VICTORIA

Report

of the

GAS AND FUEL CORPORATION OF VICTORIA

No. 63

for the

Year ended 30 June 1980

Ordered by the Legislative Assembly to be printed

MELBOURNE F D ATKINSON GOVERNMENT PRINTER

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2

GAS AND FUEL CORPORATION 0 1 Incorporated under Act No . 5507 Victoria (re -enacted by Act No . 6260)

DIRECTORS N.A. SMITH, A.A.S.A., A.C.I.S., R.C.A., Comp. I. Gas E., F.A.I.E., J.P., Chairman

T.G. CRANE, B.Sc., A.R.C.S.

AR. GUY, C.B.E.

D.G. HILL, B.E., F.I.E. Aust., AI. Arb. Aust.

W.M. LONIE, A.S.M.B., M.Aus. I.M.M., M.A.l.M.E.

P.B. RONALD, C.M.G.

F.J. SWEENEY, F.C.A.

ASSOCIATE DIRECTORS

RC. ARNOLD, C.Eng., F.I. Gas E., F. Inst. E., F.A.I.E.

J.M. SHAW, B.Mech.E., F.I.E. Aust., C. Eng. Aust., F.A.I.E.

SECRETARY J .G. MARTIN, B.Com., AA.S.A. (Senior)

Registered Office: 171 Ainders Street, Melbourne, Victoria, 3000.

Share and Loan Registry: 171 Flinders Street, Melbourne, Victoria, 3000.

The Directors record with deep regret the death on 12th November, 1979, of their colleague, Mr. Keith Rowell, who had been a Director since November 1975.

GAS AND FUEL CORPORATION OF VICTORIA

ADDRESS ALL MAIL TO BOX 388D,G.P.O. 3001 CABLE ADDRESS 'GAFCOR' TELEPHONE 63 0391

The Honourable J.C.M. Balfour, M.P., Minister for Minerals and Energy, 151 Flinders Street, MELBOURNE, Victoria. 3000.

Sir,

As required by Section 21 of the Gas and Fuel Corporation Act 1958 (No. 6260) we, the Chairman and Directors of the Gas and Fuel Corporation of Victoria present to you the Thirtieth Annual Report of the Corporation covering the financial year ended 30th June, 1980.

The financial accounts have been examined by the Auditor-General in accordance with the provisions of the Act and a copy of his report is contained in this Annual Report.

-----~-0~-~-

···~···o·~~~· N.A. SMITH CHAIRMAN

.... ~ .................... ~ ... . T.G. CRANE DIRECTOR

.•••••.••• A.R. GUY 11

D.G. HILL 11

W.M. LONIE 11

P.B. RONALD 11

F .J. SWEENEY 11

7th November, 1980.

IICTORIA Annual Report 1980

MR W.M. LONIE

FOR THE BUSY READER -FACTS AT A GlANCE

o After meeting all financial commitments, the Corporation made a consolidated net profit of $4.9 million for the year.

o Demand for gas rose by 6.9% over the previous year.

0 Sales of appliances increased by 9.8%.

o The number of consumers rose by 6.5%.

o Revenue for the year amounted to $271.2 million.

o Capital expenditure for the · year totalled $66.6 million.

o Total funds employed amounted to $518 million.

MR P. B. RONALD MR. F.J. SWEENEY

DURING THE YEAR * Notification of Grant of Permit to explore for

oil and gas in the Otway Basin was received. * Construction of the LNG Plant at Dandenong

was completed. * Building of the new Dandenong District Centre

and redevelopment of the Highett and Fitzroy properties continued.

* A new UHF mobile communications system began operation.

* A further extension of the Brooklyn Compressor Station was completed and construction of a new compressor station at Wollert commenced.

• Construction of a pipeline to supply natural gas to Maryborough was completed and supply was extended to Churchill.

OUR OBJECTIVES As a public authority of the State owned jointly by the Government and public shareholders, the Corporation's principal objectives are: • To ensure a safe, economical and effective

supply of gas to the people of Victoria. * To promote the efficient use of gas in those

applications where it can effectively contribute to meeting the energy demands of modem society.

* To operate as an effici~nt business enterprise at a level of profit consistent with its role as a publicly owned utility.

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DIRECTORS' REPORT

The Directors of the Gas and Fuel Corporation of Victoria holding office at the date of this report are

N.A SMITH Chairman and Managing Director T.G. CRANE AR. GUY, C.B.E. D.G. HILL WM. LONIE P.B. RONALD. C.M.G. F.J. SWEENEY

Mr W.M. Lonie was elected to the Board on 14th March, 1980 to fill the casual vacancy following the death of Mr KA Rowell on 12th November, 1979.

PROFIT The consolidated net profit of the group for the financial year after providing for income tax and for the payment of $10,697,500 to the State of Victoria Consolidated Fund under the Public Authorities (Contributions) Act 1966 amounted to $4,875.225. Contributions to the group

profit were Gas and Fuel Corporation of Victoria Waldorf Appliances Proprietary Limited The Albury Gas Company Limited

PETROLEUM EXPLORATION

$5,749,208

A wholly owned subsidiary company, Gas and Fuel Exploration No Liability, has entered into a joint venture with Phillips Australian Oil Company and M.LM. Investments Pty. Ltd. to carry out explor­ation for oil and gas in the Otway Basin.

RESERVES AND PROVISIONS The following material transfers to reserves and provisions were made within the group during the year, resulting from

Charges to Profit and Loss account Long Service Leave Accrued Annual Leave Retiring Allowances Doubtful Debts Deferred Repairs Depreciation Taxation Repairs to Gas Cylinders

Appropriations

$2,394,174 769,002 154,085

1,005,073 413,133

24,234,716 6.529

720,000

Contingency Reserve 50,000 Reserve for Gas Research 2,000,000

Equity Increase in National Debt Sinking Fund 117,400

DIVIDENDS Dividends paid by the Corporation during the past financial year, and referred to in the Directors' Report of 24th August, 1979, were 4% Preference Shares (4 cents per share)

paid on 31st August, 1979 $157,639 6% 'B' Preference Shares (6 cents per share)

paid on 31st August, 1979 180,630

$338,269

Dividends paid out of profits for the year ended 30th June, 1980. 4% Preference Shares (4 cents per share)

paid on 29th February, 1980. $157,639 6% 'B' Preference Shares (6 cents per share)

paid on 29th February, 1980 180.630 4% Preference Shares (4 cents per share)

paid on 29th August, 1980 157,639 6% 'B' Preference Shares (6 cents per share)

paid on 29th August, 1980 180,630 $676,538

Since 30th June, 1979 no subsidiary has paid to or declared a dividend in favour of the Corporation which has not been provided for in the Statement of Profit and Loss for the year ended 30th June, 1980.

DEBENTURE ISSUES Additional loan money was raised by the issue of the following debentures by the Gas and Fuel Corporation of Victoria throughout the year.

Amount Interest Rate Maturity Date $ %

250,000 10.7 1. 9.1983 40.000 10.3 1.10.1983

11,422,800 10.4 1.10.1983 18,000 10.7 1.10.1983

316,000 10.7 1.11.1983 10,000 10.7 1. 1.1984

8,562,300 10.8 1 4.1984 200,000 11.1 1. 4.1984

87,000 12.5 1. 7.1984 13,000 10.7 1. 1.1985

317,800 10.8 1. 4.1985 3,800,000 12.5 1. 7.1985 3,151,337 10.4 1.10.1986

17,200 10.8 1. 4.1987 10,000 12.5 1. 7.1987

200,000 10.8 1.10.1989 334,400 10.9 1. 4.1990

10,000 12.6 1. 7.1990 500,000 10.8 1.10.1994

20,900 10.9 1. 4.1995 29,280,737

The following Debentures were issued to redeem maturing loans

Amount $

4,000,000 10.000

100,000 2,780,200

524,000 1,000,000 1,040,300

20,000 585,400 300,000

20.000 10o:ooo 275,600

1,000,000 477,800

2,196,663 500,000 269,900 100,000

54,000 702,800

23,000 1,700,000

78,300 100,000 268,400

38,200

18,264,563

Interest Rate %

10.4 10.7 10.7 10.4 10.7 10.7 10.7 11.1 10.8 11.1 12.5 11.1 10.8 11.9 10.4 10.4 10.7 10.8 10.5 10.8 10.5 10.8 10.8 10.9 12.6 10.5 10.9

ADDITIONAL INFORMATION

Maturity Date

1. 4.1983 1. 8.1983 1. 9.1983 1.10.1983 1.10.1983 1.11.1983 1.12.1983 1. 3.1984 1. 4.1984 1. 4.1984 1. 7.1984 1. 2.1985 1. 4.1985 1. 4.1985 1. 4.1986 1.10.1986 1.10.1986 1. 4.1987 1. 4.1989 1. 8.1989 1.10.1989 1.12.1989 1. 2.1990 1. 4.1990 1. 5.1990 1.10.1994 1. 4.1995

The Directors took reasonable steps to ascertain before the Profit and Loss Account and Balance Sheet of the Corporation were completed, that all known bad debts were written off and adequate provisions made for doubtful debts.

At the date of this report the Directors are not aware of any circumstances which would render the amount written off for bad debts, or the amount of the provision for doubtful debts in the group inadequate to any substantial extent.

The Directors took reasonable steps before the Profit and Loss Account and Balance Sheet were made out, to ascertain the current assets of the Corporation, other than debtors, were shown in the accounting records at a value equal to or below the value that would be expected to be realised in the ordinary course of business.

At the date of this report the Directors are not aware of any circumstances which would render the values attributable to the current assets in the group accounts misleading.

No charge on the assets of any corporation in the group has arisen since the end of the financial year to the date of this report to secure the liabilities of any other person, and no contingent liability has arisen since the end of the financial year to the date of this report.

No contingent or other liability of any corporation in the group has become enforceabl'2, or is likely to become enforceable within a period of twelve months after the end of the financial year which in the opinion of the Directors, will or may affect the ability of the holding company to meet its obligations.

At the date of this report the Directors are not aware of any circumstances not otherwise dealt with in the report or group accounts which would render any amount stated in the group accounts misleading.

The results of the operations of the group, or of any corporation in the group during the financial year have not in the opinion of the Directors been substantially affected by any item, transaction or event of a material and unusual nature, not other­wise referred to in this report.

Since 30th June, 1980 and to the date of this report, in the opinion of the Directors, no item, transaction or event of a material and unusual nature which would affect substantially the results of the operations of any corporation in the group for the next succeeding financial year, has occurred.

No Director, since the end of the financial year, has received or become entitled to receive a benefit by reason of a contract made by the Corporation or a related corporation with the Director or firrn of which he is a member or with a company in which he has a substantial interest.

The Corporation is a company of the kind specified in the Schedule to the Order published in the Victoria Government Gazette No. 47 dated 22nd June, 1977 and the amounts have been rounded off in accordance with that Order.

Dated at Melbourne this 29th Day of August, 1980.

On behalf of the Board in accordance with a resolution of the Directors of Gas and Fuel Corporation of Victoria

N.A SMITH, Chairman

F.J. SWEENEY, Director

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REVIEW OF THE YEAR

In a period when economic uncertainty continued within the community, the Corporation achieved a satisfactory financial result for 1979/80 with a net profit of $4.9 million compared with $3.9 million for the previous year. Although the effects of inflation were severely felt during the year and the Corporation had to review tariffs, it is pleasing to record that the increases were substantially lower than the general rate of inflation. As the effects of increasing oil prices were felt throughout the community, there was a sharp increase in the number of new domestic consumers and a greatly increased demand for gas space and central heaters to replace oil heating. A total of 7 4 900 new domestic home heating customers were added during the year and, as a consequence, revenue from appliance and installation trading in both metropolitan and country areas rose significantly. The sudden upsurge in demand for new services caused a severe strain on the Corporation's resources and _necessitated a major exercise in logistics to organise manpower, materials and equipment. The work force was expanded, the number of contractors engaged on service laying was increased arid, during the latter months of the year, an average rate of 1400 new connections per week was achieved. In industry and commerce, continuing increases in the price of oil plus the Federal Government's tax incentives, accelerated the move to natural gas from oil in a considerable number of smaller installations where conversion costs could not be justified in the past. The Corporation continued to strongly oppose moves of the Federal Government to arbitrarily increase the price of liquefied petroleum gas (LP Gas) to so-called "export parity levels". It is therefore pleasing to report that the Federal Government's LP Gas policy, as announced in April 1980, agreed substantially with the Corporation's long held view that consumers in

rural areas who are dependent on LP Gas for cooking and heating should not be penalised. The Federal Government's plan to subsidise the cost of LP Gas purchased by the Corporation for its domestic customers in reticulated country areas was welcomed but the decision not to include industrial and commercial consumers was difficult to understand, In keeping with its role as Australia's principal gas undertaking, the Corporation played a major part in the activities of The Australian Gas Association and maintained close ties with the gas industry world-wide, both directly and through the International Gas Union.

MARKETING In yet another record year, total gas sales for 1979/80 increased by 6.9%, total reticulated gas customers increased to 821 297 at 30 JunE> 1980 and appliance sales rose to 79 500 units - an ihcrease of 7 100 units on last year. Domestic In the domestic market, gas sales rose by 5.5% to 37.0 million gigajoules. Sales of space and central heaters and hot water units continued to climb and the traditional gas cooker market was maintained at a very high level.

I "' ~ .s ~

GAS SALES 120

110

100

90

80 70

60 50 40

30

20 10

0

_ ....... Industrial ___ ......-----......---.,....

Commercial ___ ... -------• ·-------·---- . . e------- I e .-- Domestic

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Appliance sales to new homes, including those constructed by the Housing Commission, Victoria, continued to reflect the reduced level of new building work. Gas was selected for major appliance use in 89% of homes constructed. The main volume of appliance advertising was again undertaken by appliance manufacturers, mainly through direct mailing of catalogues to all homes. In the Greater Melbourne area 31 000 homes converted to gas during the year. Of these 30 000 were situated on line of main thereby requiring minimum capital expenditure to supply gas. Commercial and Industrial Sales into the commercial market increased by 8.6% to 9.4 million gigajoules whilst industrial gas sales increased by 7.5% from 65.4 million gigajoules to 70.3 million gigajoules. Seventy­three new major industrial contracts were signed including fourteen in country areas. Government policy was also reflected in the increased number of Education Department schools which converted from oil to gas. Energy Management In recognition of the special role gas has to play in meeting the energy needs of our urbanised society and the need to ensure that our energy resources are used efficiently, the Corporation continued with a full programme of energy management activities throughout the year. The second annual Energy Management Week was held during the first week in December, a

More than 60,000 people haue uisited the Corporation's low energy houses, built at Ballarat, Endeauour Hills and A/bury. A fourth home is under construction at Bendigo.

low energy house was erected at Ballarat in conjunction with local enterprise and another house was commenced at Bendigo, also in association with local interests. Approximately 19 000 people visit~d the Energy Information Centre at 151 Rinders Street and coverage of the Centre was extended through operation of a suitably equipped caravan in Melbourne and country areas. The Energy Management School conducted courses for plant engineers from industry and the Energy Consultative Service conducted a number of surveys in large industries to advise on financial and energy savings which could be achieved through adoption of energy management practices. The Corporation's internal energy conservation programme was expanded to a number of new areas and increased savings of electricity, gas and transport fuels were achieved. Conversion of Corporation motor vehicles to LP Gas operation continued throughout the year and at 30 June 1980 a total of 227 vehicles had been converted. During the year, further 6-cylinder sedans and station sedans were replaced by lighter vehicles where practicable and the proportion of 4-cylinder vehicles in the passenger fleet rose from 45% to 62%.

COUNTRY OPERATIONS

Reticulated gas sales in country areas totalled 31.2 million gigajoules - an increase of 3.9 million gigajoules, or 14.2% on the previous year. The number of customers receiving reticulated gas supply in country areas increased by 10.6% to 115 300, made up of 103 200 natural gas and 12 100 Tempered LP Gas customers. Natural gas represented 98.5% of the gas sold in these areas.

COUNTRY GAS SALES 32

31

30

29

28

27

26

25

24

23

22

21

7

8

In both new and existing houses, gas has now gained the majority share of the hot water market.

Sales to decentralised industries represented a significant proportion of the Corporation's total industrial sales and 78.6% of the total gas sales in country areas. Appliance sales by Country Branches and Agencies totalled 24 000, an increase of 7.6% on the previous year, and represented 30.2% of the total number of appliances sold by the Corporation in reticulated areas. The acceptance of natural gas in new homes continued to improve on already highly satisfactory levels. New showrooms were opened at Kyneton, Maryborough and Moe and agencies were appointed at Morwell, Euroa, Mooroopna and Drouin. The demand for reticulated Tempered LP Gas in the Western District continued to grow, resulting in further large expenditure on plant to ensure security of supply. The Corporation continued to extend natural gas supply to country areas where this was economically viable. Construction of the pipeline to Maryborough was completed and supply to Churchill commenced. Supply to Kyneton was delayed due to difficulties in resolving objections to the route of the transmission pipeline. To meet the increased demand for gas, a total of 288 kilometres of new mains and 12 500 new services were laid in country areas during the year.

Uquefied Petroleum Gas The Corporation's LP Gas Division which supplies gas in cylinders and bulk to approximately 115 000 customers in areas beyond the reach of a reticulated gas supply, both directly and through a network of more than 800 independent dealers had a turnover for appliances, cylinders and bulk tank rentals and gas of $21.4 million - $5.2 million above 1978/79. An additional 4 .5 tonne capacity road tanker was purchased during the year increasing the fleet to 24 tankers with an aggregate capacity of approximately 152 tonnes. LP Autogas continued its role of providing a conversion service and a centre for information on the use of LP Gas as an automotive fuel.

The LP Gas Vehicle Conversion Training School conducted free ten-day courses for personnel drawn from the motor industry, including new vehicle dealers, private contractors and members of the Victorian Automobile Chamber of Commerce. The School also conducted emergency courses for members of Police, Fire Brigade, Ambulance and State Emergency Services.

Albury Gas Co. Ltd. The Albury Gas Company Ltd., a wholly owned subsidiary of the Corporation, experienced increases of 43% in gas sales and 34.3% in the number of consumers. Twenty-seven kilometres of mains were added to the reticulation system and 1304 new services laid for the year. CliSTOMER SERVICE Efficient service to customers continued to be the prime objective of the Corporation throughout the year and over one million customer enquiries were processed by the Corporation's computerised telephone system. Gas supply and appliance maintenance jobs completed exceeded the previous year's total by 10% and requests for the installation of new appliances rose by 34%. Two hundred agencies for the receiving of customers' account payments were maintained throughout the year and approximately 44% of customers used these facilities. In preparation for the introduction of natural gas to Moe and Maryborough, training programmes were held for plumbers and other intere~ted parties. Following the construction of a transmission pipeline to Sunbury, a. project to adjust appliances in that area to use natural gas efficiently was completed during the year. In all, some 4145 gas appliances owned by 1619 consumers were converted.

TECHNICAL OPERATIONS Transmission Pipelines During the year, 45 kilometres of transmission pipeline were installed, increasing to over 1700 kilometres the total length of transmission pipe­lines. Major works included construction of a 31.5 kilo­metre pipeline from the existing Bendigo pipeline at Guildford, to supply the City of Maryborough and a 13.5 kilometre pipeline to supply natural gas to a new plant being constructed for Australian Newsprint Mills at Ettamogah, near Albury. As the first stage of a programme of "intelligent" pigging of transmission pipelines, a Kaliper pig was passed through two sections of pipeline between Longford and Tyers and the pipeline between Tyers and Jeeralang, to detect any indentations or obstructions. No defects were located in this first survey of 144 kilometres of pipeline. Routine patrol and maintenance on transmission pipelines continued throughout the year. A total of 4900 inspection manhours were expended in supervising the activities of other authorities per­forming construction work adjacent to the Corpor­ation's installations to avoid the possibility of damage being caused to these important pipelines. Mains and Services A total of 578.5 kilometres of new mains were laid at a cost of $12.0 million to supply domestic, industrial and commercial consumers - 6% lower than the preceding year. Whilst new mains required for domestic supply were approximately 11% lower than in 1978/79, mains required to supply indust­rial and commercial consumers increased by almost 100%. The metropolitan distribution system was extended to T ecoma, Bel grave, North Warrandyte and Rosebud as part of the Corporation's policy of making gas available wherever economically just­ified. A total of 199 kilometres of mains were renewed during the year, including a number of mains replaced under difficult conditions in the central Melbourne area. Reinforcement projects involved laying of 38.6 kilometres of mains. A total of 55 922 new service connections were completed- 54% more than in 1978/79. Service renewals totalled 11 000 compared with 8810 in the previous year. Leakage survey activities were maintained at the level required to provide two surveys of the Melbourne central business district, one survey of business/shopping locations in all metropolitan areas and country branches, and general surveys aimed at achieving full coverage of the whole of the reticulation system over a 4-5 year period.

MAINS Km 19

18

17 E

"" 15 16 '§

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~ 15

14

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PEAK DAY ISSUE (Nat. Gasl 600

500

.9l 400 .a

.13> "' 15 300

~ ~ 200

100

SPACE HEATING SALES as % of Domestic Sales

"' 0 .-.. 00

~ ~

SPACE HEATING CONSUMERS-----

100

90

80

70

60

as% of Domestic Consumers

--­__ .... 50 .. ----

.......... --40

30

_ .... _ ..... ----:-

9

10

Other Major Projects Cor.struction of the Corporation's liquefied natural gas (LNG) Plant at Dandenong was completed during the year and filling of the storage tank was commenced early in May. This major project will increase security of supply of gas and will supple­ment supply on days of peak demand.

Building of the new Dandenong District Centre commenced in August 1979 and is now well advanced with completion expected in October 1980. Solar equipment has been incorporated in the administration building to provide half the total annual energy requirements for heating and cool­ing the building. Redevelopment of the Highett property and reconstruction of the Fitzroy District Centre proceeded during the year. Tenders were let for a Centre at Highett which will centralise the training of staff engaged on the installation and mainten­ance of gas mains and services and gas appliances. In addition, consultants were appointed for the development of a new laboratory complex at Highett to eventually replace the Port Melbourne laboratories and production of a master plan for the early redevelopment of the Tooronga District Centre was initiated.

The installation and commissioning of 4 Solar Saturn gas turbine powered compressors at Brooklyn Compressor Station was completed early in the year. These compressors will increase the capacity of the pipelines to Geelong, Ballarat and Bendigo. Four more Solar compressors have been ordered and are scheduled for installation at Brooklyn by winter 1981. Construction of the Wollert Compressor Station which will increase the capacity of the Albury/ Wodonga pipeline progressed satisfactorily. Two of the three Solar Saturn compressors required were delivered to the site and are scheduled to come into operation prior to next winter. A new UHF mobile communications system commenced operation in the metropolitan area in June 1980 and the Albury and Ballarat radio systems were changed from VHF to UHF during the year. Research and Development An ongoing programme directed towards develop­ment of more efficient gas appliances continued throughout the year. In a parallel activity, a wide range of appliances was tested for conformity with Australian Gas Association approval requirements. Assistance was provided to the Victorian Solar Energy Research Committee with its solar energy development and domestic projects, and consider­able effort was devoted to the development of test rigs for evaluating solar collectors.

In order to improve the accuracy and efficiency of testing both domestic and commercial/industrial gas meters, development of new techniques for meter testing continued. As a result of this programme, improved meter testing procedures were introduced during the year.

GAS SUPPLY In 1979/80 BHP/Esso delivered a total of 148.7 million gigajoules of natural gas into the Corp­oration's transmission system at Longford, an increase of 16% over 1979. The highest daily delivery was 681 000 gigajoules. Of the gas received, the Corporation supplied 62% to metro­politan areas and 22% to country areas while 10% was delivered to the State Electricity Commission and 6% to the producers for their own use in Melbourne, Westernport and Geelong.

To cope with the increased scale and complexity of gas supply and transport, a new control room was constructed at Dandenong and more sophisticated control procedures were introduced.

EXPLORATION In order to determine the gas potential of Bass Strait, the Corporation continued its involvement in petroleum exploration through Gas and Fuel Exploration N.L a wholly owned subsidiary.

The Joint Venture of Gas and Fuel Exploration N. L and Beach Petroleum N.L conducted a marine seismic survey in the Gippsland Basin Permit Vic/Pll Area. About 1320 line kilometres were recorded between January and March 1980 and the data was processed by Geophysical Service International in Sydney. Interpretation of the survey results revealed a number of leads, several of which will be drilled in 1981 provided a suitable drill-ship can be contracted. Geological studies of existing well data continued throughout the year and results are being integrated with the seismic controL

900

800

~ j 700

600

500

NUMBER OF CONSUMERS

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During the year, Gas and Fuel Exploration N.L. joined with Phillips Australian Oil Company and M.I.M. Investments Pty. Ltd. to apply for a petro­leum exploration permit in the Otway Basin off~ shore from Portland, Victoria. Permit Vic/P14 was granted to the group on 16 January, 1980. Phillips as operator for the venture commenced an appraisal of the area using existing geological and geophysical data acquired by previous permit holders. An extensive marine seismic survey is planned and arrangements have been made with Geophysical Service International for this work to be carried out in late 1980. It is hoped that interpretation of the data from this survey will identify targets for a future drilling programme.

WALDORF APPLIANCES PTY. LTD. Turnover of commercial cooking equipment supplied by Waldorf Appliances Pty. Ltd., the Cor­poration's fully-owned subsidiary, jncreased again this year, retaining the Company's substantial share of the commercial cooking market. New equipment introduced during the year was well received by the catering industry and notable sales increases were made in New South Wales and overseas markets.

Overseas sales to our established markets showed pleasing increases; a chain of hotels and mining exploration camps in China were supplied during the year and the company participated in, and was represented at, government-sponsored trade displays in Fiji, Indonesia, Singapore, New Zealand and Noumea.

The LNG Plant at Dandenong - the first of its kind in Australia - ensures security of supply during periods of peak demand.

FINANCE AND ADMINISTRATION After meeting all financial commitments, consol­idated net profit for the year amounted to $4.9 million on a turnover of $271.2 million. Capital Expenditure Capital Expenditure in 1979/80 totalled $66.6 million, a decrease of $2.2 million from the previous year. $2.4 m.illion was spent on the construction of the pipeline to Maryborough and $2.7 million on other pipeline projects. In allied gas supply works $4.3 million was spent towards the construction of the liquefied natural gas facility at Dandenong, and $0.7 million on metering, regulating and odourising equipment. $2 million was spent on the extension of the com­pressor station at Brooklyn and a further $1 .7 million towards the construction of a new compressor station at Wollert. Provision of mains, services and meters and the maintenance and extension of the metropolitan distribution system accounted for $25.9 million while similar works in country areas absorbed $10.9 million. Installation of the new UHF radio communications system cost $3.5 million and $3.1 million was spent on the construction of new service centres at Dandenong, Fitzroy and Highett. Purchase of motor vehicles, mechanical equipment and miscellaneous capital expenditure totalled $8.5 million and $0.9 million was spent on the purchase of bulk tanks to meet the demand for LP Gas. Fund Raising External funds raised to finance Capital Expend­iture and to redeem maturing loans during the year amounted to $4 7.5 million. The money came from two public loans and from private loans from banks, insurance companies, superannuation funds and similar institutions plus private investors.

iij :g 15

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CAPITAL EXPENDITURE 80

70

60

50

40

30

"' ..... "'

11

12

The Corporation records its warm appreciation to all investors for the support accorded its loan programme for the 1979/80 financial year. Computer Extensions Change-over from the Burroughs 86700 computer system to the Burroughs 87800 system was completed in October 1979. The new computer is faster and provides additional capacity for expansion of current systems and implement­ation of new applications. Among new computer applications implemented during the year were the redesign of the Stores System, one of the original systems placed on the computer, and transfer of the Accounts Payable System from accounting machines.

EMPLOYEE RELATIONS At 30 June 1980, the Corporation and its subsid­iaries employed a total of 5 029 people. Staff turnover during the year remained low and the response to advertisements and the number of personal enquiries regarding employment continued at an abnormally high level, reflecting the general employment situation. The intake of apprentices for the year was 54, bringing the total number employed by the Corp­oration to 190. In addition, the Corporation con­tinued to train young people in both office and field work under the Youth Employment Scheme. It also provided Work Experience for 65 students from 4 7 schools.

After a number of successful trials, the progressive introduction of flexible working hours was implemented during the year. At 30 June 1980 approximately half of the departments at Head Office had transferred to this system. There was a continuing call on the services of the Welfare Officer who provided valuable assistance to employees and their families throughout the year in an atmosphere of complete confidentiality. Industrial Relations A significant proportion of the industrial relations activity during the year was in work value studies related to claims for higher wages for both staff and non-staff employees. This involved a considerable amount of travelling by industrial staff. The close contact resulting from this ensured a continuation of the good relationships between the Corporation and union representatives that have existed for many years. Close liaison was also maintained with other gas undertakings, particularly in South Australia and New South Wales, where joint action was taken on matters of common interest.

Safety Although the number of accidents was about the same as last year, the increasing effectiveness of the

safety training programme was reflected in a con­siderable reduction in time lost per accident. A Defensive Driving Course conducted during the year was attended by 600 employees and it is pleasing to note that the number of vehicle accidents fell by about 100. Training In order to facilitate employee involvement in internal training programmes, courses were restructured to provide a larger number of shorter duration. As a result, 560 employees attended 76 courses, compared with 510 at 61 in 1978/79.

Two Residential Management courses were conducted to give training in management techniques to 40 selected personnel and 147 employees undertook studies at external institutions. The successful efforts of employees completing apprenticeships and tertiary studies were acknowledged at special presentation ceremonies.

In a year of record demand, almost 75,000 customers chose gas for clean. efficient. low-cost heating.

The splendid "terraced" Council Chamber of the City of A/bury combines eye­appeal with the inner comfort of gas heating, cooling and hot water.

NUMBER OF LP G CONSUMERS 120

115

110

~ 105

~ 100

95

90

0 ,.._ ,.._ 0>

ao ,.._ 0>

C) ao 0>

14

PROFIT AND LOSS STATEMENT Gas and Fuel Corporation of Victoria for year ended 30th June, 1980

Income Sales- Gas

-Appliances, LP. Gas and Other Products

Gross Income

Cost of Sales - Gas -Appliances, LP. Gas

and Other Products

Net Income

Expenditure (Note 2) Distribution Marketing Administration Amortisation of Natural Gas Change-over Costs Amortisation of Goodwill Contribution to Consolidated Fund

Dividends Receivable (Note 4)

Operating Profit Less:

Income Tax Transfer to Contingency Reserve Transfer to Reserve for Gas Research Transfer to Trading Stock

Valuation Reserve Dividends-

4% Preference -Interim Dividend Paid Final Dividend Proposed

6% "8'' Preference -Interim Dividend Paid Final Dividend Proposed

Net Surplus for Year Unappropriated Profits from Previous Year Stock Valuation Adjustment

Balance Carried Forward

CONSOLIDATED

1980 1979 $000 $000

205,988 183,974

65,173 52,833

271,161 236,807

46,874 43,646

54,204 41,576

101,078 85,222

170,083 151,585

66,688 49,161 29,766 25,576 51,981 45,771

4,250 18,328 1,818 2,000

10,698 6,820

165,201 147,656

4,882 3,929

4,882 3,929

7 21 50 50

2,000 2,000

35

158 158 158 158

180 180 180 180

2,149 1,147 2,812 1,621

44

4,961 2,812

GAS AND FUEL CORPORATION

1980 1979 $000 $000

204,749 183,048

59,962 48,251

264,711 231,299

46,109 42,917

50,187 38,288

96,296 81,205

168,415 150,094

66,198 48,909 29,050 24,951 50,709 44,580

4,212 18,300 1,799 2,000

10,698 6,820

162,666 145,560

5,749 4,534 25

5,749 4,559

50 50 2,000 2,000

158 158 158 158

180 180 180 180

3,023 1,833 4,854 3,021

7,877 4,854

Rounding off to the nearest thousand dollars has been adopted.

BALANCE SHEET Gas and Fuel Corporation of Victoria at 30th June, 1980

CONSOLIDATED GAS AND FUEL CORPORATION

1980 1979 1980 1979 $000 $000 $000 $000

Capital Liabilities lssl.fed Share Capital (Note 5) 21,903 21,903 21,903 21,903 Net Advances from State of

Victoria (Note 7) 7,858 7,999 7,858 7,999 Debentures (Note 8) 335,443 321,322 335,443 321,322

365,204 351,224 365,204 351,224 Reserves (Note 6)

Capital Reserves 42,669 42,669 42,669 42,669 Revenue Reserves 13,375 10,636 13,301 10,562

421,248 404,529 421,174 404,455 Unappropriated Profits 4,961 2,812 7,877 4,854

Total Capital Funds 426,209 407,341 429,051 409,309

REPRESENTED BY-Current Assets

Cash in Hand and at Banks 1,757 861 1,716 792 Short Term Deposits (Note 22) 18,691 18,186 18,691 18,186 Trade Debtors (Note 9) 45,250 40,311 43,989 39,134 Other Debtors and Prepayments (Note 9) 3,087 3,453 3,004 3,391 Stocks and Stores (Note 1 0) 20,153 15,362 18,709 13,927

Total Current Assets 88,938 78,173 86,109 75,430

Less: Current Liabilities and Provisions Bank Overdraft (Note 11) 8,368 2,275 8,363 2,228 Debentures (redeemable within 1 2 months) 33,457 20,005 33,457 20,005 Trade Creditors 19,452 17,024 18,760 16,408 Other Creditors 10,353 7,322 10,346 7,263 Provision- Deferred Repairs 1,208 1,308 1,208 1,308

- Preference Dividend 338 338 338 338 - Accrued Annual Leave 5,142 4,419 5,114 4,399 -Income Tax 7 21

---Total Current Liabilities 78,325 52,712 77,586 51,949

Net Current Assets 10,613 25,461 8,523 23,481 Deferred Assets - Loans to

Subsidiaries (Note 12) 13,040 8,669 Fixed Assets (Note 13) 415,684 381 '194 408,406 376,356 Investments

In Subsidiary Companies (Note 18) 1,090 1,090 In other Companies 27 33 27 33 In Statutory Authorities (Note 17) 9,959 5,000 9,959 5,000

436,283 411,688 441,045 414,629

Less: Deferred Liabilities Provision for Long Service Leave 12,734 11,374 12,585 11,250 Provision for Retiring Allowances 598 692 598 692

Total Deferred Liabilities 13,332 12,066 13,183 11,942

422,951 399,622 427,862 402,687 Intangible Assets

Unamortised Debenture Issue Expenses (Note 14) 1,189 904 1,189 904

Natural Gas Change·over Costs (Note 15) 986 4,838 3,919 Goodwill (Note 16) 1,818 1,799 Exploration Costs 1,083 159

Rounding off to the nearest thousand 426,209 407,341 429,051 409,309

dollars has been adopted. 15

16

NOTES TO THE ACCOUNTS GAS AND FUEL CORPORATION OF VICTORIA

1. Statement of Accounting Principles The following summary of significant accounting principles is given in order to assist in understanding the figures presented in the accounts. (a) Accounting System

The financial statements are prepared on the basis of historical cost accounting. (b) Consolidation

Under the heading "Consolidated" are the accounts of the Gas and Fuel Corporation of Victoria and its wholly owned subsidiary companies Waldorf Appliances Proprietary Limited and The Albury Gas Company Limited both incorporated in New South Wales, and Gas and Fuel Exploration No Liability incorporated in Victoria.

(c) Stock Valuations Stocks are valued substantially at average cost and provisions are included for depreciation and obsolescence of stock.

(d) Employee Benefits The accounts include provisions for accrued long service leave, outstanding and accrued annual leave, and extended sick leave. A provision is included for retiring allowances payable to employees not covered by superannuation.

(e) Research and Development Expenditure for research and development is written off in the year in which the expenditure is incurred.

(f) Depreciation Depreciation is calculated on a straight line basis at rates based on the estimated working life of fixed assets. It was decided to charge the cost of renewal of gas mains and services to revenue in line with other gas utilities as from 1st July, 1979, with aconsequentincreaseof$8,910,015 in Distribution expenses charged for the year. Additionally it was decided to charge to revenue the cost of fixing industrial and commercial gas meters as from 1st July, 1979, in line with the policy on domestic gas meters, and to accelerate the rate of depreciation of previously capitalized meter fixing. These increased charges amounted to $5,964,640.

(g) Intangible Assets A policy was adopted to write off the amount of goodwill included in the Balance Sheet over a period of three years. Natural gas changeover costs have been amortised over a period of years on the basis of volumes of gas sold. Debenture issue expenses relating to each issue of debentures are written off over the term of the issue.

CONSOLIDATED GAS & FUEl: CORPORATION

1980 1979 1980 1979 $000 $000 $000 $000

2. Charges against revenue for the year included -(a) Interest on debenture and other fixed

loans from outside group 30,216 26,642 30,216 26,642 Other interest outside group 194 756 188 753

30,410 27,398 30,404 27,395 Less: Interest received from investments 5,918 5,179 5,918 5,179

: Interest received from subsidiaries 635 507

24,492 22,219 23,851 21,709

Rounding off to the nearest thousand dollars has been adopted.

2. (b) Provision in respect of Depreciation on Buildings, Plant & Equipment Amortisation -Natural Gas Change-over Costs -Goodwill Doubtful Debts - Trade Doubtful Debts - Hire Purchase Accrued Annual Leave Long Service Leave Retiring Allowances Deferred Repairs

The cost of plant in normal course of retirement 1980 $685,000 (1979 $399,000) has been deducted from the Provision for Depre cia tio n

(c) Directors' remuneration (d) Audit Fees (Auditing Group Accounts)

The Auditors received no other benefits 3. Bad Debts have been written off against

provision for -Trade Debtors Hire Purchase Debtors

4. Dividends receivable from -

Waldorf Appliances Pty. Ltd. 5. Capital

Authorised Capital -7,500,000 4% Cumulative Preference Shares of

$2 each 6,625,000 6% "B" Cumulative Preference Shares

of $2 each 7,500,000 Ordinary Shares of $2 each

Issued Capital -4% Cumulative Preference Shares of $2 each 6% "B" Cumulative Preference Shares of $2 each Ordinary Shares of $2 each

CONSOLIDATED

1980 $000

24,235

4,250 1,818

870 135 769

2,394 154 413

35,038

30 51

611 95

1979 $000

24,231

18,328 2,000

809 90

715 2,192

97 256

48,718

22 46

753 84

GAS & FUEL CORPORATION

1980 $000

24,076

4,212 1,799

857 135 735

2,356 154 413

34,737

24 46

606 95

1980 $000

15,000

13,250 15,000

43,250

7,882 6,021 8,000

21,903

1979 $000

24,107

18,300 2,000

793 90

678 2,164

97 256

48,485

22 41

740 84

1979 $000

25

15,000

13,250 15,000

43,250

7,882 6,021 8,000

21,903

All ordinary shares issued are held by the State of Victoria. The Articles of Association of the Corporation restrict the transfer of the 4% Cumulative Preference Shares to any transferee other than the State of Victoria, except in special circumstances.

6. Reserves 1980 1979 1980 1979 $000 $000 $000 $000

Transfers to Reserves during the year -Capital Reserves

Asset Revaluation 11,924 11,924 Asset Realization

Fixed Assets 229 229

Rounding off to the nearest thousand dollars has been adopted.

17

NOTES TO THE ACCOUNTS !Cont.l CONSOLIDATED GAS & FUEL CORPORATION

1980 1979 1980 1979 6. (Cont.) $000 $000 $000 $000

Revenue Reserves -Profit and Loss Account -

Special Leakage Survey 83 83 Repairs to Gas Cylinders 720 645 720 645

Appropriations -Contingency Reserve 50 50 50 50 Gas Research 2,000 2,000 2,000 2,000 Trading Stock Valuation 35

Increase in General Reserve for equity increase in the National Debt Sinking Fund 117 113 117 113

1980 $000

7. Advances from the State of Victoria 10,000 Discount and charges incurred 106

10,106 Less: Equity in National Debt Sinking Fund 2,248

7,858

1980 1979 1980 1979 $000 $000 $000 $000

8. Debentures Redeemable 1-2 years from 30th June 19,600 33,372 19,600 33,372 Redeemable 2-5 years from 30th June 105,739 62,473 105,739 62,473 Redeemable after 5 years from 30th June 210,104 225,477 210,104 225,477

335,443 321,322 335,443 321,322

The due repayment of the principal sums and the payment of all interest secured by any debentures or debenture stock issued by the Corporation is guaranteed by the Government of Victoria under Clause 13 of the Gas and Fuel Corporation Act 1958.

CONSOLIDATED GAS & FUEL CORPORATION

1980 1979 1980 1979 $000 $000 $000 $000

9. Debtors and Prepayments -Trade 46,650 40,140 45,369 38,927 Hire Purchase 8,497 6,961 8,427 6,930

55,147 47,101 53,796 45,857 Less: Provision ·for Doubtful Debts -

Trade 1,091 832 1,062 810 Hire Purchase 150 110 150 110

-1,241 942 1,212 920

Unearned Interest 1,528 1,253 1,528 1,253 Consumers Deposits 6,807 4,364 6,746 4,319 Provision for Interest thereon 321 231 321 231

45,250 40,311 43,989 39,134 Other Debtors 2,233 2,483 2,228 2,478 Prepayments 854 970 776 913

48,337 43,764 46,993 42,525

Hire purchase terms charges are absorbed into the Profit and Loss Account in equal instalments over the term of the contract

Rounding off to the nearest thousand dollars has been adopted.

18

CONSOLIDATED GAS & FUEL CORPORATION

1980 1979 1980 1979 $000 $000 $000 $000

10. Stocks and Stores 21,829 17,773 20,385 16,338 Less: Depreciation 1,676 2,411 1,676 2,411 --

20,153 15,362 18,709 13,927 11. Bank Overdraft

Bank Balances (Cash Book) 8,368 2,275 8,363 2,228 Less: Unpresented Cheques 6,314 3,141 6,314 3,141

2,054 866 2,049 913

12. Deferred Assets-Loans to Subsidiaries

Albury Gas Company Ltd. 10,391 7,125 Waldorf Appliances Pty. Ltd. 1,561 1,436 Gas and Fuel Exploration N.L 1,088 108

13,040 8,669 --

13. Fixed Assets Freehold Land

at independent valuation 1974 210 210 1979 36,211 38,329 36,211 38,329

at cost 2,672 1,850 2,672 1,850 39,093 40,389 38,883 40,179

Buildings - on freehold land

at independent valuation 1974 34 34 Less: Depreciation 16 12

18 22 - at independent valuation 1979 14,193 14,861 14,193 14,861

Less: Depreciation 4,176 4,034 4,176 4,034 10,017 10,827 10,017 10,827 --

at cost 724 724 Less: Depreciation 46 46

678 678 - on leasehold land at cost 5,390 3,183 5,390 3,183

Less: Depreciation 1,292 1,000 1,292 1,000 4,098 2,183 4,098 2,183

Machinery, Plant and Equipment - at independent valuation 1961 5,617 5,274 5,617 5,274

Less: Depreciation 5,172 1,983 5,172 1,983 445 3,291 445 3,291

-at cost 451,147 383,444 443,613 378,495 Less: Depreciation 121,805 103,060 121,321 102,717

329,342 280,384 322,292 275,778 Capital Work in Progress -at cost 32,316 44,382 32,316 44,382

Less: Depreciation 323 284 323 284 31,993 44,098 31,993 44,098

Total Net Fixed Assets 415,684 381,194 408,406 376,356

Rounding off to the nearest thousand dollars has been adopted.

19

20

NOTES TO THE ACCOUNTS (Cont l

14. Unamortised Debenture Issue Expenses Balance 30th June, 1979/78

Add: Expenses of Issue for the year

Less: Amount written off

15 Natural Gas Change-over Costs Less: Amounts written off

16. Goodwill Less: Amortisation

17. Investments in Statutory authorities ~re Melbourne and Metropolitan Board of Works Melbourne and Metropolitan Tramways Board Melbourne Underground Rail Loop Authority West Gate Bridge Authority

18. Investments in Subsidiary Companies are Shares in Waldorf Appliances Proprietary Limited

incorporated in New South Wales (1 00% holding) at cost

Shares in The Albury Gas Company Limited incorporated in New South Wales

(1 00% holding) at cost Shares in Gas and Fuel Exploration No Liability

incorporated in Victoria (1 00% holding) at cost

19. Statement of Shareholders at 7th August, 1980

CONSOLIDATED

1980 1979 $000 $000

904 877 602 325

1,506 1,202 317 298

1,189 904 67,786 67,388 66,800 62,550

986 4,838 5,818 5,818 5,818 4,000

1,818

(a) Number of holders 4% Cumulative Preference Shares

Number of Holders 338

12

1 Total 351

Number of Shares Held 1-1.000

1,001·5,000 5,001-10,000

10,001 and over

GAS & FUEL CORPORATION 1980 1979 $000 $000

904 877 602 325

1,506 1,202 317 298

1,189 904 66,734 66,441 66,734 62,522

5,799 5,799 5,799 4,000 --

1

$000

4,959 1,000 2,000 2,000

$125,441

964,748

2

Number of holders 6% "B" Cumulative Preference Shares

Number of Holders 1,170

209 22 21

Total 1,422

Number of Shares Held 1-1,000

1,001-5,000 5,001-10,000

10,001 and over

Rounding off to the nearest thousand dollars has been adopted {except for investments in subsidiary companies).

19. (Cont.) (b) Voting Rights

(i) 4% Cumulative Preference Shareholders have the same rights as the holder of ordinary shares to receive notices of general meetings, reports, balance sheets and accounts and to attend and vote at general meetings of the Corporation and to vote at a separate meeting convened for the purpose of passing a resolution to alter or modify the Memorandum of Association for the purpose of issuing additional preference shares.

(ii) 6% "B" Cumulative Preference Shareholders have the same rights as the holder of ordinary shares to receive notices of general meetings, reports, balance sheets and accounts and to attend and vote at general meetings of the Corporation and to vote at a separate meeting of the holders of 6% "B" Cumulative Preference Shares convened for the purpose of passing a resolution to sanction a variation to the Articles of Association of the Corporation which affects the rights and privileges attached to the 6% "B" Cumulative Preference Shares.

(iii) The only ordinary Shareholder being the State of Victoria is entitled to receive notices of general meetings, reports, balance sheets and accounts and to attend and vote at general meetings of the Corporation.

(c) Ninety-eight percent of 4% Cumulative Preference Shares and sixty-eight percent of 6% "B'' Cumulative Preference Shares are held by the twenty largest holders in each of the respective categories. Ninety-eight percent of the 4% Cumulative Preference Shares are held by the State of Victoria.

20. The only Share and Loan Register of the Corporation is located at the registered office of the Corooration. 171 Flinders Street. Melbourne.

21. The closing date for the receipt of nominations for the office of director is twenty-one days before the general meeting.

22. Money Market Temporary surplus funds are invested on the short term money market and include funds received in advance for the 1980/81 year.

23. Contingent Liabilities (Unsecured) These liabilities consisted of commitments under contract for capital expenditure and guarantees by the Corporation approximating $14,038,000 (1979 $10,451,000) and the Princes Gate long term lease.

SOURCE AND APPLICATION OF FUNDS For year ended 30th June, 1980

Gas and Fuel Corporation of Victoria and Subsidiaries

Source of Funds 1980 1979 Application of Funds 1980 1979 $000 $000 $000 $000

Net Earnings 4,882 3,929 Dividend 676 676 Depredation 24,234 24,231 Increase in Fixed Assets 59,028 65,488 Amortisation 6,068 20,328 Increase in Net Current Increase in Provisions Assets 9,062

and Reserves 2,603 1,940 Natural Gas Change-Decrease in Net over Costs 94 30

Current Assets 769 Exploration Costs 924 159 Long Term Borrowing 27,145 30,049 Investment in Statutory

Authorities 4,959 Tax Payment 20

$65,701 $65,701

Rounding off to the nearest thousand dollars has been adopted.

21

22

STATEMENT BY PRINCIPAL ACCOUNTING OFFICER I, Roberf Reginald Edwards, being the officer in charge of the preparation of the accompanying accounts of the Gas and Fuel Corporation of Victoria and group accounts of Gas and Fuel Corporation of Victoria and its subsidiaries for the year ended 30th June, 1980, state that to the best of my knowledge and belief such accounts and group accounts give a true and fair view of the matters required by Section 162 of the Companies Act 1961 to be dealt with therein.

Dated this 20th Day of August, 1980. RR. EDWARDS Principal Accounting Officer

STATEMENT BY DIRECTORS In the opinion of the directors of the Gas and Fuel Corporation of Victoria the accompanying balance sheet is drawn up so as to give a true and fair view of the state of affairs of the Corporation as at 30th June, 1980, and the accompanying statement of profit and loss is drawn up so as to give a true and fair view of the profit of the Corporation for the year ended 30th June, 1980.

It is also the opinion of the directors that the accompanying group accounts of the Gas and Fuel Corporation of Victoria and its subsidiary companies are drawn up so as to give a true and fair view of -(a) the profit and loss of the Corporation and its subsidiaries for the

respective last financial years, and (b) the state of affairs of the Corporation and its subsidiaries as at the end

of their respective last financial years, so far as they concern members of the holding company.

Dated at Melbourne this 29th Day of August, 1980.

On behalf of the Board, N.A SMITH, Chairman F.J. SWEENEY, Director

AUDITORS' REPORT TO THE MEMBERS OF GAS AND FUEL CORPORATION OF VICTORIA In our opinion the accompanymg accounts, being the balance sheet and profit and loss account of the Gas and Fuel Corporation, and group accounts, being the consolidated balance sheet and consolidated profit and loss account of the Corporation and its subsidiaries, which have been prepared under the historical cost convention as stated in note 1, are properly drawn up and so as to give a true and fair view of the state of affairs of the Corporation and of the group as at 30th June, 1980 and of the profit of the Corporation and of the group for the year ended on that date so far as they concern members of the holding company. We are satisfied that the accounts of the subsidiaries that have been consolidated with other accounts are in form and content appropriate and proper for the purposes of the preparation of the consolidated accounts and we have received satisfactory information and explanations required by us for that purpose. No auditor's report on the accounts of any of the subsidiaries was made subject to any qualification, or included any comment made subject to any qualification. · G.I. Stevenson and Co. are auditors of the subsidiary companies.

G.I. STEVENSON & CO., Chartered Accountants

J.D. TAUBMAN, Partner

Dated at Me.lbourne this 7th Day of October, 1980

B.J. WALDRON, Auditor-General

1. Head Office Showroom 2. Ftinting Division, Clayton 3 . Service Despatch

(Control) 4. Customer Relations 5. Electrical Section,

Transport and General Services.

6. Systems & Data Ftocessing

7. Scientific Services B. Drawing Office

APPRECIATION 1979/80 was another year of achievement for the Corporation as it met the continuing growth in demand for gas in Victoria. The Directors place on record their sincere appreciation of the loyalty, enthusiasm and co-opera­tion of all employees whose efforts played a major part in achieving the year's successful results.

23

24

10 YEAR STATISTICAL SUMMARY

FINANCIAL STATISTICS INCOME $'000 Sales-Gas

-Appliances, L.P. Gas, etc.

Gross Income

COST OF SALES $'000

Cost of Sales - Gas

-Appliances, L.P. Gas, etc.

Total Cost of Sales Net Income

EXPENDITURE $'000 Distribution

Marketing

Administration

Amortisation of Natural Gas Change-over Costs

Amortisation of Goodwill

Contribution to Consolidated Fund

Total Expenditure

NET PROFIT $'000

OPERATING STATISTICS GAS SALES '000 gigajoules Domestic

Commercial Industrial

Total Gas Sales

PEAK DAY ISSUE '000 gigajoules

CONSUMERS as at 30th June

Domestic

Commercial

Industrial

Total Consumers

EMPLOYEES- average number

MAINS- kilometres as at 30th June

KEY RATIOS Average Revenue

cents per megajoule sold Gas Sales

gigajoules per kilometre of main

Average Consumption gigajoules per domestic consumer

Consumers number per kilometre of main

1980 1979

205,988 183,974

65,173 52,833

271,161 236,807

46,874 43,646

54,204 41,576

101,078 85,222

170,083 151.585

66,688 49,161

29,766 25,576

51,981 45,771

4,250 18,328

1,818 2,000

10,698 6,820

165,201 147,656

4,882 3,929

36,797 35,056

9,425 8,675

70,286 65,407

116,690 109,138

551 512

7~5,389 746,617

20,895 19.775

5,013 4,811

821,297 771,203

4,844 4,556

17,897 17,235

0.177 0.169

6,520 6,332

47 47

46 45

1978 1977 1976

161,003 137,095 109,710

49,770 53,939 50,412

210,773 191,034 160.122

38,364 33,984 26,988

39,655 43,004 40,993

78,019 76,988 67,981

132,754 114,046 92,141

39,968 33,263 28,359 22,473 20,312 18,960

42,962 41,790 33,179

16,200 12,164 6,912

2,000

5,860 4,640 3,820

129,463 112,169 91,230

3,291 1,877 911

31,850 29,669 24,236

7,327 6,428 6,065

62,886 59,374 53,327

102,063 95,471 83,628

464 462 391

716,332 689,451 664,713

18,218 17,551 17,218

4,944 4,855 4,734

739,494 711,857 686,665

4,400 4,295 4,278

16,514 15,814 15,091

0.158 0.144 0.131

6,180 6,037 5,542

44 43 37

45 45 46

1975 1974 1973 1972 1971

92,474 72,263 61,129 45,872 40,088

45,656 34,081 27,701 14,276 11,703

138,130 106,344 88,830 60,148 51,791

22,529 18,720 13,734 11,273 11,579

36,774 26,800 21,663 10,522 8,246

59,303 45,520 35,397 21,795 19,825

78,827 60,824 53,433 38,353 31,966

21,385 16,183 14,520 15,145 13,968

17,034 13,975 11,611 8,608 7,521

31,966 24,141 20,970 10,559 6,927

4,575 3,546 3,002 2,191 1,700

3,000 2,180 1,828 1,602 1 '125 77,960 60,025 51,931 38,105 31,241

867 799 1,502 248 725

22,721 18,469 16,609 13,065 11,117

5,561 3,784 3,315 2,400 1,810

43,971 37,421 22,544 10,596 5,923

72,253 59,674 42,468 26,061 18,850

335 282 230 139 98

• CONVERSION FACTORS: 637,511 612,950 596,014 488,997 477,921 1 kilometre 0.621 miles

1 giga;oule 9.479 therms 16,107 16,068 15,852 14,406 14,177 1 giga;oule 1000 mega;oules

4,451 4,579 4,650 4,040 4,124 • 1971 includes Geelong Gas Co. for the full

658,069 633,597 616,516 507,443 496,222 year and the former Gas Supply Branches for 7 months.

4,176 4,094 4,092 3,314 3,336 • Net profit 1971 includes $254,000 Pre-

acquisition Profit Geelong Gas Company.

14,365 13,795 13,225 10,144 9,692 • Administration 1972 includes intere'3t on investment in Subsidiary Companies and on Redundant Plant.

• 1973 includes Colonial Gas Holdings for the full year.

0.128 0.121 0.144 0.176 0.213 • Net profit 1973 includes $636,000 Pre-acquisition Profit- Colonial Gas Holdings.

5,030 4,326 3,211 2,569 1,945 • Administration 1973 onwards includes in-teres! previously allocated to other Opera-ling Accounts.

36 30 28 27 23 • 1977 onwards excludes Mt. Gambier Gas Co .. sold prior to 30th June, 1977.

46 46 47 50 51

25 ·-"~--~-

2

26 3

PRINCIPAL NATURAL GAS TARIFFS as at 30th June, 1980

• DOMESTIC TARIFFS

Tariff 01 DOMESTIC COOKING & OTHER USES

Supply Charge: .................. $1.90 CCJmmodity Charge: All gas@ . .. 0.3 7 c/MJ

Tariff 02 DOMESTIC STORAGE WATER

HEATING & OTHER USES

Supply Charge: .................. $1.90 Commodity Charge: All gas@ ... 0.35 c/MJ

Tariff 03 DOMESTIC HOME HEATING &

OTHER USES Supply Charge: ................... $2.60 Commodity Charge: All Gas@ 0.27c/MJ

• COMMERCIAL AND INDUSTRIAL

GENERAL Tariff 13/21

(6.1 to 50 m3 /h capacity meter/regulator) Supply Charge: .................... $5.40 Commodity Charge: First 35 000 MJ @ 0.40 c/MJ Next 265 000 MJ@ 0.27 c/MJ Next 700 000 MJ @ 0. 17 c/MJ Over 1 000 000 MJ @ 0. 16 c/MJ

• Contract Tariffs

Contract Natural Gas Tariffs are available to industrial or commercial customers or potential customers whose annual consumption is 10 500 000 MJ (100,000 therms) per year or more. Contract prices are dependent upon the contracted volume and load factor of gas consumption and the cost of facilities required to provide the service.

NOTES: (1) Tariffs are per meter per month. (2) The Supply Charge is the minimum bill.

During the year 50,000 new customers were added and gas was chosen for major appliance use in 89% of new dwellings.

2 The Corporation is the State's major energy supplier, providing approximately 48% of total secondary energy requirements (excluding transport), with electricity 26%, petroleum 18% and other fuels 8%.

3 Superb food cooked by gas and enjoyed in the charm and elegance of Annabel/e's, Alfred Place. Melbourne.

.1 The Corporation laid 45 km of transmission pipelines and 575 km of mains during the year, making a toto/length of 1,700 km of pipelines and 17, 900 km of mains.

2 The pipes are laid and natural gas becomes available to more Victorians. The land is restored to its former state and agricultural life quickly returns to normal.

3 Historic Maryborough is the most recent town to receive natural gas supply.

4 Radio-equipped vehicles, many LPG-operated, are used to provide prompt efficient service to customers in city and country.

5 Gas is preferred by leading chefs Celso Galeazzi (Manager) {right), Christopher Redmond (captain) and other team members who represented Australia at the 1980 Culinary Olympics in Frankfurt.

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GAS AND FUEL CORPORATION OF VICTORIA

AREAS OF RETICULATED SUPPLY

STRAIT

- NATURAL GAS PIPELINES

• TO WNS SUPPLIED W ITH NATURAL GAS

A TEMPERED LIQUEFIED PETROLEUM GAS (TLPG) S U P PLY

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