WALCHA COUNCIL ANNUAL REPORT 2014 - 2015...Walcha Council 2014-2015 Annual Report Appendix B...

Walcha Council 2014-2015 Annual Report Appendix B

WO/2015/02113 Page 73

WALCHA COUNCIL ANNUAL REPORT 2014 - 2015

General Purpose Financial Statements

For the Year Ended

30 June 2015

Financial Statements 2015

page 1

Walcha Council

General Purpose Financial Statements for the financial year ended 30 June 2015

Contents

1. Understanding Council's Financial Statements

2. Statement by Councillors & 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

(i) These financial statements are General Purpose Financial Statements and cover the consolidated operationsfor Walcha Council.

(ii) Walcha Council is a body politic of NSW, Australia - being constituted as a Local Government areaby proclamation and is duly empowered by the Local Government Act (LGA) 1993 of NSW.

Council's Statutory Charter is detailed in Paragraph 8 of the LGA and includes giving Council;

the ability to provide goods, services & facilities, and to carry out activities appropriate to the current & futureneeds of the local community and of the wider public,

the responsibility for administering regulatory requirements under the LGA and

a role in the management, improvement and development of the resources in the area.

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

(iii) All figures presented in these financial statements are presented in Australian Currency.

(iv) These financial statements were authorised for issue by the Council on 23 October 2015.Council has the power to amend and reissue these financial statements.

Page

4

67

5

2

3

8

9

8587

Annual Report 2014-2015 - Page 74

Financial Statements 2015_

Walcha Council

Notes to the Financial Statementsfor the financial year ended 30 June 2015

Understanding Council's Financial Statements

page 2

Introduction

Each year, individual Local Governments across NSW are required to present a set of audited financial statements to their Council & Community.

What you will find in the Statements

The financial statements set out the financial performance, financial position & cash flows of Council for the financial year ended 30 June 2015.

The format of the financial statements is standard across all NSW Councils and complies with both the accounting & 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 &ownership of the financial statements.

About the Primary Financial Statements

The financial statements incorporate 5 "primary" financial statements:

1. The Income Statement

Summarises Council's financial performance for the year, listing all income & 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 Income

Primarily records changes in the fair values of Council's Infrastructure, Property, Plant & Equipment.

3. The Statement of Financial Position

A 30 June snapshot of Council's financial position indicating its Assets, Liabilities & “Net Wealth”.

4. The Statement of Changes in Equity

The overall change for the year (in dollars) ofCouncil's "Net Wealth".

5. The Statement of Cash Flows

Indicates 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 5 primary financial statements.

About the Auditor's Reports

Council's financial statements are required to beaudited by external accountants (that generally specialize in Local Government).

In NSW, the Auditor provides 2 audit reports:

1. An opinion on whether the financial statements present fairly the Council's financial performance & position, &

2. Their observations on the conduct of the Audit including commentary on the Council's financial performance & financial position.

Who uses the Financial Statements ?

The financial statements are publicly available documents & must be presented at a Council meeting between 7 days & 5 weeks after the date of the Audit Report.

Submissions from the public can be made to Council up to 7 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.



This Statement should be read in conjunction with the accompanying Notes. page 4

Walcha Council

Income Statement for the financial year ended 30 June 2015

$ '000

Income from Continuing OperationsRevenue:Rates & Annual ChargesUser Charges & FeesInterest & Investment RevenueOther RevenuesGrants & Contributions provided for Operating Purposes 2

Grants & Contributions provided for Capital PurposesOther Income:Net gains from the disposal of assetsNet Share of interests in Joint Ventures &Associates using the equity method

Total Income from Continuing Operations

Expenses from Continuing OperationsEmployee Benefits & On-CostsBorrowing CostsMaterials & ContractsDepreciation & AmortisationImpairmentOther Expenses

Total Expenses from Continuing Operations

Operating Result from Continuing Operations

Discontinued Operations

Net Profit/(Loss) from Discontinued Operations

Net Operating Result for the Year

Net Operating Result attributable to CouncilNet Operating Result attributable to Non-controlling Interests

Net Operating Result for the year before Grants andContributions provided for Capital Purposes

Original Budget as approved by Council - refer Note 16Financial Assistance Grants for 13/14 were lower reflecting one off timing differences due to a change in how the grant was paid in prior years - refer Note 3 (e)

(4,382)

3e,f

-

40

395,603

3,280

-

1,040

926

2,570

173

4c

3b

(12)

19

572,8442,622

4a

(12)

-

Budget 1

3e,f

4d

5

4b

3,681428

65

2,755

2015

175

4,114

Notes

3a

3d3c

10,968

4d1,166

-

4,291

-2,383

-

3,574

4e

2

-

15,660

(4,382)

11,278

4,783

4,197-

1,038

24

1

(4,382)

-

(5,308)

11,893

1,205

1,205

-

1,205

-

152233

3,371

(12)

10,980

3,964

(440)

Actual 2015

74

277

4,1064,493

163

13,098

-

148230

4,822

Actual 2014

928




Walcha Council

Statement of Comprehensive Income for the financial year ended 30 June 2015

$ '000

Net Operating Result for the year (as per Income statement)

Other Comprehensive Income:

Amounts which will not be reclassified subsequently to the Operating Result Gain (loss) on revaluation of I,PP&ETotal Items which will not be reclassified subsequentlyto the Operating Result

Amounts which 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 CouncilTotal Comprehensive Income attributable to Non-controlling Interests

2015

-

20b (ii) (895)

1,205

Notes

(12)

49,738

49,738

2014

(895)

310

Actual

(895) 49,750

Actual

49,750

-

49,750

310




Walcha Council

Statement of Financial Positionas at 30 June 2015

$ '000

ASSETSCurrent AssetsCash & Cash EquivalentsInvestmentsReceivablesInventoriesOtherNon-current assets classified as "held for sale"Total Current Assets

Non-Current AssetsInvestmentsReceivablesInventoriesInfrastructure, Property, Plant & EquipmentInvestments accounted for using the equity methodInvestment PropertyIntangible AssetsTotal Non-Current Assets

TOTAL ASSETS

LIABILITIESCurrent LiabilitiesPayablesBorrowingsProvisionsTotal Current Liabilities

Non-Current LiabilitiesPayablesBorrowingsProvisionsTotal Non-Current Liabilities

TOTAL LIABILITIES

Net Assets

EQUITYRetained EarningsRevaluation ReservesCouncil Equity InterestNon-controlling Equity Interests

Total Equity

757-

2,964

-

419,596-

2020

10

8,315

2015

8

6a6b

6162,092

284,198419,596421,285

421,285

1781,5761,603

-

-

63

3272,014

7

14199

25

6b

--

417,864

417,884

-

423,883

688

599

10

1,183

10

10

418,033

421,285

10

10

-

8

426,348

1,744

3,410

-

137,086

1,653 1,845

4,287

2,442

1,054

5,063

-

-

20 20

--

-

418,013

5,999

-

419,596

285,093

662-

134,503

Actual 2014

Actual

5,532

8

7

Notes

-

12

22

Annual Report 2014-2015 - 9



Walcha Council

Statement of Changes in Equity for the financial year ended 30 June 2015

$ '000

Opening Balance (as per Last Year's Audited Accounts)

a. Correction of Prior Period Errorsb. Changes in Accounting Policies (prior year effects)

Revised Opening Balance (as at 1/7/14)

c. Net Operating Result for the Year

d. Other Comprehensive Income - Revaluations : IPP&E Asset Revaluation RsveOther Comprehensive Income

Total Comprehensive Income (c&d)

e. Distributions to/(Contributions from) Non-controlling Interests

f. Transfers between Equity

Equity - Balance at end of the reporting period

$ '000

Opening Balance (as per Last Year's Audited Accounts)

a. Correction of Prior Period Errorsb. Changes in Accounting Policies (prior year effects)

Revised Opening Balance (as at 1/7/13)

c. Net Operating Result for the Year

d. Other Comprehensive Income - Revaluations : IPP&E Asset Revaluation RsveOther Comprehensive Income

Total Comprehensive Income (c&d)

e. Distributions to/(Contributions from) Non-controlling Interests

f. Transfers between Equity

Equity - Balance at end of the reporting period

421,285

-

Interest

-

Equity

-

419,596

2015

-20b (ii)

1,37920 (c)

135,881-20 (d)

-1,205

Retained ReservesEarningsNotes

-134,515

--

--

(12)

2014

-(12)

111,206

-235,343

235,343-

20 (d)

134,503

20b (ii)

49,750 49,738

- --

419,596

-

49,738-

-

285,093 -

--

285,093

(Refer 20b)

-

(Refer 20b)

Reserves

134,503

-

(895)

(895)

1,205 -

Non-

-1,379

20 (c) 23,309

--

137,086

1,205

EarningsRetained

Notes

284,198

-

-

--

421,285

--

310

-

23,309

EquityTotal

-

(12)

-

-

Interestcontrolling

346,549

InterestCouncil

(895)

-

- (895)-(895)

-

(895)

controlling

420,974

419,596

--

Council

1,205

419,596

420,974

Non-

310

1,379 --

285,093

(895)

-

346,549

369,858-

23,309

-

-

(12)

-

49,750

-

49,750

369,858

49,75049,75049,750

-49,750

TotalInterest

Annual Report 2014-2015 - 0



Walcha Council

Statement of Cash Flows for the financial year ended 30 June 2015

$ '000

Cash Flows from Operating ActivitiesReceipts:Rates & Annual ChargesUser Charges & FeesInvestment & Interest Revenue ReceivedGrants & ContributionsOtherPayments:Employee Benefits & On-CostsMaterials & ContractsBorrowing CostsOtherNet Cash provided (or used in) Operating Activities

Cash Flows from Investing ActivitiesReceipts:Sale of Investment SecuritiesSale of Infrastructure, Property, Plant & EquipmentDeferred Debtors ReceiptsPayments:Purchase of Infrastructure, Property, Plant & EquipmentNet Cash provided (or used in) Investing Activities

Cash Flows from Financing ActivitiesReceipts:Proceeds from Borrowings & AdvancesPayments:Repayment of Borrowings & AdvancesNet Cash Flow provided (used in) Financing Activities

Net Increase/(Decrease) in Cash & Cash Equivalents

plus: Cash & Cash Equivalents - beginning of year

Cash & Cash Equivalents - end of the year

Additional Information:

plus: Investments on hand - end of year

Total Cash, Cash Equivalents & Investments

Please refer to Note 11 for information on the following:- Non Cash Financing & Investing Activities.- Financing Arrangements.- Net cash flow disclosures relating to any Discontinued Operations

2,343(1,060)

11b

1025 146

3,834

(2,769)

1,775

(28)

3,052

572

(205)

-

2,847

2,685

(61)

327

5,544

12

5,532

(3,368)(3,474)(3,120)

3,174

2,847

(2,939)

600

(61)

(4,482)

(39)(4,132)

Budget

4,114

1734,206

2015

2,570175

-

1,548(1,038)

11a

(60)

-

(1,773)

40-

11a2,602

(245)

(60)

2,847

(1,733)

5,685

92500

10

4,043126

2,798182

(4,395)

(23)3,799

(23)

4,687

(43)(2,936)(4,743)

(1,574)

4,349

20142015Actual

NotesActual

6b



page 9

Walcha Council

Notes to the Financial Statements for the financial year ended 30 June 2015

Contents of the Notes accompanying the Financial Statements

Details

Summary of Significant Accounting PoliciesCouncil Functions / Activities - Financial InformationCouncil Functions / Activities - Component DescriptionsIncome from Continuing OperationsExpenses from Continuing OperationsGains or Losses from the Disposal of AssetsCash & Cash Equivalent AssetsInvestmentsRestricted Cash, Cash Equivalents & Investments - DetailsReceivablesInventories and Other AssetsInfrastructure, Property, Plant & EquipmentExternally Restricted Infrastructure, Property, Plant and EquipmentInfrastructure, Property, Plant and Equipment - Current Year ImpairmentsPayables, Borrowings and ProvisionsDescription of (and movements in) ProvisionsStatement of Cash Flows - Additional InformationCommitments for ExpenditureStatement of Performance Measures:13a (i) Local Government Industry Indicators (Consolidated)13a (ii) Local Government Industry Graphs (Consolidated)13b Local Government Industry Indicators (by Fund)Investment PropertiesFinancial Risk ManagementMaterial Budget VariationsStatement of Developer ContributionsContingencies and Other Liabilities/Assets not recognisedInterests in Other EntitiesEquity - Retained Earnings and Revaluation Reserves

Financial Result & Financial Position by Fund"Held for Sale" Non Current Assets & Disposal GroupsEvents occurring after the Reporting DateDiscontinued OperationsIntangible AssetsReinstatement, Rehabilitation and Restoration LiabilitiesFair Value Measurement

n/a - not applicable

2(a)

32(b)

6(b)

5

38

35

3637

43

41

42

39

23

26

Note

22

14

10(a)10(b)

17

6(a)

4

6(c)

9(c)

11

24

Page

1

25

19

1516

20

21

46

45

40

41 n/a

18

1213

10262728

78

9(a)9(b)

33

36

44

57

50

6665 n/a

65 n/a

27 68

4947

65 n/a

50 n/a

59

54

65 n/a

56

63

61



Walcha Council


Note 1. Summary of Significant Accounting Policies

page 10

The principal accounting policies adopted by Council in the preparation of these consolidated financial statements are set out below in order to assist in itsgeneral understanding.

Under Australian Accounting Standards (AASBs),accounting policies are defined as those specific principles, bases, conventions, rules and practices applied by a reporting entity (in this case Council) in preparing and presenting its financial statements.

(a) Basis of preparation

(i) Background

These financial statements are general purpose financial statements which have been prepared in accordance with;

Australian Accounting Standards and Australian Accounting Interpretations issued by the Australian Accounting Standards Board,

the Local Government Act (1993) & Regulation,and

the Local Government Code of Accounting Practice and Financial Reporting.

For the purpose of preparing these financial statements, Council has been deemed to be a not-for-profit entity.

(ii) Compliance with International Financial Reporting Standards (IFRSs)

Because AASBs are sector neutral, some standards either:

(a) have local Australian content and prescription that is specific to the Not-For-Profit sector (including Local Government) which are not in compliance with IFRS’s, or

(b) specifically exclude application by Not for Profit entities.

Accordingly in preparing these financial statementsand accompanying notes, Council has been unable to comply fully with International Accounting Standards, but has complied fully with Australian Accounting Standards.

Under the Local Government Act (LGA), Regulations and Local Government Code of Accounting Practice & Financial Reporting, it should be noted that Councils in NSW only have a requirement to comply with AASBs.

(iii) New and amended standards adopted by Council

During the current year, the following relevant accounting standards became mandatory and have been adopted by Council:

AASB 10 Consolidated Financial StatementsAASB 11 Joint ArrangementsAASB 12 Disclosures of Interests in Other

Entities

AASB 10 introduced a new definition of control based on the substance of the relationship and required Councils to consider their involvement with other entities regardless of whether there was a financial interest.

AASB 11 classified joint arrangements into either joint ventures (equity accounting) or joint operations (accounting for share of assets and liabilities).

AASB 12 has increased the level of disclosures required where Council has any interests in subsidiaries, joint arrangements, associates or unconsolidated structured entities.

Adoption of the new standards have not impacted the preparation of these financial statements.

(iv) Early adoption of Accounting Standards

Council has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2014.

Refer further to paragraph (ab) relating to a summary of the effects of Standards with future operative dates.

(v) Basis of Accounting

These financial statements have been preparedunder the historical cost convention except for:

(i) certain financial assets and liabilities at fair value through profit or loss and available-for-



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page 11

sale financial assets which are all valued at fair value,

(ii) the write down of any Asset on the basis ofImpairment (if warranted) and

(iii) certain classes of non current assets (eg. Infrastructure, Property, Plant & Equipment andInvestment Property) that are accounted for at fair valuation.

The accrual basis of accounting has also been applied in their preparation.

(vi) Changes in Accounting Policies

Council’s accounting policies have been consistently applied to all the years presented, unless otherwise stated.

There have also been no changes in accounting policies when compared with previous financial statements unless otherwise stated [refer Note 20(d)].

(vii) Critical Accounting Estimates

The preparation of financial statements requires the use of certain critical accounting estimates (in conformity with AASBs).

Accordingly this 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 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 of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out below:

(i) Estimated fair values of infrastructure, property, plant and equipment.

(ii) Estimated remediation provisions.

Critical judgements in applying Council's accounting policies

(i) Impairment of Receivables - Council has made a significant judgement about the impairment of a number of its receivables in Note 7.

(ii) Projected Section 94 Commitments - Council has used significant judgement in determining future Section 94 income and expenditure in Note 17.

(b) Revenue recognition

Council recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to it and specific criteria have been met for each of the Council’sactivities as described below.

Council bases any estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Revenue is measured at the fair value of the consideration received or receivable.

Revenue is measured on major income categories as follows:

Rates, Annual Charges, Grants and Contributions

Rates, annual charges, grants and contributions (including developer contributions) are recognised as revenues when the Council obtains control over the assets comprising these receipts.

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

A provision for the impairment on rates receivables has not been established as unpaid rates represent a charge against the rateable property that will be recovered when the property is next sold.



Walcha Council



page 12

Control over granted assets is normally obtained upon their receipt (or acquittal) or upon earlier notification that a grant has been secured, and is valued at their fair value at the date of transfer.

Revenue from Contributions is recognised when the Council either obtains control of the contribution or the right to receive it, (i) it is probable that the economic benefits comprising the contribution will flow to the Council and (ii) the amount of the contribution can be measured reliably.

Where grants or contributions recognised as revenues during the financial year were obtained on condition that they be expended in a particular manner or used over a particular period and those conditions were undischarged at balance date, the unused grant or contribution is disclosed in Note 3(g).

Note 3(g) also discloses the amount of unused grant or contribution from prior years that was expended on Council’s operations during the current year.

The Council has obligations to provide facilities from contribution revenues levied on developers under the provisions of S94 of the EPA Act 1979.

Whilst Council generally incorporates these amounts as part of a Development Consents Order, such developer contributions are only recognised as income upon their physical receipt by Council, due to the possibility that individual Development Consents may not be acted upon by the applicant and accordingly would not be payable to Council.

Developer contributions may only be expended for the purposes for which the contributions were required but the Council may apply contributions according to the priorities established in work schedules.

A detailed Note relating to developer contributions can be found at Note 17.

User Charges, Fees and Other Income

User charges, fees, penalties and other income are recognised as revenue when the service has beenprovided, the payment is received, or when the penalty has been applied, whichever first occurs.

A provision for the impairment of these receivables is recognised when collection in full is no longer probable.

A liability is recognised in respect of revenue that is reciprocal in nature to the extent that the requisite service has not been provided as at balance date.

Sale of Infrastructure, Property, Plant and Equipment

The profit or loss on sale of an asset is determined when control of the asset has irrevocably passed to the buyer.

Interest and Rents

Rental income is accounted for on a straight-line basis over the lease term.

Interest Income from Cash & Investments is accounted for using the effective interest rate at the date that interest is earned.

Other Income

Other income is recorded when the payment is due, the value of the payment is notified or the payment is received, whichever occurs first.

(c) Principles of Consolidation

These financial statements incorporate (i) the assets and liabilities of Council and any entities (or operations) that it controls (as at 30 June 2015) and (ii) all the related operating results (for the financial year ended the 30th June 2015).

In the process of reporting on Council’s activities as a single unit, all inter-entity year end balances and reporting period transactions have been eliminated in full between Council and its controlled entities.

(i) The Consolidated Fund

In accordance with the provisions of Section 409(1) of the LGA 1993, all money and property received by Council is held in the Council’s Consolidated Fund unless it is required to be held in the Council’s Trust Fund.

The Consolidated Fund and other entities through which the Council controls resources to carry on its



Walcha Council



page 13

functions have been included in the financial statements forming part of this report.

The following entities have been included as part of the Consolidated Fund:

General Purpose OperationsWater SupplySewerage ServicePrivate Works ActivityConcrete Batching Activity

(ii) The Trust Fund

In accordance with the provisions of Section 411 of the Local Government Act 1993 (as amended), a separate and distinct Trust Fund is maintained to account for all money and property 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 property subject to Council’s control have been included in these statements.

Trust monies and property held by Council but not subject to the control of Council, have beenexcluded from these statements.

A separate statement of monies held in the Trust Fund is available for inspection at the Council office by any person free of charge.

(iii) Joint Arrangements

Council has no interest in any Joint Arrangements.

(iv) Associates

Where Council has the power to participate in the financial and operating decisions of another entity,(ie. where Council is deemed to have “significantinfluence” over another entities operations but neither controls nor jointly controls the entity), then Council accounts for such interests using the equity method of accounting – in a similar fashion to Joint Ventures.

Such entities are usually termed Associates.

Any interests in Associates are accounted for using the equity method and are carried at cost.

Detailed information relating to Council’s interest in Associates can be found at Note 19 (b).

(v) County Councils

Council is a member of the following County Councils(which are bodies corporate under the Local Government Act);

New England Weeds County CouncilRegional weed control5 Constituent Councils

The governing body of each County Council is responsible for managing its own affairs.

Council is of the opinion that it neither controls nor significantly influences the above County Council and accordingly this entity has not been consolidated orotherwise included within these financial statements.

(vi) Unconsolidated Structured Entities

Council has no interest in any Unconsolidated Structured Entities.

(d) Leases

Council does not have any operating or finance lease.

(e) Cash and Cash Equivalents

For Statement of Cash Flows (and Statement of Financial Position) presentation purposes, cash and cash equivalents includes;

cash on hand,

deposits held at call with financial institutions,

other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and

bank overdrafts.

Bank overdrafts are shown within borrowings in current liabilities on the balance sheet but are incorporated into Cash & Cash Equivalents for presentation of the Cash Flow Statement.



Walcha Council



page 14

(f) Investments and Other Financial Assets

Council (in accordance with AASB 139) classifies each of its investments into one of the following categories for measurement purposes:

financial assets at fair value through profit or loss,

loans and receivables,

held-to-maturity investments, and

available-for-sale financial assets.

Each classification depends on the purpose/intention for which the investment was acquired & at the time it was acquired.

Management determines each Investmentclassification at the time of initial recognition and re-evaluates this designation at each reporting date.

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets that are “held for trading”.

A financial asset is classified in the “held for trading”category if it is acquired principally for the purpose of selling in the short term.

Assets in this category are primarily classified as current assets as they are primarily held for trading &/or are expected to be realised within 12 months of the balance sheet date.

(ii) Loans and receivables

Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market.

They arise when the Council provides money, goods or services directly to a debtor with no intention (or in some cases ability) of selling the resulting receivable.

They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Council’s management has the positive intention and ability to hold to maturity.

In contrast to the “Loans & Receivables” classification, these investments are generally quoted in an active market.

Held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the reporting date, which are classified as current assets.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.

Investments must be designated as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term.

Accordingly, this classification principally comprises marketable equity securities, but can include all types of financial assets that could otherwise be classified in one of the other investment categories.

They are generally included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date or the term to maturity from the reporting date is less than 12 months.

Financial Assets – Reclassification

Council may choose to reclassify a non-derivative trading financial asset out of the held-for-trading category if the financial asset is no longer held for the purpose of selling it in the near term.

Financial assets other than loans and receivables are permitted to be reclassified out of the held-for-trading category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term.

Council may also choose to reclassify financial assets that would meet the definition of loans and



Walcha Council



page 15

receivables out of the held-for-trading or available-for-sale categories if it has the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification.

Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortised cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently made.

Effective interest rates for financial assets reclassified to loans and receivables and held-to-maturity categories are determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates prospectively.

General Accounting & Measurement of Financial Instruments:

(i) Initial Recognition

Investments are initially recognised (and measured)at fair value, plus in the case of investments not at “fair value through profit or loss”, directly attributable transactions costs

Purchases and sales of investments are recognised on trade-date - the date on which the Council commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Council has transferred substantially all the risks and rewards of ownership.

(ii) Subsequent Measurement

Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value.

Loans and receivables and held-to-maturityinvestments are carried at amortised cost using the effective interest method.

Realised and unrealised gains and losses arising from changes in the fair value of the financial assets classified as “fair value through profit or loss”category are included in the income statement in the period in which they arise.

Unrealised gains and losses arising from changes in the fair value of non monetary securities classified as "available-for-sale" are recognised in equity in the available-for-sale investments revaluation reserve.

When securities classified as "available-for-sale"are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities.

Impairment

Council assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired.

A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired.

If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss - is removed from equity and recognised in the income statement.

Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

If there is evidence of impairment for any of Council’s financial assets carried at amortised cost (eg. loans and receivables), the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate.

The carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If a



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loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

As a practical expedient, the group may measure impairment on the basis of an instrument’s fair value using an observable market price.

(iii) Types of Investments

Council has an approved Investment Policy in order to undertake its investment of money in accordance with (and to comply with) Section 625 of the Local Government Act and S212 of the LG (General) Regulation 2005.

Investments are placed and managed in accordance with the Policy and having particular regard to authorised investments prescribed under the Ministerial Local Government Investment Order.

Council maintains its investment Policy incompliance with the Act and ensures that it or itsrepresentatives exercise care, diligence and skill that a prudent person would exercise in investing Councilfunds.

Council amended its policy following revisions to the Ministerial Local Government Investment Order arising from the Cole Inquiry recommendations. Certain investments that Council holds are no longer prescribed (eg. managed funds, CDOs, and equity linked notes), however they have been retainedunder grandfathering provisions of the Order. These will be disposed of when most financially advantageous to Council.

(g) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.

Council uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date.

Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held.

If the market for a financial asset is not active (and for unlisted securities), the Council establishes fair value by using valuation techniques.

These include reference to the fair values of recent arm’s length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values.

The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Council for similar financial instruments.

(h) Receivables

Receivables are initially recognised at fair value and subsequently measured at amortised cost, less any provision for impairment.

Receivables (excluding Rates & Annual Charges) are generally due for settlement no more than 30 days from the date of recognition.

The collectibility of receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off in accordance with Council’s policy.

A provision for impairment (ie. an allowance account) relating to receivables is established when there is objective evidence that the Council will not be able to collect all amounts due according to the original terms of each receivable.

The amount of the provision is the difference between the asset’s carrying amount and the present



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value of estimated future cash flows, discounted at the effective interest rate.

Impairment losses are recognised in the Income Statement within other expenses.

When a receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written offagainst the allowance account.

Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement.

(i) Inventories

Raw Materials and Stores, Work in Progress and Finished Goods

Raw materials and stores, work in progress and finished goods in respect of business undertakings are all stated at the lower of cost and net realisable value.

Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.

Costs are assigned to individual items of inventory on the basis of weighted average costs.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Inventories held in respect of non-business undertakings have been valued at cost subject to adjustment for loss of service potential.

Land Held for Resale/Capitalisation of Borrowing Costs

Land held for resale is stated at the lower of cost and net realisable value.

Cost is assigned by specific identification and includes the cost of acquisition, and development and borrowing costs during development.

When development is completed borrowing costs and other holding charges are expensed as incurred.

Borrowing costs included in the cost of land held for resale are those costs that would have been avoided if the expenditure on the acquisition and development of the land had not been made.

Borrowing costs incurred while active development is interrupted for extended periods are recognised as expenses.

(j) Infrastructure, Property, Plant and Equipment (I,PP&E)

Acquisition of assets

Council’s non current assets are continually revalued (over a 5 year period) in accordance with the fair valuation policy as mandated by the Office of Local Government.

At balance date, the following classes of I,PP&E were stated at their Fair Value;

- Plant and Equipment(as approximated by depreciated historical cost)

- Operational Land (External Valuation)

- Community Land (External Valuation)

- Buildings – Specialised/Non Specialised (External Valuation)

- Other Structures- (External Valuation)

- Roads Assets incl. roads, bridges & footpaths(Internal Valuation)

- Bulk Earthworks (Internal Valuation)

- Stormwater Drainage (Internal Valuation)

- Water and Sewerage Networks(Internal Valuation)

- Other Assets(as approximated by depreciated historical cost)



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Initial Recognition

On initial recognition, an asset's cost is measured at its fair value, plus all expenditure that is directly attributable to the acquisition.

Where settlement of any part of an asset’s cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of recognition (ie. date of exchange) of the asset to arrive at fair value.

The discount rate used is the Council’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Where infrastructure, property, plant and equipment assets are acquired for no cost or for an amount other than cost, the assets are recognised in the financial statements at their fair value at acquisition date - being the amount that the asset could have been exchanged between knowledgeable willing parties in an arm’s length transaction.

Subsequent costs

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 cost of the item can be measured reliably.

All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Asset Revaluations (including Indexation)

In accounting for Asset Revaluations relating to Infrastructure, Property, Plant & Equipment:

Increases in the combined carrying amounts of asset classes arising on revaluation are credited to the asset revaluation reserve.

To the extent that a net asset class increase reverses a decrease previously recognised via the profit or loss, then increase is first recognised in profit or loss.

Net decreases that reverse previous increases of the same asset class are first charged against

revaluation reserves directly in equity to the extent of the remaining reserve attributable to the asset, with all other decreases charged to the Income statement.

Water and sewerage network assets are indexed annually between full revaluations in accordance withthe latest indices provided in the NSW Office of Water - Rates Reference Manual.

For all other assets, Council assesses at each reporting date whether there is any indication that a revalued asset’s carrying amount may differ materially from that which would be determined if the asset were revalued at the reporting date.

If any such indication exists, Council determines the asset’s fair value and revalues the asset to that amount.

Full revaluations are undertaken for all assets on a 5 year cycle.

Capitalisation Thresholds

Items of infrastructure, property, plant and equipment are not capitalised unless their cost of acquisition exceeds the following;

Land- council land 100% Capitalised - open space 100% Capitalised- land under roads (purchases after 30/6/08) 100% Capitalised

Plant & EquipmentOffice Furniture > $5,000Office Equipment > $5,000Other Plant &Equipment > $5,000

Buildings & Land ImprovementsPark Furniture & Equipment > $5,000

Building- construction/extensions 100% Capitalised- renovations > $10,000

Other Structures > $10,000

Water & Sewer AssetsReticulation extensions > $10,000Other > $10,000



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Stormwater AssetsDrains & Culverts > $10,000Other > $10,000

Transport AssetsRoad construction & reconstruction > $10,000Reseal/Re-sheet & major repairs: > $10,000Bridge construction & reconstruction > $10,000

Depreciation

Depreciation on Council's infrastructure, property, plant and equipment assets is calculated using the straight line method in order to allocate an assetscost (net of residual values) over its estimated useful life.

Land is not depreciated.

Estimated useful lives for Council's I,PP&E include:

Plant & Equipment- Office Equipment 5 to 10 years- Office furniture 10 to 50 years- Vehicles 5 to 8 years- Heavy Plant/Road Making equip. 10 to 20 years- Other plant and equipment 10 to 50 years

Other Equipment- Playground equipment 20 to 50 years- Benches, seats etc 10 to 20 years

Buildings- Buildings : Masonry 50 to 100 years- Buildings : Other 20 to 40 years

Stormwater Drainage- Drains 80 to 100 years- Culverts 100 years

Transportation Assets- Sealed Roads : Surface 50 to 120 years- Sealed Roads : Seal 15 to 50 years- Unsealed roads Surface 20 to 50 years- Bridge : Concrete 100 years- Bridge : Timber 60 years

Water & Sewer Assets- Dams and reservoirs 100 years- Bores 20 to 40 years

- Reticulation pipes : PVC 70 to 80 years- Reticulation pipes : Other 25 to 75 years

- Pumps and telemetry 25 to 70 years

Other Infrastructure Assets- Bulk earthworks Infinite

All asset residual values and useful lives are reviewed and adjusted (if appropriate), at each reporting date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount – refer Note 1(s) on AssetImpairment.

Disposal and De-recognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Council’s Income Statement in the year the asset is derecognised.

(k) Land

Land (other than Land under Roads) is in accordance with Part 2 of Chapter 6 of the Local Government Act (1993) classified as either Operational or Community.

This classification of Land is disclosed in Note 9(a).

(l) Land under roads

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

Council has elected not to recognise land under roads acquired before 1 July 2008 in accordance with AASB 1051.

Land under roads acquired after 1 July 2008 is recognised in accordance with AASB 116 – Property, Plant and Equipment.



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(m) Intangible Assets

Council has not classified any assets as Intangible.

(n) Crown Reserves

Crown Reserves under Council’s care and control are recognised as assets of the Council.

While ownership of the reserves remains with the Crown, Council retains operational control of the reserves and is responsible for their 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 Council and revenues relating the reserves are recognised within Council’s Income Statement.

Representations are currently being sought across State and Local Government to develop a consistent accounting treatment for Crown Reserves across both tiers of government.

(o) Rural Fire Service assets

Under section 119 of the Rural Fires Act 1997, “all fire fighting equipment purchased or constructedwholly or from money to the credit of the Fund is to be vested in the council of the area for or on behalf of which the fire fighting equipment has been purchased or constructed”.

At present, the accounting for such fire fighting equipment is not treated in a consistent manner across all Councils.

Until such time as discussions on this matter have concluded and the legislation changed, Council will continue to account for these assets as it has beendoing in previous years, which is to incorporate the assets, their values and depreciation charges within these financial statements.

(p) Investment property

Council has no investment properties.

(q) Provisions for close down, restoration and for environmental clean up costs –including Tips and Quarries

Close down, Restoration and Remediation costs include the dismantling and demolition of infrastructure, the removal of residual materials and the remediation of disturbed areas.

Estimated close down and restoration costs are provided for in the accounting period when the obligation arising from the related disturbance occurs, whether this occurs during 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 areexpected to arise from future disturbance.

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 estimates and revisions to the estimated lives of operations, and are subject to formal review at regular intervals.

Close down, Restoration and Remediation costs are a normal consequence of tip and quarry operations, and the majority of close down and restoration expenditure is incurred at the end of the life of the operations.

Although the ultimate cost to be incurred is uncertain, Council estimates the respective costs based on feasibility and engineering studies using current restoration standards and techniques.

The amortisation or ‘unwinding’ of the discount applied in establishing the net present value of provisions is charged to the income statement in each accounting period.

This amortisation of the discount is disclosed as a borrowing cost in Note 4(b).

Other movements in the provisions for Close down, Restoration and Remediation costs including those resulting from new disturbance, updated cost estimates, changes to the estimated lives of operations and revisions to discount rates are capitalised within property, plant and equipment.



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These costs are then depreciated over the lives of the assets to which they relate.

Where 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 balance sheet date and the cost is charged to the income statement.

Provision is made for the estimated present value of the costs of environmental clean up obligations outstanding at the balance sheet date.

These costs are charged to the income statement.

Movements in the environmental clean up provisions are presented as an operating cost, except for the unwind 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 in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other locations.

The expected timing of expenditure can also change, for example in response to changes in quarry reserves or production rates.

As a result there could be significant adjustments to the provision for close down and restoration and environmental clean up, which would affect future financial results.

Specific Information relating to Council's provisions relating to Close down, Restoration and Remediation costs can be found at Note 26.

(r) Non-Current Assets (or Disposal Groups) “Held for Sale” & DiscontinuedOperations

Council has no assets held for sale or discontinued operations.

(s) Impairment of assets

All Council's I,PP&E is subject to an annual assessment of impairment.

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

Where an asset is not held principally for cash generating purposes (for example Infrastructure Assets) and would be replaced if the Council was deprived of it then depreciated replacement cost is used as value in use, otherwise value in use is estimated by using a discounted cash flow model.

Non-financial assets (other than goodwill) that suffered a prior period impairment are reviewed for possible reversal of the impairment at each reporting date.

Goodwill & other Intangible Assets that have an indefinite useful life and are not subject to amortisation are tested annually for impairment.

(t) Payables

These amounts represent liabilities and includegoods and services provided to the Council prior to the end of financial year which are unpaid.

The amounts for goods and services are unsecured and are usually paid within 30 days of recognition.



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(u) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred.

Borrowings are subsequently measured at amortised cost.

Amortisation results in any difference between the proceeds (net of transaction costs) and the redemption amount being recognised in the Income Statement over the period of the borrowings using the effective interest method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired.

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

(v) Borrowing costs

Borrowing costs are expensed.

(w) Provisions

Provisions for legal claims, service warranties andother like liabilities are recognised when:

Council has a present legal or constructive obligation as a result of past events;

it is more likely than not that an outflow of resources will be required to settle the obligation; and

the amount has been reliably estimated.

Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole.

A provision is recognised even if the likelihood of 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 to settle the present obligation at the reporting date.

The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

The increase in the provision due to the passage of time is recognised as interest expense.

(x) Employee benefits

(i) Short Term Obligations

Short term employee benefit obligations include liabilities for wages and salaries (including non-monetary benefits), annual leave and vesting sick leave expected to be wholly settled within the 12 months after the reporting period.

Leave liabilities are recognised in the provision for employee benefits in respect of employees’ services up to the reporting date with other short term employee benefit obligations disclosed under payables.

These provisions are measured at the amountsexpected to be paid when the liabilities are settled.

All other short-term employee benefit obligations are presented as payables.

Liabilities for non vesting sick leave are recognised at the time when the leave is taken and measured at the rates paid or payable, and accordingly no Liability has been recognised in these reports.

Wages & salaries, annual leave and vesting sick leave are all classified as Current Liabilities.

(ii) Other Long Term Obligations

The liability for all long service and annual leave in respect of services provided by employees up to the reporting date (which is not expected to be wholly settled within the 12 months after the reporting



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period) are recognised in the provision for employee benefits.

These liabilities are measured at the present value of the expected future payments to be made using the projected unit credit method.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.

Expected future payments are then discounted using market yields at the reporting date based on national government bonds with terms to maturity and currency that match as closely as possible the estimated future cash outflows.

Due to the nature of when and how Long Service Leave can be taken, all Long Service Leave for employees with 4 or more years of service has been classified as Current, as it has been deemed that Council does not have the unconditional right to defer settlement beyond 12 months – even though it is not anticipated that all employees with more than 4 years service (as at reporting date) will apply for and take their leave entitlements in the next 12 months.

(iii) Retirement benefit obligations

All employees of the Council are entitled to benefits on retirement, disability or death.

Council contributes to various defined benefit plans and defined contribution plans on behalf of its employees.

Defined Benefit Plans

A liability or asset in respect of defined benefit superannuation plans would ordinarily be recognised in the balance sheet, and measured as the present value of the defined benefit obligation at the reporting date plus unrecognised actuarial gains (less unrecognised actuarial losses) less the fair value of the superannuation fund’s assets at thatdate and any unrecognised past service cost.

The present value of the defined benefit obligation is based on expected future payments which arise from membership of the fund to the reporting date, calculated annually by independent actuaries using the projected unit credit method. Consideration is given to expected future wage and salary levels,

experience of employee departures and periods of service.

However, when this information is not reliably available, Council can account for its obligations to defined benefit plans on the same basis as its obligations to defined contribution plans – i.e. as an expense when they become payable.

Council is party to an Industry Defined Benefit Plan under the Local Government Superannuation Scheme, named the “Local Government Superannuation Scheme – Pool B”

This Scheme has been deemed to be a “multi employer fund” for the purposes of AASB 119.

Sufficient information is not available to account for the Scheme as a defined benefit plan (in accordance with AASB 119) because the assets to the scheme are pooled together for all Councils.

The last valuation of the Scheme was performed by Mr Martin Stevenson, BSc, FIA, FIAA on 20/02/2013and covers the period ended 30/06/2015.

However the position is monitored annually and the Actuary has estimated that as at 30 June 2015 theprior period deficit still exists.

Effective from 1 July 2009, employers are required to contribute additional contributions to assist in extinguishing this deficit.

The amount of employer contributions to the defined benefit section of the Local Government Superannuation Scheme and recognised as an expense and disclosed as part of Superannuation Expenses at Note 4(a) for the year ending 30 June2015 was $229,339 .

The amount of additional contributions included in the total employer contribution advised above is $98,449.96

The share of this deficit that can be broadly attributed to Council is estimated to be in the order of $224,882.35 as at 30 June 2015.

Council’s share of that deficiency cannot beaccurately calculated as the Scheme is a mutual arrangement where assets and liabilities are pooled together for all member councils.



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For this reason, no liability for the deficiency has been recognised in these financial statements.

Council has, however, disclosed a contingent liability in Note 18 to reflect the possible obligation that may arise should the Scheme require immediate payment to correct the deficiency.

Defined Contribution Plans

Contributions to Defined Contribution Plans are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

(iv) Employee Benefit On-Costs

Council has recognised at year end the aggregate on-cost liabilities arising from employee benefits, and in particular those on-cost liabilities that will arise when payment of current employee benefits is made in future periods.

These amounts include Superannuation and Workers Compensation expenses which will be payable upon the future payment of certain Leave Liabilities accrued as at 30/06/15.

(y) Self insurance

Council does not self insure.

(z) Allocation between current andnon-current assets & liabilities

In the determination of whether an asset or liability is classified as current or non-current, consideration is given to the time when each asset or liability is expected to be settled.

The asset or liability is classified as current if it is expected to be settled within the next 12 months, being the Council’s operational cycle.

Exceptions

In the case of liabilities where Council does not have the unconditional right to defer settlement beyond 12 months (such as vested long service leave), the liability is classified as current even if not expected to be settled within the next 12 months.

In the case of inventories that are “held for trading”,these are also classified as current even if not expected to be realised in the next 12 months.

(aa) Taxes

The Council is exempt from both Commonwealth Income Tax and Capital Gains Tax.

Council does however have to comply with both Fringe Benefits Tax and Goods and Services Tax (GST).

Goods & Services Tax (GST)

Income, expenses and assets are all recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO).

In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the revenue / expense.

Receivables and payables within the Balance Sheet are stated inclusive of any applicable GST.

The net amount of GST recoverable from or payable to the ATO is included as a current asset or current liability in the Balance Sheet.

Operating cash flows within the Cash Flow Statement are on a gross basis, ie. they are inclusive of GST where applicable.

Investing and Financing cash flows are treated on a net basis (where recoverable from the ATO), ie. they are exclusive of GST. Instead, the GST component of investing and financing activity cash flows which are recoverable from or payable to the ATO are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from (or payable to)the ATO.

(ab) New accounting standards and interpretations

Certain new (or amended) accounting standards and interpretations have been published that are not mandatory for reporting periods ending 30 June 2015.



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Council has not adopted any of these standards early.

Council’s assessment of the impact of these new standards and interpretations is set out below.

Apart from the AASB disclosures below, there are noother standards that are “not yet effective” which areexpected to have a material impact on Council in the current or future reporting periods and on foreseeable future transactions.

Applicable to Local Government:

AASB 9 - Financial Instruments (and associated amending standards)

AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and has an effective date for reporting periods beginning on or after 1 January 2018 (and must be applied retrospectively).

The overriding impact of AASB 9 is to change the requirements for the classification, measurement and disclosures associated with financial assets.

Under the new requirements the four current categories of financial assets stipulated in AASB 139 will be replaced with two measurement categories:

fair value and

amortised cost (where financial assets will only be able to be measured at amortised cost where very specific conditions are met).

AASB 15 - Revenue from contracts with customers and associated amending standards

AASB 15 will introduce a five step process for revenue recognition with the core principle of the new Standard being that entities recognise revenueso as to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the entity expects to be entitled in exchange for those goods or services.The changes in revenue recognition requirements in AASB 15 may cause changes to accounting policies relating to the timing and amount of revenue recorded in the financial statements as well as additional disclosures.

The full impact of AASB 15 has not yet been ascertained or quantified.

AASB 15 will replace AASB 118 which covers contracts for goods and services and AASB 111 which covers construction contracts.

The effective date of this standard is for annual reporting periods beginning on or after 1 January 2017.

AASB 124 - Related Party Disclosures

From 1 July 2016, AASB 124 Related Party Disclosures will apply to Council.

This means that Council will be required to disclose information about related parties and Council transactions with those related parties.

Related parties will more than likely include the Mayor, Councillors and certain Council staff. In addition, the close family members of those people and any organisations that they control or are associated with will be classified as related parties (and fall under the related party reporting requirements).

Not applicable to Local Government per se;

None

(ac) Rounding of amounts

Unless otherwise indicated, amounts in the financial statements have been rounded off to the nearest thousand dollars.

(ad) Comparative Figures

To ensure comparability with the current reporting period’s figures, some comparative period line items and amounts may have been reclassified or individually reported for the first time within thesefinancial statements and/or the notes.

(ae) Disclaimer

Nothing contained within these statements may be taken to be an admission of any liability to any person under any circumstance.


Walcha Council


Note 2(a). Council Functions / Activities - Financial Information

1. Includes: Rates & Annual Charges (incl. Ex-Gratia), Untied General Purpose Grants & Unrestricted Interest & Investment Income.page 26

8,001 Share of gains/(losses) in Associates &

General Purpose Income 1

Continuing Operations

5,097 Joint Ventures (using the Equity Method)

Operating Result from

-

Economic Affairs

6,234 Total Functions & Activities

568

3,6155,045

13,09811,279 11,89315,66010,968

-- -

1,448 607

--

-

525 430

7,353 15,660 11,893

Financial Statem

ents 2015

-933

1,541 423,883

(1,063)-

426,348

636328

423,883

--

426,348

-

2,474

-1,873

3,104

(364)376,869

10,980

--

10,980

-

-

-

1,231(3,627)

(12)

(153)848495

-(880)

(9,427)

(4,382)

--

1,205

794

3,6155,045 5,097

(456)(24)

(530) (562)

(82)

-

(5,425)(199)

(3,892)

592

235-

9,774(408) 59

(251)(234)

(26) (47)

12-

77(130)

99

-11,310 8,340

9,924-

53589815 -

(212)-(83) -

586(114)

19 15588

Actual2015

02014

- - 347

5816,162

1,187

5,55815,798

4,34099

(99)(167)

3-(136)

(666)178

Actual

14778378,488

4,50693 62 4,178(18)204

8,30226

(1,659)3,565 Transport & Communication 2,877 Mining, Manufacturing & Construction 5 8

4,587

787795 841415 411

6,246

(183)218(170)

211

312

708338358

584,628

104 638 560

78 104

544

231 Housing & Community Amenities 48 Water Supplies

Recreation & Culture 108

625 Sewerage Services 386

590 657416146

774 Community Services & Education 779(200)926

802755780 721952

(10)

1 100

789

73

800

(72)84

-482 1,720

Health Environment 726

2 1711 1

2 123 Public Order & Safety

Governance Administration

-(1,005)(1,611)

4

2015Actual

OriginalBudget

2015ActualBudget

(122)214109 4

- 3241,487

136670146-

Operating Result from Continuing Operations

OriginalBudget

OriginalActual

2015 20142015 2015Actual

2014Actual

2014 2015

$ '000 Income, Expenses and Assets have been directly attributed to the following Functions / Activities.Details of these Functions/Activities are provided in Note 2(b).

Income from Continuing Operations

Expenses from Continuing Operations

Total Assets held (Current &

Non-current) Functions/Activities

20152014Actual Actual Actual

Grants included in Income from Continuing Operations



page 27

Walcha Council


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 & SAFETY

HEALTH

ENVIRONMENT

COMMUNITY SERVICES & EDUCATION

HOUSING & COMMUNITY AMENITIES

WATER SUPPLIESSEWERAGE SERVICES

RECREATION & CULTURE

AGRICULTURE

MINING, MANUFACTURING & CONSTRUCTION

TRANSPORT & COMMUNICATION

ECONOMIC AFFAIRS

Noxious plants and insect/vermin control, other environmental protection, solid waste management, streetcleaning, drainage, stormwater management.

Costs relating to the Council’s role as a component of democratic government, including elections, members’fees and expenses, subscriptions to local authority associations, meetings of council and policy makingcommittees, area representation and public disclosure and compliance.

Corporate Support and Other Support Services (not otherwise attributed to the listed functions / activities).

Fire protection, animal control, enforcement of local government regulations, emergency services, other.

Inspection, immunisations, food control, health centres, other, administration.

Camping areas, caravan parks, tourism and area promotion, industrial development promotion, real estatedevelopment, private works, concrete batching plant, other business undertakings.

Administration, family day care, child care, youth services, other family and children, aged and disabled, migrantservices, Aboriginal services, other community services, education.

Housing, town planning, street lighting, other sanitation and garbage, public cemeteries, public conveniences,

Public libraries, museums, art galleries, community centres, public halls, other cultural services, swimmingpools, sporting grounds, parks and gardens (lakes), other sport and recreation.

Building control, quarries & pits, other.

Urban roads, sealed rural roads, unsealed rural roads, bridges, footpaths, aerodromes, parking areas, busshelters and services, water transport, RMS works, other.



page 28

Walcha Council


Note 3. Income from Continuing Operations

$ '000

(a) Rates & Annual Charges

Ordinary RatesResidentialFarmlandMiningBusinessTotal Ordinary Rates

Special RatesNil

Annual Charges (pursuant to s.496, s.496A, s.496B, s.501 & s.611)Domestic Waste Management ServicesWater Supply ServicesSewerage ServicesWaste Management Services (non-domestic)

Total Annual Charges

TOTAL RATES & ANNUAL CHARGES

Council has used 2013 year valuations provided by the NSW Valuer General in calculating its rates.

112,542

372

104

Notes 2015

184

3,964

Actual

384

106

2,633

Actual

3,0193,124

2014

284194283

194

206293

4,106

982 945

289



page 29

Walcha Council


Note 3. Income from Continuing Operations (continued)

$ '000

(b) User Charges & Fees

Specific User Charges (per s.502 - Specific "actual use" charges)

Water Supply ServicesSewerage ServicesWaste Management Services (non-domestic)

Total User Charges

Other User Charges & Fees(i) Fees & Charges - Statutory & Regulatory Functions (per s.608)

Planning & Building RegulationPrivate Works - Section 67Regulatory/ Statutory FeesSection 149 Certificates (EPA Act)

Section 603 CertificatesAdministrationAnimal ControlTotal Fees & Charges - Statutory/Regulatory

(ii) Fees & Charges - Other(incl. General User Charges (per s.608)

AerodromeAged CareCemeteriesChild CareLease RentalsLibrary & Art GalleryPark RentsQuarry RevenuesRMS (formerly RTA) Charges (State Roads not controlled by Council)

Swimming CentresTourismWaste Disposal Tipping FeesOtherOtherTotal Fees & Charges - Other

TOTAL USER CHARGES & FEES

8

6

3,512

3

263,236

25

- 12

2,755

-1

2

15 -

1,523

-

419

18

-

13133

1-

52

5341

23

5

34

14

377

434

6

3

519

79

22468

2014Actual

21

362

2015

79

Actual

4476

-

2

151

128

Notes

4,493

1,817

53

--

518



page 30

Walcha Council



$ '000

(c) Interest & Investment Revenue (incl. losses)

Interest & Dividends - Interest on Overdue Rates & Annual Charges (incl. Special Purpose Rates)

- Interest earned on Investments (interest & coupon payment income)TOTAL INTEREST & INVESTMENT REVENUE

Interest Revenue is attributable to:Unrestricted Investments/Financial Assets:Overdue Rates & Annual Charges (General Fund)

General Council Cash & InvestmentsRestricted Investments/Funds - External:Water Fund OperationsSewerage Fund OperationsTotal Interest & Investment Revenue Recognised

(d) Other Revenues

Commissions & Agency FeesDiesel RebateRecycling Income (non domestic)

Sales - GeneralTown PlanningAdministrationOther Other - Staff FBT ContributionTOTAL OTHER REVENUE

Notes 2015

31

152

16

Actual Actual

26121

2014

31122

64

25

233

-19

13

64

35

44

22

539 28

-

-13

152

41

74

148

30

32

230

6955

148

26



page 31

Walcha Council



$ '000

(e) Grants

General Purpose (Untied)Financial AssistancePensioners' Rates Subsidies - General Component

Total General Purpose

1 The Financial Assistance Grant for the comparative 13/14 year reflects a one off timing difference (reduction). This grant ceased being paid in advance in the 13/14 year by up to 50% as had occurred in previous years.

Specific PurposePensioners' Rates Subsidies: - Water - Sewerage - Domestic Waste ManagementCommunity CareCommunity CentresEmployment & Training ProgramsEnvironmental ProtectionLibrary - per capitaLIRS SubsidyStreet LightingTransport (Roads to Recovery)

Transport (Other Roads & Bridges Funding)

PreschoolHACCHousing and CommumityStormwaterWastePublic ArtCemeterySwimming PoolTotal Specific PurposeTotal Grants

Grant Revenue is attributable to:- Commonwealth Funding- State Funding- Other Funding

29

(587)

-

253

20

--

253

59

-

-

253

--

-

127

253

24

-

-

127127

-

68

44

587

-

-

-

-

165

- -

-

-

24

Capital

--

41

-

-

Operating 2015

11

1,873

14

21

99

2,260

--

--

-

9

2014

-

-

Capital

-

2,221

--

587

--

914

--

2014

-

1,288

15

351

2

914 59

-

1

5872,977

1

-

-

-

3

-

-

717 720

1,852

-

13

19

9

2

--

2015Operating

933 --

350

-

-

28

234236

-

1

1,1042,977

408-

8

-

2,221

21-

3

37

5



page 32

Walcha Council



$ '000

(f) Contributions

Developer Contributions:(s93 & s94 - EP&A Act, s64 of the LGA):Nil

Other Contributions:RMS Contributions (Regional Roads, Block Grant)

Other one off contributionsTotal Other ContributionsTotal Contributions

TOTAL GRANTS & CONTRIBUTIONS

$ '000

(g) Restrictions relating to Grants and Contributions

Certain grants & contributions are obtained by Council on conditionthat they be spent in a specified manner:

Unexpended at the Close of the Previous Reporting Period

add: Grants & contributions recognised in the current period but not yet spent:

less: Grants & contributions recognised in a previous reporting period now spent:

Net Increase (Decrease) in Restricted Assets during the Period

Unexpended and held as Restricted Assets

Comprising: - Specific Purpose Unexpended Grants - Developer Contributions

-

150

428

1,181

305 455

(705)

150

Actual

476

175

(4,084)

476

476

175

Capital 2014

-

Capital 2015

150

175

3,379

(3,914)

326

3,371

2015Operating

2014

277

(150)

21

-

Actual

836

1,150

2014Operating

3,764

314

1,150

3,681

704704

704

326

2015

21



page 33

Walcha Council


Note 4. Expenses from Continuing Operations

$ '000

(a) Employee Benefits & On-Costs

Salaries and WagesEmployee Leave Entitlements (ELE)

Superannuation - Defined Contribution Plans

Superannuation - Defined Benefit Plans

Workers' Compensation InsuranceFringe Benefit Tax (FBT)

Training Costs (other than Salaries & Wages)

OtherTotal Employee Costsless: Capitalised CostsTOTAL EMPLOYEE COSTS EXPENSED

Number of "Equivalent Full Time" Employees at year end

(b) Borrowing Costs

(i) Interest Bearing Liability CostsInterest on LoansTotal Interest Bearing Liability Costs Expensed

(ii) Other Borrowing CostsDiscount adjustments relating to movements in Provisions (other than ELE)

- Remediation LiabilitiesTotal Other Borrowing CostsTOTAL BORROWING COSTS EXPENSED

621

33-

24

(508)4,799

2014

313

3,487

37

259

41

47

276

4,291

Actual

5,364

41

4,822(542)

Notes

68

46

24

77

74

-

33

Actual

5733

3,625

2015

81225

71

67

63

926

9

26 33



page 34

Walcha Council


Note 4. Expenses from Continuing Operations (continued)

$ '000

(c) Materials & Contracts

Raw Materials & ConsumablesContractor & Consultancy CostsAuditors Remuneration (1)

Legal Expenses: - Legal Expenses: OtherTotal Materials & Contractsless: Capitalised CostsTOTAL MATERIALS & CONTRACTS

1. Auditor Remuneration During the year, the following fees were incurred for services provided by the Council's Auditor (& the Auditors of other Consolidated Entities):

(i) Audit and Other Assurance Services - Audit & review of financial statements: Council's AuditorRemuneration for audit and other assurance servicesTotal Auditor Remuneration

$ '000

(d) Depreciation, Amortisation & Impairment

Plant and EquipmentOffice EquipmentFurniture & FittingsBuildings - SpecialisedOther StructuresInfrastructure: - Roads - Bridges - Footpaths - Stormwater Drainage - Water Supply Network - Sewerage NetworkOther Assets - Heritage Collections - OtherAsset Reinstatement CostsTOTAL DEPRECIATION &IMPAIRMENT COSTS EXPENSED

1

1,379

67

1,328

66

4

203

31

2,383

149

2,622

2,844(2,801)

108

27

38

-

2323

-

3

Actual

31

Notes

477

14920 53

3,574

-

37

2,298

1

206

-

2,680

(5)5,645

2015Actual

4,630

2014

997

23

-

2015

6

-

Actual

48

-

9 & 26

--

-

(1,479)

Actual Notes

23

5

-

-

-

-

- --

-

2014

-

12245

37

49

97

26-

304

-

Depreciation/Amortisation

-

Actual

37

5,053

-

--

Actual Impairment Costs

-

37

-

20142015

--

-



page 35

Walcha Council


Note 4. Expenses from Continuing Operations (continued)

$ '000

(e) Other Expenses

Other Expenses for the year include the following:

Bad & Doubtful DebtsContributions/Levies to Other Levels of Government - Emergency Services Levy (includes FRNSW, SES, and RFS Levies)

- NSW Fire Brigade Levy - NSW Rural Fire Service Levy - Library - SundryCouncillor Expenses - Mayoral FeeCouncillor Expenses - Councillors' FeesCouncillors' Expenses (incl. Mayor) - Other (excluding fees above)

Electricity & HeatingInsuranceStreet LightingTelephone & CommunicationsNoxious WeedsRates & ChargesTOTAL OTHER EXPENSES

Note 5. Gains or Losses from the Disposal of Assets

Plant & EquipmentProceeds from Disposal - Plant & Equipmentless: Carrying Amount of P&E Assets Sold / Written OffNet Gain/(Loss) on Disposal

Financial Assets*Proceeds from Disposal / Redemptions / Maturities - Financial Assetsless: Carrying Amount of Financial Assets Sold / Redeemed / MaturedNet Gain/(Loss) on Disposal

NET GAIN/(LOSS) ON DISPOSAL OF ASSETS

* Financial Assets disposals / redemptions include:- Net Gain/(Loss) from Financial Instruments "At Fair Value through profit & loss"Net Gain/(Loss) on Disposal of Financial Instruments

15

36

15

13

-6

146

82

213

82

Actual 2014

18

41

60

2

14270

1,166

-

60

(17)

92(10)82

Actual

500

(163)

65

185 82

68

25553

163

185

2015Actual

Notes

134

1813

119

1

67

151

83

4

1,040

60

25

(22)

59

(47)

Actual

276

72

185(315)



page 36

Walcha Council


Note 6a. - Cash Assets and Note 6b. - Investments

$ '000

Cash & Cash Equivalents (Note 6a)Cash on Hand and at BankCash-Equivalent Assets 1

- Short Term DepositsTotal Cash & Cash Equivalents

Investments (Note 6b)- NCD's, FRN's (with Maturities > 3 months)

Total InvestmentsTOTAL CASH ASSETS, CASHEQUIVALENTS & INVESTMENTS

1 Those Investments where time to maturity (from date of purchase) is < 3 mths.

Cash, Cash Equivalents & Investments wereclassified at year end in accordance withAASB 139 as follows:

Cash & Cash Equivalentsa. "At Fair Value through the Profit & Loss"

Investmentsa. "At Fair Value through the Profit & Loss"- "Designated at Fair Value on Initial Recognition"Investments

Note 6(b-i)Reconciliation of Investments classified as"At Fair Value through the Profit & Loss"Balance at the Beginning of the YearDisposals (sales & redemptions)

Balance at End of Year

Comprising:- NCD's, FRN's (with Maturities > 3 months)- CDO's

Total

Refer to Note 27 - Fair Value Measurement for information regarding the fair value of investments held.

-

-

-

Actual

-

-

-

-

-

22-

-

-

327

-

327

-

327 -

2014

-

327

2,964

-

-

2014

305

-

3,291

337-

-

2015

-

12

12

12

5,532

12

126(b-i)

12

327(315)

-12-

(10)

Actual

5,544

-

2,964

-

327

-

-

-

5,532

Non Current Non Current

-

2,964

-

2,840

327

Notes

2015Actual

Current Actual

2,692

Current

-

-



page 37

Walcha Council


Note 6c. Restricted Cash, Cash Equivalents & 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 - Included in LiabilitiesNil

External Restrictions - OtherDeveloper Contributions - General (D)Specific Purpose Unexpended Grants (F)Water Supplies (G)Sewerage Services (G)External Restrictions - OtherTotal External Restrictions

Internal RestrictionsPlant & Vehicle ReplacementInfrastructure ReplacementEmployees Leave EntitlementPreschoolTip site remediationQuarries remediationMirani Bus CommitteeCommunity Recycling CentreTotal Internal Restrictions

TOTAL RESTRICTIONS

D Development contributions which are not yet expended for the provision of services and amenities in accordancewith contributions plans (refer Note 17).

F Grants which are not yet expended for the purposes for which the grants were obtained. (refer Note 1) G Water, Sewerage, Domestic Waste Management (DWM) & other Special Rates/Levies/Charges are externally

restricted assets and must be applied for the purposes for which they were raised.

2015 Closing Transfers from

-1,500

3,291

-

424

Opening

2015

-

Restrictions

742

Current

Balance

-

Non Current

2014Actual

309305

2014

(152)

1,938

- 21

-

-- 22

Non Current Actual

38324

7-

103457

(303)(303)

1,303

292 490(87)

1,938

2,107

5,544

2,125

1,938

2015

Current

456

116

-

-

-

Restrictions

324

-

457

Balance

21

-

-103

22

5,544

Actual

-

--

Transfers to

845

285

-

-

2,125

(151)

-

116

1,187

742

58

-461

-

-

116

2,125

2,867

38

7

-

3,437

(87) 1,500

961 (391)

-

-

58

3,291

Actual



page 38

Walcha Council


Note 7. Receivables

$ '000

PurposeRates & Annual ChargesInterest & Extra ChargesUser Charges & FeesAccrued Revenues - Other Income AccrualsDeferred DebtorsNet GST ReceivableGeneral DebtorsOther DebtorsTotal

less: Provision for ImpairmentOther DebtorsTotal Provision for Impairment - Receivables

TOTAL NET RECEIVABLES

Externally Restricted ReceivablesWater Supply - Rates & Availability Charges - OtherSewerage Services - Rates & Availability Charges- OtherTotal External RestrictionsInternally Restricted ReceivablesNilUnrestricted ReceivablesTOTAL NET RECEIVABLES

Notes on Debtors above:(i) Rates & Annual Charges Outstanding are secured against the property.

(ii) Doubtful Rates Debtors are provided for where the value of the property is less than the debt outstanding. An allowance for other doubtful debts is made when there is objective evidence that a receivable is impaired.

(iii) Interest was charged on overdue rates & charges at 8.50% (2014 9.00%).Generally all other receivables are non interest bearing.

(iv) Please refer to Note 15 for issues concerning Credit Risk and Fair Value disclosures.

Current

-

-

70

2,014

57

(2)

2,0281,944

1,246

1

(2)

5

--

24

-

32

464

4

-

2,014

160 -

1,139

-

2,016

--

- 10

Notes2015

637

-

--

34

30

-

-

19--

-

-

-

548

-

2,092

8

64 -

2,092

-

-

-

-

2014

-

--15

403

Current

-

-

-

-

-

--

-

Non Current

-

2,092

- -

-

Non Current

-

-



page 39

Walcha Council


Note 8. Inventories & Other Assets

$ '000

InventoriesReal Estate for resale(refer below)

Stores & MaterialsTrading StockTotal Inventories

Other AssetsNil

TOTAL INVENTORIES / OTHER ASSETS

Externally Restricted Assets

There are no restrictions applicable to the above assets.

Other Disclosures

(a) Details for Real Estate DevelopmentResidentialTotal Real Estate for Resale(Valued at the lower of cost and net realisable value)

Represented by:Acquisition CostsTotal CostsTotal Real Estate for Resale

Movements:Real Estate assets at beginning of the yearTotal Real Estate for Resale

(b) Inventory Write DownsThere were no amounts recognised as an expense relating to the write down of Inventory balances held during the year.

Refer to Note 27 - Fair Value Measurement for information regarding the fair value of other assets held.

20

-

--

20

-

757

20

Notes Current

-

-2020

-

20-20

-

20

757

161

- 20

--

20

-

-

20

- 20

-

20

20

20

- 20

2014

149

20

Current

20616

-

20

467

-

Non Current Non Current

-

20

2015

596616


30 June 2015

ure, Property, Plant & Equipment

At At Carrying At At

Cost Fair Value Dep'n Impairment Value Cost Fair Value D

- - - - - 541 - - - - - - - 541- 5,721 2,929 - 2,792 78 (38) (304) - - - - - 5,732- 109 107 - 2 13 - (4) - - - - - 122- 115 70 - 45 - - (5) (9) - - - - 95

- 2,268 - - 2,268 - - - - - - - - 2,268- 1,397 - - 1,397 - - - - - - - - 1,397- 8,523 5,215 - 3,308 1 (9) (49) - - - 3 - 8,501- 2,110 796 - 1,314 - - (31) - - - - - 2,109

- 156,343 26,646 - 129,697 1,244 - (1,379) 190 - - - - 157,808 2- 34,961 2,515 - 32,446 310 - (149) - - - - - 35,271

d Assets - 5,283 1,725 - 3,558 27 - (20) 191 - - - - 5,494preciable) - 210,622 - - 210,622 - - - - - - - - 210,622

- 12,903 3,049 - 9,854 - - (97) (378) 1,226 - (1,186) - 11,315- 17,124 1,751 - 15,373 15 - (206) - - - 228 - 17,397- 5,157 990 - 4,167 8 - (67) - - - 61 - 5,243

- 126 44 - 82 - - (1) - - - - - 126- 1,239 604 - 635 80 - (26) 6 - - - - 1,335

n & Restoration

- 246 89 - 157 - - (22) - - (25) - - 222- 800 653 - 147 - - (23) - 153 (198) - - 601

TURE,EQUIP.

ure Assets are made up of Asset Renewals ($1,565,898) and New Assets ($39,127).cement of existing assets (as opposed to the acquisition of new assets).

surement for information regarding the fair value of other Infrastructure, Property, Plant & Equipment.

as at

Asset Additions

WDVof Asset

Disposals

Depreciation Expense

Revaluation Incrementsto Equity (ARR)

Adjust prior year over

depreciation

- 465,047 47,183 - 417,864

as at 30/6/2014Asset Movements during the Reporting Period

AccumulatedAdjustments& Transfers

Unwind Tips & Quarries

2,317 (47) (2,383) (0) (223)1,379 (895) - 466,199



page 41

Walcha Council


Note 9b. Externally Restricted Infrastructure, Property, Plant & Equipment

Note 9c. Infrastructure, Property, Plant & Equipment - Current Year Impairments

Council has recognised no impairment losses during the reporting period nor reversed any prior period losses.

30 -

Actual

29,863

2014

Actual

1,751

990 4,1675,157

1,868

Actual

5,203 35,804 5,941-

-- -

- 3,049

3,049 12,904

4,339994

158

-

4 14

15,66917,537

-

-

30 30

A/Dep & Carrying ValueCost

At

157

127

Carrying Value

At

31255

- 3131

Impairm'tFair Value

- - 117 138

127-

17,124 15,373-

-

17,472

-

-

Impairm'tFair Value

127 -

302

-

145

31

15,800

127

17,933 2,132 - - 15,485

5

1,987

18

30 -

-

-

-

158

-

-

13-

18

158

1,073

-

5,420

-

4,341

-

-

6

30

124

1,079

-

5,333

- 139

9,855

-

12,904 9,419

30

-

9,855

-29,764

$ '000

Total Sewerage Services

Class of Asset

Water Supply

Infrastructure

- Operational Land

Land

- Operational Land

-

Total Water Supply

-

Buildings - Community Land

Sewerage Services

Other Structures -

5,244 Infrastructure

Plant & Equipment

4,170

Land

Domestic Waste Management

Buildings

Buildings158

Actual

At A/Dep &At2015

Cost

--

TOTAL RESTRICTED I,PP&E

1,896

299

11,315

203

34,966

11,315 1,896

- Total Other Restrictions - 9,419

Total DWM

Stormwater Drainage

145

60 64

- 96

-

Other Restricted Assets

-



page 42

Walcha Council


Note 10a. Payables, Borrowings & Provisions

$ '000

PayablesGoods & Services - operating expenditurePayments Received In AdvanceAccrued Expenses: - Borrowings - Other Expenditure AccrualsATO - Net GST PayableOtherTotal Payables

BorrowingsBank OverdraftLoans - Secured 1

Total Borrowings

ProvisionsEmployee Benefits;Annual LeaveLong Service LeaveTime in LieuRostered Day OffSub Total - Aggregate Employee BenefitsAsset Remediation/Restoration (Future Works)

Total Provisions

Total Payables, Borrowings & Provisions

(i) Liabilities relating to Restricted Assets

Externally Restricted AssetsSewerLiabilities relating to externally restricted assets

Internally Restricted AssetsNil

Total Liabilities relating to restricted assetsTotal Liabilities relating to Unrestricted AssetsTOTAL PAYABLES, BORROWINGS & PROVISIONS

1. Loans are secured over the General Rating Income of Council Disclosures on Liability Interest Rate Risk Exposures, Fair Value Disclosures & Security can be found in Note 15.

1,8431,845

-

2,442

-

4

1,165

Non Current

178

2

-

662

18

-

Current

1,6532

2015

-

3,409

Current

1,653

--

-

1,653

78

Non Current

-

--

976

11761

4

- 6 -

40-

1 2

3,410

1

1

42,438

2014

2,442 1,845

1,5761,054

3

407

1,744

1,183

1,141

599599

-

63

-

52

-

Non Current

1,60326

662

-406

-

18-

78

-688

1,576 1,603

56

58

2014

-

3,410

-280

-

Notes Non Current Current

-

-

188

-

57

-

-

-

-

--

1,442 305

63

1,170

2015Current



page 43

Walcha Council


Note 10a. Payables, Borrowings & Provisions (continued)

$ '000

(ii) Current Liabilities not anticipated to be settled within the next 12 months

The following Liabilities, even though classified as current, are not expectedto be settled in the next 12 months.

Provisions - Employees Benefits

Note 10b. Description of and movements in Provisions

a. Employees Leave Entitlements & On-Costs represents those benefits accrued and payable and an estimate of thosethat will become payable in the future as a result of past service.

b. Asset Remediation, Reinstatement & Restoration Provisions represent the Present Value estimate of future costs Council will incur in order to remove, restore & remediate assets &/or activities as a result of past operations.

(343)

Additional Provisions

Actual

55

Unused amounts reversed

2015

407-

ClosingBalance

as at 30/6/15

-

Remeasurement effects due to

Discounting

-(223) -

2,657(237)

-

956

-

975

Actual

TOTAL1,165

Rostered Day Off-34

98 (43)

2,759 732

Class of Provision Decrease due to Payments

266

OpeningBalance

as at 1/7/14

(24)

975

-Asset Remediation

(211)

(597)

10

976

2015

956

Long Service Leave406 334

1,188

2014

Annual Leave

2014

1,219



page 44

Walcha Council


Note 11. Statement of Cash Flows - Additional Information

$ '000

(a) Reconciliation of Cash Assets

Total Cash & Cash Equivalent AssetsLess Bank OverdraftBALANCE 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 & AmortisationNet Losses/(Gains) on Disposal of AssetsPrior year over depreciationUnwinding of Discount Rates on Reinstatement Provisions

+/- Movement in Operating Assets and Liabilities & Other Cash Items:Decrease/(Increase) in ReceivablesIncrease/(Decrease) in Provision for Doubtful DebtsDecrease/(Increase) in InventoriesIncrease/(Decrease) in PayablesIncrease/(Decrease) in accrued Interest PayableIncrease/(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

(c) Non-Cash Investing & Financing ActivitiesNil

(d) Financing Arrangements

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

Bank Overdraft Facilities (1)

Credit Cards / Purchase CardsTotal Financing Arrangements

Amounts utilised as at Balance Date:- Bank Overdraft FacilitiesTotal Financing Arrangements Utilised

1. The Bank overdraft facility may be drawn at any time and may be terminated by the bank without notice. Interest rates on overdrafts are Interest Rates on Loans & Other Payables are disclosed in Note 15.

(ii) Secured Loan LiabilitiesLoans are secured by a mortgage over future years Rate Revenue only.

(6)

30

(65)

13

(18)

30

2,343

59

2

-1,379

87

(141)

21(104)

(12)

Actual

5,532(117)

2,964

2,847

2,383

Actual

(163)

1,205

-

Notes

4

(282)

2014

2,622

--

66

37

5,685

(222)

(226)

147

5,532

6a10

2015

200200

117

4728

1,137

230

117

23030



page 45

Walcha Council


Note 12. Commitments for Expenditure

$ '000

(a) Capital Commitments (exclusive of GST)

Capital expenditure committed for at the reporting date but notrecognised in the financial statements as liabilities:

Property, Plant & EquipmentBuildingsOther StructuresRoadsWater ServicesTotal Commitments

These expenditures are payable as follows:Within the next yearLater than one year and not later than 5 yearsLater than 5 yearsTotal Payable

Sources for Funding of Capital Commitments:Unrestricted General FundsFuture Grants & ContributionsExternally Restricted ReservesInternally Restricted ReservesInsurance ReimbursementTotal Sources of Funding

(b) Finance Lease Commitments

Nil

(c) Operating Lease Commitments (Non Cancellable)

Nil

(d) Investment Property Commitments

Nil

44

2015Actual

51426

-

Notes

-

-

-

-

-

-

790

206

44

-

-

-790

-

-

Actual

-

-

-

148

-

270290

790

790

38 -

2014



page 46

Walcha Council


Note 13a(i). Statement of Performance Measurement - Indicators (Consolidated)

$ '000

Local Government Industry Indicators - Consolidated

1. Operating Performance RatioTotal continuing operating revenue (1)

(excl. Capital Grants & Contributions) - Operating ExpensesTotal continuing operating revenue (1)

(excl. Capital Grants & Contributions)

2. Own Source Operating Revenue RatioTotal continuing operating revenue (1)

(excl. ALL Grants & Contributions)

Total 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 (from the Statement of Cash Flows)

+ Borrowing Costs (from the Income Statement)

5. Rates, Annual Charges, Interest & 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+ All Term DepositsPayments from cash flow of operating andfinancing 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 & associates.

(2) Refer Notes 6-8 inclusive.Also excludes any real estate & land for resale not expected to be sold in the next 12 months

(3) Refer to Note 10(a).(4) Refer to Note 10(a)(ii) - excludes all payables & provisions not expected to be paid in the next 12 months (incl. ELE).

4,550

2.782,434

780 5,532

23.87x

8,977

-27.58%

69.40%

4.33%

4.13

Indicator

9.69%

26.72

6.04%

2015

2.57

x12

12,935

3,222 135

6,307

-4.82%

3.80

65.81%

2015

25.57

765

Amounts

7.10 mths

7.68%

12,658

197

2.59x

2013

65.16%

2014Prior Periods



page 47

Walcha Council


Note 13a(ii). Local Government Industry Indicators - Graphs (Consolidated)

Benchmark: Minimum >=0.00% Ratio is within BenchmarkSource for Benchmark: Code of Accounting Practice and Financial Reporting #23 Ratio is outside Benchmark

Benchmark: Minimum >=60.00% Ratio is within BenchmarkSource for Benchmark: Code of Accounting Practice and Financial Reporting #23 Ratio is outside Benchmark

Benchmark: Minimum >=1.50 Ratio is within BenchmarkSource for Benchmark: Code of Accounting Practice and Financial Reporting #23 Ratio is outside Benchmark

Commentary on 2014/15 Result

Purpose of Unrestricted Current

Ratio

This ratio measures Council’s

achievement of containing operating expenditure within operating revenue.

This ratio measures fiscal flexibility. It is

the degree of reliance on external funding

sources such as operating grants &

contributions.


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

the unrestricted activities of Council.

Commentary on 2014/15 ResultPurpose of Own

Source Operating Revenue Ratio

Unrestricted ratio is holding steady and exceeds the minimum benchmark of 1.5.

Council has achieved a positive result that exceeds the minimum benchmark. This is a

result of lower depreciation.

2014/15 Ratio 69.40%

Council's own source revenue continues to exceed the minimum benchmark of 60%.

2014/15 Ratio 2.59x

Purpose of Operating

Performance Ratio 2014/15 Ratio 6.04%6.04%

-28.60% -27.58%

-4.82%

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

2012 2013 2014 2015

Rat

io %

1. Operating Performance Ratio

65.81% 65.16% 69.40%59.00%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015

Rat

io %

2. Own Source Operating Revenue Ratio

3.06 2.78 2.57 2.59

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2012 2013 2014 2015

Rat

io (

x)

3. Unrestricted Current Ratio



page 48

Walcha Council


Note 13a(ii). Local Government Industry Indicators - Graphs (Consolidated)


Benchmark: Maximum <10.00% Ratio is within BenchmarkSource for Benchmark: Code of Accounting Practice and Financial Reporting #23 Ratio is outside Benchmark


Purpose of Cash Expense Cover

Ratio


2014/15 Ratio 7.10 mths

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

for its immediate expenses without

additional cash inflow.

Outstanding rates has dropped to a very low 4.33%. This is due to 8 assessments that were outstanding in excess of 4 years

having now been settled.

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

recovery efforts.

2014/15 Ratio 23.87x

2014/15 Ratio 4.33%

Purpose of Rates & Annual Charges

Outstanding Ratio


Cash expense cover ratio exceeds the minimum benchmark of 3.0 and indicates

that Council has sufficient cash on hand to meet its operating expenses for 7 months.

This ratio measures the availability of operating cash to

service debt including interest, principal and

lease payments

Roads to Recovery funding is now included in operating income, in prior years this was

capital. The ratio for 2013/14 was previously reported to be 18.67, but

recalculating the operating income results in 25.57 for 2013/14 and 23.87 for the current financial year. Counciil is well

placed to increase borrowings in the future to fund infrastructure renewal.


Purpose of Debt Service Cover Ratio

24.26 26.72 25.57 23.87

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2012 2013 2014 2015

Rat

io (

x)

4. Debt Service Cover Ratio

5.80%7.68%

9.69%

4.33%

0%

2%

4%

6%

8%

10%

12%

2012 2013 2014 2015

Rat

io %

5. Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage

4.08 3.80 4.13

7.10

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2012 2013 2014 2015

Rat

io (

mth

s)

6. Cash Expense Cover Ratio



page 49

Walcha Council


Note 13b. Statement of Performance Measurement - Indicators (by Fund)

$ '000

Local Government Industry Indicators - by Fund

1. Operating Performance RatioTotal continuing operating revenue (1)

(excl. Capital Grants & Contributions) - Operating ExpensesTotal continuing operating revenue (1)

(excl. Capital Grants & Contributions)

2. Own Source Operating Revenue RatioTotal continuing operating revenue (1)

(excl. ALL Grants & Contributions)

Total 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 (from the Statement of Cash Flows)

+ Borrowing Costs (from the Income Statement)

5. Rates, Annual Charges, Interest & 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+ All Term DepositsPayments from cash flow of operating andfinancing activities

Notes

(1) - (4) Refer to Notes at Note 13a(i) above.(5) General Fund refers to all of Council's activities except for its Water & Sewer activities which are listed separately.

Sewer

98.48%

5.84 mths

42.14

97.85%

0.00

9.92%

2.57

3.29%

53.92 mths

5.58 mths

10.14%

0.00

16.27%

9.34%16.18%

2015

2.59x

8.18%

23.21x

General 5

14.56%

1338.00x

609.50

prior period: -19.79% 18.55%

x12

prior period: 1.96

prior period:

prior period: 78.00

-41.99%

2015

24.08

66.95%

prior period: 98.63% 97.83% 61.54%

-4.81%

No Liabilities

2015

No Liabilities

0.00

Water

9.49

prior period:



page 50

Walcha Council


Note 14. Investment Properties

$ '000

Council has not classified any Land or Buildings as "Investment Properties"

Note 15. Financial Risk Management

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 & FinancialLiabilities recognised in the financial statements is presented below.

Financial AssetsCash and Cash EquivalentsInvestments - "Designated At Fair Value on Initial Recognition"ReceivablesTotal Financial Assets

Financial LiabilitiesBank OverdraftPayablesLoans / AdvancesTotal Financial Liabilities

Fair Value is determined as follows:

- Cash & Cash Equivalents, Receivables, Payables - are estimated to be the carrying value which approximates mkt value.

- Borrowings & Held to Maturity Investments - are based upon estimated future cash flows discounted by the current market interest rates applicable to assets & liabilities with similar risk profiles, unless quoted market prices are available.

- Financial Assets classified (i) "at fair value through profit & loss" or (ii) Available for Sale - are based upon quoted market prices (in active markets for identical investments) at the reporting date or independent valuation.

Refer to Note 27 - Fair Value Measurement for information regarding the fair value of financial assets & liabilities

2,0927,558

327

117

1,528

20152015

1,688662

5,532

2014

32712 122,014

2015

723

117 -

7,558

2,964

Fair Value Carrying Value 2014

2,964

2,092

2014Actual

5,532

2,350 1,488

648662

-

2,350

6481,688763

5,3835,3832,014

Actual Notes



page 51

Walcha Council


Note 15. Financial Risk Management (continued)

$ '000

(a) Cash & Cash Equivalents, Financial assets 'at fair value through the profit & Loss' "Available-for-sale" financial assets & "Held-to-maturity" Investments

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

Council's Finance area manages the Cash & Investments portfolio with the assistance of independent advisors.

Council has an Investment Policy which complies with the Local Government Act & Minister's Investment Order.This Policy is regularly reviewed by Council and it's staff and an Investment Report is tabled before Council ona monthly basis setting out the portfolio breakup and its performance.

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 &Investments.

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.

2015Possible impact of a 10% movement in Market ValuesPossible impact of a 1% movement in Interest Rates

2014Possible impact of a 10% movement in Market ValuesPossible impact of a 1% movement in Interest Rates 32

(33)(33)

Decrease of Values/Rates

(32)

(29) (29)1

33

(1)

Increase of Values/Rates

3332 (32)

Profit Equity 1

29 29(1)

Profit Equity



page 52

Walcha Council



$ '000

(b) Receivables

Council's major receivables comprise (i) Rates & Annual charges and (ii) User Charges & 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 & 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 & Annual Charges Other ReceivablesCurrent Current< 1 year overdue 0 - 30 days overdue1 - 2 years overdue 30 - 60 days overdue2 - 5 years overdue 60 - 90 days overdue> 5 years overdue > 90 days overdue

(iii) Movement in Provision for Impairment of ReceivablesBalance at the beginning of the year+ new provisions recognised during the yearBalance at the end of the year

39

100%

83

100%

1,636

222

-2

2014

45% 96%

2015Rates &

1,856

59

2014

2015

(1)

18

Annual

4%

2

102

20

-

2015

52%

1,689

Rates &

-

55%

Other

48%

-

160

Other

3%

Receivables

97%

181

Annual

-- 2-

77

2014

1,776

2 -(18)

403

100%

Receivables Charges Charges

100%

Rates & Annual Other Annual Other

Charges Receivables Charges Receivables

Rates &



page 53

Walcha Council



$ '000

(c) Payables & Borrowings

Payables & Borrowings are both subject to liquidity risk - the risk that insufficient funds may be on hand to meetpayment 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 & overdraft facilities utilised as required.

The contractual undiscounted cash outflows (ie. principal and interest) of Council's Payables & Borrowings areset out in the maturity table below:

$ '000

Trade/Other PayablesLoans & AdvancesTotal Financial Liabilities

Bank OverdraftTrade/Other PayablesLoans & AdvancesTotal Financial Liabilities

Borrowings are also subject to interest rate risk - the risk that movements in interest rates could adverselyaffect funding costs & debt servicing requirements. Council manages this risk through the diversification ofborrowing types, maturities & interest rate structures.

The following interest rates were applicableto Council's Borrowings at balance date:

Bank OverdraftTrade/Other PayablesLoans & Advances - Fixed Interest Rate

4-5 Yrs1-2 Yrs

-

Outflows

-

- 1,688

CarryingSubject

to no

2014

2015-

309

Cash

0.0%

2015

723

662

1,688

-

65

-

309

117

-

70

2,350

117

66

2,35066

63

1,688 0.0% 0.0%

0.0%

Interest RateInterest RateCarrying

396

- -

AverageValue

648

Values

71

67 71

101

74

1,751

ActualTotal

1,688

-

-

79

-

662

74

-

- -

-

1,488

Average

396

763

648

117648

6622,350

5.9% 723 6.1%

Value

2014Carrying

1,528

-

65

> 5 Yrs

-

1,488

-

117 749

63

- 117

- 648

-

79

70

67

63

3-4 Yrspayable in:

maturity 2-3 Yrs



page 54

Walcha Council


Note 16. Material Budget Variations

$ '000

Council's Original Financial Budget for 14/15 was adopted by the Council on 24 June 2014.

While the Income Statement included in this General Purpose Financial Report must disclose the OriginalBudget adopted by Council, the Local Government Act requires Council to review its Financial Budget on aQuarterly 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 & Annual Charges

User Charges & FeesAdditional funding received from State Roads, $1,946,077 for maintenance works.

Interest & Investment RevenueInvestment interest was $37,611 less than budgeted as a result of lower interest rates than forecast.

Other RevenuesFuel rebate received was $21,737 higher than budget.Staff FBT contributions including vehicle leaseback was $26,379, no amount was budgeted.

Operating Grants & ContributionsRoads to Recovery Funding was budgeted as Capital Grants, however this should be Operating Grants. The amount received was $605,600 which was $14,600 higher than the budget.FAGS amount received was $102,705 more than the budget.Budget income for Community Recycling Centre, $183,260 - $164,934 was received in May 2014 and is included in External Restrictions (note 6c), the balance to be paid when work is complete (2016).

Capital Grants & ContributionsRoads to Recovery budget $591,000 should be Operating Budget.$278,650 RDA Grant was not received as the work on Thunderbolts Way was not complete. This amount will be received in 2016.

Net Gains from Disposal of Assets$500,000 was received for Longreach Global Capital for a Property Note that had been written down to $315,400 in2012. The difference of $184,600 is reported as a gain on the disposal of investments.

173

F

F

123 306%

401

U

57

U926

40

3,280

163

(70%)277

3,681

33%

(649)

75%

230

4,114

2,570 4,493

Actual

(0%)

F

2015---------- Variance* ----------

(8)

2015

U

F

(27) (15%)

12%

1,923

148

4,106

175

2015Budget



page 55

Walcha Council


Note 16. Material Budget Variations (continued)

$ '000

EXPENSESEmployee Benefits & On-Costs

Borrowing Costs$33,047 amount for Unwinding of PV discounts on Tips & Quarries remediation was not included in the budget.

Materials & ContractsTransfer of capital costs, -$2,020,730 not included in the budget. This reduces the Materials & Contracts budget to

Depreciation & AmortisationThe Depreciation budget was set on the prior years incorrect depreciation rates for roads & bridges.

Other Expenses

Budget Variations relating to Council's Cash Flow Statement include:

Cash Flows from Operating ActivitiesContract fees for State Maintenance was $1,946,077 higher than forecast. Outstanding rates were collected from sale of properties. In addition, materials and contracts was lower than the budgeted amount.

Cash Flows from Investing Activities

Cash Flows from Financing Activities 1.4%

69.6%

(61)

(1,733) (1,206)

(2)

1,548 5,685

U(60)

U(2,939)

(1)

4,137 F267.2%

(0%)

36%5,603

Budget

4,783

2015

3,574

4,197 F2,383

F

1,038 U

(91%)

1,040

2,029

(39)4,822

Actual

39

2015

U

43%1,814

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

(1%)

(35) U74

2015

$3,582,638



Page 56

Walcha Council


Note 17. Statement of Developer Contributions

$ '000

Council recovers contributions, raises levies & enters into planning agreements on development works that are subject to a development consent issued by Council.All contributions must be spent/utilised for the specific purpose they were levied and any interest applicable to unspent funds must be attributed to remaining funds.

The following tables detail the receipt, interest and use of the above contributions & levies and the value of all remaining funds which are "restricted" in their future use.

SUMMARY OF CONTRIBUTIONS & LEVIES

Roads

S94 CONTRIBUTIONS - UNDER A PLAN

CONTRIBUTION PLAN NUMBER 1

Roads

PURPOSE OpeningBalance

-Non Cash Year

--

Contributionsreceived during the Year

Interest

21

earned

Cash

21

-21

21 -

--

Borrowing

in Year

-- 21-

--

-

-

Restricted

-

Held asInternalExpenditureearned

Internal

during Restricted(to)/from

Interest

in Year

-

AssetBorrowing

Total S94 Revenue Under Plans

Cash

-

S94 Contributions - under a Plan -

Total -

duringExpenditure

Year

Contributions

Total Contributions

PURPOSENon Cash

--

-

21

Opening

-

-

-21-

received during the YearBalance

-

(to)/from

-

- 21 -

still

-21 -

income

-

Over or

21

-

Cumulative

due/(payable)

-

Internal

Asset

outstanding

-

Future

21

-

-

21

Held as Exp

(under)Funding

21

- 21 21

Funding

CumulativeProjections

- - 21

due/(payable)

InternalOver or

Borrowings(under)

21

outstanding

Projections

-

Exp

Futureincome

-

Borrowings

still

-

-

-



page 57

Walcha Council


Note 18. Contingencies & Other Assets/Liabilities Not Recognised

$ '000

The following assets and liabilities do not qualify for (ii) Statewide Limitedrecognition in the Statement of Financial Position, buttheir knowledge & disclosure is considered relevant Council is a member of Statewide Mutual, a mutualto the users of Council's Financial Report. pool scheme providing liability insurance to Local

Government.

LIABILITIES NOT RECOGNISED: Membership includes the potential to share in eitherthe net assets or liabilities of the fund depending on

1. Guarantees its past performance. Council’s share of the NetAssets or Liabilities reflects Councils contributions to

(i) Defined Benefit Superannuation the pool and the result of insurance claims within Contribution Plans each of the Fund Years.

Council participates in an employer sponsored The future realisation and finalisation of claimsDefined Benefit Superannuation Scheme, and makes incurred but not reported to 30/6 this year may resultcontributions as determined by the Superannuation in future liabilities or benefits as a result of pastScheme's Trustees. events that Council will be required to fund or share

in respectively.Member Councils bear responsibility of ensuring thereare sufficient funds available to pay out the required (iii) StateCover Limitedbenefits as they fall due.

Council is a member of StateCover Mutual LimitedThe Schemes most recent full actuarial review and holds a partly paid share in the entity.indicated that the Net Assets of the Scheme werenot sufficient to meet the accrued benefits of the StateCover is a company providing workersSchemes Defined Benefit member category with compensation insurance cover to the NSW Localmember Councils required to make significantly Government Industry and specifically Council.higher contributions in future years.

Council has a contingent liability to contribute furtherThe Local Government Superannuation Scheme equity in the event of the erosion of the Company'showever is unable to provide Council with an accurate capital base as a result of the company's pastestimate of its share of the net deficit and accordingly performance and/or claims experience or as a resultCouncil has not recorded any net liability from it's of any increased prudential requirements from APRA.Defined Benefit Scheme obligations in accordancewith AASB 119. These future equity contributions would be required

to maintain the company’s minimum level of NetFuture contributions made to the defined benefit Assets in accordance with its Licence Requirements.scheme to rectify the net deficit position will berecognised as an expense when they become (iv) Other Guaranteespayable - similar to the accounting for DefinedContributions Plans. Council has provided no other Guarantees other than

those listed above.



page 58

Walcha Council


Note 18. Contingencies & Other Assets/Liabilities Not Recognised (continued)

$ '000

LIABILITIES NOT RECOGNISED (continued): ASSETS NOT RECOGNISED:

2. Other Liabilities (i) Land Under Roads

(i) Third Party Claims As permitted under AASB 1051, Council has electednot to bring to account Land Under Roads that it

The Council is involved from time to time in various owned or controlled up to & including 30/6/08.claims incidental to the ordinary course of businessincluding claims for damages relating to its services.

Council believes that it is appropriately coveredfor all claims through its Insurance Coverage anddoes not expect any material liabilities to eventuate.

(ii) S94 Plans

Council levies Section 94/94A Contributions uponvarious development across the Council area throughthe required Contributions Plans.

As part of these Plans, Council has received fundsfor which it will be required to expend the monies inaccordance with those Plans.

As well, these Plans indicate proposed futureexpenditure to be undertaken by Council, which willbe funded by making levies and receipting funds infuture years or where a shortfall exists by the use ofCouncil's General Funds.

These future expenses do not yet qualify as liabilitiesas of the Reporting Date, but represent Councilsintention to spend funds in the manner and timingset out in those Plans.



page 59

Walcha Council


Note 19. Interests in Other Entities

$ '000

Council's objectives can and in some cases are best met through the use of separate entities & operations.

These operations and entities range from 100% ownership and control through to lower levels of ownershipand control via co-operative arrangements with other Councils, Bodies and other Outside Organisations.

The accounting and reporting for these various entities, operations and arrangements varies in accordancewith accounting standards, depending on the level of Councils (i) interest and (ii) control and the type (form) ofentity/operation, as follows;

Controlled Entities (Subsidiaries) Note 19(a)Operational arrangements where Council's control (but not necessarily interest) exceeds 50%.

Joint Ventures & Associates Note 19(b)Joint Ventures are operational arrangements where the parties that have joint control haverights to the net assets of the arrangement.Associates are separate entities where Council has significant influence over the operations(but neither controls nor jointly controls them).

Joint Operations Note 19(c)Operational arrangements where the parties that have joint control have rights to specificassets and obligations for specific liabilities relating to the arrangement rather than a rightto the net assets of the arrangement.

Unconsolidated Structured Entities Note 19(d)Unconsolidated Structured Entities represent “special vehicles” that Council has an interestin but which are not controlled by Council and therefore not consolidated as a Subsidiary,Joint Arrangement or Associate. Attributes of Structured Entities include restricted activities,a narrow and well-defined objective and insufficient equity to finance its activities withoutfinancial support.

Subsidiaries, Joint Arrangements and Associates not recognised Note 19(e)

(a) Controlled Entities (Subsidiaries) - being entities & operations controlled by Council

Council has no interest in any Controlled Entities (Subsidiaries).

(b) Joint Ventures and Associates

Council has no interest in any Joint Ventures or Associates.

(c) Joint Operations

Council has no interest in any Joint Operations.

(d) Unconsolidated Structured Entities

Council has no Unconsolidated Structured Entities



page 60

Walcha Council


Note 19. Interests in Other Entities (continued)

$ '000

(e) Subsidiaries, Joint Arrangements & Associates not recognised

The following Subsidiaries, Joint Arrangements & Associates have not been recognised in this Financial Report.

Name of Entity/Operation Principal Activity/Type of Entity

New England Weeds Authority Control of noxious weedsthroughout the New England Region

Reasons for non recognitionWalcha contributed $72,099 to NEWA's operations in 2015, along with Uralla & Guyra Shires. Armidale Dumaresq contributed $108,614. NEWA is an autonomous organisation with its board of directors made up of councillors from each constituent council. Walch exercises no direct control over the Authority.

Central Northern Regional Libraries Provides library services to Tamworth,Narrabri, Liverpool Plains, Urallaand Walcha Councils.

Reasons for non recognitionWalcha contributed $54,705 to CNRL in 2015. CNRL is managed by Tamworth Regional Council and WalchaCouncil has no control over the organisation.

Statewide Limited Provides insurance cover to LocalGovernment

Reasons for non recognitionCouncil is a member but has no control over the organisation, although Walcha Council is represented on the board by its General Manager.

StateCover Limited Provides Workers Compensationto Local Government

Reasons for non recognitionCouncil is a member of StateCover and has no control over the organisation.

Namoi Councils Joint Organisation

Reasons for non recognitionWalcha paid a membership of $5000 in 2015 and is one of 8 member and 1 associate councils. Walcha has nocontrol and no financial investment.

NA NA

NA NA

NA NA

NA

2015Net Assets

NA

2015

NA NA

Net Profit



page 61

Walcha Council


Note 20. Equity - Retained Earnings and Revaluation Reserves

$ '000

(a) Retained Earnings

Movements in Retained Earnings were as follows:Balance at beginning of Year (from previous years audited accounts)

a. Correction of Prior Period Errorsb. Net Operating Result for the YearBalance at End of the Reporting Period

(b) Reserves

(i) Reserves are represented by:

- Infrastructure, Property, Plant & Equipment Revaluation ReserveTotal

(ii) Reconciliation of movements in Reserves:

Infrastructure, Property, Plant & Equipment Revaluation Reserve- Opening Balance- Revaluations for the year- Balance at End of Year

TOTAL VALUE OF RESERVES

(iii) Nature & Purpose of Reserves

Infrastructure, Property, Plant & Equipment Revaluation Reserve- The Infrastructure, Property, Plant & Equipment Revaluation Reserve is used to record increments/decrements of Non Current Asset values due to their revaluation.

284,198284,198

285,093

134,503

23,309

Actual Actual

285,093

9(a)

20 (c) 1,379

2015

1,205

Notes

(12)

2014

111,206

(895)

137,086

134,503

235,343

285,093

285,093

284,19849,750

285,093284,198



page 62

Walcha Council


Note 20. Equity - Retained Earnings and Revaluation Reserves (continued)

$ '000

(c) Correction of Error/s relating to a Previous Reporting Period

Correction of errors disclosed in this year's financial statements:

A number of quarries had been overdepreciated as at June 2014This resulted in Accumulated Depreciation exceeding the asset value.An adjustment to Accumulated Depreciation was processed againstRetained Earnings in the 2014-15 financial year.This resulted in the following equity adjustment

During the Stormwater Revaluation in 2015 an overstatement in prioryears depreciation was identified and an adjustment was made againstcurrent year IPP&E and retained earnings to correct the error.This resulted in an equity adjustment

In accordance with AASB 108 - Accounting Policies, Changes inAccounting Estimates and Errors, the above Prior Period Errorshave been recognised retrospectively.

These amounted to the following Equity Adjustments:

- Adjustments to Opening Equity - 1/7/13 (relating to adjustments for the 30/6/13 reporting year end and prior periods)

- Adjustments to Closing Equity - 30/6/14 (relating to adjustments for the 30/6/14 year end)

Total Prior Period Adjustments - Prior Period Errors

(d) Voluntary Changes in Accounting Policies

Council made no voluntary changes in any accounting policies during the year.

---

During the revaluation exercise in the 2014 year , an overstatement in prior years depreciation of some assets has been identified and an adjustment has been made against against the current year IPPE and retained earnings to correct these errors , as it was found to be impractical to restate the prior year comparatives.

These amounted to the following equity adjustment:

Asset depreciation overstatement

-

-

--

2015

-

-

-

153

-

Notes

-

23,309

-

-

-

23,309

-

1,226

--

23,309

-

Actual Actual

-

2014

1,379

1,379



page 63

Walcha Council


Note 21. Financial Result & Financial Position by Fund

Income Statement by Fund$ '000

Continuing OperationsIncome from Continuing OperationsRates & Annual ChargesUser Charges & FeesInterest & Investment RevenueOther RevenuesGrants & Contributions provided for Operating PurposesGrants & Contributions provided for Capital PurposesOther IncomeNet Gains from Disposal of AssetsShare of interests in Joint Ventures & Associatesusing the Equity MethodTotal Income from Continuing Operations

Expenses from Continuing OperationsEmployee Benefits & on-costsBorrowing CostsMaterials & ContractsDepreciation & AmortisationImpairmentOther ExpensesTotal Expenses from Continuing OperationsOperating Result from Continuing Operations

Discontinued Operations

Net Profit/(Loss) from Discontinued OperationsNet Operating Result for the Year

Net Operating Result attributable to each Council FundNet Operating Result attributable to Non-controlling Interests

Net Operating Result for the year before Grants and Conand Contributions provided for Capital Purposes

1 General Fund refers to all Council's activities other than Water & Sewer. NB. All amounts disclosed above are Gross - that is, they include internal charges & recoveries made between the Funds.

-

--

1,116

-105

61(249)

10,6931,393

-

-

-

74

842

-

-

-

163

-

230-3,663

Actual

General1Sewer

208

4,052

2015

296

2015

Water

4,438

419

2,107292

1635861(249)

(249) 1,393

-(249) 61

-

919

277

147

3,155

12,086

-

-

-

68

-

-

61

Actual

99

237

35

-

-

-

1,393

-

-

-

-

127

593

-

13

3,601

Actual

20979

100362

2015 2015Actual



page 64

Walcha Council

Notes to the Financial Statements as at 30 June 2015

Note 21. Financial Result & Financial Position by Fund (continued)

Statement of Financial Position by Fund$ '000

ASSETSCurrent AssetsCash & Cash EquivalentsInvestmentsReceivablesInventoriesOtherNon-current assets classified as 'held for sale'Total Current Assets

Non-Current AssetsInvestmentsReceivablesInventoriesInfrastructure, Property, Plant & EquipmentInvestments Accounted for using the equity methodInvestment PropertyIntangible AssetsTotal Non-Current AssetsTOTAL ASSETS

LIABILITIESCurrent LiabilitiesPayablesBorrowingsProvisionsTotal Current Liabilities

Non-Current LiabilitiesPayablesBorrowingsProvisionsTotal Non-Current LiabilitiesTOTAL LIABILITIESNet Assets

EQUITYRetained EarningsRevaluation ReservesTotal Equity1 General Fund refers to all Council's activities other than Water & Sewer. NB. All amounts disclosed above are Gross - that is, they include internal receivables & payables between the Funds.

-

599

--

--

404,525

1,744-

-

1

-

1,338

1,6033,409

-

-

-

-

-

20

-15,800

2015

--

2015

4,341

-

-

4,3415,679

Actual

-

- -

6,633

16,144

Sewer

Actual

-

Actual

757

397,892

397,872

344

Water

-

-

-

20152015Actual

-

-

-

35

1,653-

6,146

399,463

2,960399,463

1

-

-271,240

16,1449,998

-

5,678

128,222

-

16,144-

2,718

-

--

5,678- 5,062

1

1,054

-

- 62

-

-

--

-

-35

-

15,800

-

-

-

-

1,303

1,944

309

General1

3,92012



page 65

Walcha Council


Note 22. "Held for Sale" Non Current Assets & Disposal Groups

$ '000

Council did not classify any Non Current Assets or Disposal Groups as "Held for Sale".

Note 23. Events occurring after the Reporting Date

Events that occur between the end of the reporting period (ending 30 June 2015) and the date when the financialstatements are "authorised for issue" have been taken into account in preparing these statements.

Council has adopted the date of receipt of the Auditors' Report as the applicable "authorised for issue" daterelating to these General Purpose Financial Statements.

Accordingly, the "authorised for issue" date is 23/10/15.

Events that occur after the Reporting Period represent one of two types:

(i) Events that provide evidence of conditions that existed at the Reporting Period

These financial statements (and the figures therein) incorporate all "adjusting events" that provided evidence ofconditions that existed at 30 June 2015.

(ii) Events that provide evidence of conditions that arose after the Reporting Period

These financial statements (& figures therein) do not incorporate any "non-adjusting events" that have occurredafter 30 June 2015 and which are only indicative of conditions that arose after 30 June 2015.

Council is unaware of any material or significant "non-adjusting events" that should be disclosed.

Note 24. Discontinued Operations

Council has not classified any of its Operations as "Discontinued".

Note 25. Intangible Assets

Intangible Assets represent identifiable non-monetary asset without physical substance.

Council is unaware of any control over Intangible Assets that warrant recognition in the Financial Statements,including either internally generated and developed assets or purchased assets.

Actual Actual



page 66

Walcha Council


Note 26. Reinstatement, Rehabilitation & Restoration Liabilities

$ '000

Council has legal/public obligations to make restore, rehabilitate and reinstate the following assets/operations:

Asset/Operation

Refuse Disposal Sites (3)Quarries (25)Balance at End of the Reporting Period

Under AASB 116 - Property, Plant & Equipment, where the use of an asset results in the obligation to dismantleor remove the asset and restore the site on which the asset stands, an estimate of such costs is required to beincluded in the cost of the asset.

An equivalent liability must be recognised under AASB 137 - Provisions, Contingent Liabilities and ContingentAssets.

The provision has been calculated by determining the present value of the future expenditures expected to beincurred. The discount rate used is the risk free borrowing rate applicable to Council.

Specific uncertainties relating to the final costs and the assumptions made in determining the amounts ofprovisions include:

Reconciliation of movement in Provision for year:

Balance at beginning of yearAmounts capitalised to new or existing assets:Effect of a change in discount rates used in PV calculationsEffect of a change in other calculation estimates usedAmortisation of discount (expensed to borrowing costs)Total - Reinstatement, rehabilitation and restoration provision

Amount of Expected Reimbursements

Of the above Provisions for Reinstatement, Rehabilitation and Restoration works, those applicable to GarbageServices & Waste Management are able to be funded through future charges incorporated within Council'sAnnual Domestic Waste Management Charge.

2015

265

32

- (2)(222) 59

Estimated

2014

1,165 1,076

976 1,165

year of

711

The year in which the rehabiliation is expected to be carried out is uncertain, for gravel pits assumptions have been made about the remaining production before the end of the pits life. The remaining life of the gravel pits was reassessed in June 2015 and this has resulted in a decrease to the Net Present Value (NPV) of the Future Costs to Restore the Sites, as shown below. For refuse sites the timing of rehabiliation can be affected by quantities of garbage disposed which are based on historical estimates. Many factors can affect the estimates of the garbage going into landfill including amounts recovered through recycling and increases in population and changes in building activity within the council area. The cost of rehabilitation is also uncertain as this can be affected by changes in government regulation and the cost of plant labour and materials at the time the work is predicted to be required.

976

restoration

282

10(a) 1,165

NPV of Provision

883

33



page 67

Walcha Council


Note 26. Reinstatement, Rehabilitation & Restoration Liabilities (continued)

$ '000

Provisions for close down and restoration and for 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

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.

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.

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.



page 68

Walcha Council


Note 27. 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- Financial Assets - Held for Trade

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 accessat 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 & recognised at fair values:

2015

Recurring Fair Value Measurements

Financial AssetsInvestments- "Held for Trading"Total Financial Assets

Infrastructure, Property, Plant & EquipmentPlant & equipmentOffice equipmentFurniture & fittingsOperational landCommunity landBuildings specialisedOther structuresRoadsBridgesFootpaths & other road assetsBulk earth worksStormwaterWaterSewerHeritageOther assetsTip QuarryWork in ProgressTotal Infrastructure, Property, Plant & Equipment

81dd/mm/yy

-30/05/15 -

- 418,013

695

dd/mm/yy -

30/06/14 -

30/06/14 - - 32,607 32,60730/06/14 -

dd/mm/yy30/05/15 - - 4,170 4,170

541-

- - 695

78

dd/mm/yy - - 3,253 3,253

dd/mm/yy - - 11

dd/mm/yy - - 1,283 1,28330/06/14 - - 129,752 129,752

- -

11dd/mm/yy - - 31 31

1,397 1,397dd/mm/yy - - 2,268 2,268dd/mm/yy

dd/mm/yy - - 2,528 2,528

Level 3 Total

Valuation active mktsof latest unobservable

Date Quoted Significant

Fair Value Measurement HierarchyLevel 1 Level 2

Significant

inputsinputsprices in observable

12 - 12

78

- 15,410 15,410

- 210,622

30/05/15 -

418,013

-30/06/15 - 12 -

- 81

12

541-

- 111

210,6223,756 3,756

111

-

30/05/15 - - 9,419 9,41930/05/15 -

-



page 69

Walcha Council


Note 27. Fair Value Measurement (continued)

$ '000

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

2014

Recurring Fair Value Measurements

Financial AssetsInvestments- "Held for Trading"Total Financial Assets

Infrastructure, Property, Plant & EquipmentPlant & equipmentOffice equipmentFurniture & fittingsOperational landCommunity landBuildings specialisedOther structuresRoadsBridgesFootpaths & other road assetsBulk earth worksStormwaterWaterSewerHeritageOther assetsTip QuarryTotal Infrastructure, Property, Plant & Equipment

(2) Transfers between Level 1 & 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.

- - 417,864 417,864147

30/06/14 - - 157 157- - 636 636

30/06/14

30/06/14

- - 3,558 3,558

84-

- - 147

- 84

- - 210,621 210,621- - 9,854 9,854

30/06/14 - - 15,373 15,37330/06/14 - - 4,166 4,166

1,397 1,397

-

3,307- - 1,314 1,314

30/06/14 - - 129,697 129,697- - 32,446 32,446

- - 3,307

-

Date Quoted Significant

inputs

30/06/14

unobservableinputs

- - 2,268

Level 3 Total

327 - 327

2,792

46

2,792-

of latest

-

- - 1 1- - 46

Valuation active mkts

Level 1 Level 2

2,268- -

Fair Value Measurement Hierarchy

prices in observable

327 - 327

Significant



page 70

Walcha Council



$ '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 observableinputs (Level 2 inputs) and unobservable inputs (Level 3 inputs).

The Fair Valuation techniques Council has employed while utilising Level 2 and Level 3 inputs are as follows:

Financial Assets

Infrastructure, Property, Plant & Equipment

Council obtains valuations from an investment adviser on a yearly basis to ensure the financial statements reflect the most up to date valuation. The fair value of such assets is based on the market approach, with significant unobservable inputs due to the highly liquid nature of the financial instruments Council has invested in. The valuation is based on off market bids, estimation of the quality of the underlying assets securing the investment as well as changes in interest rates and market factors.

Plant & Equipment, Office Equipment & Furniture & Fittings

These assets are valued at cost, but are disclosed at fair value in the notes; the carrying amount of these assets is assumed to be approximate Fair Value due to the nature of the assets. Examples of assets within these classes are as follows.

- Plant & equipment: Graders, Trucks, Rollers, Tractors and Motor Vehicles. - Office Equipment: Computers, Photocopiers etc. - Furniture & Fittings: Chairs, Desks etc.

There has been no change to the valuation process during the reporting period.



page 71

Walcha Council



$ '000

(3) Valuation techniques used to derive Level 2 and Level 3 Fair Values (continued)

Infrastructure, Property, Plant & Equipment (continued)

Operational & Community Land

Operational and Community Land are based on either the land value provided by the Valuer General or an average unit rate based on the land value for similar properties were the VG did not provide a land value , having regard to the highest and best use of the land. Operational land has been valued by external valuers, Liquid Pacific, using the principals of Fair Value as defined in Accounting Standard AASB13. As these rates were not considered to be observable market evidence they have been classified as Level 3.

Buildings - Non Specialised

Non specialised and specialised buildings have been valued by external valuer, Scott Fullerton Valuations, using the principals of Fair Value, as defined in Accounting Standard AASB13. As these values were not considered to contain observable market evidence they have been classified as Level 3 and have been valued using the gross replacement cost method. Replacement cost has been formulated based on the substantial analysis of construction costs from over 120 councils throughout NSW. The valuer inspected the entire network of buildings. Useful life and residual value have been determined with regard to the Local Government Code of Accounting Practice & Financial Reporting. Inherent limitations in that buildings were not componentised as part of the valuation process and were valued based on the estimated replacement cost of the building as a whole.

Other Structures

Other Structures are assets that do not fit the definition of buildings. They include swimming pools, grandstands and playgrounds. Other Structures have been valued by external valuer, Scott Fullerton Valuations, using the principals of Fair Value, as defined in Accounting Standard AASB13. As these values were not considered to contain observable market evidence they have been classified as Level 3 and have been valued using the gross replacement cost method. Replacement cost has been formulated based upon the substantial analysis of construction costs from over 120 councils throughout NSW. The valuer inspected the entire network of other structures. Useful life and residual value have been determined with regard to the Local Government Code of Accounting Practice & Financial Reporting.



page 72

Walcha Council



$ '000



Roads

Roads revaluations have been conducted internally by Council's Engineering Department. Sealed roads have been segmented into like behaving lengths of road and componentised into the base pavement and the surface seal. Unsealed roads have only the base pavement component. Replacement costs are based upon actual costs on recent projects and Rawlinsons Reference Rates where applicable. Condition assessment has been completed in two phases, through intentional physical inspection taking photographic evidence of a portion of the network for valuation. Thereby a representative sample was chosen based on the Engineering Department's experience and knowledge of the road network. Additionally limitations exist in the sporadic nature of unsealed roads condition as such council has condition assessed these roads using an aged based approach.

Useful life and residual value has been set using Council's knowledge of how the road network behaves with consideration given to the quality of inputs used including gravel and bitumen and the specific weather and traffic conditions that impact upon the Council area.

Bulk Earthworks

Bulk Earthworks consist of cuttings, fill and levelling of earth and rocks. The valuation was completed internally and based replacement cost on Rawlinsons Reference Rates. As there had been no earthwork construction since the previous revaluation in 2010, the 2014 revaluation indexed the data already available by the IPWEA indices to come up with a replacement cost.

Council has determined that bulk earthworks have infinite useful lives.

Footpaths & Other road Assets

Footpaths and other road assets includes footpaths, kerb & guttering, roundabouts and other minor assets. They have been valued internally by Council's Engineering Department. Given the small size of the network, all footpaths, kerb & guttering and other road assets were physically inspected and photographic evidence was obtained. This formed the basis of the condition assessment. Useful lives were determined with consideration to the previous revaluation and based on Council's knowledge of the behaviour of other concrete assets. No residual has been set due to the requirement to completely remove the assets prior to replacing them.



page 73

Walcha Council



$ '000



Bridges

Bridges have been valued internally by Council's Engineering Department and have been componentised into girder, corbel, deck, headstock, pile, abutment, kerb log and hand rail.

To ensure completeness of data the Authority Asset Management software was utilised as a starting point for conducting the revaluation. Council staff physically inspected all bridges to ensure the accuracy of data that was input into the Asset Management System. Condition was determined based on these inspections. Each bridge was given a condition rating in accordance with the methodology in the IPWEA (NSW) Bridge Guide, 2009. Replacement costs were based upon recently completed bridge projects in the shire. Council determined timber bridges replacement cost based upon the cost to replace with their modern equivalent, judgementally determined to be either a concrete bridge or concrete culvert.

Useful lives for timber bridges were based on research by Peter J Yttrup (1996) contained in the IPWEA Bridge Guide. Condition ratings for concrete bridges were set based upon councils own knowledge and experience of the bridge network and in conjunction with the Local Government Assets Accounting Manual. Residual values exist for the Councils estimate of the value of the approaches and the road alignment for concrete bridges and for the cost of timber bridges which are considered to have a much longer life then the superstructure.Stormwater Drainage

Drainage assets comprise pits, culverts, open channels, headwalls and various types of quality devices used to collect store and remove stormwater. The cost approach estimated the replacement cost for each asset by componentising the assets into significant parts with different useful lives and taking into account a range of factors. First principles estimating accompanied by actual Council costs were utilised in determining the current stormwater assets value. These values were deemed to be in line with the Rawlinson Reference Rates.



page 74

Walcha Council



$ '000



Water Network

Water assets were valued internally by Council's Engineering Department. Assets in this class include reservoirs, pumping stations and water pipelines. Condition assessment was undertaken in 2 distinct ways. For above ground assets a visual assessment in accordance with the Visual Assessment Manual published by New Zealand Water and Waste Association was conducted. For underground pipes, due to the inability to visually inspect them the assessment was based upon frequency of breakages and maintenance. This forms an inherent limitation on the data obtained. Replacement costs were calculated based on Rawlinsons Reference Rates. Useful life and residual values were set using a matrix calculated in 2008 by the former NESAC Group of Councils which was itself based on the knowledge and experience of the Group's Engineers.

Sewer Network

Sewer assets were valued internally by Council's Engineering Department. Assets in this class include treatment works, pumping stations and sewer mains. Condition assessment was undertaken in 2 distinct ways. For above ground assets a visual assessment in accordance with the Visual Assessment Manual published by New Zealand Water and Waste Association was conducted. For underground pipes, due to the inability to visually inspect them the assessment was based upon frequency of blockages, breakages and maintenance. This forms an inherent limitation on the data obtained. Replacement costs were calculated based on Rawlinsons Reference Rates. Useful life and residual values were set using a matrix calculated in 2008 by the former NESAC Group of Councils which was itself based on the knowledge and experience of the Group's Engineers in regards to the pattern of consumption.



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(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 - 1/7/13

Purchases (GBV)Disposals (WDV)Depreciation & ImpairmentRevaluationsAdjustments

Closing Balance - 30/6/14

Purchases (GBV)Disposals (WDV)Depreciation & ImpairmentAdjustments & TransfersRevaluations

Closing Balance - 30/6/15 2,268 1,283312,528

78 -

(164)

27,487- 1 (1) - - 1 - - 1

(477) (3) (6) - - (48) (1,893)

129,697

-

2,792

269 - - 1,906

- - - - - - - 27,487(31) (1,328)

(164) - -

45 2,268 140,8231,3972 3,308 1,314

11

Plant & Office FurnitureEquipment Equipment & fittings Land

BuildingsspecialLand

RoadsOther Structures

Total

3,164 4 52 2,268 113,0993,237

- - - -

1,397 1,345 101,632

- - - 118 2,293

1,454(38) - - (47)

---

13 119(9)

--

(304) (4) (5) - (1,772)

-

(31)

- - - 3-- - (9) - 63

-- 190(118)

3--

1,244-

(1,379)- (49)

-

129,7523,254 140,5241,397

Operational Community



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

a. The following tables present the changes in Level 3 Fair Value Asset Classes. (continued)


Purchases (GBV)Depreciation & ImpairmentRevaluationsAdjustments


Purchases (GBV)Depreciation & ImpairmentAdjustments & TransfersRevaluations


310 27 -

635

- - 1 - 2 2 (2) (1) 210,673 2,875 31,606 - 314 104 - - 45,572

(53) - (108) (203) (66) (1) (27) (607)

3,558 4,167 82

Total

15,195 4,091 85 638 230,754

32,446 210,622 9,854 15,373

Heritage

32,607

Other & other water

Bridges Footpaths Bulk Earth Storm Water Sewer

21,032 736 179,015 9,962

276,737

890 - - - 65 36 - 25 1,016(149)

- 80 45 - 105 567(149) (20) - (97) (206) (67) (1) (26) (566)

- - (378) (65) (36) - (19) (307)191- 329- - 40 228 61 --

210,622 9,419 15,410 4,170 81 695 276,7603,756

Works



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

a. The following tables present the changes in Level 3 Fair Value Asset Classes. (continued)


Depreciation & ImpairmentRevaluations


Purchases (GBV)Depreciation & ImpairmentRevaluations


- - - 157 147 304

- - - - - - 22 35 57- - - - - - (21) (101) (122)

TotalAsset WIP Tip QuarryAsset

- - - - - 156 213

Here

369

Asset Asset Asset

-

Here Here Here Here

(45)-- - - - 541 - - 541-- - - - - (22) (23)

- - - 541 110- -

- - - - - (25) (45) (70)-

79

- - -

730



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(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 in deriving the various Level 3 Asset Class fair values.

Financial Assets

Investments

I,PP&E

Plant & Equipment

Office Equipment

ClassFair

Value(30/6/15)

$'000

Rangeof Inputs

(incl. probable)

Relationship of unobservableinputs to Fair Value

Movements in value of the underlying assets of the structured products , as well as increased risks associated with the two investments held by council can significantly affect theit value.

ValuationTechnique/s

UnobservableInputs

Changes in the remaining useful life or residual value would result in changes to fair value measurement.

- Gross replacement cost - Remaining useful life - Residual value


- Varies - 4 to 50 yrs - 0%

Cost approach

Cost approach

Market approach - Risk rating - Value of underling assets

11


2,528 - Varies - 4 to 50 yrs - 0%

unit rate , $.50 to $1.00



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

I,PP&E (continued)

Furniture & fittings

Operational land

Community land


- Varies considerably

- Varies considerably


Market approach

Market approach


- similar local property prices - Alternative use

- unimproved capital value from valuer general

Cost approach31

2,268

1,397

ClassFair

Value(30/6/15)

$'000


UnobservableInputs

Rangeof Inputs

(incl. probable)


Significant changes in the price per square metre would result in significant changes to fair value measurement

Significant changes in the price per square metre would result in significant changes to fair value measurement



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I,PP&E (continued)

Buildings special

Other structures

Roads

- Varies - Poor to excellent - 5 to 50 yrs - 20 to 50%



- Gross replacement cost - Asset condition - Remaining useful life - Residual value

Cost approach - (depreciated replacement cost)


Significant changes in the gross replacement value , asset condition , pattern of consumption effecting the remaining useful life or residual value would result in significant changes to fair value measurement.




Cost approach - (depreciated replacement cost)3,254

1,283

129,752

Significant changes in the replacement cost or useful life / residual value

ClassFair

Value(30/6/15)

$'000


UnobservableInputs

Rangeof Inputs

(incl. probable)




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I,PP&E (continued)

Bridges

Bulk earth works

- Varies - Poor to excellent - 100 yrs - 40%

- varies from asset to asset





32,607

210,622 Cost approach - (depreciated replacement cost)

- Gross replacement cost

3,756 Cost approach - (depreciated replacement cost)


- Varies - Poor to excellent - 20 to 30 yrs - 0%


Footpaths & other road assets

ClassFair

Value(30/6/15)

$'000


UnobservableInputs

Rangeof Inputs

(incl. probable)




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I,PP&E (continued)

Storm water

Water

A change in the assessment of observable inputs would impact the fair values & depreciation rates.

Condition ratings mau change due to continued inspections , outcomes from complaints , data arising from replacement and changes in service level impacting condition ranking. If condition rating changes then fair value will be impacted.

9,419 Cost approach - ( replacement cost)

- Varies - Poor to excellent - 50 to 60 yrs - 0%


ClassFair

Value(30/6/15)

$'000


UnobservableInputs

Rangeof Inputs

(incl. probable)




- Varies - Poor to excellent - 10 to 150 yrs - varies




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I,PP&E (continued)

Sewer

Heritage - Gross replacement cost - Remaining useful life - Residual value





- Varies - Poor to excellent - 10 to 100 yrs - varies

A change in the assessment of observable inputs would impact the fair values & depreciation rates.

Condition ratings mau change due to continued inspections , outcomes from complaints , data arising from replacement and changes in service level impacting condition ranking. If condition rating changes then fair value will be impacted.

ClassFair

Value(30/6/15)

$'000


UnobservableInputs

Rangeof Inputs

(incl. probable)


81 Cost approach



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I,PP&E (continued)

Other

Tips

Quarry

(5). Highest and best use

All of Council's non financial assets are considered to being utilised for their highest and best use.

- n/a Unit cost assumptions for rehab rates , discount rates , CPI , and regulation changes

Cost approach Unit cost assumptions for rehab rates , discount rates , CPI , and regulation changes - n/a

79 Cost approachSignificant changes in discount erates , cost escalation or timing of work could effect the value of this asset class.

ClassFair

Value(30/6/15)

$'000


UnobservableInputs

Rangeof Inputs

(incl. probable)


110Significant changes in discount erates , cost escalation or timing of work could effect the value of this asset class.

695 Cost approach - Gross replacement cost - Remaining useful life - Residual value




Armidale

page 87


2

page 88


3

page 89


4

page 90


5

page 91


6

page 92


7

6.0%-4.8%

-27.6%

69.4%65.2% 65.8%

23.8725.57 26.72

2.59 2.572.78

4.3%9.7% 7.7%

7.104.13 3.80

page 93


8

page 94


9

page 95


10

91.3%166.6%

79.0%

8.5% 10.4% 10.0%

1.080.69 0.69

1.06 1.200.66

page 96


11

page 97


12

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WALCHA COUNCIL ANNUAL REPORT 2014 - 2015...Walcha Council 2014-2015 Annual Report Appendix B...

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Transcript of WALCHA COUNCIL ANNUAL REPORT 2014 - 2015...Walcha Council 2014-2015 Annual Report Appendix B...