Central Darling Shire Council · All press releases, financial statements and other information are...

Central Darling Shire Council GENERAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2018

“Realising quality opportunities for all in theCentral Darling Shire through Effective Leadership,

Community Involvement and Facilitation of Services”

Financial Statements 2018

Central Darling Shire Council

General Purpose Financial Statements for the year ended 30 June 2018

Contents

1. Understanding Council’s Financial Statements

2. Statement by the Administrator and Management

3. Primary Financial Statements:

– Income Statement– Statement of Comprehensive Income– Statement of Financial Position– Statement of Changes in Equity– Statement of Cash Flows

4. Notes to the Financial Statements

5. Independent Auditor’s Reports:

– On the Financial Statements (Sect 417 [2])– On the Conduct of the Audit (Sect 417 [3])

Overview

21 Reid StreetWilcannia NSW 2836

Council’s guiding principles are detailed in Chapter 3 of the LGA and includes:

principles applying to the exercise of functions generally by council,principles to be applied when making decisions,principles of community participation,principles of sound financial management, andprinciples for strategic planning relating to the development of an integrated planning and reporting framework.

A description of the nature of Council’s operations and its principal activities are provided in Note 2(b).

Through the use of the internet, we have ensured that our reporting is timely, complete and available at minimumcost. All press releases, financial statements and other information are publicly available on our website:www.centraldarling.nsw.gov.au.

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4

67

5

2

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Central Darling Shire Council is constituted under the Local Government Act 1993 (NSW) and has its principal place of business at:

8

9

6366

page 1

Financial Statements 2018_



Understanding Council’s financial statements

page 2

Introduction

Each year, individual local governments across New South Wales are required to present a set of audited financial statements to their council and community.

What you will find in the statements

The financial statements set out the financial performance, financial position and cash flows of Council for the financial year ended 30 June 2018.

The format of the financial statements is standard across all NSW Councils and complies with both the accounting and reporting requirements of Australian Accounting Standards and requirements as set down by the Office of Local Government.

About the Councillor/Management Statement

The financial statements must be certified by senior staff as ‘presenting fairly’ the Council’s financial results for the year and are required to be adopted by Council – ensuring both responsibility for and ownership of the financial statements.

About the primary financial statements

The financial statements incorporate five ‘primary’ financial statements:

1. The Income StatementSummarises Council's financial performance for the year, listing all income and expenses.

This statement also displays Council's original adopted budget to provide a comparison between what was projected and what actually occurred.

2. The Statement of Comprehensive IncomePrimarily records changes in the fair value of Council's Infrastructure, Property, Plant and Equipment.

3. The Statement of Financial PositionA 30 June snapshot of Council's financial position indicating its assets, liabilities and “net wealth”.

4. The Statement of Changes in EquityThe overall change for the year (in dollars) of Council’s “net wealth”.

5. The Statement of Cash FlowsIndicates where Council's cash came from and where it was spent. This statement also displays Council's original adopted budget to provide a comparison between what was projected and what actually occurred.

About the Notes to the Financial Statements

The Notes to the Financial Statements provide greater detail and additional information on the five primary financial statements.

About the Auditor’s Reports

Council’s annual financial statements are required to be audited by the NSW Audit Office. In NSW the auditor provides 2 audit reports:

1. an opinion on whether the financial statementspresent fairly the Council’s financial performanceand position, and

2. their observations on the conduct of the audit,including commentary on the Council’s financialperformance and financial position.

Who uses the financial statements?

The financial statements are publicly available documents and must be presented at a Council meeting between seven days and five weeks after the date of the Audit Report.

The public can make submissions to Council up to seven days subsequent to the public presentation of the financial statements.

Council is required to forward an audited set of financial statements to the Office of Local Government.




Statement by the Administrator and Managementmade pursuant to Section 413(2)(c) of the Local Government Act 1993 (NSW) (as amended)

The attached General Purpose Financial Statements have been prepared in accordance with:

the Local Government Act 1993 (NSW) (as amended) and the regulations made thereunder,

the Local Government Code of Accounting Practice and Financial Reporting.

To the best of our knowledge and belief, these financial statements:

present fairly the Council’s operating result and financial position for the year,

accord with Council’s accounting and other records.

We are not aware of any matter that would render these statements false or misleading in any way.

Signed in accordance with a resolution of Council made on 18 December 2018.

Greg WrightAdministrator

Greg Hill Jacob PhilpGeneral Manager Responsible Accounting Officer

the Australian Accounting Standards and other pronouncements of the Australian AccountingStandards Board

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Income Statement for the year ended 30 June 2018

$ ’000

Income from continuing operationsRevenue:Rates and annual chargesUser charges and feesInterest and investment revenueOther revenuesGrants and contributions provided for operating purposesGrants and contributions provided for capital purposesOther income:Net gains from the disposal of assets

Total income from continuing operations

Expenses from continuing operationsEmployee benefits and on-costsBorrowing costsMaterials and contractsDepreciation and amortisationOther expenses

Total expenses from continuing operations

Operating result from continuing operations

Net operating result for the year

Net operating result attributable to Council

Net operating result for the year before grants andcontributions provided for capital purposes

1,267

23,547

56

25,323

5,832

unaudited

4,072 11,992

6,047

Original

3c,d

4c4b

5,335

346

3b

4a

3c,d

–

92 4,444

3,701 7,347

4d

22,280

1,102

1,998

Notes

3a

2018

68

9,486 5,500

22,733

2018

9,539 102 570

11,826

4,475 101

5,098

1,017

49

1,267

74 10,584 3,528

830

4,338

5,832 1,267

2017

1,878

86 466

5,832

19,491

9,573

1,211 1,494

–

10,062

2,014

6,047

Actual Actual budget

6,047

547

16,686

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This statement should be read in conjunction with the accompanying notes. page 4



Statement of Comprehensive Income for the year ended 30 June 2018

$ ’000

Net operating result for the year (as per Income Statement)

Other comprehensive income:

Amounts that will not be reclassified subsequently to the operating result

Gain (loss) on revaluation of IPP&ETotal items which will not be reclassified subsequentlyto the operating result

Amounts that will be reclassified subsequently to the operating resultwhen specific conditions are metNil

Total other comprehensive income for the year

Total comprehensive income for the year

Total comprehensive income attributable to Council

2017

6,747

2018

1,267

Notes

5,832

4,431 915 7a

915 4,431

5,698

4,431

6,747

915

5,698

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Statement of Financial Position as at 30 June 2018

$ ’000

ASSETSCurrent assetsCash and cash equivalentsReceivablesInventoriesOtherTotal current assets

Non-current assetsInfrastructure, property, plant and equipmentTotal non-current assets

TOTAL ASSETS

LIABILITIESCurrent liabilitiesPayablesIncome received in advanceBorrowingsProvisionsTotal current liabilities

Non-current liabilitiesBorrowingsProvisionsTotal non-current liabilities

TOTAL LIABILITIES

Net assets

EQUITYAccumulated surplusRevaluation reserves

Total equity

3,524

175,369

25 7,449

5,011

1,028

1,818 74

623

172,279

–

59,936

4,265

1,243

Notes

5a6

166,487

64,367

166,487

2,787

98

1212

7a

173,936

3,022

169,671

2017

183

2,230 2,163 4,220

208 23

6,614

2018

169,671

111,002

737

621

109,735

175,369

622 737

75

961 102

88

8

172,279

1,128

178,893

9

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Statement of Changes in Equity for the year ended 30 June 20182018

$ ’000

Opening balance

Net operating result for the year

Other comprehensive income – Gain (loss) on revaluation of IPP&EOther comprehensive income

Total comprehensive income (c&d)

Equity – balance at end of the reporting period

Net operating result for the year prior to correction of errors and changes in accounting policies

Accumulated Accumulated

4,431

1,267

4,431

5,698

169,671 59,936 109,735

915

5,832 915

– 915

6,747

– 915

5,832

915

5,832 – – 5,832

equity

162,924

surplus

103,903 59,021

reserverevaluation Total

IPP&E2017

111,002 64,367 175,369

– 4,431

1,267 4,431

7a – 4,431

2018

109,735 59,936 169,671

revaluation TotalNotes surplus reserve

IPP&E

equity

1,267 – 1,267 – 1,267 5,832

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Statement of Cash Flows for the year ended 30 June 2018

$ ’000

Cash flows from operating activitiesReceipts:Rates and annual chargesUser charges and feesInvestment and interest revenue receivedGrants and contributionsBonds, deposits and retention amounts receivedOtherPayments:Employee benefits and on-costsMaterials and contractsBorrowing costsOther

Net cash provided (or used in) operating activities

Cash flows from investing activitiesReceipts:Sale of infrastructure, property, plant and equipmentPayments:Purchase of infrastructure, property, plant and equipment

Net cash provided (or used in) investing activities

Cash flows from financing activitiesReceipts:NilPayments:Repayment of borrowings and advances

Net cash flow provided (used in) financing activities

Net increase/(decrease) in cash and cash equivalents

Plus: cash and cash equivalents – beginning of year

Cash and cash equivalents – end of the year

54

1,692 1,872 6,642

512

2018 2017Actual

–

2018

5,228

– 14,986

68

–

(4,444)

(8,845)

(8,845)

(100)

2,746

516

(102)

2,230

(102)

10a

Notes

1,798

(62)

Original

budget unaudited

–

(8,111)

9,463

(4,542)

(64)

(39)

12,881

(4,037)

(11,131)

– 1,476

11,712

Actual

13,816

(13,636) (5,151)

(5,433)

(101) (752)

(165)

(165)

(4,037)

2,230

269

1,961

2,230

1,990

(100)

(5,384)

4,220 10a

10b 7,474

–

6,163

(1,607)

49

3

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Notes to the Financial Statements for the year ended 30 June 2018

Contents of the notes accompanying the financial statements

Details

Basis of preparationCouncil functions/activities – financial informationCouncil functions/activities – component descriptionsIncome from continuing operationsExpenses from continuing operationsCash and cash equivalent assetsRestricted cash, cash equivalents and investments – detailsReceivablesInfrastructure, property, plant and equipmentExternally restricted infrastructure, property, plant and equipmentPayables and borrowingsProvisionsStatement of cash flows – additional informationCommitments for expenditureContingencies and other liabilities/assets not recognisedFinancial risk managementMaterial budget variationsFair value measurementRelated party transactionsFinancial result and financial position by fundStatement of performance measures – consolidated resultsStatement of performance measures – by fund

Additional council disclosures (unaudited)

Statement of performance measures – consolidated results (graphs)Council information and contact details

5818(a) 57

18(c) 60

5(a)4

5(b)

18(b)

10

1716

27

1211

Note

8

Page

12(a)

32(b)

25

30

15

9

4514

37

13

36

3841

24

101415162023

67(a)7(b)

19 62

47

55

33

54

29

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Central Darling Shire Council Notes to the Financial Statements for the year ended 30 June 2018 Note 1. Basis of preparation

page 10

These financial statements were authorised for issue by Council on 28/12/2018. Council has the power to amend and reissue these financial statements. The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Australian Accounting Interpretations, the Local Government Act 1993 (NSW) and Regulations, and the Local Government Code of Accounting Practice and Financial Reporting. Council is a not for-profit entity for the purpose of preparing these financial statements. The financial statements are presented in Australian dollars and are rounded to the nearest thousand dollars. Full dollars have been used in Note 16 Related party disclosures in relation to the disclosure of specific related party transactions. Unless otherwise indicated, all amounts disclosed in the financial statements are actual amounts. Specific budgetary amounts have been included for comparative analysis (to actuals) in the following reports and notes: Income statement Statement of cash flows Note 14 – Material budget variations and are clearly marked. (a) New and amended standards adopted by Council There have been no new (or amended) accounting standards adopted by Council in this year’s financial statements which have had any material impact on reported financial position, performance or cash flows. (b) Historical cost convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities and certain classes of infrastructure, property, plant and equipment and investment property. (c) Significant accounting estimates and judgements The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Council's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Council and that are believed to be reasonable under the circumstances. Critical accounting estimates and assumptions Council makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk


Central Darling Shire Council Notes to the Financial Statements for the year ended 30 June 2018 Note 1. Basis of preparation (continued)

page 11

of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include: (i) estimated fair values of infrastructure, property, plant and equipment – refer Note 7, (ii) estimated tip remediation provisions – refer Note 9, (iii) employee benefit provisions – refer Note 9. Significant judgements in applying the Council's accounting policies (iv) Impairment of receivables Council has made a significant judgement about the impairment of a number of its receivables in Note 6. Monies and other assets received by Council (a) The Consolidated Fund In accordance with the provisions of Section 409(1) of the Local Government Act 1993 (NSW), all money and other assets received by Council is held in the Council’s Consolidated Fund unless it is required to be held in the Council’s Trust Fund. Cash and other assets of the following entities have been included as part of the Consolidated Fund: General purpose operations Water service Sewerage service (b) The Trust Fund In accordance with the provisions of Section 411 of the Local Government Act 1993 (NSW) (as amended), a separate and distinct Trust Fund is maintained to account for all money and other assets received by the Council in trust which must be applied only for the purposes of, or in accordance with the trusts relating to those monies. Trust monies and other assets subject to Council’s control have been included in these reports. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to the taxation authority is included with other receivables or payables in the Statement of Financial Position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which that are recoverable from, or payable to the taxation authority are presented as operating cash flows. New accounting standards and interpretations issued not yet effective Certain new accounting standards and interpretations have been published that are not mandatory for the current reporting period and which have not been applied.



page 12

As at the date of authorisation of these financial statements, Council considers that the standards and interpretations listed below will have an impact upon future published financial statements ranging from additional and / or revised disclosures to actual changes as to how certain transactions and balances are accounted for. Effective for annual reporting periods beginning on or after 1 July 2018 • AASB 9 Financial Instruments This replaces AASB 139 Financial Instruments: Recognition and Measurement, and addresses the classification, measurement and disclosure of financial assets and liabilities. The standard introduces a new impairment model that requires impairment provisions to be based on expected credit losses, rather than incurred credit losses.

Based on assessments to date, Council expects a small increase to impairment losses however the standard is not expected to have a material impact overall.

Effective for annual reporting periods beginning on or after 1 July 2019

• AASB 15 Revenue from Contracts with Customers, AASB 1058 Income of Not-for-Profit Entities and

AASB 2016-8 Amendments to Australian Accounting Standards - Australian Implementation Guidance for Not-for-Profit Entities

AASB 15 will replace AASB 118 Revenue, AASB 111 Construction Contracts and a number of Interpretations. AASB 2016-8 provides Australian requirements and guidance for not-for-profit entities in applying AASB 9 and AASB 15, and AASB 1058 will replace AASB 1004 Contributions. Together they contain a comprehensive and robust framework for the recognition, measurement and disclosure of income including revenue from contracts with customers. While Council is still reviewing the way that income is measured and recognised to identify whether there will be any material impact arising from these standards, these standards may affect the timing of the recognition of some grants and donations. • AASB 16 Leases Council is currently a party to leases that are not recognised in the Statement of Financial Position. It is likely that some of these leases will need to be included in the Statement of Financial Position when this standard comes into effect.

A lease liability will initially be measured at the present value of the lease payments to be made over the lease term. A corresponding right-of-use asset will also be recognised over the lease term. Council has not elected to apply any pronouncements before their operative date in these financial statements.



page 13

Going concern Council has been under administration since 23 December 2013 due to its poor financial position. Since that time Council has operated on an altered business model by reducing staff and contractors and tightly controlling expenditure. The financial statements for the 2018 financial year have been prepared on a going concern basis. However, Council acknowledges the weak cash position as at 30 June 2018, creates a material uncertainty regarding continuation as a going concern. Management believe Council is a going concern as it forecasts positive net cash inflows for future years in its Long Term Financial Plan. Council has previously used restricted funds for operational purposes without Ministerial approval. This constituted a breach of section 409(3) and 410(3) of the Local Government Act 1993. Central Darling Shire Council has sought ministerial approval under Section 410 of the Local Government Act 1993, to allow council to continue utilizing restricted cash reserves to cover operational expenses, due to ongoing financial challenges faced by Council. Ministerial approval under Section 410 of the Local Government Act 1993 was granted on the 22nd of June 2018.




Note 2(a). Council functions/activities – financial information

Total functions and activities 25,323 22,280 23,547 173,936 178,893

–

1,267

8,359 6,163

19,491

– –

8,574 5,832

(207)

10,885

783 2,243

– 551

1,298 444

– 5 49

100 11,357

3,405 283

27,312 – – 1,343

– 888 (76)

178,893 5,311 7,528

– 303 52

– 38

4,463 11,998

2,657 –

1,762 –

112,825

(173)

–

12,865 –

(139) (729)

11

– 677

(124) (245)

143 –

(446)

(208)

(440)

4,646 (3,688) (125)

2018 2017

3 –

– – – – (133) –

(424) (354)

(3,695) (167) 155

10

Transport and communications 12,844 Economic affairs 334 25

Environment

92 140 2,320

244

481

268

10,622

474 1,432 1,514

274

171 –

Public order and safety5,790

148 958 Administration

General purpose income

Governance

6,163

132 157 356

558 23 71

Recreation and culture

Community services and educationHousing and community amenities

Sewerage servicesWater supplies

16

– 125

8,359

–

16

237

134

310 729

309 12,061

–

133

–

2,095

486 324

1,068 485

Income from continuing operations

Income, expenses and assets have been directly attributed to the following functions/activities.Details of these functions/activities are provided in Note 2(b).

Expenses from continuing operations

Operating result from continuing operations

$ ’000

Total assets held (current and non-

current) Functions/activities

2017

Grants included in income from continuing

operations

201720182018 2017 2018 2018 2017

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Note 2(b). Council functions/activities – component descriptions

Details relating to the Council’s functions/activities as reported in Note 2(a) are as follows:

Governance

Administration

Public order and safety

Health

Environment

Community services and education

Housing and community amenities

Water supplies

Sewerage services

Recreation and culture

Transport and communications

Economic affairs

General purpose income

Includes noxious plan and insect/vermin control; other environmental protection; solid wast management,including domestic waste; other waste management; other sanitation; and garbage, street cleaning, drainageand stormwater management.

Includes costs relating to Council's role as a component of democratic government, including elections,subscriptions to local authority associations, meetings of Council and policy-making committees, publicdisclosures (e.g. GIPA) and legislative compliance.

Includes corporate support, executive services, shire services and any other Council policy compliance.

Includes Council's fire and emergency services levy, fire protection, emergency services, enforcement ofregulations and animal control.

Includes immunisations, food control and health clinics.

Includes grant funding not directly attributable to the above categories.

Includes administration and education; social protection (welfare); migrant, Aboriginal and other communityservices and administration, youth services; aged and disabled services and children's services.

Includes public cemeteries; public conveniences; street lighting; town planning; and other community amenities

Includes community centres and halls, sporting grounds, venues, swimming pools, parks and gardens, andother sporting, recreational and cultural services.

Includes camping areas and caravan parks, tourism and area promotion, and other business undertakings.

Includes sealed and unsealed roads, bridges, footpaths, parking areas, and aerodromes.

Supply of water services to Wilcannia, Menindee, White Cliffs and Ivanhoe.

Supply of sewerage services to Wilcannia.

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Note 3. Income from continuing operations

$ ’000

(a) Rates and annual charges

Ordinary ratesResidentialFarmlandBusinessTotal ordinary rates

Annual charges (pursuant to s.496, s.496A, s.496B, s.501 & s.611)Domestic waste management servicesWater supply servicesSewerage servicesTotal annual charges

TOTAL RATES AND ANNUAL CHARGES

Council has used 2017 year valuations provided by the NSW Valuer General in calculating its rates.

Accounting policy for rates and annual chargesRates, annual charges, grants and contributions (including developer contributions) are recognised as revenuewhen the Council obtains control over the assets comprising these receipts. Developer contributions may onlybe expended for the purposes for which the contributions were required, but the Council may apply contributionsaccording to the priorities established in work schedules.

Control over assets acquired from rates and annual charges is obtained at the commencement of the ratingyear as it is an enforceable debt linked to the rateable property or, where earlier, upon receipt of the rates.

461

1,219 1,093 161

2,014

533 471

1,878

322

44 429

795

20172018

182

304

41 440

785

504

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Note 3. Income from continuing operations (continued)

$ ’000

(b) User charges and fees

Specific user charges (per s.502 – specific ‘actual use’ charges)Domestic waste management servicesWater supply servicesSewerage servicesTotal specific user charges

Other user charges and fees(i) Fees and charges – statutory and regulatory functions (per s.608)Planning and building regulationPrivate works – section 67Total fees and charges – statutory/regulatory

(ii) Fees and charges – other (incl. general user charges (per s.608))Caravan parkCemeteriesLeaseback fees – Council vehiclesRent and hire of council propertyRMS (formerly RTA) charges (state roads not controlled by Council)Swimming centresWaste disposal tipping feesOtherTotal fees and charges – other

TOTAL USER CHARGES AND FEES

Accounting policy for user charges and feesUser charges and fees are recognised as revenue when the service has been provided.

3

553

392

2017

–

12 541

440

445 5

1

2018

–

5

8,535

9,573

4

21 7

3

69

393

597

23

4

19 8,493

611

10

8,366

14

12

39

9,539

8,575

32

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$ ’000

(c) Grants

General purpose (untied)Current year allocationFinancial assistance – general componentFinancial assistance – local roads componentOtherPensioners’ rates subsidies – general componentTotal general purpose

Specific purposeAirportBushfire and emergency servicesCommunity careEnvironmental protectionHeritage and culturalTransport (roads to recovery)Transport (other roads and bridges funding)YouthWater and sewerTotal specific purposeTotal grants

Grant revenue is attributable to:– Commonwealth funding– State funding

3

900 – 1,592

100 41

7,806 5,771

1,211 7,363 1,494

1,494

–

–

–

–

1,494

–

–

–

–

2017Capital

– –

–

120

–

2018

–

2,052

1,211 1,592

19

–

– 10

303

2018

155

–

51 1,585

1

Operating

–

5 – 100

–

Capital

1,571

–

3,721

5,311 –

5,265

1,211

9,391

1

9,391

1,585

7,363

19

71

65

2017

–

2,244

Operating

–

1,374

7,528

–

–

1,211

1,494

1,863 143

–

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$ ’000

(d) Contributions

Other contributions:Cash contributionsRMS contributions (regional roads, block grant)Total other contributions – cashTotal other contributionsTotal contributions

TOTAL GRANTS AND CONTRIBUTIONS

Accounting policy for contributionsControl over grants and contributions is normally obtained upon their receipt (or acquittal) and is valued at thefair value of the granted or contributed asset at the date of transfer.

Where grants or contributions recognised as revenues during the financial year were obtained on condition thatthey be expended in a particular manner or used over a particular period and those conditions wereun-discharged at reporting date, the unused grant or contribution is disclosed above.

A liability is recognised in respect of revenue that is reciprocal in nature to the extent that the requisite servicehas not been provided at reporting date.

– 2,699 2,435 – –

2,435

2018Operating

2018Notes Operating

2017

2,699

1,494

–

11,826

–

1,211

2,699 2,435

–

2,699 –

10,062

2,435

Capital

–

Capital 2017

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Note 4. Expenses from continuing operations

$ ’000

(a) Employee benefits and on-costs

Salaries and wagesEmployee leave entitlements (ELE)SuperannuationWorkers’ compensation insuranceFringe benefit tax (FBT)Training costs (other than salaries and wages)Total employee costsLess: capitalised costsTOTAL EMPLOYEE COSTS EXPENSEDNumber of ‘full-time equivalent’ employees (FTE) at year end

Accounting policy for employee benefits and on-costsEmployee benefit expenses are recorded when the service has been provided by the employee.

Retirement benefit obligationsAll employees of the Council are entitled to benefits on retirement, disability or death. Council contributes tovarious defined benefit plans and defined contribution plans on behalf of its employees.

Superannuation plansContributions to defined contribution plans are recognised as an expense as they become payable. Prepaidcontributions are recognised as an asset to the extent that a cash refund or a reduction in the future paymentsis available.

Council participates in a Defined Benefit Plan under the Local Government Superannuation Scheme, however,when sufficient information to account for the plan as a defined benefit is not available and therefore Councilaccounts for its obligations to defined benefit plans on the same basis as its obligations to defined contributionplans, i.e. as an expense when it becomes payable – refer to Note 12 for more information.

60

5,199 (101)

4,475

241

128

77

4,708

42

(233)

3,790

264

5,098

2017

412 507

58

42

4,248

2018

64

58

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page 20




Note 4. Expenses from continuing operations (continued)

$ ’000

(b) Materials and contracts

Raw materials and consumablesContractor and consultancy costs – Contractor costsAuditors remuneration (2)

Legal expenses: – Legal expenses: debt recovery – Legal expenses: otherOperating leases: – Operating lease rentals: minimum lease payments (1)

TOTAL MATERIALS AND CONTRACTS

Operating leasesLeases in which a significant portion of the risks and rewards of ownership arenot transferred to Council as lessee are classified as operating leases. Paymentsmade under operating leases (net of any incentives received from the lessor) arecharged to the income statement on a straight-line basis over the period of the lease.

1. Operating lease payments are attributable to:ComputersMotor vehiclesOther

2. Auditor remunerationDuring the year the following fees were paid or payable for services provided by theauditor of Council, related practices and non-related audit firms

Auditors of the Council – NSW Auditor-General:

(i) Audit and other assurance servicesAudit and review of financial statementsRemuneration for audit and other assurance services

Total Auditor-General remuneration

Total Auditor remuneration

355

64

88

3

2017

–

52 52

52

104

21

11,414

11,992

–

–

10,584

52 52

10,134

2018

18

– 28 263

52 52

355

52

334

52

52

309

309

1

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X8A11T

page 21





$ ’000

(c) Depreciation, amortisation and impairment

Depreciation and amortisationPlant and equipmentInfrastructure: – Buildings – non-specialised – Other structures – Roads – Stormwater drainage – Water supply network – Sewerage networkReinstatement, rehabilitation and restoration assets: – Tip assetsTotal depreciation and amortisation costs

TOTAL DEPRECIATION, AMORTISATION AND IMPAIRMENT /REVALUATION DECREMENT COSTS EXPENSED

Accounting policy for depreciation, amortisation and impairment expenses

Depreciation and amortisationDepreciation and amortisation are calculated using the straight line method to allocate their cost, net of theirresidual values, over their estimated useful lives. Useful lives are included in Note 7 for IPPE assets.

Impairment of non-financial assetsOther assets are tested for impairment whenever events or changes in circumstances indicate that the carryingamount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carryingamount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value lesscosts to sell and value in use.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there areseparately identifiable cash inflows that are largely independent of the cash inflows from other assets or groupsof assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possiblereversal of the impairment at each reporting date.

Impairment losses for revalued assets are firstly offset against the amount in the revaluation surplus for theclass of asset, with only the excess to be recognised in the Income Statement.

Impairment of financial assetsCouncil assesses at the end of each reporting period whether there is objective evidence that a financial asset orgroup of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairmentlosses are incurred only if there is objective evidence of impairment as a result of one or more events thatoccurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact onthe estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

2017

275

4,072

628

3,528 43

3,528 4,072

17 16

756 843

78 86

142

43

627

186

Notes

2,077 236

1,547

2018

7 & 9

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$ ’000

(d) Other expenses

AdvertisingBad and doubtful debtsBank chargesDonations, contributions and assistance to other organisations (Section 356)Electricity and heatingInsurancePrinting and stationeryStreet lightingSubscriptions and publicationsTelephone and communicationsValuation feesTOTAL OTHER EXPENSES

Accounting policy for other expensesOther expenses are recorded on an accruals basis as the Council receives the goods or services.

Note 5(a). Cash and cash equivalent assets

$ ’000

Cash and cash equivalentsCash on hand and at bankTotal cash and cash equivalents

Accounting policy for cash and cash equivalentsFor Statement of Cash Flow presentation purposes, cash and cash equivalents includes cash on hand; depositsheld at call with financial institutions.

9

2017

62

94

136 46

(96) 6

201

37

16 1,017 830

309

17

350 199

2018

187 103

33

21

108

5

4

4,220 4,220

Notes

–

2018

2,230

2017

2,230

X8A0T

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Note 5(b). Restricted cash, cash equivalents and investments – details

$ ’000

Total cash, cash equivalentsand investments

attributable to:External restrictions (refer below)Internal restrictions (refer below)Unrestricted

$ ’000

Details of restrictions

External restrictions – otherSpecific purpose unexpended grantsWater suppliesSewerage servicesExternal restrictions – otherTotal external restrictions

Internal restrictionsFinancial assistance grantsTotal internal restrictions

TOTAL RESTRICTIONS

Central Darling Shire Council had sought ministerial approval under Section 410 of the Local Government Act 1993, for council to continue utilizing restricted cash reserves to cover operational expenses, due to ongoing financial challenges faced by Council.

The use of these funds represents an internal loan between the Central Darling Shire Council's General Fund andthe Central Darling Shire Council's Water and Sewerage Services Funds.Ministerial approval under Section 410 of The Local Government Act 1993 was granted on the 22nd of June 2018and the loan was raised as at 30th June 2018.The term of the loan is 2 years, with a Date of Maturity of 30th June 2020.The Rate of Interest for this Loan is 0%.

– 4,220

–

–

Current

4,220

2018Non-current Current

403

–

1,712

366

1,864

–

366 – –

1,864 1,712

1,206 342

4,220 –

1,001

2017

2017

–

2018

–

2,230

Non-current

2,230

Notes 2018

–

–

366

2017

– –

103

1,712

1,864

521

–

2,230

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Note 6. Receivables

$ ’000

PurposeRates and annual chargesInterest and extra chargesUser charges and feesGovernment grants and subsidiesNet GST receivableTotal

Less: provision for impairmentRates and annual chargesInterest and extra chargesUser charges and feesTotal provision for impairment – receivables

TOTAL NET RECEIVABLES

Externally restricted receivablesWater supply – Rates and availability chargesSewerage services – Rates and availability chargesTotal external restrictionsUnrestricted receivablesTOTAL NET RECEIVABLES

Movement in provision for impairment of receivablesBalance at the beginning of the year– previous impairment losses reversedBalance at the end of the year

Current 2017

Non-current

– 472 556

1,000

Notes

– 424 858

(270) –

(270) –

–

(110)

–

–

2,643

(100)

5,011

105

– 859 869

–

–

–

480 (96)

–

–

–

1,170

2018576

–

439 615

–

–

(110) –

–

(480) (100)

–

– –

–

–

–

– 5,491

– 3,770

Current

–

Non-current

2,163

–

(480)

5,011

2,163

993 4,037

–

–

134

480

– – 974

–

2018

2017

480 –

X8A2T

page 25




Note 6. Receivables (continued)

Accounting policy for receivables

Recognition and measurementLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quotedin an active market. They are included in current assets, except for those with maturities greater than 12 monthsafter the reporting date which are classified as non-current assets. Loans and receivables are included inReceivables (Note 6) in the Statement of Financial Position. Receivables arerecognised initially at fair value and subsequently measured at amortised cost using the effective interestmethod, less provision for impairment. Receivables are generally due for settlement within 30 days.

Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

ImpairmentFor loans and receivables the amount of the loss is measured as the difference between the asset’s carryingamount and the present value of estimated future cash flows (excluding future credit losses that have not beenincurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset isreduced and the amount of the loss is recognised in profit or loss.

Collectability of receivables is reviewed on an on-going basis. Debts that are known to be uncollectible are writtenoff by reducing the carrying amount directly. An allowance account (provision for impairment of receivables) isused when there is objective evidence that Council will not be able to collect all amounts due according to theoriginal terms of the receivables.

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financialreorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicatorsthat the receivable is impaired. When a receivable for which an impairment allowance had been recognisedbecomes uncollectable in a subsequent period it is written off against the allowance account. Subsequentrecoveries of amounts previously written off are credited against other expenses in the Income statement.

2018 2017

page 26




Note 7(a). Infrastructure, property, plant and equipment

Asset class

$ ’000

Capital work in progress 1,418 – 1,418 5,128 – (2,723) – 3,823 – 3,823 Plant and equipment 2,929 2,121 808 215 (142) – – 3,144 2,263 881 Land: – Operational land 268 – 268 – – – 190 458 – 458 – Community land 523 – 523 – – – – 523 – 523 Infrastructure: – Buildings – non-specialised 31,802 22,153 9,649 9 (843) – 4,241 32,943 19,887 13,056 – Other structures 7,001 2,577 4,424 – (236) 416 – 7,417 2,813 4,604 – Roads, bridges, footpaths 119,466 24,842 94,624 – (2,077) 2,307 – 121,773 26,919 94,854 – Bulk earthworks (non-depreciable) 24,234 – 24,234 – – – – 24,234 – 24,234 – Stormwater drainage 1,294 300 994 – (17) – – 1,293 316 977 – Water supply network 43,784 18,342 25,442 – (628) – – 43,784 18,970 24,814 – Sewerage network 6,027 2,011 4,016 – (86) – – 6,027 2,097 3,930 Reinstatement, rehabilitation and restoration assets (refer Note 9): – Tip assets 393 306 87 81 (43) – – 475 350 125 TOTAL INFRASTRUCTURE,PROPERTY, PLANT AND EQUIP.

Renewals are defined as the replacement of existing assets (as opposed to the acquisition of new assets).

– 5,433 (4,072) 239,139 72,652 166,487 172,279 4,431 245,894 73,615

as at 30/6/2018

Net carrying amount

Asset movements during the reporting period

Accumulated depreciation

and impairment

as at 30/6/2017

WIPtransfers

Additionsrenewals

Revaluation increments

to equity (ARR)

Net carrying amount

Accumulated depreciation

and impairment

Gross carrying amount

Gross carrying amount

Depreciation expense

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page 27




Note 7(a). Infrastructure, property, plant and equipment (continued)

Accounting policy for infrastructure, property, plant and equipment

Infrastructure, property, plant and equipment are held at fair value. Independent valuations are performed atleast every five years, however the carrying amount of assets is assessed at each reporting date to confirm that it is not materially different from current fair value.

Water and sewerage network assets are indexed at each reporting period in accordance with the RatesReference Manual issued by Crown Lands and Water (CLAW).

Increases in the carrying amounts arising on revaluation are credited to the asset revaluation reserve. To theextent that the increase reverses a decrease previously recognising profit or loss relating to that asset class, theincrease is first recognised as profit or loss. Decreases that reverse previous increases of assets in the sameclass are first charged against revaluation reserves directly in equity to the extent of the remaining reserveattributable to the class; all other decreases are charged to the Income Statement.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,only when it is probable that future economic benefits associated with the item will flow to Council and the costof the item can be measured reliably. All other repairs and maintenance are charged to the income statementduring the financial period in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocatetheir cost, net of their residual values, over their estimated useful lives as follows:

Plant and equipment Years Other equipment YearsOffice equipment 5 to 10 Playground equipment 5 to 15 Office furniture 10 to 20 Benches, seats etc. 10 to 20 Computer equipment 4Vehicles 5 to 8 BuildingsHeavy plant/road making equipment 5 to 8 Buildings: masonry 50 to 100 Other plant and equipment 5 to 15 Buildings: other 20 to 40

Water and sewer assets Stormwater assetsDams and reservoirs 80 to 100 Drains 80 to 100 Bores 20 to 40 Culverts 50 to 80 Reticulation pipes: PVC 70 to 80 Flood control structures 80 to 100 Reticulation pipes: other 25 to 75 Pumps and telemetry 15 to 20

Transportation assets Other infrastructure assetsSealed roads: surface 20 Swimming pools 50Sealed roads: structure 50 Unsealed roads 20Unsealed roads 20 Other open space/recreational assets 20Bridge: concrete 100 Other infrastructure 20Bridge: other 50Road pavements 60Kerb, gutter and footpaths 40

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are includedin the Income statement.

page 28




Note 7(a). Infrastructure, property, plant and equipment (continued)

Accounting policy for infrastructure, property, plant and equipment (continued)

Land under roadsLand under roads is land under roadways and road reserves including land under footpaths, nature strips andmedian strips.

Council has elected not to recognise land under roads acquired before 1 July 2008 in accordance withAASB 1051 Land Under Roads.

Crown reservesCrown Reserves under Council’s care and control are recognised as assets of the Council. While ownership ofthe reserves remains with the Crown, Council retains operational control of the reserves and is responsible fortheir maintenance and use in accordance with the specific purposes to which the reserves are dedicated.Improvements on Crown Reserves are also recorded as assets, while maintenance costs incurred by Counciland revenues relating to the reserves are recognised within Council’s Income Statement.

Rural Fire Service assetsUnder section 119 of the Rural Fire Services Act 1997 (NSW) , “all fire fighting equipment purchased orconstructed wholly or from money to the credit of the Fund is to be vested in the council of the area for or onbehalf of which the fire fighting equipment has been purchased or constructed”.

Note 7(b). Externally restricted infrastructure, property, plant and equipment

Council has externally restricted infrastructure, property, plant and equipment. These restrictions relate to Council providing water and sewerage services.

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Note 8. Payables and borrowings

$ ’000

PayablesAccrued expenses: – Salaries and wages – Other expenditure accrualsSecurity bonds, deposits and retentionsATO – net GST payableTotal payables

Income received in advancePayments received in advanceTotal income received in advance

BorrowingsLoans – secured 1

Total borrowings

TOTAL PAYABLES AND BORROWINGS

(a) Payables and borrowings relating to restricted assets

Externally restricted assetsWaterSewer

TOTAL PAYABLES AND BORROWINGS

1. Loans are secured over the general rating income of Council Disclosures on liability interest rate risk exposures, fair value disclosures and security can be found in Note 13.

1,050 –

–

1,758

–

2018

623

1,818

–

1,128

58

–

– 75 – 75

20172018

3 –

–

1,826

Non-current

–

39

–

1,826

102

–

2017

623

–

1,826

–

–

–

102

–

Non-current

–

–

– –

621

–

75

Current

74

Current Non-current

621

–

–

74

Current

2

Non-current

–

39

– 26

Current

–

13

621 1,994 –

–

–

– –

621

Payables and borrowings relating to externally restricted assets

Total payables and borrowings relating to restricted assets

– 621

1,994 1,955

Total payables and borrowings relating to unrestricted assets

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Note 8. Payables and borrowings (continued)

$ ’000

(b) Changes in liabilities arising from financing activities

$ ’000

(c) Financing arrangements

(i) Unrestricted access was available at balance date to the following lines of credit:

Credit cards/purchase cardsTotal financing arrangements

Drawn facilities as at balance date:– Credit cards/purchase cardsTotal drawn financing arrangements

Undrawn facilities as at balance date:– Credit cards/purchase cardsTotal undrawn financing arrangements

1. The bank overdraft facility may be drawn at any time and may be terminated by the bank without notice.

Class of borrowings

TOTAL 723 (100) – 623 (100)

Openingbalance

as at 1/7/17Cash flows Acquisition Fair value

changes

Loans – secured 723

38

– – – 623

Othernon-cash

movements

Closingbalance

as at 30/6/18

2018 2017

7

38

7

31

4

–

38

34

Non-cash changes

2017

2017 2018

2018

31

4

38

34

–

page 31




Note 8. Payables and borrowings (continued)

Accounting policy for payables and borrowings

PayablesThese amounts represent liabilities for goods and services provided to the Council prior to the end of financialyear that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

BorrowingsBorrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequentlymeasured at amortised cost. Any difference between the proceeds (net of transaction costs) and theredemption amount is recognised in the income statement over the period of the borrowings using the effectiveinterest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of theloan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee isdeferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of thefacility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over theperiod of the facility to which it relates.

Borrowings are removed from the Statement of Financial Position when the obligation specified in the contractis discharged, cancelled or expired. The difference between the carrying amount of a financial liability that hasbeen extinguished or transferred to another party and the consideration paid, including any non-cash assetstransferred or liabilities assumed, is recognised in other income or finance cost.

Borrowings are classified as current liabilities unless Council has an unconditional right to defer settlement ofthe liability for at least 12 months after the reporting date.

page 32




Note 9. Provisions

$ ’000

ProvisionsEmployee benefits:Annual leaveLong service leave

Asset remediation/restoration:Asset remediation/restoration (future works)

Sub-total – asset remediation/restoration

TOTAL PROVISIONS

(a) Provisions relating to restricted assetsThere are no restricted assets (external or internal) applicable to the above provisions

$ ’000

(b) Current provisions not anticipated to be settled within the next twelve months

The following provisions, even though classified as current, are notexpected to be settled in the next 12 months.

Provisions – employees benefits

(c) Description of and movements in provisions

At beginning of yearChanges to provision:

At beginning of yearChanges to provision:

713

118

Asset remediation

– 713 Total other provisions at end of year –

Current

502 483

118

643

Self-insurance

27

595

622

595

620 702

2017

702 620

–

2018Current

737 961

Non-current

1,028

526 24

713

2017

–

– – –

–

Non-current

478

713

2018

Other (enter details here...)

2018 Other (enter details here...)


– – – – 595 595

Total

Other provisions

Other provisions

Asset remediation



– –

– 595

643

595 – – –


Self-insurance

2017

(48) (48)

Total

Total other provisions at end of year

Additional provision for landfill remediation

Additional provision for landfill remediation

X10A3T

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Note 9. Provisions (continued)

Nature and purpose of non-employee benefit provisions

Asset remediationCouncil has a legal/public obligation to make, restore, rehabilitate and reinstate the council tip and quarry.

Accounting policy for provisionsProvisions are recognised when Council has a present legal or constructive obligation as a result of past events,it is probable that an outflow of resources will be required to settle the obligation, and the amount has beenreliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement isdetermined by considering the class of obligations as a whole. A provision is recognised even if the likelihoodof an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditure required tosettle the present obligation at the reporting date. The discount rate used to determine the present valuereflects current market assessments of the time value of money and the risks specific to the liability. Theincrease in the provision due to the passage of time is recognised as interest expense.

Employee benefits

Short-term obligationsLiabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leaveexpected to be wholly settled within 12 months after the end of the period in which the employees render therelated service are recognised in respect of employees' services up to the end of the reporting period and aremeasured at the amounts expected to be paid when the liabilities are settled. The liability for annual leaveand accumulating sick leave is recognised in the provision for employee benefits. All other short-termemployee benefit obligations are presented as payables.

Other long-term employee benefit obligationsThe liability for long service leave and annual leave that is not expected to be wholly settled within 12 monthsafter the end of the period in which the employees render the related service is recognised in the provision foremployee benefits and measured as the present value of expected future payments to be made in respect ofservices provided by employees up to the end of the reporting period using the projected unit credit method.

Consideration is given to expected future wage and salary levels, experience of employee departures, andperiods of service. Expected future payments are discounted using market yields at the end of the reportingperiod on national government bonds with terms to maturity and currency that match, as closely as possible,the estimated future cash outflows.

The obligations are presented as current liabilities in the Statement of Financial Position if the Council doesnot have an unconditional right to defer settlement for at least 12 months after the reporting date, regardless ofwhen the actual settlement is expected to occur.

page 34




Note 9. Provisions (continued)

Provisions for close-down and restoration, and environmental clean-up costs – tips and quarries

RestorationClose down and restoration costs include the dismantling and demolition of infrastructure and the removal ofresidual materials and remediation of disturbed areas. Estimated close down and restoration costs are providedfor in the accounting period when the obligation arising from the related disturbance occurs, whether this occursduring the development or during the operation phase, based on the net present value of estimated future costs.

Provisions for close down and restoration costs do not include any additional obligations which are expected toarise from future disturbance. The costs are estimated on the basis of a closure plan. The cost estimates are calculated annually during the life of the operation to reflect known developments, eg updated cost estimatesand revisions to the estimated lives of operations, and are subject to formal review at regular intervals

RehabilitationWhere rehabilitation is conducted systematically over the life of the operation, rather than at the time of closure,provision is made for the estimated outstanding continuous rehabilitation work at each reporting date and thecost is charged to the Income Statement.

Provision is made for the estimated present value of the costs of environmental clean up obligations outstandingat the reporting date. These costs are charged to the Income Statement. Movements in the environmental cleanup provisions are presented as an operating cost, except for the unwinding of the discount which is shown as a borrowing cost.

Remediation procedures generally commence soon after the time the damage, remediation process and estimated remediation costs become known, but may continue for many years depending on the nature of the disturbance and the remediation techniques.

As noted above, the ultimate cost of environmental remediation is uncertain and cost estimates can vary inresponse to many factors including changes to the relevant legal requirements, the emergence of newrestoration techniques or experience at other locations. The expected timing of expenditure can also change, forexample in response to changes in quarry reserves or production rates. As a result there could be significantadjustments to the provision for close down and restoration and environmental clean up, which would affectfuture financial results.

Other movements in the provisions for close down and restoration costs, including those resulting from newdisturbance, updated cost estimates, changes to the estimated lives of operations and revisions to discountrates are capitalised within property, plant and equipment. These costs are then depreciated over the lives of theassets to which they relate.

Close down and restoration costs are a normal consequence of tip and quarry operations, and the majority ofclose down and restoration expenditure is incurred at the end of the life of the operations. Although the ultimatecost to be incurred is uncertain, Council estimates the respective costs based on feasibility and engineeringstudies using current restoration standards and techniques.

page 35




Note 10. Statement of cash flows – additional information

$ ’000

(a) Reconciliation of cash assets

Total cash and cash equivalent assetsBalance as per the Statement of Cash Flows

(b) Reconciliation of net operating result to cash provided from operating activities

Net operating result from Income StatementAdjust for non-cash items:Depreciation and amortisationNet losses/(gains) on disposal of assetsUnwinding of discount rates on reinstatement provisions

+/- Movement in operating assets and liabilities and other cash items:Decrease/(increase) in receivablesIncrease/(decrease) in provision for doubtful debtsDecrease/(increase) in inventoriesDecrease/(increase) in other assetsIncrease/(decrease) in other accrued expenses payableIncrease/(decrease) in other liabilitiesIncrease/(decrease) in employee leave entitlementsIncrease/(decrease) in other provisionsNet cash provided from/(used in)operating activities from the Statement of Cash Flows

(25) (7)

–

2,848

(63)

3,528 –

(3,491)

2017

118

(691)

35

2 520

(96)

(49) 4,072

(83)

5,832

(70)

7,474

–

(7) 2

6,163

Notes

4,220

2018

2,230 6a

1,267

2,230 4,220

(5)

X10A4T

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X10A6T

page 36




Note 11. Commitments for expenditure

$ ’000

Operating lease commitments (non-cancellable)

a. Commitments under non-cancellable operating leases at the reporting date, but not recognised as liabilities are payable:

Within the next yearLater than one year and not later than 5 yearsTotal non-cancellable operating lease commitments

b. Non-cancellable operating leases include the following assets:Office equipment and computersMotor Vehicles (Light fleet)

Conditions relating to operating leases:– All operating lease agreements are secured only against the leased asset.– No lease agreements impose any financial restrictions on Council regarding future debt etc.

2018 2017

224

721

436 285 101

325

X10A0T

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page 37




Note 12. Contingencies and other liabilities/assets not recognised

The following assets and liabilities do not qualify for recognition in the Statement of Financial Position, but their knowledge and disclosure is considered relevant to the users of Council’s financial report.

LIABILITIES NOT RECOGNISED:

1. Guarantees

(i) Defined benefit superannuation contribution plans

Council participates in an employer-sponsored defined benefit superannuation scheme and makes contributionsas determined by the superannuation scheme’s trustees.

Member councils bear responsibility of ensuring there are sufficient funds available to pay out the required benefits as they fall due.

While the scheme's most recent full actuarial review indicated that the net assets of the scheme were sufficient tomeet the accrued benefits of the scheme's defined benefit member category, member councils are required to make contributions in future years where the scheme goes into deficit (as has occurred in previous years).

The Local Government Superannuation Scheme however is unable to provide Council with an accurate estimate of any share of the net deficit and accordingly Council has not recorded any net liability from its defined benefit scheme obligations in accordance with AASB 119.

Future planned contributions being made to the defined benefit scheme to rectify past (and projected) deficitpositions will be recognised as an expense when they become payable – similar to the accounting fordefined contributions plans.

Member councils are treated as Pooled Employers for the purposes of AASB119. Pooled Employers are required to pay standard employer contributions and additional lump sum contributions to the Fund.

The standard employer contributions were determined using the new entrant rate method under which acontribution rate sufficient to fund the total benefits over the working life-time of a typical new entrant iscalculated. The current standard employer contribution rates are:

Division B 1.9 times employee contributionsDivision C 2.5% salariesDivision D 1.64 times employee contributions

The additional lump sum contribution for each Pooled Employer is a share of the total additional contributionsof $40.0 million per annum from 1 July 2017 for 4 years to 30 June 2021, apportioned according to eachemployer's share of the accrued liabilities as at 30 June 2017. These additional lump sum contributions areused to fund the deficit of assets to accrued liabilities as 30 June 2017.

The adequacy of contributions is assessed at each triennial actuarial investigation and monitored annuallybetween triennials.

As stated above, each sponsoring employer is exposed to the actuarial risks associated with current and former employees of other sponsoring employers and hence shares in the associated gains and losses.

However, there is no relief under the Fund's trust deed for employers to walk away from their defined benefitobligations. Under limited circumstances, an employer may withdraw from the plan when there are no activemembers, on full payment of outstanding additional contributions. There is no provision for allocation of any surplus which may be present at the date of withdrawal of the entity.

There are no specific provisions under the Fund's trust deed dealing with deficits or surplus on wind-up.

There is no provision for the allocation of any surplus which may be present at the date of withdrawal of anemployer.

X10A12T

page 38




Note 12. Contingencies and other liabilities/assets not recognised (continued)

LIABILITIES NOT RECOGNISED (continued):

1. Guarantees (continued)

(i) Defined benefit superannuation contribution plans (continued)

The plan is a defined benefit plan. However, each sponsoring employer is exposed to the actuarial risksassociated with current and former employees of other sponsoring employers and hence shares in the associatedgains and losses (to the extent that they are not borne by members). As such, there is not sufficient reliableinformation to allow each sponsoring employer to account for its proportionate share of the defined benefitobligation, sub-group assets and costs associated with the sub-group in the same way as it would for a singleemployer sponsored defined benefit plan.

The amount of Council employer contributions to the defined benefit section of the Fund and recognised as an expense and disclosed as part of superannuation expenses at Note 4 (a) for the year ending 30 June 2018 was $ 49,945.30.

The last valuation of the Fund was by the Actuary, Mr Richard Boyfield, FIAA on 12 December 2017, relatingto the period ended 30 June 2017.

Council's expected contributions to the Fund for the next annual reporting period is $ 40,231.36.

The estimated employer reserves financial position for the Pooled Employers at 30 June 2018 is:

Employer reserves only * $ millions Asset CoverageAssets 1,817.8Past Service Liabilities 1,787.5 101.7%Vested Benefits 1,778.0 102.2%

* excluding member accounts and reserves in both assets and liabilities.

The key economic long term assumptions used to calculate the present value of accrued benefits are:

Investment return 6.0% per annumSalary inflation * 3.5% per annumIncrease in CPI 2.5% per annum* Plus promotional increases

The contribution requirements may vary from the current rates if the overall sub-group experience is not in linewith the actuarial assumptions in determining the funding program, however any adjustment to the fundingprogram would be the same for all sponsoring employers in the Pooled Employers group.

Please note that the estimated employer reserves financial position above is a preliminary calculation and onceall the relevant information has been received by the Funds Actuary, the 2018 triennial review will be completed around December 2018.

Council's additional lump sum contribution is around 0.09% of the total additional lump sum contributions forall Pooled Employers (of $40m each year from 1 July 2017 to 30 June 2021) which provides an indication of the level of participation of Council compared with other employers in the Pooled Employer sub-group.

(ii) Statewide Limited

Council is a member of Statewide Mutual, a mutual pool scheme providing liability insurance to local government.

Membership includes the potential to share in either the net assets or liabilities of the fund depending on its pastperformance. Council’s share of the net assets or liabilities reflects Council’s contributions to the pool and the resultof insurance claims within each of the fund years.

The future realisation and finalisation of claims incurred but not reported to 30/6 this year may result in futureliabilities or benefits as a result of past events that Council will be required to fund or share in respectively.

page 39




Note 12. Contingencies and other liabilities/assets not recognised (continued)

LIABILITIES NOT RECOGNISED (continued):

1. Guarantees (continued)

(iii) StateCover Limited

Council is a member of StateCover Mutual Limited and holds a partly paid share in the entity.

StateCover is a company providing workers compensation insurance cover to the NSW local government industryand specifically Council.

Council has a contingent liability to contribute further equity in the event of the erosion of the company’s capitalbase as a result of the company’s past performance and/or claims experience or as a result of any increasedprudential requirements from APRA.

These future equity contributions would be required to maintain the company’s minimum level of net assets inaccordance with its licence requirements.

2. Other liabilities

(i) Third party claims

The Council is involved from time to time in various claims incidental to the ordinary course of business includingclaims for damages relating to its services.

Council believes that it is appropriately covered for all claims through its insurance coverage and does not expectany material liabilities to eventuate.

(ii) Potential land acquisitions due to planning restrictions imposed by Council

Council has classified a number of privately owned land parcels as local open space or bushland.

As a result, where notified in writing by the various owners, Council will be required to purchase these land parcels.

At reporting date, reliable estimates as to the value of any potential liability (and subsequent land asset) from suchpotential acquisitions has not been possible.

page 40




Note 13. Financial risk management

$ ’000

Risk management

Council’s activities expose it to a variety of financial risks including (1) price risk, (2) credit risk, (3) liquidity riskand (4) interest rate risk.

The Council’s overall risk management program focuses on the unpredictability of financial markets and seeksto minimise potential adverse effects on the financial performance of the Council.

Council does not engage in transactions expressed in foreign currencies and is therefore not subject to foreigncurrency risk.

Financial risk management is carried out by Council’s finance section under policies approved by the Council.

A comparison by category of the carrying amounts and fair values of Council’s financial assets and financialliabilities recognised in the financial statements is presented below.

Financial assetsCash and cash equivalentsReceivablesTotal financial assets

Financial liabilitiesPayablesLoans/advancesTotal financial liabilities

Fair value is determined as follows:

– Cash and cash equivalents, receivables, payables – are estimated to be the carrying value that approximates market value.

– Borrowings and held-to-maturity investments – are based upon estimated future cash flows discounted by the current mkt interest rates applicable to assets and liabilities with similar risk profiles, unless quoted market prices are available.

7,241

2,541

2,163

2017Carrying value

623 1,751

1,128

2,541 1,921 723 723

5,011 7,241

2,322

1,818

6,542

1,298

Fair value

1,818

5,011

623

6,383

4,220

2018 2017

2,230 4,220 2,230

2018

X10A10T

page 41




Note 13. Financial risk management (continued)

$ ’000

Council’s objective is to maximise its return on cash and investments whilst maintaining an adequate level ofliquidity and preserving capital.

Council’s finance area manages the cash and Investments portfolio with the assistance of independentadvisors.

Council has an investment policy which complies with the Local Government Act 1993 and MinisterialInvestment Order 625. This policy is regularly reviewed by Council and its staff and a monthly Investment reportis provided to Council setting out the make-up and performance of the portfolio as required by LocalGovernment regulations.

The risks associated with the investments held are:

– Price risk – the risk that the capital value of Investments may fluctuate due to changes in market prices, whether there changes are caused by factors specific to individual financial instruments or their issuers or are caused by factors affecting similar instruments traded in a market.

– Interest rate risk – the risk that movements in interest rates could affect returns and income.

– Credit risk – the risk that the investment counterparty will not complete their obligations particular to a financial instrument, resulting in a financial loss to Council – be it of a capital or income nature.

Council manages these risks (amongst other measures) by diversifying its portfolio and only purchasinginvestments with high credit ratings or capital guarantees.

Council also seeks advice from independent advisers before placing any funds in cash equivalents andinvestments.

(a) Market risk – price risk and interest rate risk

The following represents a summary of the sensitivity of Council’s Income Statement and accumulated surplus(for the reporting period) due to a change in either the price of a financial asset or the interest rates applicable.

It is assumed that the change in interest rates would have been constant throughout the reporting period.

2018Possible impact of a 1% movement in interest rates

2017Possible impact of a 1% movement in interest rates

Increase of values/rates

8

(7) (7)

Decrease of values/rates

(8) 8

7

Equity

7

(8) Equity Profit Profit

page 42





$ ’000

(b) Credit risk

Council’s major receivables comprise (i) rates and annual charges and (ii) user charges and fees.

The major risk associated with these receivables is credit risk – the risk that debts due and payable to Councilmay not be repaid in full.

Council manages this risk by monitoring outstanding debt and employing stringent debt recovery procedures.It also encourages ratepayers to pay their rates by the due date through incentives.

Credit risk on rates and annual charges is minimised by the ability of Council to secure a charge over the landrelating to the debts – that is, the land can be sold to recover the debt. Council is also able to charge intereston overdue rates and annual charges at higher than market rates which further encourages the payment of debt.

There are no significant concentrations of credit risk, whether through exposure to individual customers,specific industry sectors and/or regions.

The level of outstanding receivables is reported to Council monthly and benchmarks are set and monitored foracceptable collection performance.

Council makes suitable provision for doubtful receivables as required and carries out credit checks on mostnon-rate debtors.

There are no material receivables that have been subjected to a re-negotiation of repayment terms.

A profile of Council’s receivables credit risk at balance date follows:

(i) Ageing of receivables – %Current (not yet overdue)Overdue

(ii) Ageing of receivables – valueRates and annual chargesCurrent1 – 2 years overdue

Other receivablesCurrent> 91 days overdue

1,219

100%

2017

311

424

100%

charges annual

75%

2018

689

1,643

70%

receivables Other

25%

4,237 396

858

20%30%

Rates and 2018

receivables

100%

charges Other

641 1,000

80%

2018 2017

217

80%

annual

20%

2017Rates and

100%

4,633

page 43





$ ’000

(c) Liquidity risk

Payables and borrowings are both subject to liquidity risk – the risk that insufficient funds may be on handto meet payment obligations as and when they fall due.

Council manages this risk by monitoring its cash flow requirements and liquidity levels and maintaining anadequate cash buffer.

Payment terms can (in extenuating circumstances) also be extended and overdraft facilities utilised as required.

Borrowings are also subject to interest rate risk – the risk that movements in interest rates could adverselyaffect funding costs and debt servicing requirements. Council manages this risk by borrowing long term andfixing the interest rate on a 4-year renewal basis. The Finance Section regularly reviews interest ratemovements to determine if it would be advantageous to refinance or renegotiate part or all of the loan portfolio.

The contractual undiscounted cash outflows (ie. principal and interest) of Council’s payables and borrowingsare set out in the maturity table below:

$ ’000

Trade/other payablesLoans and advancesTotal financial liabilities

Trade/other payablesLoans and advancesTotal financial liabilities

interest rateaverage

Weighted

1,818

2018

1,818

– 1,748 1,751

–

to noSubject

carryingoutflows values> 5 Years

848 2,666

- 188

3

2,541

1,128 623

723

3 -

1,818

1 – 5 Years

623 - -

ActualcashTotal

1,125 623

1,818

1,751 –

660

2017

1,128

maturity ≤ 1 Yearpayable in:

-

- 188

-

- 660 6.00%

6.00%

- –

page 44




Note 14. Material budget variations

$ ’000

While the Income Statement included in this General Purpose Financial Report must disclose the originalbudget adopted by Council, the Local Government Act 1993 requires Council to review its financial budgeton a quarterly basis, so that it is able to manage the various variations between actuals versus budget thatinvariably occur throughout the year.

This note sets out the details of material variations between Council’s original budget and its actualresults for the year as per the Income Statement – even though such variations may have been adjusted forduring each quarterly budget review.

Note that for variations* of budget to actual :Material variations represent those variances that amount to 10% or more of the original budgeted figure.F = Favourable budget variation, U = Unfavourable budget variation

$ ’000

REVENUESRates and annual charges

User charges and feesDuring the financial year a substantial amount of unbudgeted works were received from RMS

Interest and investment revenueHigher than expected actual cash balances throughout year

Other revenuesAdditional insurance recovery received due to additional insurance claims made. Council's budget does not attemptto budget for insurance claimes. Also there was additional activity driving increased Commission and Agency Feesparticularly in the area of RTA NSW.

Operating grants and contributions

Capital grants and contributionsBudgeted grant for White Cliffs water treatment plant not received during financial year

Net gains from disposal of assetsCouncil does not budget for the disposal of assets.

(4,289)

Council’s original financial budget for 17/18 was adopted by the Council on 28 June 2017 and is not required to be audited.

2018

F

16

F

49 0%

U

576

102

2,014

49

(78%)

346

1,211

4,204

1,998

6%

79%

F

10,062

9,539

34

1%

5,500

–

9,486

Budget ---------- Variance* ----------

5,335

68

224 570

F

F65%

50%

F

2018 2018Actual

X10A11T

page 45




Note 14. Material budget variations (continued)

$ ’000

EXPENSESEmployee benefits and on-costsDuring the year Council had the opportunity to take on extra works facilitated through RMS. These works required additional staff not included in Council's Annual Budget.Additionally to this there were a number of large termination payments that were also not included in the Annual Budget.

Borrowing costsBorrowing costs for the year under-estimated in the Annual Budget

Materials and contractsDuring the year Council had the opportunity to take on extra works facilitated through RMS. These additional worksthat were not included in Council's Annual Budget are the reason for the increase spend in Contractors and Materials

Depreciation and amortisation

Other expenses

Budget variations relating to Council’s Cash Flow Statement include:

Cash flows from operating activitiesAlbeit there were additional unbudgeted RMS works during the year, the main driver of this unfavourale variance is that the budgeted grant for the White cliffs water treatment plant was not received during the year.

Cash flows from investing activitiesIncluded in this category of the Budgeted Cash Flow was expenditure to be undertaken for the replacement of the White Cliffs water treatment plant, to be funded by a grant. As of 30 June 2018 only a portion of expenditure on this project had been incurred due to the fact that the budgeted grant had not been received.

Cash flows from financing activities

3,701

(1,989)

2018

(2.0%)

(39.1%)

(100)

(8,845) 3,461

85

9,463 7,474 U(21.0%)

F(102)

(5,384) F

2

8% F

(63%)

---------- Variance* ----------

(15%)

(9)

1,102 1,017

(371)

Budget

U

U4,072

U101

2018

U

(4,645)

(654) 5,098

Actual

(10%)

(10%)

4,444

2018

92

7,347 11,992

page 46




Note 15. Fair value measurement

$ ’000

The Council measures the following asset and liability classes at fair value on a recurring basis:

– Infrastructure, property, plant and equipment

The fair value of assets and liabilities must be estimated in accordance with various accounting standards foreither recognition and measurement requirements or for disclosure purposes.

AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a‘level’ in the fair value hierarchy as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

(1) The following table presents all assets and liabilities that have been measured and recognised at fair values:

2018

Recurring fair value measurements

Infrastructure, property, plant and equipmentPlant and equipmentOperational landCommunity landBuildingsOther structuresRoads, bridges and footpathsBulk earthworksStormwater drainageWater supply networkSewerage networkTip assetsTotal infrastructure, property, plant and equipment

523 523 458 – 30/06/18

30/06/09

30/06/18 –

– – 4,604 4,604

–

30/06/15

30/06/1730/06/14

24,234 977

13,056 30/06/14

881

24,814

24,234 –

– – 3,930 –

– – 24,814

30/06/18

–

14,395

Quoted Significant

Fair value measurement hierarchyLevel 1

–

– 881

168,916 –

3,930

– 13,056

95,314 95,314

125 125

– 458

observableinputsactive mkts

–

154,521

–

–

–

30/06/17 – 977

of latest

30/06/18

Level 2SignificantLevel 3 Total

prices in

30/06/15 –

inputsunobservable

Date

valuation

X10A7T

X10A14T

page 47




Note 15. Fair value measurement (continued)

$ ’000

(1) The following table presents all assets and liabilities that have been measured and recognised at fair values: (continued)

2017

Recurring fair value measurements

Infrastructure, property, plant and equipmentPlant and equipmentOperational landCommunity landBuildingsOther structuresRoads, bridges and footpathsBulk earthworksStormwater drainageWater supply networkSewerage networkTip assetsTotal infrastructure, property, plant and equipment

(2) Transfers between level 1 and level 2 fair value hierarchies

During the year, there were no transfers between level 1 and level 2 fair value hierarchies for recurring fairvalue measurements.

dd/mm/yy – –

165,069 87 87

4,016

– 24,234

523

994 994

dd/mm/yy – 9,649

dd/mm/yy –

523

dd/mm/yy

4,424 4,424

dd/mm/yy – –

94,624

dd/mm/yy – – 24,234

– 4,016

dd/mm/yy– –

–

– 9,649

25,442 25,442

– – –

dd/mm/yy– 268

94,624

808

unobservableinputs

TotalLevel 2Significant

of latestDate Quoted

prices in observableinputs

Level 3Significant

valuation

Level 1

10,725 154,344

–

–

dd/mm/yy

– 808

–

active mkts

dd/mm/yy

Fair value measurement hierarchy

dd/mm/yy – 268

page 48





$ ’000

(3) Valuation techniques used to derive level 2 and level 3 fair values

Where Council is unable to derive fair valuations using quoted market prices of identical assets(ie. level 1 inputs) Council instead utilises a spread of both observable inputs (level 2 inputs) andunobservable inputs (level 3 inputs).

The fair valuation techniques Council has employed while utilising level 2 and level 3 inputs are as follows:

Infrastructure, property, plant and equipment (IPP&E)

Stormwater drainage

The Stormwater Drainage asset class consists of Council’s pits and Culverts. APV Valuers completed the valuation of these assets in 2009. The valuation methodology adopted was based on current replacement costof the asset.

Replacement costs (unit rates) and useful lives for Stormwater Drainage assets were determined through professional judgement on behalf of APV, which incorporated standard unit rates applied to the dimensions of the asset and considered environmental factors based on asset location. Other significant inputs considered in the valuation of these assets are asset condition, remaining useful life, and pattern of consumption.

This asset class is categorised as Level 3 as some of the above-mentioned inputs used in the valuation of these assets require significant professional judgement and are therefore unobservable. Valuation techniques remainedthe same for this reporting period.

Other structure

Council’s other structure assets comprise of fences, flagpoles, monuments and the like.

Replacement costs (unit rate) and useful lives of Council's other structure assets were determined using technicalknowledge from council staff (engineers and asset management). Other significant inputsconsidered in the valuation of these assets are condition rating, remaining useful life, pattern of consumption,dimensions, and components. The valuation was completed in 2014.

This asset class is categorised as Level 3 as some of the above-mentioned inputs used in the valuation of theseassets require significant professional judgement and are therefore unobservable. Valuation techniques remainedthe same for this reporting period.

Buildings

Council engaged AssetVal Pty Ltd to value all buildings and shelters in 2018. The valuation methodology adopted was based on current replacement cost of the asset.

The valuation aspects are generally, but not limited to the location, size, condition, style and utility of the asset. Replacement cost, asset condition, remaining useful life and building components are some of the inputs used in fair value determination. Since most of these inputs require judgement and are unobservable, the asset class has been classified as Level 3. Valuation techniques remained the same for this reporting period.

page 49





$ ’000

(3) Valuation techniques used to derive level 2 and level 3 fair values (continued)

Roads, bridges, footpaths and bulk earthworks

Council’s roads & Bridges are componentised into the pavement, surface and formation and further separated intosegments for inspection and valuation.

The valuation of assets was completed by APV Valuers in June 2015.

The current replacement cost approach was adopted to value Councils assets. The replacement costs (based onunit rates), useful lives and conditions were determined by technical information provided by Council's asset planners and professional judgement on behalf of APV.

Some of the other significant inputs considered in the valuation of these assets are remaining useful life, pattern of consumption, dimensions, and components.

This asset class is categorised as Level 3 as some of the above-mentioned inputs used in the valuation of theseassets require significant professional judgement and are therefore unobservable. Valuation techniques remainedthe same for this reporting period.

Tip remediation

Council operates a landfilling operation as well as a range of waste services, including recycled and reclaimedproducts. It has been recognised that there will be significant costs associated with the closure and post closuremanagement of the landfill site.

Closure of the landfill will involve a wide range of activities including preparation of a Landfill Closure and Management Plan, final capping of the landfill waste and site re-vegetation, decommissioning and removing infrastructure and equipment that will not be required post-closure, and fencing sensitive infrastructure.

The key unobservable inputs are the discount rate, cost escalation rate, actual timing of costs and futureenvironmental management requirements. There has been no change to the valuation process during the reportingperiod.

Water supply network

This asset category includes:

Dams & Weirs, Mains, Reservoirs and treatment plants.

The valuation of assets was completed by Brearly & Hansen Valuers in June 2017.

The current replacement cost approach was adopted to value Councils assets. The replacement costs (based on unit rates), useful lives and conditions were determined by technical information provided by Council's asset planners asset planners and professional judgement on behalf of APV.

Some of the other significant inputs considered in the valuation of these assets are remaining useful life, pattern of consumption, dimensions, and components. Valuation techniques remained the same for this reporting period.

page 50





$ ’000

(3) Valuation techniques used to derive level 2 and level 3 fair values (continued)

Sewerage network

This asset category includes:

Mains, Pumping stations and sewerage ponds.

The valuation of assets was completed by Brearly & Hansen Valuers in June 2017.

The current replacement cost approach was adopted to value Councils assets. The replacement costs (based on unit rates), useful lives and conditions were determined by technical information provided by Council's asset planners and professional judgement on behalf of APV.

Some of the other significant inputs considered in the valuation of these assets are remaining useful life, pattern of consumption, dimensions, and components. Valuation techniques remained the same for this reportingperiod.

Community land

Assets within the “Community Land” class are:

- Council owned land, and- Care Control Management land [Crown] of which Council derives current and future economic benefits arising from the use of the land asset.

Council’s community land is valued on the Unimproved Capital Value (UCV), provided by the Valuer General 01/07/2018.

Currently all Council assets in this asset class are based on UCV, however, should Council have an asset in futurefor which an UCV is not provided, the replacement cost will be used. Replacement cost will be based on averageunit rates for similar properties, land use, dimensions, land size and shape, which are not considered observablebased on market evidence, therefore, placing the whole asset class in Level 3. Valuation techniques remainedthe same for this reporting period.

Operational land

Council’s operational land includes all of Council's land classified as operational land under Local Government Act1993.

Council’s community land is valued on the Unimproved Capital Value (UCV), provided by the Valuer General 01/07/2018.

Currently all Council assets in this asset class are based on a modelled market based valuation process, however, should Council have an asset in future for which this valuation process is not available, the replacement cost will be used. Replacement cost will be based on average unit rates for similar properties, land use, dimensions, land size and shape, which are not considered observable based on market evidence, therefore, placing the whole asset class in Level 3. Valuation techniques remained the same for this reporting period.

page 51





$ ’000

(4). Fair value measurements using significant unobservable inputs (level 3)

a. The following tables present the changes in level 3 fair value asset classes.

Opening balance – 1/7/16

Depreciation and impairmentOther movement (WIP Transfers)Other movement (details here)

Closing balance – 30/6/17

Depreciation and impairmentOther movement (WIP Transfers)Other movement (details here)


Opening balance – 1/7/16

Depreciation and impairmentTransferOther movement (WIP transfers)Other movement (Revaluation)


Depreciation and impairmentOther movement (WIP transfers)


213

Water

–

–

(764)

915 –

24,234

bridges

128,816

network

–

– 5,011 – 2,855 2,919 –

5,011

5,011

(2,848)

network

2,307

– (275)

94,624

24,234

24,234 122,708

–

earthworks Total

93,316 4,635

–

2,777

– –

Tip

25,442

664 (83) 607

(78)

– (1,853) 416

1,317

4,016

3,930 126 29,847

30,539 994

–

95,314

assets

(628)

977

126,838

24,814

26 – (81) – – (81)

(774)

(43)

–

29,862 984 25,888

– (43) (86)

82 (17)

(2,848)

82

(16) (627)

(402)

87

footpaths

2,163

Receivables

4,424

Other

(1,822) 64

(1,547)

Bulk

4,604

Stormwater Seweragesupplydrainage

– –

–

– (236)

Total

2,723 (1,617)

–

structures

Roads

523

523

LandCommunity

– – –

–

– –

523

page 52





$ ’000

(4). Fair value measurements using significant unobservable inputs (level 3) (continued)

b. Significant unobservable valuation inputs used (for level 3 asset classes) and their relationship to fair value.

The following table summarises the quantitative information relating to the significant unobservable inputs used inderiving the various level 3 asset class fair values.

IPP&E

(5). Highest and best useAll of Council’s non-financial assets are considered as being utilised for their highest and best use.

Valuationtechnique/s

125

24,814

3,930

977

Current replacement cost

Replacement costAsset condition ratingRemaining useful life4,604

119,598

UnobservableinputsClass

Fairvalue

(30/6/18)$’000

Current replacement costReplacement costAsset condition ratingRemaining useful life

Replacement costAsset condition ratingRemaining useful life

Discounted future value of remediation Remediation rate






Community Land 523 Current replacement cost Replacement costAsset condition rating

Sewerage network

Water supply network

Tip remediation

Stormwater drainage

Roads, bridges, footpaths and bulk earthworks

Other structures

page 53




Note 16. Related party transactions

$ ’000

a. Key management personnel

Key management personnel (KMP) of the Council are those persons having the authority and responsibility for planning, directing and controlling the activities of thecouncil, directly or indirectly.

The aggregate amount of KMP compensation included in the Income Statement is:

Compensation:Short-term benefitsOther long-term benefitsTermination benefitsTotal

5 695

2018640 50

2017660

– –

660

X11A0T

page 54




Note 17. Financial result and financial position by fund

Income Statement by fund$ ’000

Continuing operationsIncome from continuing operationsRates and annual chargesUser charges and feesInterest and investment revenueOther revenuesGrants and contributions provided for operating purposesGrants and contributions provided for capital purposesOther incomeNet gains from disposal of assetsTotal income from continuing operations

Expenses from continuing operationsEmployee benefits and on-costsBorrowing costsMaterials and contractsDepreciation and amortisationOther expensesTotal expenses from continuing operationsOperating result from continuing operations

Net operating result attributable to each council fund

Net operating result for the year before grants and contr and contributions provided for capital purposes

1 General fund refers to all Council’s activities other than Water and Sewer. NB. All amounts disclosed above are gross – that is, they include internal charges and recoveries made between the funds.

21,949

1,514

17

17

(550) –

474 – (407)

–

1,107 –

–

–

388

143

17

– (407)

1,657

303 –

– 101

20,292

– 1,068

1,017

– 49

10,718

1,657

589

570 – –

–

86

491

3,358 886

9,759

628

5,098 –

– –

39

1,299 –

57 392 9,147

2018

182

2018

6

General1SewerWater

2018 2018

533

X12A1T

page 55



Notes to the Financial Statements as at 30 June 2018

Note 17. Financial result and financial position by fund (continued)

Statement of Financial Position by fund$ ’000

ASSETSCurrent assetsCash and cash equivalentsReceivablesInventoriesOtherTotal current assets

Non-current assetsInfrastructure, property, plant and equipmentTotal non-current assetsTOTAL ASSETS

LIABILITIESCurrent liabilitiesPayablesIncome received in advanceBorrowingsProvisionsTotal current liabilities

Non-current liabilitiesProvisionsTotal non-current liabilitiesTOTAL LIABILITIESNet assets

EQUITYAccumulated surplusRevaluation reservesTotal equity1 General Fund refers to all Council’s activities other than Water and Sewer. NB. All amounts disclosed above are gross – that is, they include internal receivables and payables between the funds.

737

98,156 1,706

2018

–

0

45,786

2,787

11,140

143,942

–

–

–

403 1,206

Sewer

2018

859 1,170

General1

2,611

2018

Water

134

23 4,012

24,895 3,930

– –

143,454

208

–

–

143,454

– – 623

75

961

2018

537

– –

2,065 –

–

1,128

3,930

–

–

4,467

– 737 –

3,524 26,960

4,467 143,942

26,960

–

4,467

147,466

26,960

–

–

15,820

–

– –

– –

–

24,895

2,761

–

page 56




Note 18(a). Statement of performance measures – consolidated results

$ ’000

Local government industry indicators – consolidated

1. Operating performance ratioTotal continuing operating revenue (1) excluding capitalgrants and contributions less operating expensesTotal continuing operating revenue (1) excluding capitalgrants and contributions

2. Own source operating revenue ratioTotal continuing operating revenue (1)

excluding all grants and contributionsTotal continuing operating revenue (1)

3. Unrestricted current ratioCurrent assets less all external restrictions (2)

Current liabilities less specific purpose liabilities (3, 4)

4. Debt service cover ratioOperating result (1) before capital excluding interestand depreciation/impairment/amortisationPrincipal repayments (Statement of Cash Flows)plus borrowing costs (Income Statement)

5. Rates, annual charges, interest and extra charges outstanding percentageRates, annual and extra charges outstandingRates, annual and extra charges collectible

6. Cash expense cover ratioCurrent year’s cash and cash equivalentsplus all term depositsMonthly payments from cash flow of operating and financing activities

Notes

(1) Excludes fair value adjustments and reversal of revaluation decrements, net gain/(loss) on sale of assets and the net share of interests in joint ventures and associates.(2) Refer Notes 6-8 inclusive. Also excludes any real estate and land for resale not expected to be sold in the next 12 months.(3) Refer to Notes 8 and 9.(4) Refer to Note 8(b) and 9(b) – excludes all payables and provisions not expected to be paid in the next 12 months (incl. ELE).

35.69%

x12

20.80x

1,716 4,220

3,005

2.46 mths

1,092

201

1.6 mths > 3 mths

47.40%

0.71x > 1.5x

33.22x > 2x

10%

21.20x

0.3 mths

24.75%

23,498

Indicator

7

12,225

Amounts

22,287

2018 20162018Benchmark

> 0.00%

36.34%

52.03%

Prior periods

2,167 1,401

4,180

2017

2.02x

39.05%

0.65x

3.34%18.20%0.03%

> 60.00%

X12A0T

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Note 18(b). Statement of performance measures – by fund

$ ’000

Local government industry indicators – by fund

1. Operating performance ratioTotal continuing operating revenue (1) excluding capital grants and contributions less operating expensesTotal continuing operating revenue (1) excluding capital grants and contributions

2. Own source operating revenue ratioTotal continuing operating revenue (1) excluding capital grants and contributions Total continuing operating revenue (1)

3. Unrestricted current ratioCurrent assets less all external restrictions (2)

Current liabilities less specific purpose liabilities (3, 4)

Notes

(1) - (4) Refer to Notes at Note 18a above.(5) General fund refers to all of Council’s activities except for its water and sewer activities which are listed separately.

Benchmark

> 60.00%

> 0.00%

50.56%

0.65x

2.59% 21.55% -57.05% -45.17% 3.46% -76.61%

2018 2018 20182017 2017

87.08% 40.70% 38.29% 100.00%

2.02x 34.38xNo liabilities

No liabilities

2017Water indicators Sewer indicatorsGeneral indicators 5

71.92x > 1.5x

47.69%

X13A0T

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Note 18(b). Statement of performance measures – by fund (continued)

$ ’000

Local government industry indicators – by fund (continued)

4. Debt service cover ratioOperating result (1) before capital excluding interest and depreciation/impairment/amortisationPrincipal repayments (Statement of Cash Flows) plus borrowing costs (IncomeStatement)

5. Rates, annual charges, interest and extra charges outstanding percentageRates, annual and extra charges outstandingRates, annual and extra charges collectible

6. Cash expense cover ratioCurrent year’s cash and cash equivalents plus all term depositsMonthly payments from cash flow of operating and financing activities

Notes

(1) Refer to Notes at Note 18a above.(5) General fund refers to all of Council’s activities except for its water and sewer activities which are listed separately.

19.90x

4.32%

32.60x 0.00x 0.00x 0.00x

0.00 months

2017

73.63% 65.22%161.16% 184.50%-3.80%

General indicators 5 Water indicators Sewer indicators

0.00x

x12

Benchmark2018 2017 2018 2017

months months monthsmonths1.52 0.00 0.00 0.64 0.00

months

> 2x

> 3 months

END OF AUDITED FINANCIAL STATEMENTS

2018

10.00%

page 59




Note 18(c). Statement of performance measures – consolidated results (graphs)

Benchmark: ――― Minimum >=0.00% Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark

Benchmark: ――― Minimum >=60.00% Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark

Benchmark: ――― Minimum >=1.50 Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark

To assess the adequacy of working capital and its ability to satisfy obligations in the short term for

the unrestricted activities of Council.

Council has maintained a reasonably strong working capital position for the year mainly due to payments received for large projects (Eurella) and the receipt of grants

in advance in the previous year.

Purpose of own source operating

revenue ratio

Commentary on 2017/18 result

2017/18 ratio 52.03%

This ratio measures fiscal flexibility. It is

the degree of reliance on external funding

sources such as operating grants and

contributions.

Reflects the reliance Council has on grant income, and the difficulty in generating own source revenue due to geographic location

and population.

Purpose of unrestricted current

ratio


2017/18 ratio 0.65x

Purpose of operating

performance ratio


2017/18 ratio 0.03%

This ratio measures Council’s

achievement of containing operating expenditure within operating revenue.

This ratio has decreased in the 2018 year due to the completion of large projects (Eurella) and federeral grants not being

received in advance.3%

18%

0%

-1%-5%

0%

5%

10%

15%

20%

2015 2016 2017 2018

Rat

io %

1. Operating performance ratio

35% 39%47% 52%

0%

10%

20%

30%

40%

50%

60%

70%

2015 2016 2017 2018

Rat

io %

2. Own source operating revenue ratio

2.0

0.30.7 0.6

0.0

0.5

1.0

1.5

2.0

2.5

2015 2016 2017 2018

Rat

io (x

)

3. Unrestricted current ratio

X14A0T

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Note 18(c). Statement of performance measures – consolidated results (graphs)


Benchmark: ――― Maximum <10.00% Ratio is within BenchmarkSource for Benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside Benchmark


Purpose of cash expense cover ratio


2017/18 ratio 2.46 mths

This liquidity ratio indicates the number of months a Council can continue paying

for its immediate expenses without

additional cash inflow.

The improvement in this ratio is due to the improvement in Council's cash position.

To assess the impact of uncollected rates and annual charges on Council’s liquidity and the adequacy of

recovery efforts.

This ration reflects the difficulty in collecting rates within the community.

Purpose of debt service cover ratio


2017/18 ratio 20.80x

This ratio measures the availability of operating cash to

service debt including interest, principal and

lease payments

The reduction in this ratio is primarily due to Council's operating result being lower

than the 2017 year.

Purpose of rates and annual charges

outstanding ratio


2017/18 ratio 36.34%

12.9

21.2

33.2

20.8

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2015 2016 2017 2018

Rat

io (x

)

4. Debt service cover ratio

25% 25%

36% 36%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2015 2016 2017 2018

Rat

io %

5. Rates, annual charges, interest and extra charges outstanding percentage

0.0 0.3

1.6

2.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2015 2016 2017 2018

Rat

io (m

ths)

6. Cash expense cover ratio

page 61




Note 19. Council information and contact details

Principal place of business:21 Reid StreetWilcannia NSW 2836

Contact detailsMailing address: Opening hours:PO BOX 165 9.00 a.m to 5.00 p.m Wilcannia NSW 2836

Telephone: 08 8083 8900 Internet: www.centraldarling.nsw.gov.auFacsimile: 08 8091 5994 Email:

Officers Elected membersGENERAL MANAGER MAYORGreg Hill Greg Wright

RESPONSIBLE ACCOUNTING OFFICER COUNCILLORSJacob Philp

Other informationABN: 65 061 502 439

[email protected]

X15A0T

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http://www.centraldarling.nsw.gov.au/




















mailto:[email protected]





















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