethink Reuse • Remake - Recycle'. Hunter Water JUdged I he event and presented awards to the winners.

Attended the first stakeholder engagement sess1ons representing Hunter Water

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HUNTER WATER CORPORATION CONSOLIDATED FINANCIAL STATEMENTS FOR … · · 2016-02-16HUNTER WATER...

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