Liverpool City Council Audited Financial Statements 2012 13

LIVERPOOL CITY COUNCIL GENERAL PURPOSE AND SPECIAL PURPOSE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

Financial Statements 2013

Liverpool City Council General Purpose Financial Statements for the financial year ended 30 June 2013

Contents

Page

1. Understanding Council's Financial Statements

2

2. Statement by Councillors & Management

3

3. Primary Financial Statements: - Income Statement - Statement of Comprehensive Income - Statement of Financial Position - Statement of Changes in Equity - Statement of Cash Flows

4 5 6 7 8

4. Notes to the Financial Statements

9

5. Independent Auditor's Reports: - On the Financial Statements - On the Conduct of the Audit

(Sect 417 [2]) (Sect 417 [3])

84 86

Overview (i)

These financial statements are General Purpose Financial Statements and cover the consolidated operations for Liverpool City Council.

(ii)

Liverpool City Council is a body politic of NSW, Australia - being constituted as a Local Government area by 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; i the ability to provide goods, services & facilities, and to carry out activities appropriate to the current & future

needs of the local community and of the wider public, i the responsibility for administering regulatory requirements under the LGA and i 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 30 October 2013.

Council has the power to amend and reissue these financial statements.

page 1

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Understanding Council's Financial Statements Introduction Each year, individual Local Governments across NSW are required to present a set of audited financial statements to their Council & Community.

4. The Statement of Changes in Equity The overall change for the year (in dollars) of Council's "Net Wealth".

5. The Statement of Cash Flows

What you will find in the Statements

Indicates where Council's cash came from and where it was spent.

The financial statements set out the financial performance, financial position & cash flows of Council for the financial year ended 30 June 2013.

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

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 NSW Division 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�.

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 be audited 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 Division of Local Government.

page 2

Financial Statements 2013

Liverpool City Council Income Statement for the financial year ended 30 June 2013 Budget (1) 2013 $ '000

Actual 2013

Actual 2012

96,934 12,031 6,355 11,807 14,838 47,084

92,454 10,075 7,140 14,297 17,813 54,292

5

1,620

745

19

785

438

191,454

197,254

51,273 2,736 46,133 32,594 11,629

48,896 2,995 41,554 32,698 9,705

144,365

135,848

47,089

61,406

-

-

47,089

61,406

47,089 -

61,406 -

5

7,114

Notes

Income from Continuing Operations Revenue: 96,255 13,027 4,439 9,808 13,193 19,549

Rates & Annual Charges User Charges & Fees Interest & Investment Revenue Other Revenues Grants & Contributions provided for Operating Purposes Grants & Contributions provided for Capital Purposes

3a 3b 3c 3d 3e,f 3e,f

Other Income: 156,271

Net gains from the disposal of assets Net Share of interests in Joint Ventures & Associated Entities using the equity method

Total Income from Continuing Operations Expenses from Continuing Operations

53,965 2,280 43,872 31,885 11,336 143,338 12,933

Employee Benefits & On-Costs Borrowing Costs Materials & Contracts Depreciation & Amortisation Impairment Other Expenses

4a 4b 4c 4d 4d 4e

Total Expenses from Continuing Operations

Operating Result from Continuing Operations Discontinued Operations

-

Net Profit/(Loss) from Discontinued Operations

12,933

Net Operating Result for the Year

12,933 -

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

(6,616)

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

24

(1) Original Budget as approved by Council - refer Note 16

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

page 4

Financial Statements 2013

Liverpool City Council Statement of Comprehensive Income for the financial year ended 30 June 2013

$ '000

Notes

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

Actual 2013

Actual 2012

47,089

61,406

Other Comprehensive Income: Amounts which will not be reclassified subsequently to the Operating Result Gain (loss) on revaluation of I,PP&E Correction of Errors

Total Items which will not be reclassified subsequently to the Operating Result

20b (ii) 20b (ii)

36,952 (93,186)

-

(56,234)

-

(56,234)

-

(9,145)

61,406

(9,145) -

61,406 -

Amounts which will be reclassified subsequently to the Operating Result when specific conditions are met Nil

Total Other Comprehensive Income for the year

Total Comprehensive Income for the Year

Total Comprehensive Income attributable to Council Total Comprehensive Income attributable to Non-controlling Interests

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

page 5

Financial Statements 2013

Liverpool City Council Statement of Financial Position as at 30 June 2013

$ '000

ASSETS Current Assets Cash & Cash Equivalents Investments Receivables Inventories Other Non-current assets classified as "held for sale" Total Current Assets Non-Current Assets Investments Receivables Inventories Infrastructure, Property, Plant & Equipment Investments accounted for using the equity method Investment Property Intangible Assets Total Non-Current Assets

Notes

6a 6b 7 8 8 22

6b 7 8 9 19 14 25

TOTAL ASSETS LIABILITIES Current Liabilities Payables Borrowings Provisions Total Current Liabilities Non-Current Liabilities Payables Borrowings Provisions Total Non-Current Liabilities

10 10 10

10 10 10

TOTAL LIABILITIES

Net Assets

Actual 2013

Actual 2012

48,497 36,000 12,594 55 248 97,394

54,392 50,009 13,474 59 117 118,051

41,680 362 1,730,967 4,876 10,250 800 1,788,935

11,435 307 1,746,385 4,091 10,270 449 1,772,937

1,886,329

1,890,988

16,832 6,292 14,090 37,214

15,663 6,468 13,495 35,626

37,497 2,376 39,873

33,820 3,155 36,975

77,087

72,601

1,809,242

1,818,387

1,166,930 642,312 1,809,242 -

1,113,420 704,967 1,818,387 -

1,809,242

1,818,387

EQUITY Retained Earnings Revaluation Reserves Council Equity Interest Non-controlling Interests

Total Equity

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

20 20

page 6

Financial Statements 2013

Liverpool City Council Statement of Changes in Equity for the financial year ended 30 June 2013 Non$ '000

Notes

Retained Earnings

Reserves (Refer 20b)

Council Interest

controlling

Interest

Total Equity

2013 Opening Balance

1,113,420

704,967

1,818,387

-

1,818,387

a. Correction of Prior Period Errors

20 (c)

-

-

-

-

-

b. Changes in Accounting Policies (prior year effects)

20 (d)

-

-

-

-

-

1,113,420

704,967

1,818,387

-

1,818,387

47,089

-

47,089

-

47,089

(as per Last Year's Audited Accounts)

Revised Opening Balance (as at 1/7/12) c. Net Operating Result for the Year d. Other Comprehensive Income - Revaluations : IPP&E Asset Revaluation Rsve

20b (ii)

-

36,952

36,952

-

36,952

- Revaluations: Other Reserves

20b (ii)

-

-

-

-

-

- Transfers to Income Statement

20b (ii)

-

-

-

-

-

- Impairment (loss) reversal relating to I,PP&E

20b (ii)

-

-

-

-

- Correction of Errors

20b (ii)

6,421

(99,607)

(93,186)

-

(93,186)

6,421

(62,655)

(56,234)

-

(56,234)

53,510

(62,655)

(9,145)

-

(9,145)

Other Comprehensive Income Total Comprehensive Income (c&d)

-

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

-

-

-

-

-

f. Transfers between Equity

-

-

-

-

-

1,166,930

642,312

1,809,242

-

1,809,242

Equity - Balance at end of the reporting period

$ '000

Notes

Retained Earnings

Reserves (Refer 20b)

Council Interest

Noncontrolling Interest

Total Equity

2012 Opening Balance

(as per Last Year's Audited Accounts)

1,052,014

704,967

1,756,981

-

1,756,981

-

a. Correction of Prior Period Errors

20 (c)

-

-

-

-

b. Changes in Accounting Policies (prior year effects)

20 (d)

-

-

-

-

-

1,052,014

704,967

1,756,981

-

1,756,981

61,406

-

61,406

-

61,406

Revised Opening Balance (as at 1/7/11) c. Net Operating Result for the Year d. Other Comprehensive Income - Revaluations : IPP&E Asset Revaluation Rsve

20b (ii)

-

-

-

-

-

- Revaluations: Other Reserves

20b (ii)

-

-

-

-

-

- Transfers to Income Statement

20b (ii)

-

-

-

-

-

- Impairment (loss) reversal relating to I,PP&E

20b (ii)

-

-

-

-

-

- Other Movements (enter details here)

20b (ii)

-

-

-

-

-

-

-

-

-

-

61,406

-

61,406

-

61,406

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

-

-

-

-

-

f. Transfers between Equity

-

-

-

-

-

1,113,420

704,967

1,818,387

-

1,818,387

Other Comprehensive Income Total Comprehensive Income (c&d)

Equity - Balance at end of the reporting period

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

page 7

Financial Statements 2013

Liverpool City Council Statement of Cash Flows for the financial year ended 30 June 2013 Budget 2013

$ '000

Notes

Actual 2013

Actual 2012

96,502 14,798 6,849 37,833 579 20,671

92,414 9,881 7,581 41,677 576 28,648

(50,727) (56,257) (2,183) (11,773)

(48,388) (46,093) (2,625) (11,079)

56,292

72,592

149,000 2,143

100,804 1,051

Cash Flows from Operating Activities Receipts:

96,255 13,027 4,439 32,742 9,808

Rates & Annual Charges User Charges & Fees Investment & Interest Revenue Received Grants & Contributions Bonds, Deposits & Retention amounts received Other Payments:

(53,965) (43,872) (2,280) (11,336)

Employee Benefits & On-Costs Materials & Contracts Borrowing Costs Other

44,818

Net Cash provided (or used in) Operating Activities

11b

Cash Flows from Investing Activities Receipts:

125,000 -

Sale of Investment Securities Sale of Infrastructure, Property, Plant & Equipment Payments:

(128,000) (56,560)

Purchase of Investment Securities Purchase of Investment Property Purchase of Infrastructure, Property, Plant & Equipment

(165,491) (50,827)

(103,224) (10,270) (46,540)

(59,560)

Net Cash provided (or used in) Investing Activities

(65,175)

(58,179)

Cash Flows from Financing Activities Receipts:

-

9,590

Proceeds from Borrowings & Advances

-

Payments:

(6,477)

(6,477) (21,219) 54,392

33,173

Repayment of Borrowings & Advances

(6,602)

(6,830)

Net Cash Flow provided (used in) Financing Activities

2,988

(6,830)

(5,895)

7,583

Net Increase/(Decrease) in Cash & Cash Equivalents Cash & Cash Equivalents - beginning of year

11a

54,392

46,809

Cash & Cash Equivalents - end of the year

11a

48,497

54,392

6b

77,680

61,444

126,177

115,836

plus:

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

page 8

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Contents of the Notes accompanying the Financial Statements Note

Details

Page

1 2(a) 2(b) 3 4 5 6(a) 6(b) 6(c) 7 8 9(a) 9(b) 9(c) 10(a) 10(b) 11 12 13

Summary of Significant Accounting Policies Council Functions / Activities - Financial Information Council Functions / Activities - Component Descriptions Income from Continuing Operations Expenses from Continuing Operations Gains or Losses from the Disposal of Assets Cash & Cash Equivalent Assets Investments Restricted Cash, Cash Equivalents & Investments - Details Receivables Inventories & Other Assets Infrastructure, Property, Plant & Equipment Externally Restricted Infrastructure, Property, Plant & Equipment Infrastructure, Property, Plant & Equipment - Current Year Impairments Payables, Borrowings & Provisions Description of (and movements in) Provisions Statement of Cash Flows - Additional Information Commitments for Expenditure Statement of Performance Measures: 13a (i) Local Government Industry Indicators (Consolidated) 13a (ii) Local Government Industry Graphs (Consolidated) 13b Local Government Industry Indicators (by Fund)

10 27 28 29 34 38 39 39 41 43 44 45 46 46 n/a 47 48 49 51

14 15 16 17 18 19 20

Investment Properties Financial Risk Management Material Budget Variations Statement of Developer Contributions Contingencies and Other Liabilities/Assets not recognised Controlled Entities, Associated Entities & Interests in Joint Ventures Equity - Retained Earnings and Revaluation Reserves

21 22 23 24 25 26

Financial Result & Financial Position by Fund "Held for Sale" Non Current Assets & Disposal Groups Events occurring after the Reporting Period Discontinued Operations Intangible Assets Reinstatement, Rehabilitation & Restoration Liabilities

52 53 n/a 54 55 60 62 70 72 74 76 n/a 76 n/a 76 76 n/a 77 77 n/a

Additional Council Disclosures 27 28

Commentary on Council's Operating Result & Financial Position Council Information & Contact Details

78 83

n/a - not applicable

page 9

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies The principal accounting policies adopted by Council in the preparation of these consolidated financial statements are set out below in order to assist in its general understanding.

Under Australian Accounting Standards (AASB's), 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;

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 Australian Accounting Standards. (iii) New and amended standards adopted by Council None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2011 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods. (iv) Early adoption of Accounting Standards

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

Council has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2013.

 the Local Government Act (1993) & Regulation, and

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

 the Local Government Code of Accounting Practice and Financial Reporting.

(v) Basis of Accounting



For the purpose of preparing these financial statements, Council has been deemed to be a notfor-profit entity. (ii) Compliance with International Financial Reporting Standards (IFRSs) Because Australian Accounting Standards (AASB's) are sector neutral, some standards either: (a) have

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

(b) specifically exclude application by Not for

Profit entities.

These financial statements have been prepared under the historical cost convention except for: (i)

financial assets and liabilities at fair value through profit or loss, available-for-sale financial assets and investment properties which are all valued at fair value,

(ii) the write down of any Asset on the basis of Impairment (if warranted) and (iii) certain classes of Infrastructure, property, plant & equipment that are accounted for at fair valuation.

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

Accordingly in preparing these financial statements and accompanying notes, Council has been unable to comply fully with International Accounting Standards,

page 10

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies (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)].

Critical judgements accounting policies (i)

in

applying

the

entity's

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.

(vii) Critical Accounting Estimates The preparation of financial statements requires the use of certain critical accounting estimates (in conformity with AASB's).

(b) Revenue recognition

Accordingly this requires management to exercise its judgement in the process of applying the Council's accounting policies.

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

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

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.

Critical accounting estimates and assumptions

Revenue is measured on major income categories as follows:

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 investment properties

(ii) Estimated fair values of infrastructure, property, plant and equipment. (iii) Estimated tip remediation provisions.

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.

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. page 11

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies 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.

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.

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).

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

Sale of Infrastructure, Equipment

Property,

Plant

and

Interest and Rents

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.

Rents are recognised as revenue on a proportional basis when the payment is due, the value of the payment is notified, or the payment is received, whichever first occurs.

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

Interest Income from Cash & Investments is accounted for using the Effective Interest method in accordance with AASB 139.

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 and other income (including parking fees and fines) are recognised as revenue when the service has been provided, 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.

(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 30/6/13) and (ii) all the related operating results (for the financial year ended the 30th June 2013).

The financial statements also include Council’s share of the assets, liabilities, income and expenses of any Jointly Controlled Operations under the appropriate headings.

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

page 12

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies functions have been included in the financial statements forming part of this report. (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 been excluded 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 Ventures Jointly Controlled Assets & Operations The proportionate interests in the assets, liabilities and expenses of a Joint Venture Activity have been incorporated throughout the financial statements under the appropriate headings.

(v) Additional Information Note 19 provides more information in relation to Joint Venture Entities, Associated Entities and Joint Venture Operations where applicable.

(d) Leases All Leases entered into by Council are reviewed and classified on inception date as either a Finance Lease or an Operating Lease. All Council leases are Operating Leases.

The corresponding rental obligations, net of finance charges, are included in borrowings.

Operating Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.

Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

Lease income from operating leases is recognised in income on a straight-line basis over the lease term.

(e) Cash and Cash Equivalents

Jointly Controlled Entities

Cash and cash equivalents includes;

Any interests in Joint Venture Entities & Partnerships are accounted for using the equity method and is carried at cost.

 cash on hand,

Under the equity method, the share of the profits or losses of the partnership is recognised in the income statement, and the share of movements in retained earnings & reserves is recognised in the balance sheet.

 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

(iv) Associated Entities Council did not have any “Associated Entities” at balance date (i.e. the power to participate in the financial and operating decisions of another entity)

 deposits held at call with financial institutions,

 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.

page 13

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies (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.

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.

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

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

Management determines each Investment classification at the time of initial recognition and reevaluates this designation at each reporting date.

(iv) Available-for-sale financial assets

(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

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.

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

Financial Assets – Reclassification

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.

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.

They are included in current assets, except for those with maturities greater than 12 months after the

Council did not take the option of reclassifying Financial assets at balance date

page 14

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies 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-maturity investments 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.

(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 in compliance with the Act and ensures that it or its representatives exercise care, diligence and skill that a prudent person would exercise in investing Council funds.

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 retained under 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.

page 15

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies 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

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

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

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

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

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.

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

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

A provision for impairment (i.e. 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 value of estimated future cash flows, discounted at the effective interest rate.

Land Held for Resale/Capitalisation of Borrowing Costs Land held for resale is stated at the lower of cost and net realisable value. At balance date Council did not hold any Land for Resale.

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

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

Council’s non-current assets have been progressively revalued to fair value in accordance with a staged

page 16

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies implementation as advised by the Division of Local Government.

exchanged between knowledgeable willing parties in an arm’s length transaction.

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

Subsequent costs

-

Investment Properties – refer Note 1(p),

-

Operational Land (External

-

Buildings – Specialised/Non Specialised

Valuation)

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.

(External Valuation) -

Plant and Equipment (as approximated by depreciated historical cost)

-

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

-

Drainage Assets

-

Community Land

-

Land Improvements

(Internal Valuation) (VG Valuation)

(as approximated by depreciated historical cost)

-

Other Structures (as approximated by depreciated historical cost)

-

Other Assets (as approximated by depreciated historical cost)

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 carrying amounts arising on revaluation are credited to the asset revaluation reserve.  To the extent that the increase reverses a decrease previously recognised via the profit or loss, then increase is first recognised in profit or loss.

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

 Decreases that reverse previous increases of the same asset 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.

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 (i.e. date of exchange) of the asset to arrive at fair value.

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.

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.

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

Initial Recognition

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

Full revaluations are undertaken for all assets on a 5 year cycle or as determined by the DLG. A revaluation for Operational Land and Buildings was conducted by an independent valuer as at 30 June 2013. page 17

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies Capitalisation Thresholds

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

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

Plant & Equipment - Office Equipment - Office furniture - Computer Equipment - Vehicles - Heavy Plant/Road Making equip.

- Other plant and equipment

5 to 10 years 10 years 10 years 5 to 8 years 5 to 8 years 5 to 10 years

Other Equipment - Playground equipment - Benches, seats etc

3 to 20 years 3 to 20 years

Buildings - Buildings : Masonry - Buildings : Other

50 to 100 years 20 to 40 years

Stormwater Drainage - Pits - Pipes - Culverts

75 years 100 years 75 to 100 years

Transportation Assets - Sealed Roads : Surface (asphalt) - Sealed Roads : Surface (concrete) - Sealed Roads : Structure - Unsealed roads - Bridge : Concrete

15 years 75 years 75 years 75 years 80 years

- Road Pavements - Kerb, Gutter & Paths

100 years 75 years

Land - council land - open space - land under roads (purchases after 30/6/08) Plant & Equipment Office Furniture Office Equipment Other Plant &Equipment Buildings & Land Improvements Park Furniture & Equipment

100% Capitalised 100% Capitalised 100% Capitalised

> $1,000 > $1,000 > $1,000

> $1,000

Building - construction/extensions - renovations

> $1,000 > $1,000

Other Structures

> $1,000

Stormwater Assets Drains & Culverts Other

> $1,000 > $1,000

Transport Assets Road construction & reconstruction Reseal/Re-sheet & major repairs:

100% Capitalised > $1,000

Bridge construction & reconstruction

100% Capitalised

Other Assets Library Books Artworks

100% Capitalised 100% Capitalised

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

Land is not depreciated.

All asset residual values and useful lives are reviewed and adjusted (where appropriate), at each balance sheet 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 Asset Impairment.

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.

page 18

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies 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.

(m) Intangible Assets IT Development and Software Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems.

Costs capitalised include external direct costs of materials and service, direct payroll and payroll related costs of employees’ time spent on the project.

feasibility and where Council has an intention and ability to use the asset.

(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 constructed wholly 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 been doing in previous years, which is to incorporate the assets, their values and depreciation charges within these financial statements.

Amortisation is calculated on a straight line bases over periods generally ranging from 3 to 5 years.

(p) Investment property

IT development costs include only those costs directly attributable to the development phase and are only recognised following completion of technical

Investment property comprises land &/or buildings that are principally held for long-term rental yields, capital gains or both that is not occupied by Council.

page 19

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies Council conducted an independent valuation on its investment property as at 30 June 2013 and has adjusted the asset value accordingly.

(r) Impairment of assets

(q) Non-Current Assets (or Disposal Groups) “Held for Sale” & Discontinued Operations

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.

Non-current assets (or disposal groups) are classified as held for sale and stated at the lower of either (i) their carrying amount or (ii) fair value less costs to sell, if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.

The exception to this is plant and motor vehicles which are turned over on a regular basis. Plant and motor vehicles are retained in Non Current Assets under the classification of Infrastructure, Property, Plant and Equipment - unless the assets are to be traded in after 30 June and the replacement assets were already purchased and accounted for as at 30 June.

For any assets or disposal groups classified as NonCurrent Assets “held for sale”, an impairment loss is recognised at any time when the assets carrying value is greater than its fair value less costs to sell.

Non-current assets “held for sale” are not depreciated or amortised while they are classified as “held for sale”.

Non-current assets classified as “held for sale” are presented separately from the other assets in the balance sheet.

A Discontinued Operation is a component of the entity that has been disposed of or is classified as “held for sale” and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale.

The results of discontinued operations are presented separately on the face of the income statement.

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

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.

As at 30 June 2013 there were no indications or evidences of impairment for Council’s assets.

(s) Payables These amounts represent liabilities and include goods 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.

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

page 20

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies 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.

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.

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

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

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.

(w) Employee benefits

(u) Borrowing costs Borrowing costs are expensed.

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

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

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..

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

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

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

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.

(v) Provisions

 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.

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 settled within the 12 months after the reporting period) are recognised in the provision for employee benefits.

Council adopted the nominal method to report long service leave entitlement for both current and non current liabilities as it was evaluated to be a close estimate of the prescribed present value method page 21

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies 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 that date 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”

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 amount of employer contributions to the defined benefit section of the Local Government Superannuation Scheme and recognised as an expense for the year ending 30 June 2013 was $1,072,910. Council’s contributions to the scheme for the current reporting year have been recognised as an expense and disclosed as part of Superannuation Expenses at Note 4(a).

The last valuation of the Scheme was performed by Mr Martin Stevenson BSc, FIA, FIAA on 16 February 2010 and covers the period ended 30 June 2009.

However the position is monitored annually and the th Actuary has estimated that as at 30 June 2013 a deficit still exists. Effective from 1 July 2009, employers are required to contribute additional contributions to assist in extinguishing this deficit. The amount of additional contributions included in the total employer contribution advised above is $451,256.

Council’s share of that deficiency cannot be accurately calculated as the Scheme is a mutual arrangement where assets and liabilities are pooled together for all member councils. For this reason, no liability for the deficiency has been recognised in these financial statements.

However the Local Government Superannuation Scheme has estimated Council’s share of this deficit to be in the order of $2.1 million as at 30 June 2013. This has been disclosed as 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.

This Scheme has been deemed to be a “multi employer fund” for the purposes of AASB 119. page 22

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies (iv) Employee Benefit On-Costs

(z) Taxes

Council has recognised at year end the aggregate oncost 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.

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

These amounts include Superannuation and Workers Compensation expenses which will be payable upon the future payment of certain Leave Liabilities accrued as at 30/6/12.

Goods & Services Tax (GST)

(x) Self insurance

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

Council has determined to self-insure for various risks including public liability and professional indemnity.

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

A provision for self-insurance has been made to recognise outstanding claims the amount of which is detailed in Note10.

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

Council also maintains cash and investments to meet expected future claims and these are detailed in Note 6(c).

(y) Allocation between current and non-current assets & liabilities

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.

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.

Investing and Financing cash flows are treated on a net basis (where recoverable form 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.

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.

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

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) New accounting standards and UIG interpretations Certain new (or amended) accounting standards and interpretations have been published that are not mandatory for reporting periods ending 30 June 2013.

Council has not adopted any of these standards early.

page 23

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies Council’s assessment of the impact of these new standards and interpretations is set out below.

Applicable to Local Government with implications:

AASB 9 Financial Instruments, associated standards, AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2012-6 Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and transitional disclosures (effective from 1 January 2015)

Consolidation and Joint Arrangements Standards (effective 1 January 2013) In August 2011, the AASB issued a suite of five new and amended standards which address the accounting for joint arrangements, consolidated financial statements and associated disclosures.

AASB 10 replaces all of the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial Statements, and Interpretation 12 Consolidation – Special Purpose Entities.

AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and financial liabilities.

The core principle that a consolidated entity presents a parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of consolidation.

The standard is not applicable until 1 January 2015 but is available for early adoption.

However, the standard introduces a single definition of control that applies to all entities.

When adopted, the standard will affect in particular Council’s accounting for its available-for-sale financial assets, since AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity investments that are not held for trading.

It focuses on the need to have both power and rights or exposure to variable returns.

Fair value gains and losses on available-for-sale debt investments, for example, will therefore have to be recognised directly in profit or loss although there is currently a proposal by the IASB to introduce a Fair value through Other Comprehensive Income category for debt instruments.

There will be no impact on Council’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and Council does not have any such liabilities.

The de-recognition rules have been transferred from AASB 139 Financial Instruments: Recognition and Measurement and have not been changed.

AASB 10 AASB 11 Disclosure AASB 127 AASB 128 Ventures Australian

- Consolidated Financial Statements, - Joint Arrangements, AASB 12 of Interests in Other Entities, revised - Separate Financial Statements and - Investments in Associates and Joint and AASB 2011-7 Amendments to Accounting Standards arising from the

Power is the current ability to direct the activities that significantly influence returns. Returns must vary and can be positive, negative or both. Control exists when the investor can use its power to affect the amount of its returns.

There is also new guidance on participating and protective rights and on agent/principal relationships.

Council does not expect the new standard to have a significant impact on its composition.

AASB 11 introduces a principles based approach to accounting for joint arrangements.

The focus is no longer on the legal structure of joint arrangements, but rather on how rights and obligations are shared by the parties to the joint arrangement.

Based on the assessment of rights and obligations, a joint arrangement will be classified as either a joint operation or a joint venture.

Joint ventures are accounted for using the equity method, and the choice to proportionately consolidate will no longer be permitted.

page 24

Financial Statements 2013

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Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies Parties to a joint operation will account their share of revenues, expenses, assets and liabilities in much the same way as under the previous standard.

the financial statements. However, application of the new standard will impact the type of information disclosed in the notes to the financial statements.

AASB 11 also provides guidance for parties that participate in joint arrangements but do not share joint control.

Council's investment in the joint venture partnership will be classified as a joint venture under the new rules.

Council does not intend to adopt the new standard before its operative date, which means that it would be first applied in the annual reporting period ending 30 June 2014.

As Council already applies the equity method in accounting for this investment, AASB 11 will not have any impact on the amounts recognised in its financial statements.

AASB 12 sets out the required disclosures for entities reporting under the two new standards, AASB 10 and AASB 11, and replaces the disclosure requirements currently found in AASB 127 and AASB 128.

Application of this standard by Council will not affect any of the amounts recognised in the financial statements, but will impact the type of information disclosed in relation to Council's investments.

Amendments to AASB 128 provide clarification that an entity continues to apply the equity method and does not remeasure its retained interest as part of ownership changes where a joint venture becomes an associate, and vice versa. The amendments also introduce a “partial disposal� concept. Council is still assessing the impact of these amendments.

Council does not expect to adopt the new standards before their operative date. They would therefore be first applied in the financial statements for the annual reporting period ending 30 June 2014.

Applicable to Local implications for Council;

Government

but

no

None Applicable to Local Government but not relevant to Council at this stage;

Revised AASB 119 Employee Benefits, AASB 201110 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) and AASB 2011-11 Amendments to AASB 119 (September 2011) arising from Reduced Disclosure Requirements (effective 1 January 2013) This revised standard on accounting for employee benefits requires the recognition of all remeasurements of defined benefit liabilities/assets immediately in other comprehensive income (removal of the so-called 'corridor' method) and the calculation of a net interest expense or income by applying the discount rate to the net defined benefit liability or asset.

This replaces the expected return on plan assets that is currently included in profit or loss.

AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 (effective 1 January 2013)

The standard also introduces a number of additional disclosures for defined benefit liabilities/assets and could affect the timing of the recognition of termination benefits.

AASB 13 was released in September 2011.

It explains how to measure fair value and aims to enhance fair value disclosures. Council has yet to determine which, if any, of its current measurement techniques will have to change as a result of the new guidance.

The amendments will have to be implemented retrospectively.

Council does not recognise defined benefit assets and liabilities for the reasons set out in paragraph (w) (iii) and so these changes will not have an impact on its reported results

It is therefore not possible to state the impact, if any, of the new rules on any of the amounts recognised in page 25

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 1. Summary of Significant Accounting Policies Not applicable to Local Government per se; None There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

(ab) Rounding of amounts Unless otherwise indicated, amounts in the financial statements have been rounded off to the nearest thousand dollars.

(ac) 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 these financial statements and/or the notes.

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

page 26

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

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

Functions/Activities

Income from Continuing Operations

Expenses from Continuing Operations

Original

Grants included in Income from Continuing Operations

Operating Result from Continuing Operations

Original

Total Assets Held (Current & Non-current)

Original

Budget

Actual

Actual

Budget

Actual

Actual

Budget

Actual

Actual

Actual

Actual

Actual

Actual

2013

2013

2012

2013

2013

2012

2013

2013

2012

2013

2012

2013

2012

-

-

-

-

-

-

-

-

-

-

-

6,381

-

29,743

56,844

66,054

50,797

52,059

47,388

(21,054)

4,785

18,666

2,452

6,419

1,559,278

1,569,112

4

9

7

5,012

5,232

3,973

(5,008)

(5,223)

(3,966)

-

-

104

105

12,776

12,575

11,945

39,687

40,452

38,366

(26,911)

(27,877)

(26,421)

3,388

3,893

146,317

147,240

2,303

9,036

7,157

21,708

21,017

21,886

(19,405)

(11,981)

(14,729)

295

50

168,830

169,895

City Planning

24,045

26,477

25,032

26,134

25,605

24,235

(2,089)

1,783

419

543

545

Total Functions & Activities

68,871

104,941

110,195

143,338

144,365

135,848

(74,467)

(39,424)

(25,653)

7,918

10,781

1,881,453

1,886,897

87,400

785 85,728

438 86,621

-

-

-

87,400

785 85,728

438 86,621

9,599

11,414

4,876 -

4,091 -

156,271

191,454

197,254

143,338

144,365

135,848

12,933

47,089

61,406

17,517

22,195

1,886,329

1,890,988

Governance City Assets Executive City Services Corporate Services

872

797

Share of gains/(losses) in Associates & Joint Ventures (using the Equity Method)

General Purpose Income 1 Operating Result from Continuing Operations

page 27

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

Financial Statements 2013

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

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

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: CITY ASSETS The City Assets Directorate's prime focus is on the delivery of infrastructure. Several assets and infrastructure teams plan, design and manage the upgrading of existing, and construction of new community assets such as roads, drainage, parks, recreation facilities and buildings.

EXECUTIVE The Executive Services team provides executive assistance to the General Manager. The Department is customer orientated and is focused on establishing and maintaining strong working relationships with management, staff, State and Federal politicians, residents, members of the public and the local business community.

CITY SERVICES Operations teams manage our children’s services, library services, leisure centres, community development, open space and community buildings. A number of works teams manage public space appearance, maintain transport and drainage assets and provide the needed plant and fleet services CORPORATE SERVICES The Corporate Services directorate links all areas of the Council by providing the necessary support for financial management, purchasing, corporate and human resource services, as well as a strong focus on customer service, information and communication.

CITY PLANNING The City Planning directorate focuses on Statutory Planning and Building Services and encompasses the functions of building inspections, construction certificates, health inspectors, occupation certificates, development application assessments, the Design and Review Panel, the Independent Hearing and Assessment Panel, developer compliance and accreditation for places of public entertainment.

page 28

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 3. Income from Continuing Operations $ '000

Actual 2013

Actual 2012

55,121 423 18,035 73,579

52,256 448 17,430 70,134

1,367 409 1,449 3,225

1,304 395 1,432 3,131

18,741 1,307 82 20,130

17,822 1,292 75 19,189

96,934

92,454

Notes

(a) Rates & Annual Charges Ordinary Rates Residential Farmland Business Total Ordinary Rates Special Rates Environmental Levy Fire Levy Town Improvement Fund Total Special Rates Annual Charges (pursuant to s.496, s.496A, s.496B, s.501 & s.611) Domestic Waste Management Services Stormwater Management Services Section 611 Charges Total Annual Charges

TOTAL RATES & ANNUAL CHARGES

Council has used 2011 year valuations provided by the NSW Valuer General in calculating its rates.

page 29

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 3. Income from Continuing Operations (continued) Actual 2013

Actual 2012

33 3,910 520 415 226 5,104

27 3,516 408 398 212 4,561

Child Care Community Hall Rental Leaseback Fees - Council Vehicles Parking Fees Sports Field Hire Other Total Fees & Charges - Other

2,267 707 599 3,081 186 87 6,927

2,257 642 539 1,819 185 72 5,514

TOTAL USER CHARGES & FEES

12,031

10,075

$ '000

Notes

(b) User Charges & Fees Specific User Charges (per s.502 - Specific "actual use" charges) Nil Other User Charges & Fees (i) Fees & Charges - Statutory & Regulatory Functions (per s.608)

Animal Impounding Fees Planning & Building Regulation Regulatory/ Statutory Fees Section 149 Certificates (EPA Act) Section 603 Certificates Total Fees & Charges - Statutory/Regulatory (ii) Fees & Charges - Other (incl. General User Charges (per s.608)

page 30

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 3. Income from Continuing Operations (continued) $ '000

Notes

Actual 2013

Actual 2012

470 6,114 26

506 6,931 49

(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) - Interest & Dividend Income (Other) Fair Value Adjustments - Fair Valuation movements in Investments (at FV or Held for Trading)

TOTAL INTEREST & INVESTMENT REVENUE

(255)

(346)

6,355

7,140

Unrestricted Investments/Financial Assets: Overdue Rates & Annual Charges (General Fund) General Council Cash & Investments

470 2,080

506 2,219

Restricted Investments/Funds - External: Development Contributions - Section 94 Other Externally Restricted Assets Total Interest & Investment Revenue Recognised

2,859 946 6,355

3,662 753 7,140

3,784 25 2,305 1,722 30 28 919 518 15 110 38 1,170 28 144 15 225 731

2,832 43 1,724 1,395 231 1,239 1,411 2,619 13 108 37 1,038 30 186 11 770 610

11,807

14,297

Interest Revenue is attributable to:

(d) Other Revenues Rental Income - Other Council Properties Animal Control Fines - Parking Fines - Other Legal Fees Recovery - Other Compensation - Easements External Works Insurance Claim Recoveries Long Service Levy Commission Novated Lease Receipts Photocopy Income Recycling - Government Rebate Room Hire Sales - Art Galleries Sales - Printing Services Sales - Recycling Materials Other

TOTAL OTHER REVENUE

page 31

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 3. Income from Continuing Operations (continued) $ '000

2013 Operating

2012 Operating

2013 Capital

2012 Capital

7,181 1,651 767 9,599

8,327 2,348 739 11,414

-

-

456 236 1,997 490 65 87 400 516 324 37 144 4,752 14,351

246 194 2,008 494 35 125 499 409 316 137 367 4,830 16,244

805 80 2,252 29 3,166 3,166

1,066 3 261 4,341 280 5,951 5,951

2,011 12,057 283 14,351

1,759 14,475 10 16,244

3,137 29 3,166

5,951 5,951

(e) Grants General Purpose (Untied) Financial Assistance - General Component Financial Assistance - Local Roads Component Pensioners' Rates Subsidies - General Component Total General Purpose Specific Purpose Pensioners' Rates Subsidies: - Domestic Waste Management Bushfire & Emergency Services Child Care Cultural Services Drainage Economic Development Employment & Training Programs Library Recreation & Culture Street Lighting Traffic Route Subsidy Transport (Other Roads & Bridges Funding) Other Total Specific Purpose

Total Grants Grant Revenue is attributable to:

- Commonwealth Funding - State Funding - Other Funding

page 32

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 3. Income from Continuing Operations (continued) 2013 Operating

2012 Operating

2013 Capital

2012 Capital

-

-

20,461 20,461

19,412 19,412

Other Contributions: Dedications of Assets Other Contributions - DIPNR Roads & Bridges Other Total Other Contributions

417 70 487

1,436 63 70 1,569

23,457 23,457

28,929 28,929

Total Contributions

487

1,569

43,918

48,341

14,838

17,813

47,084

54,292

Actual 2013

Actual 2012

Unexpended at the Close of the Previous Reporting Period

66,838

63,776

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

28,165

24,087

$ '000

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

S 94 - Contributions towards amenities/services Total Developer Contributions 17

TOTAL GRANTS & CONTRIBUTIONS

$ '000

(g) Restrictions relating to Grants and Contributions Certain grants & contributions are obtained by Council on condition that they be spent in a specified manner:

add: Fair Value Adjustments on Section 94 Investment Funds: 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

(123)

(183)

(33,283)

(20,842)

(5,118)

3,062

61,720

66,838

5,038 56,682 61,720

7,009 59,829 66,838

page 33

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 4. Expenses from Continuing Operations $ '000

Notes

Actual 2013

Actual 2012

40,250 117 6,179 3,928 585 85 391 291 637 52,463 (1,190)

38,234 101 5,940 3,719 481 896 279 291 432 50,373 (1,477)

(a) Employee Benefits & On-Costs Salaries and Wages Travelling Employee Leave Entitlements (ELE) Superannuation - Defined Contribution Plans Superannuation - Defined Benefit Plans Workers' Compensation Insurance Fringe Benefit Tax (FBT) Training Costs (other than Salaries & Wages) Other Total Employee Costs less: Capitalised Costs

TOTAL EMPLOYEE COSTS EXPENSED Number of "Equivalent Full Time" Employees at year end

51,273

48,896

643

656

2,223 2,223

2,410 55 2,465

513 513

530 530

2,736

2,995

(b) Borrowing Costs (i) Interest Bearing Liability Costs Interest on Loans Other Debts Total Interest Bearing Liability Costs Expensed (ii) Other Borrowing Costs Interest applicable on Interest Free (& favourable) Loans to Council Total Other Borrowing Costs

TOTAL BORROWING COSTS EXPENSED

page 34

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 4. Expenses from Continuing Operations (continued) $ '000

Notes

Actual 2013

Actual 2012

10,757 33,000 72

9,677 30,351 71

646 698

272 283

(c) Materials & Contracts Raw Materials & Consumables Contractor & Consultancy Costs Auditors Remuneration (1) Legal Expenses: - Legal Expenses: Planning & Development - Legal Expenses: Other Operating Leases: - Operating Lease Rentals: Minimum Lease Payments (2) Total Materials & Contracts less: Capitalised Costs

TOTAL MATERIALS & CONTRACTS

973 46,146 (13)

900 41,554 -

46,133

41,554

- Audit & review of financial statements: Council's Auditor Remuneration for audit and other assurance services

72 72

71 71

Total Auditor Remuneration

72

71

973 973

900 900

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

2. Operating Lease Payments are attributable to:

Other

page 35

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 4. Expenses from Continuing Operations (continued) Impairment Costs $ '000

Notes

Depreciation/Amortisation

Actual 2013

Actual 2012

Actual 2013

Actual 2012

-

-

2,160 220 128 3 6,200 183

1,851 229 115 3 2,410 4,005 162

-

-

17,259 3,936

17,055 3,908

-

-

124 550 1,625 206

122 570 2,118 150

-

-

32,594

32,698

(d) Depreciation, Amortisation & Impairment Plant and Equipment Office Equipment Furniture & Fittings Land Improvements (depreciable) Buildings - Non Specialised Buildings - Specialised Other Structures Infrastructure: - Roads, Bridges & Footpaths - Stormwater Drainage Other Assets - Heritage Collections - Library Books - Parks Equipment Intangible Assets

TOTAL DEPRECIATION & IMPAIRMENT COSTS EXPENSED

25

page 36

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 4. Expenses from Continuing Operations (continued) $ '000

Notes

Actual 2013

Actual 2012

401 46 123 201 1,207 195 451 24 58 235 121 319 675 1,244 1,858 20 3,189 365 543 53 292 9

455 20 128 101 1,356 118 346 30 56 234 66 260 1,141 2,009 2,521 284 496 71 13

11,629

9,705

(e) Other Expenses Other Expenses for the year include the following: Advertising Bad & Doubtful Debts Contributions/Levies to Other Levels of Government - Department of Planning Levy - Emergency Services Levy - NSW Fire Brigade Levy - NSW Rural Fire Service Levy - Sydney Water - Australian Communication Authority Councillor Expenses - Mayoral Fee Councillor Expenses - Councillors' Fees Councillors' Expenses (incl. Mayor) - Other (excluding fees above) Donations, Contributions & Assistance to other organisations (Section 356) Election Expenses Electricity & Heating Insurance Revaluation Decrements (Fair Valuation of Investment Properties) Street Lighting Subscriptions & Publications Telephone & Communications Write Off - Library Books Write Off - Building Other

TOTAL OTHER EXPENSES

14

page 37

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 5. Gains or Losses from the Disposal of Assets $ '000

Notes

Actual 2013

Actual 2012

Property (excl. Investment Property) Proceeds from Disposal - Property less: Carrying Amount of Property Assets Sold / Written Off Net Gain/(Loss) on Disposal

1,480 (118) 1,362

564 (141) 423

663 (405) 258

487 (165) 322

149,000 (149,000) -

100,804 (100,804) -

Plant & Equipment Proceeds from Disposal - Plant & Equipment less: Carrying Amount of P&E Assets Sold / Written Off Net Gain/(Loss) on Disposal

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

NET GAIN/(LOSS) ON DISPOSAL OF ASSETS

1,620

745

page 38

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

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

$ '000

Notes

2013

2013

2012

2012

Actual Current

Actual Non Current

Actual Current

Actual Non Current

59

-

501

-

9,938 38,500 48,497

-

11,002 42,889 54,392

-

36,000 36,000

30,500 9,296 1,884 41,680

48,000 2,009 50,009

9,164 2,271 11,435

84,497

41,680

104,401

11,435

48,497

-

54,392

-

36,000 36,000

11,180 30,500 41,680

2,009 48,000 50,009

11,435 11,435

Cash & Cash Equivalents (Note 6a) Cash on Hand and at Bank Cash-Equivalent Assets1 - Deposits at Call - Short Term Deposits Total Cash & Cash Equivalents

Investments (Note 6b) - Long Term Deposits - NCD's, FRN's (with Maturities > 3 months) - Mortgage Backed Securities Total Investments

TOTAL CASH ASSETS, CASH EQUIVALENTS & INVESTMENTS

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

Cash, Cash Equivalents & Investments were classified at year end in accordance with AASB 139 as follows: Cash & Cash Equivalents a. "At Fair Value through the Profit & Loss" Investments a. "At Fair Value through the Profit & Loss" - "Designated at Fair Value on Initial Recognition"

6(b-i)

b. "Held to Maturity"

6(b-ii)

Investments

page 39

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 6b. Investments (continued) 2013

2013

2012

2012

$ '000

Actual Current

Actual Non Current

Actual Current

Actual Non Current

Note 6(b-i) Reconciliation of Investments classified as "At Fair Value through the Profit & Loss" Balance at the Beginning of the Year Revaluations (through the Income Statement) Additions Disposals (sales & redemptions) Balance at End of Year

2,009 (2,009) -

Comprising: - NCD's, FRN's (with Maturities > 3 months) - Mortgage Backed Securities - Other Long Term Financial Assets

Total

Note 6(b-ii) Reconciliation of Investments classified as "Held to Maturity" Balance at the Beginning of the Year Additions Disposals (sales & redemptions) Balance at End of Year Comprising: - Long Term Deposits

Total

-

11,435 (255) 11,180

4,489 (346) (2,134) 2,009

6,881 4,554 11,435

1,884 9,296 11,180

2,009 -

9,164 2,271

2,009

11,435

48,000 134,991 (146,991) 36,000

30,500 30,500

19,000 129,804 (100,804) 48,000

-

36,000 36,000

30,500 30,500

48,000 48,000

-

Note 6(b-iii) Reconciliation of Investments classified as "Loans & Receivables" Nil

Note 6(b-iv) Reconciliation of Investments classified as "Available for Sale" Nil

page 40

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 6c. Restricted Cash, Cash Equivalents & Investments - Details 2013

2013

2012

2012

Actual Current

Actual Non Current

Actual Current

Actual Non Current

84,497

41,680

104,401

11,435

External Restrictions (refer below) Internal Restrictions (refer below) Unrestricted

44,017 31,585 8,895 84,497

41,680 41,680

71,885 27,580 4,936 104,401

11,435 11,435

2013 $ '000

Opening Balance

Transfers to Restrictions

Transfers from Restrictions

Closing Balance

59,829 7,009 4,495 3,434 2,038 1,120 3,708 1,687 83,320 83,320

22,386 18,308 138 1,409 39 1,403 1,170 9,741 54,594 54,594

$ '000

Total Cash, Cash Equivalents and Investments attributable to:

Details of Restrictions External Restrictions - Included in Liabilities Nil

External Restrictions - Other Developer Contributions - General (D) Specific Purpose Unexpended Grants (F)

Domestic Waste Management (G) Edmonson Park Reserve (Unexpended Loan) Environmental Levy Paving Contributions Reserve Town Improvement Fund Waste and Sustainability Reserve LIRS Reserve

External Restrictions - Other Total External Restrictions

D F G

(25,533) (1,971) (18,605) (1,340) (925) (312) (2,988) (543) (52,217) (52,217)

56,682 5,038 4,198 2,232 2,522 847 2,123 2,314 9,741 85,697 85,697

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

Grants which are not yet expended for the purposes for which the grants were obtained. (refer Note 1) 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.

page 41

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 6c. Restricted Cash, Cash Equivalents & Investments - Details (continued) 2013 $ '000

Opening Balance

Transfers to Restrictions

251 2,891 3,861 3,380 4,315 470 1,478 3,665 34 418 168 604 1,319 1,310 348 162 178 429 2,046 253 27,580

499 694 1,702 935 4,543 1,764 148 16 174 492 110 1,425

110,900

Transfers from Restrictions

Closing Balance

Internal Restrictions Plant & Vehicle Replacement Employees Leave Entitlement Carry Over Works Admin Building Reseve Advance Receipt Financial Assistance Grant Apprentice/Trainee Reserve Asset Maintenance Reserve Capital Works Reserve CBD Reserve CCTV Reserve Council Reserve Elections Reserve Information Technology Reserve Insurance Reserve LEP & DCP Reserve Moorebank Voluntary Acq Reserve Parking Strategy Reserve Professional Engagement Reserve Property Development Reserve Special Projects Reserve Infrastructure Sinking Fund Tourism and Events Reserve Intermodal Fighting Reserve Organisational Reform Reserve

Total Internal Restrictions TOTAL RESTRICTIONS

2,794 923 100 312 662 17,293

(499) (2,877) (499) (4,315) (238) (83) (1,978) (18) (600) (810) (3) (449) (128) (440) (351) (13,288)

251 3,585 2,686 3,816 4,543 232 1,395 3,451 34 548 184 178 1,001 1,307 458 162 1,154 301 4,400 253 572 100 312 662 31,585

71,887

(65,505)

117,282

page 42

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 7. Receivables $ '000

Notes

Purpose Rates & Annual Charges Interest & Extra Charges User Charges & Fees Accrued Revenues - Interest on Investments - Other Income Accruals Government Grants & Subsidies Net GST Receivable Other Debtors Total

2013 Current Non Current

2012 Current Non Current

4,915 408 1,446

362 -

4,538 381 2,049

307 -

2,415 761 632 1,859 412 12,848

362

2,681 2,082 1,489 493 13,713

307

less: Provision for Impairment

User Charges & Fees Total Provision for Impairment - Receivables

TOTAL NET RECEIVABLES

(254) (254)

-

(239) (239)

-

12,594

362

13,474

307

76 110 1,084 632 1,902

-

68 112 914 1,094

-

Externally Restricted Receivables - Environmental Levy - Town Improvement - Domestic Waste Management - Government Grants - Roadworks

Total External Restrictions Internally Restricted Receivables Nil Unrestricted Receivables TOTAL NET RECEIVABLES

10,692

362

12,380

307

12,594

362

13,474

307

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 10.00% (2012 11.00%).

Generally all other receivables are non interest bearing. (iv) Please refer to Note 15 for issues concerning Credit Risk and Fair Value disclosures.

page 43

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 8. Inventories & Other Assets $ '000

Notes

2013 Current Non Current

2012 Current Non Current

Inventories Stores & Materials Total Inventories

55 55

-

59 59

-

Other Assets Prepayments Total Other Assets

248 248

-

117 117

-

303

-

176

-

TOTAL INVENTORIES / OTHER ASSETS

Externally Restricted Assets There are no restrictions applicable to the above assets.

page 44

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 9a. Infrastructure, Property, Plant & Equipment Asset Movements during the Reporting Period

as at 30/6/2012

$ '000 Plant & Equipment Office Equipment Furniture & Fittings

At

At

Cost

Fair Value

Accumulated Dep'n

Carrying

Impairment

Asset Additions

WDV of Asset Disposals

Value

as at 30/6/2013

Revaluation Other Depreciation Adjustments Movements Increments Expense & Transfers to Equity (Assets (ARR) Written Off)

-

18,385 3,263 2,188

11,334 2,133 1,121

-

7,051 1,130 1,067

2,891 175 181

(405) -

(2,160) (220) (128)

-

238,479 285,537 81,619 9,169 342 50,256 152,667 2,688

11 22,466 49,171 812

-

238,479 285,537 81,619 9,169 331 27,790 103,496 1,876

4,158 1,638 23,457 152 2,509 4,013 494

(118) -

(3) (2,157) (4,043) (183)

-

956,317 382,337

284,778 102,264

-

671,539 280,073

15,647 6,077

-

-

1,246 7,183 44,645 28,468

164 5,714 38,436 -

-

1,082 1,469 6,209 28,468

22 567 2,051 10,041

-

-

2,264,789

518,404

-

1,746,385

74,073

-

-

At

At

Cost

Fair Value

Accumulated Dep'n

Carrying

Impairment

Value

-

-

19,383 3,439 2,369

12,006 2,354 1,249

-

7,377 1,085 1,120

-

164,259 287,057 105,076 9,321 342 57,188 213,044 3,183

14 35,983 80,790 996

-

164,259 287,057 105,076 9,321 328 21,205 132,254 2,187

Land:

- Operational Land - Community Land - Land under Roads (post 30/6/08) Land Improvements - non depreciable Land Improvements - depreciable Buildings - Non Specialised Buildings - Specialised Other Structures

(85,651) (7,535)

(293)

-

-

7,273 891 28,788 -

(17,259) (3,936)

-

-

-

-

971,964 388,414

302,037 106,200

-

669,927 282,214

(124) (550) (1,625) -

-

(53) -

-

-

1,268 6,647 46,696 38,509

288 5,214 40,061 -

-

980 1,433 6,635 38,509

(346)

36,952

-

2,318,159

587,192

-

1,730,967

Infrastructure:

- Roads, Bridges, Footpaths - Stormwater Drainage Other Assets:

-

Heritage Collections Library Books Parks Equipment Other (Capital WIP)

TOTAL INFRASTRUCTURE, PROPERTY, PLANT & EQUIP.

(523)

(32,388)

(93,186)

Additions to Buildings & Infrastructure Assets are made up of Asset Renewals ($30,227) and New Assets ($43,816).

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

Financial Statements 2013

page 45

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 9b. Externally Restricted Infrastructure, Property, Plant & Equipment $ '000 Class of Asset

Actual

Actual

2013

2012

At

At

A/Dep &

Cost

Fair Value

Impairm't

Carrying Value

At

At

A/Dep &

Cost

Fair Value

Impairm't

Carrying Value

Domestic Waste Management Plant & Equipment Total DWM

-

226

223

226

220

226

223

3 3

-

-

-

226

220

6 6

TOTAL RESTRICTED I,PP&E

-

226

223

3

-

226

220

6

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

Actual

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

page 46

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 10a. Payables, Borrowings & Provisions 2013 Current Non Current

2012 Current Non Current

10,281 1,215

-

10,912 731

-

118 799 4,419 16,832

-

78 102 3,840 15,663

-

6,292 6,292

37,497 37,497

6,468 6,468

33,820 33,820

Annual Leave Sick Leave Long Service Leave

4,309 322 8,734

386

4,118 309 8,303

475

Sub Total - Aggregate Employee Benefits

13,365

386

12,730

475

510 215 14,090

1,990 2,376

550 215 13,495

2,680 3,155

37,214

39,873

35,626

36,975

$ '000

Notes

Payables Goods & Services - operating expenditure Payments Received In Advance Accrued Expenses: - Borrowings - Other Expenditure Accruals Security Bonds, Deposits & Retentions Total Payables

Borrowings Loans - Secured 1 Total Borrowings

Provisions Employee Benefits;

Self Insurance - Claims Incurred Other Insurance Claims Total Provisions

Total Payables, Borrowings & Provisions (i) Liabilities relating to Restricted Assets

2013 Current Non Current

2012 Current Non Current

Externally Restricted Assets

1,582 1,582

-

740 740

-

1,582 35,633

39,873

740 34,886

36,975

37,214

39,873

35,626

36,975

Interest Free and LIRS borrowings Liabilities relating to externally restricted assets Internally Restricted Assets

Nil Total Liabilities relating to restricted assets Total Liabilities relating to Unrestricted Assets TOTAL 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. page 47

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 10a. Payables, Borrowings & Provisions (continued) $ '000

Actual 2013

Actual 2012

8,687 2,210 10,897

8,274 1,920 10,194

(ii) Current Liabilities not anticipated to be settled within the next 12 months The following Liabilities, even though classified as current, are not expected to be settled in the next 12 months.

Provisions - Employees Benefits Payables - Security Bonds, Deposits & Retentions

Note 10b. Description of and movements in Provisions 2012

Class of Provision Annual Leave Sick Leave Long Service Leave Other

TOTAL

Opening Balance as at 1/7/12

4,118 309 8,778 3,445 16,650

2013 Remeasurement Additional Decrease due to Unused amounts effects due to Provisions Payments reversed Discounting

2,938 18 835 (730) 3,061

(2,747) (5) (493) (3,245)

-

-

Closing Balance as at 30/6/13

4,309 322 9,120 2,715 16,466

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

page 48

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 11. Statement of Cash Flows - Additional Information $ '000

Notes

Actual 2013

Actual 2012

48,497 48,497

54,392 54,392

47,089

61,406

32,594 (1,620) (23,457)

32,698 (745) (31,136)

(a) Reconciliation of Cash Assets Total Cash & Cash Equivalent Assets Less Bank Overdraft BALANCE as per the STATEMENT of CASH FLOWS

6a 10

(b) Reconciliation of Net Operating Result to Cash provided from Operating Activities Net Operating Result from Income Statement Adjust for non cash items:

Depreciation & Amortisation Net Losses/(Gains) on Disposal of Assets Non Cash Capital Grants and Contributions Losses/(Gains) recognised on Fair Value Re-measurements through the P&L: - Investments classified as "At Fair Value" or "Held for Trading" - Investment Properties Amortisation of Premiums, Discounts & Prior Period Fair Valuations - Interest Exp. on Interest Free Loans received by Council (previously Fair Valued) Share of Net (Profits) or Losses of Associates/Joint Ventures

255 20

346 -

513 (785)

530 (438)

810 15 4 (131) (631) 40 697 1,063 546 (730)

6,990 3 22 84 2,271 (160) (361) 310 561 211

+/- Movement in Operating Assets and Liabilities & Other Cash Items:

Decrease/(Increase) in Receivables Increase/(Decrease) in Provision for Doubtful Debts Decrease/(Increase) in Inventories Decrease/(Increase) in Other Assets Increase/(Decrease) in Payables Increase/(Decrease) in accrued Interest Payable Increase/(Decrease) in other accrued Expenses Payable Increase/(Decrease) in Other Liabilities Increase/(Decrease) in Employee Leave Entitlements Increase/(Decrease) in Other Provisions NET CASH PROVIDED FROM/(USED IN) OPERATING ACTIVITIES from the STATEMENT of CASH FLOWS

56,292

72,592

page 49

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 11. Statement of Cash Flows - Additional Information (continued) $ '000

Notes

Actual 2013

Actual 2012

23,457 23,457

28,929 2,207 31,136

500 500

500 35 535

(c) Non-Cash Investing & Financing Activities Land Dedications Other Dedications Total Non-Cash Investing & Financing Activities

(d) Financing Arrangements (i) Unrestricted access was available at balance date to the following lines of credit: Bank Overdraft Facilities (1) Credit Cards / Purchase Cards Total Financing Arrangements 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 Liabilities Loans are secured by a mortgage over future years Rate Revenue only.

page 50

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 12. Commitments for Expenditure $ '000

Notes

Actual 2013

Actual 2012

2,509 462 14,188 17,159

3,884 977 13,887 18,748

17,159 17,159

18,748 18,748

2,494 865 2,870 10,930 17,159

3,210 5,410 6,600 3,528 18,748

904 3,531 4,435

778 3,428 4,206

(a) Capital Commitments (exclusive of GST) Capital expenditure committed for at the reporting date but not recognised in the financial statements as liabilities: Property, Plant & Equipment Buildings Plant & Equipment Other Total Commitments These expenditures are payable as follows:

Within the next year Total Payable Sources for Funding of Capital Commitments:

Unrestricted General Funds Future Grants & Contributions Sect 64 & 94 Funds/Reserves Unexpended Loans Total Sources of Funding

(b) Finance Lease Commitments Nil

(c) Operating Lease Commitments (Non Cancellable) a. Commitments under Non Cancellable Operating Leases at the Reporting date, but not recognised as Liabilities are payable: Within the next year Later than one year and not later than 5 years Total Non Cancellable Operating Lease Commitments

b. Non Cancellable Operating Leases include the following assets: Street Sweepers, Office Rentals and Property Lease Contingent Rentals may be payable depending on the condition of items or usage during the lease term.

Conditions relating to Operating Leases: - All Operating Lease Agreements are secured only against the Leased Asset.

- No Lease Agreements impose any financial restrictions on Council regarding future debt etc.

(d) Investment Property Commitments Nil page 51

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 13a(i). Statement of Performance Measurement - Indicators (Consolidated) $ '000

Amounts 2013

Indicator 2013

Prior Periods 2012 2011

51,475 24,736

2.08 : 1

1.83

1.81

8,825 139,131

6.34%

6.77%

6.01%

96,934 191,454

50.63%

46.87%

45.54%

5,685 102,630

5.54%

5.32%

5.54%

30,227 27,395

110.34%

69.65%

66.54%

Local Government Industry Indicators - Consolidated 1. Unrestricted Current Ratio Current Assets less all External Restrictions (1) Current Liabilities less Specific Purpose Liabilities (2,3)

2. Debt Service Ratio Debt Service Cost Income from Continuing Operations (excl. Capital Items & Specific Purpose Grants/Contributions)

3. Rates & Annual Charges Coverage Ratio Rates & Annual Charges Income from Continuing Operations

4. Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage Rates, Annual & Extra Charges Outstanding Rates, Annual & Extra Charges Collectible

5. Building & Infrastructure Renewals Ratio Asset Renewals(4) Depreciation, Amortisation & Impairment

Notes (1) Refer Notes 6-8 inclusive.

Also excludes any Real Estate & Land for resale not expected to be sold in the next 12 months (2) Refer to Note 10(a).

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

(4) Asset Renewals represent the replacement &/or refurbishment of existing assets to an equivalent capacity/performance as opposed to the acquisition of new assets (or the refurbishment of old assets) that increases capacity/performance.

Asset Renewals include building and infrastructure assets only. page 52

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 13a(ii). Local Government Industry Indicators - Graphs (Consolidated) Purpose of Unrestricted Current Ratio

1. Unrestricted Current Ratio 2.5 Ratio : 1

2.3 2.08

2.1 1.9 1.7

1.70

1.81

1.83

2011

2012

1.5 2010

2013

2. Debt Service Ratio

Purpose of Debt Service Ratio

10% Ratio %

8%

7.04%

6%

6.01%

6.77%

To assess the impact of loan principal & interest repayments on the discretionary revenue of council.

2% 0% 2010

2011

2012

100%

Ratio %

80% 46.86%

45.54%

46.87%

50.63%

2010

2011

2012

2013

40% 20% 0%

4. Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage 5.54%

Ratio %

6% 5%

5.54% 5.32%

5% 5.06%

5% 5% 5% 2010

2011

2012

2013

5. Building & Infrastructure Renewals Ratio 120% Ratio %

100% 80%

The Unrestricted Current Ratio of 2.08:1 indicates that Council has twice the capacity to meet its short term obligations for unrestricted activities.

Commentary on 2012/13 Result 2012/13 Ratio

6.34%

The debt Service ratio deccreased in 2012/13 mainly due to retirement of three loans during the year.

Purpose of Rates & Annual Charges Coverage Ratio To assess the degree of Council's dependence upon revenue from rates and annual charges and to assess the security of Council's income.

Purpose of Rates & Annual Charges Outstanding Ratio To assess the impact of uncollected rates and annual charges on Council's liquidity and the adequacy of recovery efforts.

Purpose of Asset Renewals Ratio

Commentary on 2012/13 Result 2012/13 Ratio

50.63%

Th Rates & Annual Coverage Ratio improved compared to the previous three periods. The Rates & Annual Charges revenue (the numerator for the ratio) increased by $4.2m whilst the total revenue (the denominator) decreased by $6.3m.

Commentary on 2012/13 Result 2012/13 Ratio

5.54%

The Rates and Annual Charges Outstanding Percentage is within the expceted range for a relatively large metropolitan Council.

Commentary on 2012/13 Result 2012/13 Ratio

110.34%

110.34%

110% 90%

2.08 : 1

2013

3. Rates & Annual Charges Coverage Ratio

6%

2012/13 Ratio

6.34%

4%

60%

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 2012/13 Result

75.78% 66.54%

70%

69.65%

60% 2010

2011

2012

2013

To assess the rate at which these assets are being renewed relative to the rate at which they are depreciating.

The Building & Infrastructure Renewals Ratio improved from previouis comparative periods and is above the industry benchmark of 100%. This ratio indicates the rate at which Council is renewing its assets; expressed as the % of renewal expenditure to annual depreciation expense page 53

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 14. Investment Properties $ '000

Notes

Actual 2013

Actual 2012

10,250

10,270

(a) Investment Properties at Fair value Investment Properties on Hand Reconciliation of Annual Movement: Opening Balance

- Acquisitions - Net Gain/(Loss) from Fair Value Adjustments CLOSING BALANCE - INVESTMENT PROPERTIES

10,270 (20) 10,250

10,270 10,270

(b) Valuation Basis The basis of valuation of Investment Properties is Fair Value, being the amounts for which the properties could be exchanged between willing parties in arms length transaction, based on current prices in an active market for similar properties in the same location and condition and subject to similar leases.

The 2012 revaluations were based on Independent Assessments made by: Scott Fullerton Valuations Pty Ltd

(c) Contractual Obligations at Reporting Date Refer to Note 12 for disclosures relating to any Capital and Service obligations that have been contracted.

(d) Investment Property Income & Expenditure - summary Rental Income from Investment Properties:

- Minimum Lease Payments Net Revenue Contribution from Investment Properties

682 682

421 421

(20) 662

421

plus:

Fair Value Movement for year

Total Income attributable to Investment Properties

page 54

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 15. Financial Risk Management $ '000

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

The Council's overall risk management program focuses on the unpredictability of financial markets and seeks to 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 foreign currency risk.

Financial risk management is carried out by Council's Finance Section in consultation with Council's Investment advisers where appropriate under policies approved by the Council.

A comparison by category of the carrying amounts and fair values of Council's Financial Assets & Financial Liabilities recognised in the financial statements is presented below.

Carrying Value

Financial Assets Cash and Cash Equivalents Investments - "Designated At Fair Value on Initial Recognition" - "Held to Maturity" Receivables Total Financial Assets Financial Liabilities Payables Loans / Advances Total Financial Liabilities

Fair Value

2013

2012

2013

2012

48,497

54,392

48,497

54,392

11,180 66,500 12,956 139,133

13,444

11,180 66,500 12,956 139,133

13,444

15,617 43,789 59,406

48,000 13,781

129,617

14,932 40,288

55,220

15,617 39,589 55,206

48,000 13,781

129,617

14,932 34,157

49,089

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.

page 55

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 15. Financial Risk Management (continued) $ '000

(a) Fair Value Measurements The fair value of financial assets and financial liabilities must be estimated in accordance with Accounting Standards for either recognition and measurement requirements or for disclosure purposes.

AASB 7 Financial Instruments: Disclosures, requires the disclosure of how fair valuations have been arrived at for all financial assets and financial liabilities that have been measured at fair value.

Arriving at fair values for financial assets & liabilities can be broken up into 3 distinct measurement hierarchies: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs) The following table presents the financial assets and financial liabilities that have been measured & recognised at fair values: 2013 Financial Assets Investments - "Designated At Fair Value on Initial Recognition" Total Financial Assets

Level 1

Level 2

Level 3

Total

-

-

11,180

-

11,180 11,180

11,180

2012 Financial Assets Investments - "Designated At Fair Value on Initial Recognition" Total Financial Assets

Level 1

Level 2

Level 3

Total

-

-

13,444

-

13,444 13,444

13,444

Liabilities

Liabilities

Assets

Assets

2013

2012

2013

2012

-

-

The following table presents the movement in Level 3 financial instruments

Opening Balance (of Level 3 fair values) Gains/(Losses) recognised in the Income Statement Disposals Purchases Closing Balance

-

-

-

13,444 (255) (149,000) 146,991 11,180

11,370 (346) (100,804) 103,224

13,444

page 56

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 15. Financial Risk Management (continued) $ '000

(b) 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 of liquidity 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 on a monthly basis setting out the portfolio breakup and its performance.

The major risk associated with Investments is 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.

Cash & Investments are also subject to interest rate risk - the risk that movements in interest rates could affect returns and income.

A further risk associated with Cash & Investments is 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 purchasing investments 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.

Increase of Values/Rates 2013 Possible impact of a 10% movement in Market Values Possible impact of a 1% movement in Interest Rates

Decrease of Values/Rates

Profit

Equity

Profit

Equity

1,118 1,150

1,118 1,150

(1,118) (1,150)

(1,118) 1,150

1,344 1,023

1,344 1,023

(1,344) (1,023)

(1,344) (1,023)

2012 Possible impact of a 10% movement in Market Values Possible impact of a 1% movement in Interest Rates

page 57

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 15. Financial Risk Management (continued) $ '000

(c) 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 Council may 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 land relating to the debts - that is, the land can be sold to recover the debt. Council is also able to charge interest on 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.

Council makes suitable provision for doubtful receivables as required 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: 2013

2013

Rates &

(i) Ageing of Receivables Current (not yet overdue) Past due by up to 30 days Past due between 31 and 180 days Past due between 181 and 365 days

(ii) Movement in Provision for Impairment of Receivables Balance at the beginning of the year + new provisions recognised during the year - amounts already provided for & written off this year Balance at the end of the year

2012

2012

Rates &

Annual

Other

Annual

Other

Charges

Receivables

Charges

Receivables

5,277 5,277

7,069 433 77 354 7,933

4,845

4,845

8,669 144 137 225 9,175

2013

2012

239 35 (20) 254

236 20 (17) 239

page 58

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 15. Financial Risk Management (continued) $ '000

(d) Payables & Borrowings Payables & Borrowings are both subject to liquidity risk - the risk that insufficient funds may be on hand to meet payment obligations as and when they fall due.

Council manages this risk by monitoring its cash flow requirements and liquidity levels and maintaining an adequate 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 are set out in the Liquidity Table below: $ '000

Subject to no

payable in:

maturity

â&#x2030;¤ 1 Year

1-2 Yrs

2-3 Yrs

3-4 Yrs

4-5 Yrs

> 5 Yrs

4,419

11,198

-

-

-

-

-

Total

Actual

Cash

Carrying

Outflows

Values

15,617

15,617

2013 Trade/Other Payables Loans & Advances Total Financial Liabilities

-

8,738

8,287

7,737

5,848

6,048

20,109

56,767

43,789

4,419

19,936

8,287

7,737

5,848

6,048

20,109

72,384

59,406

3,840

11,092

-

-

-

-

-

14,932

14,932

-

8,757

7,523

7,092

6,528

6,036

18,108

54,044

40,288

3,840

19,849

7,523

7,092

6,528

6,036

18,108

68,976

55,220

2012 Trade/Other Payables Loans & Advances Total Financial Liabilities

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

The following interest rates were applicable to Council's Borrowings at balance date: Trade/Other Payables Loans & Advances - Fixed Interest Rate

2013

2012

Carrying

Average

Value

Interest Rate

15,617 43,789 59,406

0.0% 6.3%

Carrying

Average

Value

Interest Rate

14,932 40,288 55,220

0.0% 6.5%

page 59

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 16. Material Budget Variations $ '000

Council's Original Financial Budget for 12/13 was adopted by the Council on 25 June 2012.

While the Income Statement included in this General Purpose Financial Report must disclose the Original Budget adopted by Council, the Local Government Act requires Council to review its Financial Budget on a Quarterly Basis, so that it is able to manage the various variations between actuals versus budget that invariably occur throughout the year.

This Note sets out the details of MATERIAL VARIATIONS between Council's Original Budget and its Actual results for the year as per the Income Statement - even though such variations may have been adjusted for during 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

2013 Budget

2013 Actual

2013 ---------- Variance* ----------

REVENUES Rates & Annual Charges

96,255

96,934

679

1%

F

User Charges & Fees

13,027

12,031

(996)

(8%)

U

4,439

6,355

43%

F

Interest & Investment Revenue

1,916

Favourable variance due to higher than expected investment holdings and return for the year.

9,808 11,807 1,999 Other Revenues 20% Favourable variance mainly due increased revenue from parking and other fines $900k compared to the previous period and an increase of $600k in rental income (including a one off rental adjustment of $198k for the period) Operating Grants & Contributions

13,193

14,838

F

1,645

12%

F

27,535

141%

F

Variance mainly due additional Grants & Contribution reciepts not budgeted as follows: (1) Additional Financial Assistance Grant receipt for $532k (2) Contribution Civil Constructions for $336k (3) Grant for Economic Development $65k and for Strategic Planning $60k (3) Additional grant income for Sustainable Environment for $215k

19,549 47,084 Capital Grants & Contributions Mainly due to dedication of Land under Roads from developers valued at $23.5m Net Gains from Disposal of Assets

-

1,620

1,620

0%

F

Share of Net Profits - Joint Ventures & Associates

-

785

785

0%

F

page 60

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 16. Material Budget Variations (continued) $ '000

EXPENSES Employee Benefits & On-Costs

2013 Budget

53,965

2013 Actual

51,273

2013 ---------- Variance* ----------

2,692

2,280 2,736 (456) Borrowing Costs Mainly due to amortisation on 10 year interest free loan for $513k in 2012/13 not budgeted

5%

F

(20%)

U

Materials & Contracts

43,872

46,133

(2,261)

(5%)

U

Depreciation & Amortisation

31,885

32,594

(709)

(2%)

U

Other Expenses

11,336

11,629

(293)

(3%)

U

Budget Variations relating to Council's Cash Flow Statement include: Cash Flows from Operating Activities

44,818

56,292

11,474

25.6%

F

Cash Flows from Investing Activities

(59,560)

(65,175)

(5,615)

9.4%

U

Cash Flows from Financing Activities

(6,477)

2,988

9,465

(146.1%)

F

page 61

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

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 PURPOSE

Projections

Opening Balance

Contributions

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

Fair

28 10 (2) 6 (28) (63) (47) (20) (2) 1 (6)

1,057

2,982

(25,410)

(123)

19,404

1,057

2,982

(25,410)

19,404

1,057

2,982

(25,410)

4,179 3,418 108 3,333 4,385 2,346 779 96 98 264 398

148 259 241 302 26 37 14 4 6 20

S94 Contributions - under a Plan

59,829

19,404

Total S94 Revenue Under Plans

59,829

Total Contributions

59,829

(656) 4,356 1,984 (1,700) 16 (2,000) 105 (2,105)

Restricted Asset

Future income

Cumulative

Exp

Over or

Internal

still outstanding

(under) Funding

Borrowings due/(payable)

9,783 18 913 238 9,887 9,173 15,599 9,276 1,022 93 680

50,472 95,248 15,800 69,752 75,597 19,321 8,972 439 2,649 1,030 1,649

(39,962) (98,036) (16,967) (75,292) (84,764) (48,586) (27,256) (9,387) (2,487) (185) -

(20,092)

20,410

(2,685)

3,213

-

56,682

340,929

(402,919)

(5,308)

(123)

-

56,682

(123)

-

56,682

20,293

(19,770)

(2,770)

(4,356)

(254) (5,302) 720

328 1,184 938 2,329

(3,484) 3,200

(1,318) 2,105 -

340,929

(402,919)

(5,308)

-

page 62

Financial Statements 2013

(1,368) (15,883) (5,374) (1,737) (1) (584) (186) (22) (255) -

8,317 8,038 762 416 8,371 5,324 16,478 8,913 900 46 2,264

Held as

Borrowing Value g year Adjustment

(717) 79 45 (127) 596 1,551 973 473 48 (68) 129

Drainage Roads & Traffic Facilities Parking Local Open Space Embellishment of Local Open Space Community Facilities (Local) Community Facilities (District) Tree Planting Other Professional & Legal Fees (Other) Administration Fees Implementation

Internal

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 17. Statement of Developer Contributions (continued) $ '000

S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN - Hinchinbrook / Green Valley PURPOSE Drainage Roads & Traffic Facilities Local Open Space Community Facilities (Local) Embellishment of Local Open Space Tree Planting Other Professional & Legal Fees (Other) Administration Fees Total

Opening Balance

1,128 1,876 3,587 1,193 640 12 (39) (8) 8,389

Projections Contributions

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

3 3

-

60 88 200 201 33 (2) (8)

-

572

Fair

Internal

Borrowing Value g year Adjustment

(99) (180) (279)

(2) (3) (9) (9) (1) (24)

41 8 49

Held as Restricted Asset

Future income

1,186 1,862 3,781 1,385 492 12 (8) 8,710

Internal

still outstanding

(under) Funding

due/(payable)

(914) (1,625) (3,757) (3,757) (487) (12) -

273 237 24 (2,372) 5 (8)

2,312 (41) (132)

-

(10,551)

(1,841)

2,139

Projections Opening Balance

Contributions

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

140 81 1,777 (232) 1 1 32

-

1,800

-

-

7 4 95 (12) 2 (5) 91

Fair

Internal

Borrowing Value g year Adjustment

-

(4) (4)

244 5 249

Held as Restricted Asset

Borrowings

Future income

Cumulative

Exp

Over or

Internal

still outstanding

(under) Funding

Borrowings due/(payable)

147 85 1,868 1 1 34 -

-

(20) (1,421) (1) (1) -

147 65 447 34 -

(244) (79)

2,136

-

(1,443)

693

(323)

Financial Statements 2013

page 63

Drainage Roads & Traffic Facilities Local Open Space Community Facilities (Local) Embellishment of Local Open Space Tree Planting Other Professional & Legal Fees (Other) Administration Fees Total

Over or

-

CONTRIBUTION PLAN - Casula West PURPOSE

Cumulative

Exp

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 17. Statement of Developer Contributions (continued) $ '000

S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN - Casual East PURPOSE Drainage Roads & Traffic Facilities Local Open Space Community Facilities (Local) Embellishment of Local Open Space Professional & Legal Fees (Other) Administration Fees Total

Projections Opening Balance

1,138 1,056 2,879 1,798 761 31 7,663

Contributions

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

-

-

60 56 144 95

-

-

40 2 (4) 393

-

Internal

Fair

Held as

Borrowing Value g year Adjustment

(328) -

(3) (2)

(328)

(16)

(6) (4) (1) -

(244) 4 (240)

Restricted Asset

Future income

1,195 1,110 2,689 1,645 800 33 7,472

-

Internal

still outstanding

(under) Funding

due/(payable)

(1,015) (1,015) (2,639)

180

-

(1,573) (813) -

-

(7,055)

417

-

Opening Balance

69 84 1,198 607 1,747 (1) 15 32 3,751

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

3 805 150 118 1,076

-

4 4 64 55 97 (4) 220

(76) (1) (4) (83) (164)

Fair

Internal

Held as

Value Borrowing g year Adjustment

(3) (3) (4) (10)

-

Restricted Asset

73 88 1,186 1,463 1,990 (1) 11 63 4,873

Future income

181

244 (72) 172 Cumulative

Projections Contributions

Borrowings

Exp

Over or

Internal

still outstanding

(under) Funding

Borrowings

309 571 32

(65) (81) (1,198) (1,669) (1,929) (579) -

8 7 (12) (25) 371

1,093

(5,520)

446

(9) 11 95

due/(payable)

(114) (114)

Financial Statements 2013

page 64

Drainage Roads & Traffic Facilities Local Open Space Community Facilities (Local) Community Facilities (District) Embellishment of Local Open Space Professional & Legal Fees (Other) Administration Fees Total

Over or

95 50 72 (13) 33 -

CONTRIBUTION PLAN - Cecil Hills PURPOSE

Cumulative

Exp

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 17. Statement of Developer Contributions (continued) $ '000

S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN - Wattle Grove PURPOSE Drainage Roads & Traffic Facilities Local Open Space Community Facilities (Local) Community Facilities (District) Embellishment of Local Open Space Professional & Legal Fees (Other) Administration Fees Total

Projections Opening Balance

156 122 149 (16) (144) (4) 11 18 292

Contributions

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

-

-

-

-

8 6 8 (8) 1 15

Fair

Internal

Borrowing Value g year Adjustment

(10) -

(1) (1)

(10)

16 152 4 172

Held as Restricted Asset

Future income

164 117 157 11 19 468

Contributions

Interest

Expenditure

earned in Year

during Year

613 1,779 1,308 1,032 134 2,060 96 29 33

53,542

7,084

still outstanding

(under) Funding

due/(payable)

46 58 71 15 14 22 14 2 2 244

(308) 318 215 1,120 988 371 469 35 3,208

(191) (15,742) (3,716) (484) (463) (138) (1) (29) (20,764)

Fair

Internal

Value Borrowing g year Adjustment

164 (2) (2) 11 -

(16) (152) (4) -

-

(297)

171

(172)

13 1 (8) (43) (48) (18) (20) (2) (125)

656 (16) (2,152) (4) (41) (1,557)

Held as Restricted Asset

1,122 5,371 2,747 15,482 6,762 9,230 668 6 41,388

Borrowings

(119) (159) (19)

Cumulative

Projections

received during the Year Cash Non Cash

995 12,988 7,588 638 17,044 4,816 8,823 648 2

Internal

Future income

Exp

Over or

Internal

still outstanding

(under) Funding

Borrowings due/(payable)

11,700 18,900 15,200 1,380 5,675 2,790 439 300 280

(8,425) (20,300) (19,285) (22,147) (24,198) (10,150) (9,339) (660) (6)

4,398 (1,400) 1,286 (18,020) (3,041) (598) 330 308 280

(6,114) (656) (1,484) 18,114 3,365 1,504 41 -

56,664

(114,509)

(16,457)

14,770

Financial Statements 2013

page 65

Drainage Roads & Traffic Facilities Local Open Space Community Facilities (Local) Community Facilities (District) Embellishment of Local Open Space Tree Planting Other Professional & Legal Fees (Other) Administration Fees Total

Opening Balance

Over or

-

CONTRIBUTION PLAN - Cabramatta Creek / Carnes Hill / Prestons PURPOSE

Cumulative

Exp

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 17. Statement of Developer Contributions (continued) $ '000

S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN - Prestons Industrial Area PURPOSE Drainage Roads & Traffic Facilities Local Open Space Tree Planting Other Professional & Legal Fees (Other) Administration Fees Total

Projections

Opening Balance

1,068 (5,260) 435 77 92 8 (3,580)

Contributions

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

192 34 5

-

9 4 244

Fair

Held as

Internal

Value Borrowing g year Adjustment

-

54 (279) 24 4 5 (6)

(135) (48) -

(3) 12 (1) -

-

(198)

(183)

8

(656) 3,700 3,044

Restricted Asset

520

Future income

Embellishment of Local Open Space Administration Fees Total

Over or

Internal

still outstanding

(under) Funding

due/(payable)

Borrowings

11,200 7,050 220

(10,252) (6,090) (731)

1,469 (833) (48)

33

-

106 6

750 350

(35) (609) (152)

(2) 247 204

19,570

(17,868)

(1,793) 463

(665)

CONTRIBUTION PLAN - Riverpark Drive PURPOSE

Cumulative

Exp

1,037

Opening Balance

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

Internal

Fair

Held as

Borrowing Value g year Adjustment

Restricted Asset

Future income

(3,150) Cumulative

Projections Contributions

656 (3,700) (106)

Exp

Over or

Internal

still outstanding

(under) Funding

Borrowings due/(payable)

5 -

-

-

-

-

-

-

5 -

-

-

5 -

(3)

5

-

-

-

-

-

-

5

-

-

5

(3) Financial Statements 2013

page 66

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 17. Statement of Developer Contributions (continued) $ '000

S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN - Denham Court PURPOSE Drainage Roads & Traffic Facilities Community Facilities (Local) Administration Fees Total

Opening Balance

(12) 76 30 94

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

-

-

-

-

-

Fair

Held as

Internal

Borrowing Value g year Adjustment

-

-

-

-

-

-

Restricted Asset

Future income

(12) 76 30 94

Over or

Internal

still outstanding

(under) Funding

due/(payable)

-

(12)

-

76 30 -

-

-

94

Opening Balance

(61) 762 128 206 2,722 16 3,773

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

108 90 848 22 1,068

-

(3) 45 7 12

Fair

Internal

Held as

Borrowing Value g year Adjustment

(35)

154 (7)

(1,021) (56)

208

(1,112)

(2) (6) (8)

25 25

Restricted Asset

(64) 913 135 273 2,697 3,954

Future income

15,800 840

(88) (3) (91) Cumulative

Projections Contributions

Borrowings

Exp

Over or

Internal

still outstanding

(under) Funding

due/(payable)

(16,967) -

(64) (254) 135

Borrowings

-

32,600 140

(1,130) (35,818) -

(17) (521) 140

(168)

49,380

(53,915)

(581)

(168)

page 67

Financial Statements 2013

Roads & Traffic Facilities Parking Community Facilities (Local) Community Facilities (District) Embellishment of Local Open Space Administration Fees Total

Exp

-

CONTRIBUTION PLAN - Established Areas PURPOSE

Cumulative

Projections Contributions

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 17. Statement of Developer Contributions (continued) $ '000

S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN - City Wide Facilities PURPOSE Community Facilities (District) Embellishment of Local Open Space Administration Fees Total

Opening Balance

(2,377) (2,472) 7 (4,842)

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

405 549 954

-

(116) (116) (232)

Fair

Internal

Held as

Value Borrowing g year Adjustment

(65) -

5 4 9

(65)

-

Restricted Asset

Future income

Drainage Roads & Traffic Facilities Local Open Space Professional & Legal Fees (Other) Administration Fees Total

Exp

Over or

Internal

still outstanding

(under) Funding

due/(payable)

Borrowings

(2,148) (2,035) 7

2,148 2,035 -

(7)

-

-

(4,176)

4,183

(7)

-

-

CONTRIBUTION PLAN - Pleasure Point PURPOSE

Cumulative

Projections Contributions

Cumulative

Projections Opening Balance

6 (118) 11 12 (2) (91)

Contributions

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

-

-

(2)

-

(6) 1 (3) (10)

Fair

Internal

Held as

Borrowing Value g year Adjustment

-

-

5 5

Restricted Asset

4 (124) 12 12 (96)

Future income

-

Exp

Over or

Internal

still outstanding

(under) Funding

Borrowings due/(payable)

-

-

4 (124) 12 12 -

(34)

-

-

(96)

(87)

(53) Financial Statements 2013

page 68

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 17. Statement of Developer Contributions (continued) $ '000

S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN - Southern Hoxtonn Park Aerodrome PURPOSE Drainage Roads & Traffic Facilities Local Open Space Community Facilities (Local) Community Facilities (District) Embellishment of Local Open Space Professional & Legal Fees (Other) Administration Fees Implementation Total

Opening Balance

Projections

Contributions

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

Fair

Internal

Borrowing Value g year Adjustment

Held as Restricted Asset

Future income

Internal

still outstanding

(under) Funding

due/(payable)

Borrowings

2,885 1,462 2,000 232 405 40 84 398

102 201 169 11 23 280 2 4 20

(614) (116) (818) 60 101 6 (32) 129

(1,002) (32) (454) (73) (8) (58) -

24 3 34 (3) (5) 1 (6)

2,000 (1,700) 32 (2,105)

4,925 (1,534) (13,677) 1,302 2 544 134 680

12,643 7,296 9,339 1,099 6,590 164 228 1,649

(4,405) (5,633) (2,332) (2,099) (5,023) -

13,163 129 (6,670) 302 2 2,111 298 228 2,329

(14,187) (2,000) 1,700 (562) 2,105

(10,494)

7,506

812

(1,284)

(1,627)

48

(1,773)

(7,624)

39,008

(19,493)

11,891

(12,944)

Projections Opening Balance

Contributions

Interest

Expenditure

received during the Year Cash Non Cash

earned in Year

during Year

Internal

Fair

Borrowing Value g year Adjustment

(3) 45 (769) 165 87 2

489 143 14 277 523 20 3

-

14 7 (60) 25 13 -

(40) (800) (9) (29)

(1) 3 (1) (1) -

26

(473)

1,469

-

(1)

(878)

-

26

Held as Restricted Asset

459 195 (1,612) 466 622 13 143

Future income

Cumulative

Exp

Over or

Internal

still outstanding

(under) Funding

due/(payable)

Borrowings

14,929 62,002 44,993 16,661 31,011 1,435 -

(14,887) (63,152) (43,770) (17,341) (31,892) (1,218) -

501 (955) (389) (214) (259) 230 -

(3) (26)

171,031

(172,261)

(1,087)

(29)

Financial Statements 2013

page 69

Drainage Roads & Traffic Facilities Local Open Space Community Facilities (Local) Embellishment of Local Open Space Professional & Legal Fees (Other) Administration Fees Total

Over or

3,632 (2,851) (16,439) 1,013 2 1,816 96 (27) 2,264

CONTRIBUTION PLAN - Edmonson Park PURPOSE

Cumulative

Exp

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 18. Contingencies & Other Assets/Liabilities Not Recognised $ '000

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

LIABILITIES NOT RECOGNISED: 1. Guarantees (i) Defined Benefit Superannuation Contribution Plans Council participates in an employer sponsored Defined Benefit Superannuation Scheme, and makes contributions as determined by the Superannuation Scheme's Trustees.

(ii) Westpool and United Indepenedent Pool Council is a member of Westpool & United Indipenedent Pool a mutual pool scheme providing insurance to Local Government Membership includes the potential to share in either the net assets or liabilities of the fund depending on its past performance. Councilâ&#x20AC;&#x2122;s share of the Net Assets or Liabilities reflects Councils contributions to the pool and the result of insurance claims within each of the Fund Years.

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

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

(iii) Workers Compensation Self Insurance Bank Guarantee

The Schemes most recent full actuarial review indicated that the Net Assets of the Scheme were not sufficient to meet the accrued benefits of the Schemes Defined Benefit member category with member Councils required to make significantly higher contributions in future years.

Council is a self insurer for Workers Compensation and as acondition of its self insurance license requires either a Term Deposit or Bank Guarantee to be held based on Actuarial Assessment.

The Local Government Superannuation Scheme however is unable to provide Council with an accurate figure of its share of the net deficit. However it has etimated the deficit to be in the order of $2.1 million as at 30 June 2013.

Council Actuarial Assessment as at 30 June 2012 recommended that the current Bank Guarantee of $4.63 million be reduced to $3.42 million. At the time of preparing the Annual Financial Statements the actuarial asessement and the recommended reduction had not been reviewed and confirmed by WorkCover Authority.

2. Other Liabilities

Future contributions made to the defined benefit scheme to rectify the net deficit position will be recognised as an expense when they become payable - similar to the accounting for Defined Contributions Plans.

(i) Third Party Claims The Council is involved from time to time in various claims incidental to the ordinary course of business including claims for damages relating to its services.

page 70

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 18. Contingencies & Other Assets/Liabilities Not Recognised (continued) $ '000

LIABILITIES NOT RECOGNISED (continued): As at the reporting date Council has identified two Contingent liabilities Council is in dispute with with two contractors

in relation to claims for additional costs incurred as a result of delays and disruptions to complete the contracts in the specified and agreed time frame.

Council and its legal representatives are in negotiations with both contractors to resolve the disputed matters.

(iii) Potential Land Acquisitions due to Planning Restrictions imposed by Council Council has classified a number of privately owned land parcels as Local Open Space or Bushland.

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

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

(ii) S94 Plans Council levies Section 94/94A Contributions upon various development across the Council area through the required Contributions Plans.

ASSETS NOT RECOGNISED:

As part of these Plans, Council has received funds for which it will be required to expend the monies in accordance with those Plans.

As permitted under AASB 1051, Council has elected not to bring to account Land Under Roads that it owned or controlled up to & including 30/6/08.

As well, these Plans indicate proposed future expenditure to be undertaken by Council, which will be funded by making levies and receipting funds in future years or where a shortfall exists by the use of Council's General Funds.

(ii) Infringement Notices/Fines

These future expenses do not yet qualify as liabilities as of the Reporting Date, but represent Councils intention to spend funds in the manner and timing set out in those Plans.

(i) Land Under Roads

Fines & Penalty Income, the result of Council issuing Infringement Notices is followed up and collected by the Infringement Processing Bureau.

Councils Revenue Recognition policy for such income is to account for it as revenue on receipt.

Accordingly, at Year End, there is a potential asset due to Council representing issued but unpaid Infringement Notices.

Due to the limited information available on the status, value and duration of outstanding Notices, Council is unable to determine the value of outstanding income.

page 71

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 19. Controlled Entities, Associated Entities & Interests in Joint Ventures $ '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 ownership and 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 accordance with accounting standards, depending on the level of Councils (i) interest and (ii) control and the type (form) of entity/operation, as follows;

Note 19(a) (i)&(ii)

Associated Entities & Joint Venture Entities Arrangements in the form of a Separate Entity that deploys the resources of the operation itself.

Under Associated Entities, Council significantly influences the operations (but does not control them, whilst for JV Entities, Council Jointly Controls the Operations with other parties.

Accounting Recognition: (i) Subsidiaries disclosed under Note 19(a), and Joint Venture Operations disclosed at Note 19(c), are accounted for on a Line by Line Consolidation basis within the Income Statement and Statement of Financial Position.

(ii) Associated Entities and Joint Venture Entities as per Notes 19(b)(i) & (ii) are accounted for using the Equity Accounting Method - and are disclosed as a 1 line entry in both the Income Statement and Statement of Financial Position.

Council's Share of Net Income

Associated Entities Joint Venture Entities Total

Council's Share of Net Assets

Actual

Actual

Actual

Actual

2013

2012

2013

2012

-

-

-

-

785

438

4,876

4,091

785

438

4,876

4,091

page 72

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 19. Controlled Entities, Associated Entities & Interests in Joint Ventures $ '000

(a) Associated Entities & Joint Venture Entities (i) ASSOCIATED ENTITIES Council has no interest in any Associated Entities. (ii) JOINT VENTURE ENTITIES (a) Carrying Amounts Name of Entity

Principal Activity

UIP Westpool

Self Insurance Self Insurance

Total Carrying Amounts - Joint Venture Entities (b) Relevant Interests

Interest in Outputs

2013

2012

532 4,344 4,876

413 3,678 4,091

Interest in Ownership

Name of Entity

2013

UIP Westpool

8%

9%

8%

9%

8%

9%

12%

12%

12%

12%

12%

12%

(c) Movement in Carrying Amounts

2012

2013

Proportion of Voting Power

2012

UIP

Opening Balance Share in Operating Result Council's Equity Share in the Joint Venture Entity

2013

2012

Westpool

2013

2012

2013

2012

413 119 532

121 292 413

3,678 666 4,344

3,532 146 3,678

(d) Share of Joint Ventures Assets & Liabilities Assets Current

Liabilities

Non Current

Current

Non Current

Net Assets

2013

UIP Westpool Totals

747

-

83

132

532

8,584

4

584

3,660

4,344

9,331

4

667

3,792

4,876

2012

UIP Westpool Totals

639

-

109

117

413

7,160

6

468

3,020

3,678

7,799

6

577

3,137

4,091

2012 Expenses

Result

(e) Share of Joint Ventures Revenues, Expenses & Results Revenues

UIP Westpool Totals

2013 Expenses

Result

Revenues

740

621

119

884

593

291

1,401

735

666

1,119

972

147

2,141

1,356

785

2,003

1,565

438 page 73

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 20. Equity - Retained Earnings and Revaluation Reserves $ '000

Notes

Actual 2013

Actual 2012

1,113,420 6,421 47,089

1,052,014 61,406

1,166,930

1,113,420

642,312

704,967

642,312

704,967

(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 Errors b. Net Operating Result for the Year

20 (c)

Balance at End of the Reporting Period (b) Reserves (i) Reserves are represented by: - Infrastructure, Property, Plant & Equipment Revaluation Reserve Total (ii) Reconciliation of movements in Reserves: Infrastructure, Property, Plant & Equipment Revaluation Reserve - Opening Balance - Revaluations for the year - Correction of Prior Period Errors - Balance at End of Year TOTAL VALUE OF RESERVES

9(a) 20(c)

704,967 36,952 (99,607) 642,312

642,312

704,967 704,967

704,967

(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.

page 74

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 20. Equity - Retained Earnings and Revaluation Reserves (continued) $ '000

Notes

Actual 2013

Actual 2012

(c) Correction of Error/s relating to a Previous Reporting Period Correction of errors disclosed in this year's financial statements: Revaluation of Operational Land and Building as at 30 June 2013 revealed the following prior year errors that has been corrected in the Asset Revaluation Reserve in the current period (1) Operational Land adjusted to reflect land holdings as per Council's Operational Land register as at 30 June 2013 (2) Correction of depreciation expense on a non depreciable asset (3) Written down value of Building not owned/controlled by Council incorrectly recorded in building register (4) Correction to revaluation of Operational Land conducted in June 2008 rates used did not reflect zoning and other phyiscal chararteristics / restrictions of the land at the time of the valuation. These errors were identified when reviewing and comparing to the rates for the revalaution conducted as at June 2013. The Asset Revaluation Reserve has been adjusted accordingly in the current reporting period.

-

6,315 227 (121) (99,607)

These amounted to the following Equity Adjustments: - Adjustments to Opening Equity - 1/7/11

-

-

(relating to adjustments for the 30/6/11 reporting year end and prior periods)

- Adjustments to Closing Equity - 30/6/12

(93,186)

-

(93,186)

-

(relating to adjustments for the 30/6/12 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.

page 75

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 21. Financial Result & Financial Position by Fund $ '000

Council utilises only a General Fund for its operations.

Note 22. "Held for Sale" Non Current Assets & Disposal Groups Council did not classify any Non Current Assets or Disposal Groups as "Held for Sale".

Note 23. Events occurring after the Reporting Period Events that occur between the end of the reporting period (ending 30 June 2013) and the date when the financial statements 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" date relating to these General Purpose Financial Statements.

Accordingly, the "authorised for issue" date is 30/10/13.

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 of conditions that existed at 30 June 2013. (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 occurred after 30 June 2013 and which are only indicative of conditions that arose after 30 June 2013.

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".

page 76

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 25. Intangible Assets $ '000

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

Intangible Assets are as follows; Opening Values: Gross Book Value (1/7/12) Accumulated Amortisation (1/7/12) Accumulated Impairment (1/7/12) Net Book Value - Opening Balance Movements for the year - Purchases - Amortisation charges Closing Values: Gross Book Value (30/6/13) Accumulated Amortisation (30/6/13) Accumulated Impairment (30/6/13)

TOTAL INTANGIBLE ASSETS - NET BOOK VALUE 1

1.

Actual

Actual

2013

2012

Carrying Amount

Carrying Amount

956 (507) 449

704 (357) 347

557

252

(206)

(150)

1,513 (713) -

956 (507) -

800

449

800 800

449 449

The Net Book Value of Intangible Assets represent:

- Software

Note 26. Reinstatement, Rehabilitation & Restoration Liabilities Council has no outstanding obligations to make, restore, rehabilitate or reinstate any of its assets/operations.

page 77

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 27. Commentary on Council's Operating Result & Financial Position Council’s financial position as at 30 June 2013 continues to demonstrate a sound and stable position.

Snapshot      

$191.5 million Income from Continuing Operations $74 million capital expenditure (including $23.46 million Land Under Roads dedicated by developers) Rates and Charges comprised $96.93 million (50.62%) of the total Income from Continuing Operations Operating Surplus $47.1 million Cash reserves increased by $10.34 million $23.46 million road reserve dedicated to Council in new land release areas.

Income Statement The income statement shows how much Council earned or lost during the 2012-2013 financial year and is calculated using the following formula: Total revenue – total expenses = net result The operating surplus in 2012-2013 was $47.1 million. A positive net result does not necessarily mean there is a surplus of funds that can be used for Council operations or future capital expenditure. Some of the net result is made up of items representing funds which have been set aside for a specific purpose and “Non-Cash” revenue.

For example, during 2012-2013 these included: 

Non–Cash revenue of $23.46 million road reserves dedicated by developers to Council at Moorebank, Carnes Hill, Middleton Grange, Edmondson Park and Len Waters Estate. The value of these assets is included as revenue (these are non-cash revenues, i.e. do not represent funds available for Council operations or future capital expenditure); and



$1.1 million “in kind” contributions from developers (value of works completed at the developer’s expense in lieu of Section 94 cash contribution).



$19.4 million cash contributed by developers to fund future infrastructure associated with new development (Council is restricted as to how it may use these funds).

Sourcing our Revenue – where our money came from Council had revenue of $191.5 million in revenue during 2012-2013. The largest contributions to revenue were provided by general rates and capital grants and contributions.

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Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 27. Commentary on Council's Operating Result & Financial Position

Identifying our expenses â&#x20AC;&#x201C; where our money was spent The primary components of our $144.37 million expenditure are employee costs, depreciation and materials and contracts. Total gross expenditure increased by approximately 6.3% per cent mainly due to: (1) 4.8% increase in employee costs (3.25% annual award increase and 1.55% increase for the competency review and costs associated with the organisational restructure).

(2) 11% increase in Materials and contractsâ&#x20AC;&#x2122; consisting mainly of maintenance costs for infrastructure assets, parks and open space; price and tonnage increases for garbage and recycling materials collected during the year.

page 79

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 27. Commentary on Council's Operating Result & Financial Position

Balance Sheet The balance sheet shows what we own (our assets) and what we owe (our liabilities) and our net worth.

Assets – what we own As at 30 June 2013 Council held assets worth $1.88 billion. The major components of our assets include:    

property, plant and equipment (land, buildings, roads, stormwater drainage, motor vehicles/trucks & other plant items) capital works in progress Investment Properties Cash and Investments

.

page 80

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 27. Commentary on Council's Operating Result & Financial Position Revaluation of Assets and Correction of Prior Year Errors Council is required by the Division of Local Government to revalue its assets at Fair Value every five years and on a cyclical basis for each major asset class in accordance with Australian Accounting Standard AASB116. For the financial year ended 30 June 2013 Council engaged a registered external valuer to revalue its Buildings and Operational Land.

Council recognised a fair value gain of $36.9 million in its books upon completion and review of the valuer’s report.

This gain was made up of $29.67 million for Buildings and $7.3 million for Operational Land.

As part of the review process Council identified and revised down the rate per square metre on a number of operational land held in its asset register. This resulted in a total write down of $93.2 million for this asset class.

The main reason for the asset write down was an overstatement of the rate per square metre used in the 2008 revaluation. The land values in Council’s asset register have been adjusted as at 30 June 2013 to reflect zoning, development restrictions, limited use and other factors that were not considered during the 2008 revaluation.

Both the Revaluation Gain of $36.9 million and the correction of errors of $93.2 million are reported in the Statement of Comprehensive Income (OCI), as they have no impact on the results for the reporting period. They are instead reported as Equity adjustments to the Asset Revaluation Reserves and to Retained Earnings in Council’s Statement of Financial Position.

Capital expenditure The level of capital expenditure in 2012-2013 strived to deliver on the challenge of renewing community assets.

During the year $74 million dollars was spent on capital works and acquisitions including $23.46 million of road reserves dedication and in kind contributions of $1.1 million by developers. To assist Council in ensuring that adequate funding is available and to address the backlog of works that are required, Council lodged an application for a special rate variation with the Minister for Local Government. Council was successful in receiving approval for an additional 9 per cent increase to the notional income for a period of five years ending in 2013/2014. This increase provided an additional $5 million annually for capital works throughout the city.

Reviewing our liabilities – what we owe Council’s liabilities include debt, amounts owed to suppliers and amounts owed to employees for leave entitlements. Our total liabilities of $77.1 million represent an increase of 6.1 per cent from the previous year. The increase is mainly due to a net increase in borrowings for $3.5 million as follows: (1) Increase in loan liability for $9.6 million – Round One Local Infrastructure Renewal Scheme (LIRS).

(2) Reduction of loan liability by $6.6 million - Repayments of loan principal during the year.

(3) Increase in loan liability $0.5 million -Unwinding of deemed interest income for 2012/2013 on the ten year interest free loan.

Cash reserves Council’s cash holdings have increased by $1.5 million during 2012-2013, with an increase of $2.4 million in external restrictions and $0.9 million reduction in internal restrictions. Unrestricted funds increased from $4.9 million in the previous year to $8.9 million as at 30 June 2013.

page 81

Financial Statements 2013

_

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 27. Commentary on Council's Operating Result & Financial Position

Debt levels Councilâ&#x20AC;&#x2122;s single largest liability is its debt as a result of its loan borrowing program; at 30 June 2013 this liability was $46.2 million including $7.8 million interest free loan. Council obtained approval from the Division of Local Government (DLG) for an interest subsidy loan under round one of the Local Infrastructure Renewal Scheme (LIRS).

Council borrowed $9.6 million under this scheme at a net interest rate of 1.55% (being a rate of 5.55% charged by the bank less the DLG 4% interest subsidy) to fund road pavement reconstruction ($8.19 million) and the City Library mechanical services ($1.4 million). Council will be reviewing its future needs to borrow as part of its Long Term Financial Plan, especially opportunities to apply for future LIRS rounds as they becomes available. Councilâ&#x20AC;&#x2122;s debt service ratio at around 6.34 per cent is well below the industry benchmark of 10 per cent.

Conclusion Council is continuing to work to ensure it is in a strong financial position to provide for the present and future needs of our growing community. In accordance with the requirements of the Division of Local Government, Council developed a 10 year Community Strategic Plan supported by a Resourcing Strategy consisting of a 10 year Long Term Financial Plan, a 10 year Asset Management Plan and a 4 year Workforce Plan.

The 10 year Long Term Financial Plan is updated annually as part of the development of the Operational Plan and reviewed in detail as part of the four yearly review of the Community Strategic Plan. These plans will assist Council to inform all stakeholders of what is required to ensure a financially sustainable Regional City for all residents as we look towards the future.

page 82

Financial Statements 2013

Liverpool City Council Notes to the Financial Statements for the financial year ended 30 June 2013

Note 28. Council Information & Contact Details Principal Place of Business: 33 Moore Street LIVERPOOL NSW 2170 Contact Details Mailing Address: Locked Bag 7064 LIVERPOOL BC NSW 1871

Opening Hours: 8:30am - 5:00pm Monday to Friday

Telephone: Facsimile:

Internet: Email:

02 9821 9222 02 9821 9456

www.liverpool.nsw.gov.au council@liverpool.nsw.gov.au

Officers CHIEF EXECUTIVE OFFICER Farooq Portelli

Elected Members MAYOR Ned Manoun

RESPONSIBLE ACCOUNTING OFFICER Julie Hately

DEPUTY MAYOR Mazhar Hadid

PUBLIC OFFICER Nadia Napoletano

COUNCILLORS Ali Karnib Wendy Waller Anne Stanley Peter Harle Gus Balloot Sabrina Mamone Geoff Shelton Peter Ristevski Tony Hadchiti

AUDITORS PricewaterhouseCoopers 201 Sussex Street Sydney NSW 2000

Other Information ABN: 84 181 182 471

page 83

Liverpool City Council Independent auditor’s report to the Council – s417(2) Report on the general purpose financial statements Report on the financial statements We have audited the accompany financial statements of Liverpool City Council Council, which comprise the statement of financial position as at 30 June 2013 and the income statement, the statement atement of comprehensive income, income, statement of changes in equity and stateme statement of cash flows for the year then ended, accompanying notes to the financial statements and the Statement by Councillors and Management in the approved form as required by Section 413(2) (2) of the Local Government Act 1993.

Councillors’ responsibility for the financial statements The Councillors of the Council are responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) pretations) and the Local Government Act 1993 and for such internal control as the Councillors determine is necessary to enable the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on the financial statements based on our audit audit. We conducted our audit in accordance with Australian Auditing Standards.

Standards Those sstandards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. statements The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk sk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Councillors, as well as evaluating the overall presentation pre of the financial statements.

When this audit report is included in an Annual Report, our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial statements.

Our audit responsibility does not extend extend to the Original Budget Figures included in the Income Statement, Statement of Cash Flows and the Original Budget disclosures in notes 2(a) and 16 and the Projections disclosed in note 17 to the financial statements, st nor the attached Special Schedules, and accordingly, we express no opinion on them.

PricewaterhouseCoopers, ABN 52 780 433 757 PricewaterhouseCoopers Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.

Legislation

page 84

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Auditor’s opinion: In our opinion: (a) the Council’s accounting records have been kept in accordance with the requirements of the Local Government Act 1993, Chapter 13 part 3 Division 2 (the Division); and (b) the financial statements: (i)

have been presented, presented in all material respects, in accordance with th the requirements of this Division

(ii)

are consistent with the Council’s accounting records

(iii) present fairly,, in all material respects, the Council’s financial cial position as of 30 June 2013 and its financial performance and its cash flows for the year then ended in accordance with Australian an Accounting Standards (c) all information relevant to the conduct of the audit has been obtained; and (d) there are no material deficiencies in the accounting records or financial statements that have come to light during the course of the audit.

PricewaterhouseCoopers

Peter Buchholz Partner

Sydney 31 October 2013

.......

2 of 2

page 85

The Mayor Councillor Ned Mannoun Liverpool City Council DX 5030 LIVERPOOL

Dear Councillor Mannoun Report to the conduct of the audit for year ended 30 June 2013 – Section 417(3) We have completed out audit of the financial reports of Liverpool City Council for the year ended 30 June 2013 in accordance with Section 415 of the Local Government Act, 1993.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance as to whether the financial reports are free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amount and other disclosures in the financial reports, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion as to whether, in all material respects, the financial reports are presented fairly in accordance with Australian Accounting Standards as well as statutory requirements so as to present a view which is in consistent with our understanding of the Council’s financial position, the results of its operations and its cash flows.

This report should be read in conjunction with our audit opinion on the general purpose financial statements provided under Section 417(2) of the Local Government Act 1993.

Flowing from our audit, there are a number of comments we wish to raise concerning the trends in Council's finances. These are set out below.

Operating Result Council’s operating result declined from a surplus of $61 million in the previous year to a surplus of $47 million. Lower grants and contributions contributed to this result. The result before capital grants and contribution was a breakeven position against the previous year’s $7m surplus.

Cash Position Council’s overall cash position increased from $116 million to $126 million during the period under review. The following table highlights the composition of cash: June 2013 $m Externally restricted Internally restricted Unrestricted Total

June 2012 $m

85.7 31.6 8.9 126.2

83.3 27.6 4.9 115.8

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.

page 86

Working Capital Council’s net current assets increased from $82 million to $60 million during the period under review.

The value of net current assets needs to be adjusted in order to establish Council’s available working capital.

June 2013 $’000 Net current assets Less: External restrictions Internal restrictions Add: Current liabilities to be funded from other sources Available Working Capital

June 2012 $’000

60,180

82,425

44,017 31,585 (15,422)

71,885 27,580 (17,040)

18,555 3,133

19,963 2,923

The effective unrestricted or available working capital upon which Council could build its 2013/14 budget upon was $3.1 million.

Performance Indicators The financial reports disclose a number of useful indicators in Note 13 and these are detailed below: June 2013 % Unrestricted current ratio Debt service ratio Rate coverage ratio Rates outstanding ratio Asset renewals ratio

208 6.34 51 5.54 110

June 2012 % 183 6.77 47 5.32 70

The Unrestricted Current Ratio increased and remains above the accepted benchmark for the industry of 100%.

The Debt Service Ratio improved to 6.34% of revenue and remains below the industry benchmark of 10%.

The Rate Coverage Ratio increased to 51% of revenue reflecting the lower capital grants and contributions received during the period.

The Rates Outstanding Ratio increased to remain above the industry benchmark of 5%.

The Asset Renewal Ratio indicates that Council is renewing assets at 110% of the rate at which they are depreciating.

Council is considered to be in a sound and stable financial position. Most indicators remain better than accepted industry benchmarks.

2

page 87

General The books of accounts and records inspected by us have been kept in an accurate and conscientious manner.

We thank the General Manager and his staff for the co-operation and courtesy extended to us during the course of our audit.

Yours faithfully

PricewaterhouseCoopers

P L Buchholz Partner 31 October 2013

3

page 88

Liverpool City Council SPECIAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2013

“Liverpool - A place where people choose to live, learn, work and play”

SPFS 2013

Liverpool City Council Special Purpose Financial Statements for the financial year ended 30 June 2013

Contents 1. Statement by Councillors & Management

Page 2

2. Special Purpose Financial Statements: Income Statement - Water Supply Business Activity Income Statement - Sewerage Business Activity Income Statement - Other Business Activities

n/a n/a 3

Statement of Financial Position - Water Supply Business Activity Statement of Financial Position - Sewerage Business Activity Statement of Financial Position - Other Business Activities

n/a n/a 4

3. Notes to the Special Purpose Financial Statements

5

4. Auditor's Report

9

Background (i)

These Special Purpose Financial Statements have been prepared for the use by both Council and the Division of Local Government in fulfilling their requirements under National Competition Policy.

(ii)

The principle of competitive neutrality is based on the concept of a "level playing field" between persons/entities competing in a market place, particularly between private and public sector competitors.

Essentially, the principle is that government businesses, whether Commonwealth, State or Local, should operate without net competitive advantages over other businesses as a result of their public ownership.

(iii)

For Council, the principle of competitive neutrality & public reporting applies only to declared business activities.

These include (a) those activities classified by the Australian Bureau of Statistics as business activities being water supply, sewerage services, abattoirs, gas production and reticulation and (b) those activities with a turnover of over $2 million that Council has formally declared as a Business Activity (defined as Category 1 activities).

(iv)

In preparing these financial statements for Council's self classified Category 1 businesses and ABS defined activities, councils must (a) adopt a corporatisation model and (b) apply full cost attribution including tax equivalent regime payments & debt guarantee fees (where the business benefits from councils borrowing position by comparison with commercial rates).

page 1

SPFS 2013

Liverpool City Council Income Statement of Council's Other Business Activities for the financial year ended 30 June 2013

Carpark 0

Category 2

$ '000

Actual 2013

Actual 2012

Income from continuing operations Access charges User charges Fees Interest Grants and contributions provided for non capital purposes Profit from the sale of assets Other income Total income from continuing operations

1,180 1,180

1,192 1,192

127 184 890 1,201 (21)

153 159 864 1,176 16

(21)

16

less: Corporate Taxation Equivalent (30%) [based on result before capital]

(21) -

16 (5)

SURPLUS (DEFICIT) AFTER TAX

(21)

11

Expenses from continuing operations Employee benefits and on-costs Borrowing costs Materials and contracts Depreciation and impairment Loss on sale of assets Calculated taxation equivalents Debt guarantee fee (if applicable) Other expenses Total expenses from continuing operations Surplus (deficit) from Continuing Operations before capital amounts

Grants and contributions provided for capital purposes Surplus (deficit) from Continuing Operations after capital amounts

Surplus (deficit) from discontinued operations Surplus (deficit) from ALL Operations before tax

plus Opening Retained Profits plus/less: Prior Period Adjustments plus Adjustments for amounts unpaid: - Taxation equivalent payments - Debt guarantee fees - Corporate taxation equivalent add: - Subsidy Paid/Contribution To Operations less: - TER dividend paid - Dividend paid Closing Retained Profits Return on Capital % Subsidy from Council

-

(1,969) -

(1,985) -

-

5

-

-

-

-

(1,990)

(1,969)

-43.8% 23

28.1% -

page 3

SPFS 2013

Liverpool City Council Statement of Financial Position - Council's Other Business Activities as at 30 June 2013

Carpark Category 2

Actual 2013

Actual 2012

-

-

48 48 48

57 57 57

LIABILITIES Current Liabilities Bank Overdraft Payables Interest bearing liabilities Provisions Total Current Liabilities

2,009 29 2,038

1,994 32 2,026

Non-Current Liabilities Payables Interest bearing liabilities Provisions Other Liabilities Total Non-Current Liabilities TOTAL LIABILITIES

2,038

2,026

$ '000

ASSETS Current Assets Cash and cash equivalents Investments Receivables Inventories Other Non-current assets classified as held for sale Total Current Assets Non-Current Assets Investments Receivables Inventories Infrastructure, property, plant and equipment Investments accounted for using equity method Investment property Other Total Non-Current Assets TOTAL ASSETS

NET ASSETS

EQUITY Retained earnings Revaluation reserves Council equity interest Non-controlling equity interest

TOTAL EQUITY

(1,990)

(1,969)

(1,990) (1,990) -

(1,969) (1,969) -

(1,990)

(1,969) page 4

SPFS 2013

Liverpool City Council Special Purpose Financial Statements for the financial year ended 30 June 2013

Contents of the Notes accompanying the Financial Statements Note

Details

Page

1

Summary of Significant Accounting Policies

6

2

Water Supply Business Best Practice Management disclosure requirements

n/a

3

Sewerage Business Best Practice Management disclosure requirements

n/a

page 5

Financial Statements 2013

_

Liverpool City Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2013

Note 1. Significant Accounting Policies These financial statements are a Special Purpose Financial Statements (SPFS) prepared for use by Council and the Division of Local Government.

For the purposes of these statements, the Council is not a reporting not-for-profit entity.

The figures presented in these special purpose financial statements, unless otherwise stated, have been prepared in accordance with: 

the recognition and measurement criteria of relevant Australian Accounting Standards,

 other authoritative pronouncements of the Australian Accounting Standards Board (AASB) &  Australian Accounting Interpretations.

The disclosures in these special purpose financial statements have been prepared in accordance with:  the Local Government Act and Regulation, and  the Local Government Code of Accounting Practice and Financial Reporting.

The statements are also prepared on an accruals basis, based on historic costs and do not take into account changing money values nor current values of non-current assets (except where specifically stated).

Certain taxes and other costs (appropriately described) have been imputed for the purposes of the National Competition Policy.

The pricing & costing guidelines outline the process for identifying and allocating costs to activities and provide a standard of disclosure requirements. These disclosures are reflected in Council’s pricing and/or financial reporting systems and include taxation equivalents; council subsidies; return on investments (rate of return); and dividends paid.

Declared Business Activities In accordance with Pricing & Costing for Council

Businesses - A Guide to Competitive Neutrality,

Council has declared that the following are to be considered as business activities: Category 1 (where gross operating turnover is over $2 million)

Nil Category 2 (where gross operating turnover is less than $2 million)

a. Carpark Warren Serviceway Carpark Monetary Amounts Amounts shown in the financial statements are in Australian currency and rounded to the nearest one thousand dollars.

National Competition Policy Council has adopted the principle of ‘competitive neutrality’ to its business activities as part of the national competition policy which is being applied throughout Australia at all levels of government.

The framework for its application is set out in the June 1996 Government Policy statement on the

“Application of National Competition Policy to Local Government”.

The “Pricing & Costing for Council Businesses A Guide to Competitive Neutrality” issued by the Division of Local Government in July 1997 has also been adopted.

(i) Taxation Equivalent Charges Council is liable to pay various taxes and financial duties in undertaking its business activities. Where this is the case, they are disclosed in these statements as a cost of operations just like all other costs.

However, where Council is exempt from paying taxes which are generally paid by private sector businesses (such as income tax), equivalent tax payments have been applied to all Council nominated business activities and are reflected in these financial statements.

page 6

Financial Statements 2013

_

Liverpool City Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2013

Note 1. Significant Accounting Policies For the purposes of disclosing comparative information relevant to the private sector equivalent, the following taxation equivalents have been applied to all council nominated business activities (this does not include council’s non-business activities):

Local Government Rates & Charges A calculation of the equivalent rates and charges payable on all Category 1 businesses has been applied to all land assets owned or exclusively used by the Business Activity.

Notional Rate Applied % Corporate Income Tax Rate – 30%

Loan & Debt Guarantee Fees

Land Tax – The first $406,000 of combined land values attracts 0%. From $406,001 to $2,482,000 the rate is 1.6% + $100. For the remaining combined land value that exceeds $2,482,000, a premium marginal rate of 2.0% applies.

The debt guarantee fee is designed to ensure that council business activities face “true” commercial borrowing costs in line with private sector competitors.

Payroll Tax – 5.45% on the value of taxable salaries and wages in excess of $689,000.

In order to calculate a debt guarantee fee, council has determined what the differential borrowing rate would have been between the commercial rate and the council’s borrowing rate for its business activities.

Income Tax An income tax equivalent has been applied on the profits of each reported Business Activity.

Whilst income tax is not a specific cost for the purpose of pricing a good or service, it needs to be taken into account of in terms of assessing the rate of return required on capital invested.

Accordingly, the return on capital invested is set at a pre-tax level (gain/(loss) from ordinary activities before capital amounts) as would be applied by a private sector competitor – that is, it should include a provision equivalent to the corporate income tax rate, currently 30%.

Income Tax is only applied where a positive gain/(loss) from ordinary activities before capital amounts has been achieved.

Since this taxation equivalent is notional - that is, it is payable to the “Council” as the owner of business operations, it represents an internal payment and has no effect on the operations of the council.

Accordingly, there is no need for disclosure of internal charges in Council's General Purpose Financial Statements.

The rate applied of 30% is the equivalent company tax rate prevalent as at balance date.

(ii) Subsidies Government policy requires that subsidies provided to customers and the funding of those subsidies must be explicitly disclosed.

Subsidies occur where council provides services on a less than cost recovery basis. This option is exercised on a range of services in order for council to meet its community service obligations.

Accordingly, Subsidies disclosed (in relation to National Competition Policy) represents the difference between revenue generated from ‘rate of return’ pricing and revenue generated from prices set by the council in any given financial year.

The overall effect of subsidies is contained within the Income Statement of each reported Business Activity.

(iii) Return on Investments (Rate of Return) The Policy statement requires that councils with Category 1 businesses “would be expected to generate a return on capital funds employed that is comparable to rates of return for private businesses operating in a similar field”.

page 7

Financial Statements 2013

_

Liverpool City Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2013

Note 1. Significant Accounting Policies Such funds are subsequently available for meeting commitments or financing future investment strategies.

The Rate of Return on Capital is calculated as follows: Operating Result before Capital Income + Interest Expense Written Down Value of I,PP&E as at 30 June

As a minimum, business activities should generate a return equal to the Commonwealth 10 year bond rate which is 3.77% at 30/6/13.

The actual rate of return achieved by each Business Activity is disclosed at the foot of each respective Income Statement.

(iv) Dividends Council is not required to pay dividends to either itself (as owner of a range of businesses) or to any external entities.

page 8

Liverpool City Council Independent auditor’s report Report on the special purpose financial report Report on the financial report We have audited the accompanying financial report, being a special purpose financial report, of Liverpool City Council (the Council), which comprises the Statement of Financial Position by Business Activity for the year ended 30 June 2013, the Income Statements by Business Activity for the year then ended, Notes to the financial report for the business activities identified by Council and the Statement by Councillors and Management for Council for the year ended 30 June 2013.

Councillors’ responsibility for the financial report The Councillors of the Council are responsible for the preparation and fair presentation of the financial report and have determined that the accounting policies described in note 1 to the financial statements which form part of the financial report, are appropriate to meet the requirements of the Local Government Code of Accounting Practice and Financial Reporting. The Councillors’ responsibility also includes such internal control as the Councillors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to error or fraud.

Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Councillors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.

page 9

Auditorâ&#x20AC;&#x2122;s opinion: In our opinion, the financial report presents fairly, in all material respects, the financial position by Business Activities of Liverpool City Council as of 30 June 2013 and its financial performance by Business Activities for the year then ended in accordance with the requirements of those applicable Accounting Standards detailed in Note 1 to the financial report, and the Local Government Code of Accounting Practice and Financial Reporting.

Basis of Accounting and Restriction on Distribution and Use Without modifying our opinion, we draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared for the purpose of fulfilling the Councilâ&#x20AC;&#x2122;s financial reporting responsibilities under the Local Government Code of Accounting Practice and Financial Reporting. As a result, the financial report may not be suitable for another purpose.

Our report is intended solely for the Council.

PricewaterhouseCoopers

Peter Buchholz Partner .......

2

Sydney 31 October 2013

page 10

Liverpool City Council SPECIAL SCHEDULES for the year ended 30 June 2013

“Liverpool - A place where people choose to live, learn, work and play”

Special Schedules 2013

Liverpool City Council Special Schedules

for the financial year ended 30 June 2013

Contents

Page

Special Schedules1 2

- Special Schedule No. 1

Net Cost of Services

- Special Schedule No. 2(a) - Special Schedule No. 2(b)

Statement of Long Term Debt (all purposes) Statement of Internal Loans (Sect. 410(3) LGA 1993)

4 n/a

- Special Schedule No. 3 - Special Schedule No. 4

Water Supply - Income Statement Water Supply - Statement of Financial Position

n/a n/a

- Special Schedule No. 5 - Special Schedule No. 6

Sewerage Service - Income Statement Sewerage Service - Statement of Financial Position

n/a n/a n/a

- Notes to Special Schedules No. 3 & 5 - Special Schedule No. 7

Condition of Public Works

5

- Special Schedule No. 8

Financial Projections

7

1 Special Purpose Schedules are not audited.

Background (i)

These Special Schedules have been designed to meet the requirements of special purpose users such as;     

(ii)

the NSW Grants Commission the Australian Bureau of Statistics (ABS), the NSW Office of Water, the Department of Environment, Climate Change and Water, and the Division of Local Government (DLG).

The financial data is collected for various uses including;     

the allocation of Financial Assistance Grants, the incorporation of Local Government financial figures in national statistics, the monitoring of loan approvals, the allocation of borrowing rights, and the monitoring of the financial activities of specific services.

page 1

Special Schedules 2013

Liverpool City Council Special Schedule No. 1 - Net Cost of Services for the financial year ended 30 June 2013

$'000 Function or Activity

Expenses from.

Continuing.

Operations.

Income from continuing operations Non Capital.

Capital.

Net Cost. of Services.

-

-

-

56,497

12,620

31

(43,846)

Public Order and Safety Fire Service Levy, Fire Protection, Emergency Services Beach Control Enforcement of Local Govt. Regulations Animal Control Other Total Public Order & Safety

1,767 1,555 513 3,835

221 2,958 163 3,342

-

(1,546) 1,403 (350) (493)

Health

1,597

1,696

-

364 22,774 228 1,262 24,628

32 22,429 3 1,343 23,807

4,178 910 5,088

(332) 3,833 (225) 991 4,267

2,796 95 4,880 7,771

689 54 4,278 5,021

-

(2,107) (41) (602) (2,750)

3,737 3,844 270 7,851

391 3,180 3,571

96 96

(3,346) (568) (270) (4,184)

Water Supplies

-

-

-

-

Sewerage Services

-

-

-

-

Governance Administration

Environment Noxious Plants and Insect/Vermin Control Other Environmental Protection Solid Waste Management Street Cleaning Drainage Stormwater Management Total Environment Community Services and Education Administration & Education Social Protection (Welfare) Aged Persons and Disabled Children's Services Total Community Services & Education Housing and Community Amenities Public Cemeteries Public Conveniences Street Lighting Town Planning Other Community Amenities Total Housing and Community Amenities

-

99

page 2

Special Schedules 2013

Liverpool City Council Special Schedule No. 1 - Net Cost of Services (continued) for the financial year ended 30 June 2013

$'000 Expenses from.

Continuing.

Operations.

Function or Activity

Recreation and Culture Public Libraries Museums Art Galleries Community Centres and Halls Performing Arts Venues Other Performing Arts Other Cultural Services Sporting Grounds and Venues Swimming Pools Parks & Gardens (Lakes) Other Sport and Recreation Total Recreation and Culture

Income from continuing operations Non Capital.

Capital.

Net Cost. of Services.

7,524 137 4,079 4,320 13,334 29,394

575 5 758 727 422 2,487

79 3,373 7,751 11,203

(6,870) (132) (3,321) (220) (5,161) (15,704)

Fuel & Energy

-

-

-

-

Agriculture

-

-

-

-

-

-

-

-

3,377 918 6,985 11,280

1,066 2,863 1,317 5,246

5,993 23,457 108 1,108 30,666

3,682 23,457 2,053 (4,560) 24,632

1,512 1,512

67 67

-

(1,445) (1,445)

144,365

57,857

47,084

(39,424)

Mining, Manufacturing and Construction

Building Control Other Mining, Manufacturing & Construction Total Mining, Manufacturing and Const.

Transport and Communication Urban Roads (UR) - Local Urban Roads - Regional Sealed Rural Roads (SRR) - Local Sealed Rural Roads (SRR) - Regional Unsealed Rural Roads (URR) - Local Unsealed Rural Roads (URR) - Regional Bridges on UR - Local Bridges on SRR - Local Bridges on URR - Local Bridges on Regional Roads Parking Areas Footpaths Aerodromes Other Transport & Communication Total Transport and Communication Economic Affairs Camping Areas & Caravan Parks Other Economic Affairs Total Economic Affairs

Totals â&#x20AC;&#x201C; Functions

85,728

85,728

-

785

785

144,365

144,370

General Purpose Revenues(2) Share of interests - joint ventures & associates using the equity method

NET OPERATING RESULT (1) (1) As reported in the Income Statement

47,084

47,089

(2) Includes: Rates & Annual Charges (incl. Ex Gratia, excl. Water & Sewer), Non Capital General Purpose Grants, Interest on Investments (excl. Ext. Restricted Assets) & Interest on overdue Rates & Annual Charges

page 3

Liverpool City Council Special Schedule No. 2(a) - Statement of Long Term Debt (all purpose) for the financial year ended 30 June 2013

$'000 Principal outstanding at beginning of the year Classification of Debt Loans (by Source) Commonwealth Government Treasury Corporation Other State Government Public Subscription Financial Institutions Other Total Loans

Other Long Term Debt Ratepayers Advances Government Advances Finance Leases Deferred Payments Total Long Term Debt

Non Current

Total

Principal outstanding Transfers Interest to Sinking applicable Funds for Year

at the end of the year Current

Non Current

Total

5,728 5,728

27,937 27,937

33,665 33,665

9,590 9,590

5,802 5,802

-

-

2,223 2,223

5,459 5,459

31,994 31,994

37,453 37,453

800 800

8,700 8,700

9,500 9,500

-

800 800

-

-

-

900 900

7,800 7,800

8,700 8,700

6,528

36,637

43,165

9,590

6,602

-

-

2,223

6,359

39,794

46,153

page 4

Notes: Excludes (i) Internal Loans & (ii) Principal Inflows/Outflows relating to Loan Re-Financing.

This Schedule is prepared using the face value of debt obligations, rather than fair value (which are reported in the GPFS).

Special Schedules 2013

Total Debt

Current

New Debt redemption Loans during the year raised From Sinking during the Revenue Funds year

Liverpool City Council Special Schedule No. 7 - Condition of Public Works as at 30 June 2013

$'000 Dep'n.

Rate (%)

Dep'n Expense ($) Cost

ASSET CLASS

Asset Category

Buildings

Council Works Depot Libraries, Museums Admin Building Commercial Building Car Park Building Childcare Centre(s) Aquatic Centres Community Buildings Park Buildings Heritage Other sub total

Recreational

per Note 1

per Note 4

1-10%

92 1,511 439 33 465 275 890 1,229 981 151 134 6,200 1,625 1,625

1-3% 1-10% 1-10% 2-10% 3.33% 2.00% 1-7% 2-6% 1.50% 1-10%

Parks Equipment/Sporting Infra.

sub total Public Roads

1-5% 1.00% 2-3% 1.60% 1-20% 1-6%

11,948 584 1,750 2,229 630 118 17,259

Estimated cost to Carrying bring up to a Required(2) Current(3) Amount Asset satisfactory Annual Annual (WDV) Condition#. condition / Maintenance Maintenance standard (1)

<<<<<<<<<<<< per Note 9 >>>>>>>>>>>>

3,066 12,112 30,754 1,092 9,489 3,675 14,021 19,581 18,218 2,491 2,274 116,773

2,678 44,711 14,835 527 13,689 6,428 15,735 26,361 21,289 4,071 3,135 153,459

3 1 3 3 3 3 2 2 3 2 3

-

5,744 56,823 45,589 1,619 23,178 10,103 29,756 45,942 39,507 6,562 5,409 270,232

1,266 4,000 750 4,090 1,609 9,107 4,255 4,008 4,600 808 34,493

190 617 1,177 301 651 314 1,062 1,395 934 958 67 7,666

299 743 694 47 354 430 394 766 334 294 33 4,388

46,696 46,696

40,061 40,061

6,635 6,635

3

-

9,881 9,881

7,517 7,517

7,373 7,373

236,796 8,979 15,977 34,949 3,594 1,742 302,037

438,815 26,809 59,361 132,159 7,186 5,597 669,927

3 2 2 2 1 2

-

675,611 35,788 75,338 167,108 10,780 7,339 971,964

138,272 2,596 1,452 1,208 4,787 1,295 149,610

16,898 285 1,740 358 981 453 20,715

13,417 237 1,313 519 1,392 166 17,044

Special Schedules 2013

page 5

Sealed & Unsealed Roads Bridges & Major Culverts Footpaths & Cycleways Kerb and Gutter Road Furniture Other (Off Street Car Park) sub total

Accum.

Depreciation Amortisation Valuation & Impairment

Liverpool City Council Special Schedule No. 7 - Condition of Public Works (continued) as at 30 June 2013

$'000 Dep'n.

Rate (%)

Dep'n Expense ($) Cost

ASSET CLASS

Accum.

Depreciation Amortisation Valuation & Impairment

Asset Category

Drainage Works Piped Drainage System Gross Pollutants Traps Other (Pits, Headwalls, Wetlands)

per Note 1

per Note 4

1.00%

2,934 73 883 46 3,936 29,020

1.00% 1.00%

Retarding Basins sub total TOTAL - ALL ASSETS

Estimated cost to Carrying bring up to a Required(2) Current(3) Amount satisfactory Annual Asset Annual (WDV) Condition#. condition / Maintenance Maintenance standard (1)

<<<<<<<<<<<< per Note 9 >>>>>>>>>>>>

-

296,550 5,539 71,328 14,997 388,414

89,110 1,172 14,898 1,020 106,200

207,440 4,367 56,430 13,977 282,214

-

1,677,306

565,071

1,112,235

1 1 2 2

7,856 118 4,257 558 12,789

1,847 256 205 233 2,541

1,810 105 176 869 2,960

206,773

38,439

31,765

Notes: (1).

(2).

(3).

Satisfactory refers to estimated cost to bring the asset to a satisfactory condition as deemed by Council. It does not include any planned enhancements to the existing asset.

Required Annual Maintenance is what should be spent to maintain assets in a satisfactory standard.

Current Annual Maintenance is what has been spent in the current year to maintain assets.

#

Asset Condition "Key" - as per the DLG Integrated Planning & Reporting Manual Excellent - No work required (normal maintenance) Good - Only minor maintenance work required Average - Maintenance work required Poor - Renewal required Very Poor - Urgent renewal/upgrading required

page 6

Special Schedules 2013

1 2 3 4 5

Liverpool City Council Special Schedule No. 8 - Financial Projections as at 30 June 2013 Actual(1) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3)

$'000

13/14

14/15

15/16

16/17

17/18

18/19

19/20

20/21

21/22

22/23

191,454 144,365

168,746 149,532

176,823 152,931

177,106 156,486

186,054 161,022

187,523 164,313

192,777 168,495

197,317 172,832

195,463 177,299

194,698 181,883

201,910 186,635

Operating Result from Continuing Operations

47,089

19,214

23,892

20,620

25,032

23,210

24,282

24,485

18,164

12,815

15,275

(ii) CAPITAL BUDGET New Capital Works (2) Replacement/Refurbishment of Existing Assets Total Capital Budget

14,679 36,573 51,252

22,972 34,459 57,431

27,842 41,662 69,504

19,270 26,905 46,175

14,076 21,114 35,190

13,486 20,228 33,714

11,278 16,917 28,195

15,559 23,339 38,898

21,500 32,250 53,750

21,862 32,794 54,656

17,198 25,797 42,995

1,039 4,377 36,914 8,922 51,252

863 13,884 35,028 7,656 57,431

734 6,013 51,146 11,611 69,504

6,844 27,868 11,463 46,175

905 3,982 15,817 14,486 35,190

2,023 3,964 14,667 13,060 33,714

4,132 10,595 13,468 28,195

1,673 4,174 20,936 12,115 38,898

1,926 4,617 32,620 14,587 53,750

2,340 7,808 28,395 16,113 54,656

773 8,752 24,848 8,622 42,995

(i) OPERATING BUDGET Income from continuing operations Expenses from continuing operations

Funded by: – Loans – Asset sales – Reserves – Grants/Contributions – Recurrent revenue – Other

12/13

Special Schedules 2013

page 7

Notes: (1) From 12/13 Income Statement.

(2) New Capital Works are major non-recurrent projects, eg new Leisure Centre, new Library, new Swimming pool etc.

(3) Financial projections should be in accordance with Council’s Integrated Planning and Reporting framework.

Liverpool City Council, Level 2, 33 Moore Street, Liverpool NSW 2170 Phone 1300 36 2170 Visit www.liverpool.nsw.gov.au E-mail: lcc@liverpool.nsw.gov.au NRS: 133 677 (for hearing and speech impaired callers only) If you need this information translated call the interpreter service on 131 450 and ask them to contact Council on 1300 36 2170.

Liverpool City Council ANNUAL REPORT