Moree plains shire council financial statements 2013 14

Moree Plains Shire Council GENERAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2014

Leading the Way to a Better Community

Financial Statements 2014

Moree Plains Shire Council General Purpose Financial Statements for the financial year ended 30 June 2014

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. Notes to the Financial Statements

4 5 6 7 8 9

5. Independent Auditor's Reports: - On the Financial Statements (Sect 417 [2]) - On the Conduct of the Audit (Sect 417 [3])

88 90

Overview (i)

These financial statements are General Purpose Financial Statements and cover the consolidated operations for Moree Plains Shire Council.

(ii)

Moree Plains Shire 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;  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,  the responsibility for administering regulatory requirements under the LGA and  a role in the management, improvement and development of the resources in the area.

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

All figures presented in these financial statements are presented in Australian Currency.

page 1

Financial Statements 2014

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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.

What you will find in the Statements The financial statements set out the financial performance, financial position & cash flows of Council for the financial year ended 30 June 2014.

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

About the Councillor/Management Statement

5. The Statement of Cash Flows Indicates where Council's cash came from and where it was spent.

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

About the Notes to the Financial Statements The Notes to the financial statements provide greater detail and additional information on the 5 primary financial statements.

About the Auditor's Reports Council's financial statements are required to be audited by external accountants (that generally specialize in Local Government).

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.

In NSW, the Auditor provides 2 audit reports:

About the Primary Financial Statements

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

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

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

Who uses the Financial Statements ?

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

Submissions from the public can be made to Council up to 7 days subsequent to the public presentation of the financial statements.

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

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

More information‌

4. The Statement of Changes in Equity

A review of Council's financial performance and position for the 13/14 financial year can be found at Note 28 of the financial statements.

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

page 2

Financial Statements 2014

Moree Plains Shire Council Income Statement

for the financial year ended 30 June 2014 Budget 2014

1

$ '000

Notes

Actual 2014

Actual 2013

26,180 15,939 857 1,239 17,498 2,832

25,017 13,358 2,279 1,193 36,372 2,349

Income from Continuing Operations 26,261 9,465 1,025 1,048 21,073 2,618 61,490

Revenue: Rates & Annual Charges User Charges & Fees Interest & Investment Revenue Other Revenues Grants & Contributions provided for Operating Purposes Grants & Contributions provided for Capital Purposes Other Income: Net gains from the disposal of assets Net Share of interests in Joint Ventures & Associated Entities using the equity method

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

2

5

540

-

19

-

-

65,085

80,568

17,698 2,561 26,865 10,583 3,209 -

17,227 2,625 39,407 11,317 3,218 299

60,916

74,093

4,169

6,475

-

-

4,169

6,475

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

4,169 -

6,475 -

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

1,337

4,126

Total Income from Continuing Operations Expenses from Continuing Operations

18,682 2,993 21,474 10,724 3,483 1,500

Employee Benefits & On-Costs Borrowing Costs Materials & Contracts Depreciation & Amortisation Impairment Other Expenses Net Losses from the Disposal of Assets

58,856

Total Expenses from Continuing Operations

2,634

4a 4b 4c 4d 4d 4e 5

Operating Result from Continuing Operations Discontinued Operations

-

Net Profit/(Loss) from Discontinued Operations

2,634

Net Operating Result for the Year

2,634 -

16

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

24

page 4

Financial Statements 2014

Moree Plains Shire Council Statement of Comprehensive Income for the financial year ended 30 June 2014

$ '000

Notes

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

Actual 2014

Actual 2013

4,169

6,475

45,992 10,806

32,420 23,904

56,798

56,324

56,798

56,324

60,967

62,799

60,967 -

62,799 -

Other Comprehensive Income: Amounts which will not be reclassified subsequently to the Operating Result 20b (ii) Gain (loss) on revaluation of I,PP&E Impairment (loss) reversal relating to I,PP&E 20b (ii) Total Items which will not be reclassified subsequently to the Operating Result 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 2014

Moree Plains Shire Council Statement of Financial Position as at 30 June 2014

$ '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 2014

Actual 2013

14,116 6,989 7,389 1,588 468 30,550

21,651 1,611 8,482 1,077 405 33,226

481,894 481,894

409,758 145 409,903

512,444

443,129

5,975 1,058 5,924 12,957

6,488 959 5,459 12,906

41,261 2,708 43,969

33,214 2,458 35,672

56,926

48,578

455,518

394,551

115,945 339,573 455,518 -

111,776 282,775 394,551 -

455,518

394,551

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 2014

Moree Plains Shire Council Statement of Changes in Equity for the financial year ended 30 June 2014

$ '000

Notes

Retained Reserves Earnings (Refer 20b)

NonCouncil controlling Interest Interest

Total Equity

2014 Opening Balance (as per Last Year's Audited Accounts)

111,776

282,775

394,551

-

394,551

a. Correction of Prior Period Errors

20 (c)

-

-

-

-

-

b. Changes in Accounting Policies (prior year effects)

20 (d)

111,776

282,775

394,551

-

394,551

4,169

-

4,169

-

4,169

Revised Opening Balance (as at 1/7/13) c. Net Operating Result for the Year

-

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

20b (ii)

-

45,992

45,992

-

45,992

- Revaluations: Other Reserves

20b (ii)

-

-

-

-

-

- Transfers to Income Statement

20b (ii)

-

-

-

-

-

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

20b (ii)

-

10,806 56,798

10,806

-

10,806

56,798

4,169

56,798

60,967

-

60,967

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

-

-

-

-

-

f. Transfers between Equity

-

-

-

-

-

115,945

339,573

455,518

-

455,518

Other Comprehensive Income Total Comprehensive Income (c&d)

Equity - Balance at end of the reporting period

$ '000

Notes

Retained Reserves Earnings (Refer 20b)

NonCouncil controlling Interest Interest

56,798

Total Equity

2013 105,301

226,451

331,752

-

331,752

a. Correction of Prior Period Errors

20 (c)

-

-

-

-

-

b. Changes in Accounting Policies (prior year effects)

20 (d)

105,301

226,451

331,752

-

331,752

6,475

-

6,475

-

6,475

Opening Balance (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)

-

32,420

32,420

-

32,420

- Revaluations: Other Reserves

20b (ii)

-

-

-

-

-

- Transfers to Income Statement

20b (ii)

-

-

-

-

-

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

20b (ii)

-

23,904 56,324

23,904

23,904

56,324

-

6,475

56,324

62,799

-

62,799

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

-

-

-

-

-

f. Transfers between Equity

-

-

-

-

-

111,776

282,775

394,551

-

394,551

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.

56,324

page 7

Financial Statements 2014

Moree Plains Shire Council Statement of Cash Flows

for the financial year ended 30 June 2014 Budget 2014

$ '000

Notes

Actual 2014

Actual 2013

26,308 16,708 768 23,056 6 4,316

25,049 14,579 991 41,124 3,987

(17,283) (30,739) (2,492) (5,627)

(17,071) (42,396) (2,476) (41) (2,516)

15,022

21,230

1,414 1,006

4,014 543

(6,000) (27,123)

(16,940)

(30,703)

(12,383)

Cash Flows from Operating Activities Receipts:

26,261 9,465 1,025 23,691 1,048

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

(18,682) (21,474) (2,992) (3,483)

Employee Benefits & On-Costs Materials & Contracts Borrowing Costs Bonds, Deposits & Retention amounts refunded Other

14,859

Net Cash provided (or used in) Operating Activities

11b

Cash Flows from Investing Activities Receipts:

780

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

(34,001)

(33,221)

Purchase of Investment Securities Purchase of Infrastructure, Property, Plant & Equipment Net Cash provided (or used in) Investing Activities

Cash Flows from Financing Activities Receipts:

19,255

9,105

Proceeds from Borrowings & Advances

1,030

Payments:

(1,134)

18,121 (241) -

(959)

Repayment of Borrowings & Advances

8,146

Net Cash Flow provided (used in) Financing Activities

(876)

154

Net Increase/(Decrease) in Cash & Cash Equivalents

(7,535)

9,001

plus:

Cash & Cash Equivalents - beginning of year

11a

21,651

12,650

(241) Cash & Cash Equivalents - end of the year

11a

14,116

21,651

6b

6,989

1,611

21,105

23,262

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.

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Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Contents of the Notes accompanying the Financial Statements Note

Details

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

14 15 16 17 18 19 20

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) 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

51 52 54 55 56 60 62 63 64 n/a 65

21 22 23 24 25 26 27

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

66 68 n/a 68 n/a 68 n/a 68 n/a 69 70

Page 10 28 29 30 35 37 38 38 39 41 42 43 44 44 45 46 47 49

Additional Council Disclosures 28 29

Financial Review Council Information & Contact Details

80 87

n/a - not applicable page 9

Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

(a) Basis of preparation (i) Background These financial statements are general purpose financial statements which have been prepared in accordance with; 

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

 the Local Government Act (1993) & Regulation, and  the Local Government Code of Accounting Practice and Financial Reporting.

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

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

(b) specifically exclude application by Not for

Profit entities.

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

Under the Local Government Act (LGA), Regulations and Local Government Code of Accounting Practice & Financial Reporting, it should be noted that Councils in NSW only have a requirement to comply with AASBs. (iii) New and amended standards adopted by Council During the current year, the following relevant standards became mandatory for Council and have been adopted:  

AASB 13 Fair Value Measurement AASB 119 Employee Benefits

AASB 13 Fair Value Measurement has not affected the assets or liabilities which are to be measured at fair value, however it provides detailed guidance on how to measure fair value in accordance with the accounting standards.

It introduces the concept of highest and best use for non-financial assets and has caused the Council to review their valuation methodology.

The level of disclosures regarding fair value have increased significantly and have been included in the financial statements at Note 27.

AASB 119 Employee Benefits introduced revised definitions for short-term employee benefits.

Whilst the Council has reviewed the annual leave liability to determine the level of annual leave which is expected to be paid more than 12 months after the end of the reporting period, there has been no effect on the amounts disclosed as leave liabilities since Council’s existing valuation policy was to discount annual leave payable more than 12 months after the end of the reporting period to present values. (iv) Early adoption of Accounting Standards Council has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2013.

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

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Financial Statements 2014

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies (v) Basis of Accounting These financial statements have been prepared under the historical cost convention except for: (i)

certain financial assets and liabilities at fair value through profit or loss and available-forsale financial assets 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 non current assets (eg.

Infrastructure, Property, Plant & Equipment and Investment Property) that are accounted for at fair valuation.

The accrual basis of accounting has also been applied in their preparation. (vi) Changes in Accounting Policies Council’s accounting policies have been consistently applied to all the years presented, unless otherwise stated.

There have also been no changes in accounting policies when compared with previous financial statements unless otherwise stated [refer Note 20(d)]. (vii) Critical Accounting Estimates The preparation of financial statements requires the use of certain critical accounting estimates (in conformity with AASBs).

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

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

Critical accounting estimates and assumptions Council makes estimates concerning the future.

and

assumptions

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 remediation provisions.

Critical judgements accounting policies

in

applying

Council's

(i)

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

(ii)

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

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

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

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

Revenue is measured on major income categories as follows: Rates, Annual Charges, Grants and Contributions Rates, annual charges, grants and contributions (including developer contributions) are recognised as revenues when the Council obtains control over the assets comprising these receipts.

Control over assets acquired from rates and annual charges is obtained at the commencement of the rating year as it is an enforceable debt linked to the

page 11

Financial Statements 2014

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies 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.

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

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

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.

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 reporting date.

Sale of Infrastructure, Equipment

Property,

Plant

and

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

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

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.

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

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

Dividend Income

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.

Revenue is recognised when the Council’s right to receive the payment is established, which is generally when shareholders approve the dividend.

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

(c) Principles of Consolidation These financial statements incorporate (i) the assets and liabilities of Council and any entities (or operations) that it controls (as at 30 June 2014) and (ii) all the related operating results (for the financial year ended the 30th June 2014).

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Financial Statements 2014

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies 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 functions have been included in the financial statements forming part of this report.

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

Moree Plains Shire Council’s -

General Purpose Operations Water Supply Fund Sewerage Fund Gwydir Day Care Centre Max Centre

(iii) Joint Ventures Council participates in a number of cooperative arrangements with other Councils and other bodies.

Council’s equity share in joint ventures is considered to be immaterial and has not been included in Council’s accounts.

NWSP Cooperative Library The NWSP Cooperative Library is a contractual association between the Council’s of Moree Plains, Gwydir, Walgett and Brewarrina to carry out jointly a library service in there respective areas under the provision of Section 11 of the Library Act 1939.

Details relating to such Entities and Partnerships (where applicable) are set out in Note 19. (iv) Associated Entities Where Council has the power to participate in the financial and operating decisions (of another entity), ie. where Council is deemed to have “significant influence” over the other entities operations but neither controls nor jointly controls the entity, then Council accounts for such interests using the equity method of accounting – in a similar fashion to Joint Venture Entities & Partnerships.

Such entities are usually termed Associates. (v) County Councils

(ii) The Trust Fund

Council is not a member of any County Councils.

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.

(vi) Additional Information

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.

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.

Finance Leases Leases of property, plant and equipment where the Council has substantially all the risks and rewards of ownership are classified as finance leases. page 13

Financial Statements 2014

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments.

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

Each lease payment is allocated between the liability outstanding and the recognition of a finance charge.

The interest element of the finance charge is costed to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Bank overdrafts are shown within borrowings in current liabilities on the Statement of Financial Postition but are incorporated into Cash & Cash Equivalents for presentation of the Statement of Cash Flows

(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,

Property, plant and equipment acquired under finance leases is depreciated over the shorter of each leased asset’s useful life and the lease term.

 loans and receivables,

Operating Leases

 available-for-sale financial assets.

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

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

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.

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

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

(e) Cash and Cash Equivalents For Statement of Cash Flows (and Statement of Financial Position) presentation purposes, cash and cash equivalents includes;  cash on hand,  deposits held at call with financial institutions,  other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and  bank overdrafts.

 held-to-maturity investments, and

(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.

Derivatives are classified as held for trading unless they are designated as hedges.

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

page 14

Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies They arise when the Council provides money, goods or services directly to a debtor with no intention (or in some cases ability) of selling the resulting receivable.

They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Council’s management has the positive intention and ability to hold to maturity.

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

Held-to-maturity financial assets are included in noncurrent assets, except for those with maturities less than 12 months from the reporting date, which are classified as current assets. (iv) Available-for-sale financial assets Available-for-sale financial assets are nonderivatives that are either designated in this category or not classified in any of the other categories.

Investments must be designated as available-forsale 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.

category if the financial asset is no longer held for the purpose of selling it in the near term.

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

Council may also choose to reclassify financial assets that would meet the definition of loans and receivables out of the held-for-trading or availablefor-sale categories if it has the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification.

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

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

General Accounting & Measurement of Financial Instruments: (i) Initial Recognition Investments are initially recognised (and measured) at fair value, plus in the case of investments not at “fair value through profit or loss”, directly attributable transactions costs Purchases and sales of investments are recognised on trade-date - the date on which the Council commits to purchase or sell the asset.

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

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.

Financial Assets – Reclassification

(ii) Subsequent Measurement

Council may choose to reclassify a non-derivative trading financial asset out of the held-for-trading

Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. page 15

Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies 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.

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

The carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

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

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

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

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

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.

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

(g) Fair value estimation

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

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. page 16

Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting 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 reporting date.

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

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

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

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

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

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

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

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

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

The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

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

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

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

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

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

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Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies -

Community Land (Internal Valuation)

-

Land Improvements

-

Other Structures

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

-

Other Assets

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

Initial Recognition

Land Held for Resale/Capitalisation of Borrowing Costs Land held for resale is stated at the lower of cost and net realisable value.

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

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

(j) Infrastructure, Property, Plant and Equipment (I,PP&E) Acquisition of assets Council’s non current assets are continually revalued (over a 5 year period) in accordance with the fair valuation policy as mandated by the Office of Local Government.

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

Investment Properties – refer Note 1(p),

-

Water and Sewerage Networks

-

Operational Land (Internal Valuation)

-

Buildings – Specialised/Non Specialised

-

(Internal Valuation)

(External Valuation)

Plant and Equipment

(as approximated by depreciated historical cost)

(as approximated by depreciated historical cost) (as approximated by depreciated historical cost)

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

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

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

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

Subsequent costs Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to Council and the cost of the item can be measured reliably.

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

(as approximated by depreciated historical cost)

-

Roads Assets incl. roads, bridges & footpaths

-

Drainage Assets (Internal Valuation)

-

Bulk Earthworks (Internal Valuation)

(Internal Valuation)

page 18

Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies Asset Revaluations (including Indexation) In accounting for Asset Revaluations relating to Infrastructure, Property, Plant & Equipment:  Increases in the combined carrying amounts of asset classes arising on revaluation are credited to the asset revaluation reserve.  To the extent that a net asset class increase reverses a decrease previously recognised via the profit or loss, then increase is first recognised in profit or loss.  Net decreases that reverse previous increases of the same asset class are first charged against revaluation reserves directly in equity to the extent of the remaining reserve attributable to the asset, with all other decreases charged to the Income statement.

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

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

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

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

Capitalisation Thresholds Items of infrastructure, property, plant and equipment are not capitalised unless their cost of acquisition exceeds the following; Land - council land - open space - land under roads (purchases after 30/6/08) Plant & Equipment Office Furniture Office Equipment Other Plant &Equipment

100% Capitalised 100% Capitalised 100% Capitalised

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

Buildings & Land Improvements Park Furniture & Equipment Building - construction/extensions - renovations

> $2,000 > $10,000 > $10,000

Other Structures

> $2,000

Water & Sewer Assets Reticulation extensions Other

> $1,000 > $1,000

Stormwater Assets Drains & Culverts Other

> $1,000 > $1,000

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

> $1,000 > $1,000

Bridge construction & reconstruction

> $1,000

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

Land is not depreciated.

Estimated useful lives for Council's I,PP&E include: Plant & Equipment - Office Equipment - Office furniture - Vehicles - Heavy Plant/Road Making equip.

- Other plant and equipment

5 to 10 years 10 to 20 years 5 to 8 years 5 to 8 years 5 to 15 years

Other Equipment - Playground equipment - Benches, seats etc

5 to 15 years 10 to 20 years

Buildings - Buildings : Masonry - Buildings : Other

50 to 100 years 20 to 40 years

page 19

Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies Stormwater Drainage - Drains - Culverts - Flood Control Structures

100 years 60 years 100 years

Transportation Assets - Sealed Roads : Surface - Sealed Roads : Structure - Unsealed roads

30 years 60 years 100 years

- Bridge : Concrete

60 years

- Road Pavements - Kerb, Gutter & Paths

60 years 60 years

Water & Sewer Assets - Dams and reservoirs - Bores

100 years 30 years

- Reticulation pipes : PVC - Reticulation pipes : Other - Pumps and telemetry

70 years 25 to 75 years 5 to 15 years

Other Infrastructure Assets - Bulk earthworks

Infinite

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

Council has not classified any assets as Intangible.

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.

(n) Crown Reserves

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

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

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.

page 20

Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies (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.

(p) Investment property 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.

occurs, whether this occurs during the development or during the operation phase, based on the net present value of estimated future costs.

Provisions for close down and restoration costs do not include any additional obligations which are expected to arise from future disturbance.

Costs are estimated on the basis of a closure plan.

The cost estimates are calculated annually during the life of the operation to reflect known developments, eg updated cost estimates and revisions to the estimated lives of operations, and are subject to formal review at regular intervals.

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

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

Investment property is carried at fair value, representing an open-market value determined annually by external valuers.

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

Annual changes in the fair value of Investment Properties are recorded in the Income Statement as part of “Other Income”.

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

The last full revaluation for Council’s Investment Properties was dated 01/07/2014.

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

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

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

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

Where rehabilitation is conducted systematically over the life of the operation, rather than at the time of closure, provision is made for the estimated outstanding continuous rehabilitation work at each reporting date and the cost is charged to the income statement.

Full revaluations are carried out every year.

Estimated close down and restoration costs are provided for in the accounting period when the obligation arising from the related disturbance

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Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies Provision is made for the estimated present value of the costs of environmental clean up obligations outstanding at the reporting date.

These costs are charged to the income statement.

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.

Movements in the environmental clean up provisions are presented as an operating cost, except for the unwind of the discount which is shown as a borrowing cost.

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.

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

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

As noted above, the ultimate cost of environmental remediation is uncertain and cost estimates can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other locations.

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

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

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

(r) Non-Current Assets (or Disposal Groups) “Held for Sale” & Discontinued Operations Non-current assets (or disposal groups) are classified as held for sale and stated at the lower of either (i) their carrying amount and (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,

Non-current assets classified as “held for sale” are presented separately from the other assets in the Statement of Financial Position.

A Discontinued Operation is a component of Council 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.

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

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

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

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

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

page 22

Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies Non-financial assets (other than goodwill) that suffered a prior period impairment are reviewed for possible reversal of the impairment at each reporting date.

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

(t) Payables These amounts represent liabilities and 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.

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

Borrowings are subsequently measured at amortised cost.

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

Borrowings are removed from the Statement of Financial Position when the obligation specified in the contract is discharged, cancelled or expired.

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

(v) Borrowing costs Borrowing costs are expensed.

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

 Council has a present legal or constructive obligation as a result of past events;  it is more likely than not that an outflow of resources will be required to settle the obligation; and  the amount has been reliably estimated.

Provisions are not recognised for future operating losses.

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

A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date.

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

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

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

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

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

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Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies Liabilities for non vesting sick leave are recognised at the time when the leave is taken and measured at the rates paid or payable, and accordingly no Liability has been recognised in these reports.

Wages & salaries, annual leave and vesting sick leave are all classified as Current Liabilities. (ii) Other Long Term Obligations The liability for all long service and annual leave in respect of services provided by employees up to the reporting date (which is not expected to be wholly settled within the 12 months after the reporting period) are recognised in the provision for employee benefits.

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

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

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

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

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

Defined Benefit Plans A liability or asset in respect of defined benefit superannuation plans would ordinarily be recognised in the Statement of Financial Position, 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” Defined Contribution Plans Contributions to Defined Contribution Plans are recognised as an expense as they become payable.

Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. (iv) Employee Benefit On-Costs Council has recognised at year end the aggregate on-cost liabilities arising from employee benefits, and in particular those on-cost liabilities that will arise when payment of current employee benefits is made in future periods.

These amounts include Superannuation and Workers Compensation expenses which will be payable upon the future payment of certain Leave Liabilities accrued as at 30/06/14.

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Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies

Council does not self insure.

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

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

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

(y) Self insurance

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

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

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

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

(aa) Taxes The Council is exempt from both Commonwealth Income Tax and Capital Gains Tax. Council does however have to comply with both Fringe Benefits Tax and Goods and Services Tax (GST).

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

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

Receivables and payables within the Statement of Financial Postion are stated inclusive of any applicable GST.

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.

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

(ab) New accounting standards and interpretations Certain new (or amended) accounting standards and interpretations have been published that are not mandatory for reporting periods ending 30 June 2014.

Council has not adopted any of these standards early.

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

Applicable to implications:

Local

Government

with

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 and AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments (effective from 1 January 2017) AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and financial liabilities.

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Financial Statements 2014

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 1. Summary of Significant Accounting Policies The standard is not applicable until 1 January 2015 but is available for early adoption.

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.

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.

The Council has not yet fully assessed the impact on the reporting financial position and performance on adoption of AASB 9.

Applicable to Local Government implications for Council;

but

no

AASB 2013-3 Amendments to AASB 136 Recoverable Amount Disclosures for NonFinancial Assets (effective for 30 June 2015 Financial Statements)

the Consolidation and Joint Arrangements Standards (effective for 30 June 2015 Financial Statements for not-for-profit entities) This suite of five new and amended standards 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.

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

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

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.

There are no changes to reported financial position or performance from AASB 2013 – 3, however additional disclosures may be required.

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.

Applicable to Local Government but not relevant to Council at this stage;

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

AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities, revised AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and Joint Ventures and AASB 2011-7 Amendments to Australian Accounting Standards arising from

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

page 26

Financial Statements 2014

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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.

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.

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.

Council in the current or future reporting periods and on foreseeable future transactions.

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

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

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 2015.

Not applicable to Local Government per se; There are no other standards that are “not yet effective” and expected to have a material impact on

page 27

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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 Original

Expenses from Continuing Operations

Operating Result from Continuing Operations

Original

Grants included in Income from Continuing Operations

Total Assets held (Current & Non-current)

Original

Budget

Actual

Actual

Budget

Actual

Actual

Budget

Actual

Actual

Actual

Actual

Actual

Actual

2014

2014

2013

2014

2014

2013

2014

2014

2013

2014

2013

2014

2013

Governance Administration Public Order & Safety Health Environment Community Services & Education Housing & Community Amenities Water Supplies Sewerage Services Recreation & Culture Mining, Manufacturing & Construction Transport & Communication Economic Affairs

424 708 2 3,960 1,024 690 4,415 2,797 422 18,847 672

33 1,121 900 138 4,019 1,066 818 5,682 3,152 1,159 22,381 636

1 712 830 5 3,262 986 576 4,209 3,441 1,060 37,515 760

691 6,068 1,607 437 4,291 1,701 2,408 4,525 3,023 4,440 159 27,832 1,674

698 6,035 1,635 354 3,997 1,523 1,592 4,772 3,152 5,084 318 30,298 1,458

725 3,494 1,520 364 4,418 1,524 1,957 4,595 3,116 5,532 (305) 45,539 1,614

(691) (5,644) (899) (435) (331) (677) (1,718) (110) (226) (4,018) (159) (8,985) (1,002)

(665) (4,914) (735) (216) 22 (457) (774) 910 (3,925) (318) (7,917) (822)

(724) (2,782) (690) (359) (1,156) (538) (1,381) (386) 325 (4,472) 305 (8,024) (854)

140 531 189 415 120 25 38 284 10,534 -

173 518 319 361 141 31 94 31 24,140 124

64,019 55,407 5,224 4 2,480 24,195 50,820 28,562 39,840 150 228,430 13,313

15 61,311 5,122 5 24,574 3,641 47,241 28,078 40,617 126 224,264 8,135

Total Functions & Activities

33,961

41,105

53,357

58,856

60,916

74,093

(24,895)

(19,811)

(20,736)

12,276

25,932

512,444

443,129

27,529

23,980

27,211

-

-

-

27,529

23,980

27,211

3,307

5,728

-

-

61,490

65,085

80,568

58,856

60,916

74,093

2,634

4,169

6,475

15,583

31,660

512,444

443,129

Share of gains/(losses) in Associates &

page 28

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

Financial Statements 2014

Joint Ventures (using the Equity Method)

General Purpose Income 1 Operating Result from Continuing Operations

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 2(b). Council Functions / Activities - Component Descriptions Details relating to the Council's functions / activities as reported in Note 2(a) are as follows: GOVERNANCE Costs relating to the Council’s role as a component of democratic government, including elections, members’ fees and expenses, subscriptions to local authority associations, meetings of council and policy making committees, area representation and public disclosure and compliance.

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

PUBLIC ORDER & SAFETY Fire protection, animal control, enforcement of local government regulations, emergency services, other.

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

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

COMMUNITY SERVICES & EDUCATION Administration, family day care, child care, youth services, other family and children, aged and disabled, migrant services, Aboriginal services, other community services, education.

HOUSING & COMMUNITY AMENITIES Housing, town planning, street lighting, other sanitation and garbage, public cemeteries, public conveniences, WATER SUPPLIES SEWERAGE SERVICES RECREATION & CULTURE Public libraries, museums, art galleries, community centres, public halls, other cultural services, swimming pools, sporting grounds, parks and gardens (lakes), other sport and recreation.

MINING, MANUFACTURING & CONSTRUCTION Building control, abattoirs, quarries & pits, other.

TRANSPORT & COMMUNICATION Urban roads, sealed rural roads, unsealed rural roads, bridges, footpaths, aerodromes, parking areas, bus shelters and services, water transport, RMS works, other.

Camping areas, caravan parks, tourism and area promotion, industrial development promotion, saleyards and markets, real estate development, commercial nurseries, other business undertakings.

page 29

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 3. Income from Continuing Operations $ '000

Notes

Actual 2014

Actual 2013

4,064 13,885 2,266 20,215

3,981 13,459 2,171 19,611

1,868 1,413 2,335 349 5,965

1,371 1,151 2,602 282 5,406

26,180

25,017

(a) Rates & Annual Charges Ordinary Rates Residential Farmland Business Total Ordinary Rates Special Rates Nil Annual Charges (pursuant to s.496, s.496A, s.496B, s.501 & s.611) Domestic Waste Management Services Water Supply Services Sewerage Services Waste Management Services (non-domestic) Total Annual Charges

TOTAL RATES & ANNUAL CHARGES

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

page 30

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Notes

Actual 2014

Actual 2013

907 3,835 395 5,137

756 2,777 343 3,876

260 123 383

209 77 286

363 199 580 615 7,186 801 625 50 10,419

512 136 564 593 5,899 974 456 62 9,196

15,939

13,358

(b) User Charges & Fees Specific User Charges (per s.502 - Specific "actual use" charges) Domestic Waste Management Services Water Supply Services Sewerage Services Total User Charges Other User Charges & Fees (i) Fees & Charges - Statutory & Regulatory Functions (per s.608)

Planning & Building Regulation Private Works - Section 67 Total Fees & Charges - Statutory/Regulatory (ii) Fees & Charges - Other (incl. General User Charges (per s.608)

Aerodrome Cemeteries Child Care Rent and Hire of Council Property RMS (formerly RTA) Charges (State Roads not controlled by Council) Swimming Centres Waste Disposal Tipping Fees Other Total Fees & Charges - Other

TOTAL USER CHARGES & FEES

page 31

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Notes

Actual 2014

Actual 2013

162 84 539 16

183 52 616 4

(c) Interest & Investment Revenue (incl. losses) Interest & Dividends - Interest on Overdue Rates & Annual Charges (incl. Special Purpose Rates) - Interest on Overdue User Charges and Fees - 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

56

1,424

857

2,279

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

97 361

128 1,736

Restricted Investments/Funds - External: Development Contributions - Section 94 - Section 64 Water Fund Operations Sewerage Fund Operations Domestic Waste Management operations Total Interest & Investment Revenue Recognised

13 12 125 190 59 857

12 13 59 262 69 2,279

118 221 27 221 68 195 124 265

129 133 16 61 274 59 138 115 268

Interest Revenue is attributable to:

(d) Other Revenues Fines Legal Fees Recovery - Rates & Charges (Extra Charges) Insurance Claim Recoveries Insurance Premium Refunds and Incentive Payments Sales - General Sewer Services Weight of Loads Water Services Other

TOTAL OTHER REVENUE

1,239

1,193

page 32

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 3. Income from Continuing Operations (continued)

$ '000

2014

2013

2014

2013

Operating

Operating

Capital

Capital

1,912 1,333 62 3,307

3,127 2,542 59 5,728

-

-

(e) Grants General Purpose (Untied) Financial Assistance - General Component Financial Assistance - Local Roads Component Pensioners' Rates Subsidies - General Component Total General Purpose 1

1 1

The Financial Assistance Grant for 13/14 reflects a one off reduction due to the fact that this grant is no longer being paid in advance by up to 50% as has occurred in previous years - it does not represent a loss of income but is instead a timing difference.

Specific Purpose Pensioners' Rates Subsidies: - Water - Sewerage - Domestic Waste Management Water Supplies Sewerage Services Bushfire & Emergency Services Child Care Community Care Services Employment & Training Programs Heritage & Cultural Library - per capita Noxious Weeds Street Lighting Strengthening Basin Communities Transport (Other Roads & Bridges Funding) Other Total Specific Purpose

Total Grants

25 22 21 329 319 23 87 37 107 61 10,736 357 12,124 15,431

24 22 21 331 276 43 172 4 175 61 124 24,309 232 25,794 31,522

16 136 152 152

7 72 9 50 138 138

3,738 11,693 15,431

6,336 25,127 59 31,522

136 16 152

79 59 138

Grant Revenue is attributable to:

- Commonwealth Funding - State Funding - Other Funding

page 33

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

2014 Operating

2013 Operating

2014 Capital

2013 Capital

263 24 31 318

96 4 5 105

-

-

22 1,615 112 1,749

21 4,724 4,745

2,644 36 2,680

2,183 28 2,211

2,067

4,850

2,680

2,211

17,498

36,372

2,832

2,349

Actual 2014

Actual 2013

2,749

1,333

847

1,779

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

S 94A - Fixed Development Consent Levies S 64 - Water Supply Contributions S 64 - Sewerage Service Contributions Total Developer Contributions Other Contributions: Roads & Bridges RMS Contributions (Regional Roads, Block Grant) Other Total Other Contributions

Total Contributions

TOTAL GRANTS & CONTRIBUTIONS

17

$ '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: Unexpended at the Close of the Previous Reporting Period add: Grants & contributions recognised in the current period but not yet spent: less: Grants & contributions recognised in a previous reporting period now spent:

Net Increase (Decrease) in Restricted Assets during the Period Unexpended and held as Restricted Assets Comprising: - Specific Purpose Unexpended Grants - Developer Contributions - Other Contributions

(1,615) (768)

(363) 1,416

1,981

2,749

949 1,032 1,981

1,489 709 551 2,749

page 34

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 4. Expenses from Continuing Operations $ '000

Notes

Actual 2014

Actual 2013

12,099 3,193 1,073 404 665 156 46 393 295 18,324 (626)

12,102 2,731 1,005 398 683 93 51 426 285 17,774 (547)

(a) Employee Benefits & On-Costs Salaries and Wages Employee Leave Entitlements (ELE) Superannuation - Defined Contribution Plans Superannuation - Defined Benefit Plans Workers' Compensation Insurance Fringe Benefit Tax (FBT) Payroll Tax 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

17,698

17,227

220

210

2,496 2,496 2,496

2,465 2,465 2,465

65 65

160 160

(b) Borrowing Costs (i) Interest Bearing Liability Costs Interest on Loans Total Interest Bearing Liability Costs less: Capitalised Costs Total Interest Bearing Liability Costs Expensed (ii) Other Borrowing Costs Discount adjustments relating to movements in Provisions (other than ELE) - Remediation Liabilities Total Other Borrowing Costs

TOTAL BORROWING COSTS EXPENSED

26

2,561

2,625

26,229 45 75

38,737 86 84

22 298 147

15 127 175

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

TOTAL MATERIALS & CONTRACTS

49

26,865

183

39,407 page 35

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 4. Expenses from Continuing Operations (continued) Actual 2014

Actual 2013

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

59 16 75

54 30 84

Total Auditor Remuneration

75

84

49 49

183 183

Notes

$ '000

(c) Materials & Contracts (continued) 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

Impairment Costs $ '000

Notes

Depreciation/Amortisation

Actual 2014

Actual 2013

Actual 2014

Actual 2013

-

-

1,349 259 46 365 344 317

1,250 250 33 282 259 852

(d) Depreciation, Amortisation & Impairment Plant and Equipment Office Equipment Furniture & Fittings Buildings - Non Specialised Buildings - Specialised Other Structures Infrastructure: - Roads - Bridges - Footpaths - Stormwater Drainage - Water Supply Network - Sewerage Network - Other Infrastructure Other Assets Asset Reinstatement Costs 9 & 26 Total Depreciation & Impairment Costs less: Impairments (to)/from ARR [Equity] 9a

TOTAL DEPRECIATION & IMPAIRMENT COSTS EXPENSED

(10,806) -

(23,904) -

5,260 246 100 207 1,028 1,003 22

5,710 205 995 931 32

(10,806) 10,806

(23,904) 23,904

37 10,583 -

518 11,317 -

10,583

11,317

-

-

page 36

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Notes

Actual 2014

Actual 2013

124 267 23 95 107 107 1,255 588 350 293

36 250 22 99 141 116 77 1,178 494 504 301

(e) Other Expenses Bad & Doubtful Debts Contributions/Levies to Other Levels of Government - NSW Rural Fire Service Levy 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 Street Lighting Telephone & Communications

TOTAL OTHER EXPENSES

3,209

3,218

Actual

Actual

-

46 (91) (45)

Note 5. Gains or Losses from the Disposal of Assets Property (excl. Investment Property)

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

Plant & Equipment

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

Infrastructure

Proceeds from Disposal - Infrastructure less: Carrying Amount of Infrastructure 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

1,006 (1,193) (187)

497 (558) (61)

(9) (9)

(686) (686)

1,414 (678) 736

4,014 (3,521) 493

540

(299)

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

Net Gain/(Loss) on Disposal of Financial Instruments

736

493

736

493 page 37

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

$ '000

Notes

Cash & Cash Equivalents (Note 6a)

Cash on Hand and at Bank Cash-Equivalent Assets1 - Short Term Deposits Total Cash & Cash Equivalents

Investments (Note 6b)

- Long Term Deposits - Equity Linked Notes/Capital Protected Notes - CDO's Total Investments

TOTAL CASH ASSETS, CASH EQUIVALENTS & INVESTMENTS

1

2014

2014

2013

2013

Actual Current

Actual Non Current

Actual Current

Actual Non Current

6,116

-

11,151

-

8,000 14,116

-

10,500 21,651

-

6,000 989 6,989

-

933 678 1,611

-

21,105

-

23,262

-

14,116

-

21,651

-

5,989 1,000 6,989

-

1,611 1,611

-

1,611 56 5,000 (678) 5,989

-

1,884 1,293 (2,245) 679 1,611

989 5,000 5,989

-

933 678 1,611

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" - "Held for Trading"

6(b-i)

b. "Held to Maturity"

6(b-ii)

Investments

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) Transfers between Current/Non Current Balance at End of Year Comprising: - Equity Linked Notes/Capital Protected Notes - CDO's - Other Long Term Financial Assets

Total

1,824 131 (1,276) (679) -

Refer to Note 27 - Fair Value Measurement for information regarding the fair value of investments held. page 38

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

$ '000

Total Cash, Cash Equivalents and Investments

2014

2014

2013

2013

Actual Current

Actual Non Current

Actual Current

Actual Non Current

21,105

-

23,262

-

12,076 6,745 2,284 21,105

-

10,641 11,490 1,131 23,262

-

Opening Balance

Transfers to Restrictions

807 1,694 147 2,648

6,905 6,905

(4,784) (891) (5,675)

2,928 803 147 3,878

356 141 212 551 1,489 4,426 818 7,993 10,641

276 29 38 13,078 8,868 682 191 100 23,262 30,167

(20) (13,629) (9,408) (23,057) (28,732)

612 170 250 949 682 4,617 918 8,198 12,076

attributable to:

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

2014 $ '000

Transfers from Restrictions

Closing Balance

Details of Restrictions External Restrictions - Included in Liabilities Specific Purpose Unexpended Loans-General (A) Specific Purpose Unexpended Loans-Water (A) Specific Purpose Unexpended Loans-Sewer (A) External Restrictions - Included in Liabilities External Restrictions - Other Developer Contributions - General Developer Contributions - Water Fund Developer Contributions - Sewer Fund RMS (formerly RTA) Contributions Specific Purpose Unexpended Grants Water Supplies Sewerage Services Northern Regional Library External Restrictions - Other Total External Restrictions

(D) (D) (D) (E) (F) (G) (G)

A Loan moneys which must be applied for the purposes for which the loans were raised.

D Development contributions which are not yet expended for the provision of services and amenities in accordance

with contributions plans (refer Note 17).

E RMS Contributions which are not yet expended for the provision of services and amenities in accordance with those contributions.

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

page 39

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 6c. Restricted Cash, Cash Equivalents & Investments - Details (continued) 2014 $ '000

Internal Restrictions Plant & Vehicle Replacement Employees Leave Entitlement Aerodromes Asset Replacement Capital Replacement Sewer Community Infrastructure (Sec 94) Economic Development Special Rate Levy (SRL) Election Reserve Gravel Pits Jellicoe Park Medical Accommodation Occupational Health and Safety Onsite Effluent Property Acquisitions Regional and Local Infrastructure Program Road Sustainability Fund Welcome and Entrance Signage Waste Asset Replacement Reserve RMS Contract Retention Saleyards Reserve Sportsground Improvements Revotes Community Development Program Small Plant Council Various Projects GAR Reserve Total Internal Restrictions TOTAL RESTRICTIONS

Opening Balance

Transfers to Restrictions

Transfers from Restrictions

Closing Balance

1,707 775 529 739 2,536 11 121 98 515 30 26 87 80 300 7 2,045 60 134 1,246 183 12 224 25 11,490

125 323 69 12 15 150 5,793 92 120 80 100 6,879

(1,507) (133) (739) (704) (11) (233) (18) (3) (56) (1,651) (60) (4) (5,966) (100) (224) (25) (120) (70) (11,624)

200 900 396 1,832 211 80 584 42 38 31 80 300 7 544 130 1,073 83 12 92 10 100 6,745

22,131

37,046

(40,356)

18,821

page 40

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 7. Receivables $ '000

Notes

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

2014 Current Non Current

2013 Current Non Current

2,105 286 79 2,833

-

2,233 229 45 2,526

-

41 2,360 95 7,799

-

65 3,680 114 8,892

-

less: Provision for Impairment

Rates & Annual Charges User Charges & Fees Total Provision for Impairment - Receivables

TOTAL NET RECEIVABLES

(290) (120) (410)

-

(290) (120) (410)

-

7,389

-

8,482

-

197 1,784

-

149 1,431

-

454 156 2,591

-

480 228 2,288

-

Externally Restricted Receivables Water Supply

- Rates & Availability Charges - Other Sewerage Services

- Rates & Availability Charges - Other Total External Restrictions Internally Restricted Receivables Nil Unrestricted Receivables TOTAL NET RECEIVABLES

4,798

-

6,194

-

7,389

-

8,482

-

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 9.00% (2013 10.00%).

Generally all other receivables are non interest bearing. (iv) Please refer to Note 15 for issues concerning Credit Risk and Fair Value disclosures. page 41

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 8. Inventories & Other Assets $ '000

Notes

Inventories Real Estate for resale (refer below) Stores & Materials Total Inventories

2014 Current Non Current

2013 Current Non Current

145 1,443 1,588

-

1,077 1,077

-

468 468

-

405 405

-

2,056

-

1,482

-

Water Stores & Materials Prepayments Total Water

105 1 106

-

116 1 117

-

Sewerage Stores & Materials Total Sewerage

105 105

-

116 116

-

211 1,845 2,056

-

233 1,249 1,482

-

145 145

-

-

-

145 145 145

-

-

-

145 145

-

-

-

Other Assets Prepayments Total Other Assets

TOTAL INVENTORIES / OTHER ASSETS Externally Restricted Assets

Total Externally Restricted Assets Total Internally Restricted Assets Total Unrestricted Assets TOTAL INVENTORIES & OTHER ASSETS

Other Disclosures Details for Real Estate Development Industrial/Commercial Total Real Estate for Resale (Valued at the lower of cost and net realisable value)

Represented by:

Other Properties - Book Value Total Costs less: Provision for Under Recovery Total Real Estate for Resale Movements:

- Other Total Real Estate for Resale

Refer to Note 27 - Fair Value Measurement for information regarding the fair value of other assets held. page 42

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 9a. Infrastructure, Property, Plant & Equipment Asset Movements during the Reporting Period as at 30/6/2013

$ '000 Plant & Equipment Plant & Equipment (WIP) Office Equipment Office Equipment (WIP) Furniture & Fittings Furniture & Fittings (WIP)

At

At

Cost

Fair Value

Accumulated Dep'n

Carrying

Impairment

Asset Additions

WDV of Asset Disposals

Depreciation Expense

Impairment Reversal (via Equity)

WIP Transfers

Adjustments & Transfers

Value

-

20,643 135 4,136 384 1,316 428

11,323 2,795 905 -

-

9,320 135 1,341 384 411 428

5,595 5 217 40 64 13

-

8,989 4,182 37,335 26 32,619 10,958 13,898 2,705

6,924 5,294 1,891 -

-

8,989 4,182 30,411 26 27,325 10,958 12,007 2,705

3 45 220 57 141 137 5 195 484

-

261,490 8,357 30,030 8,179 20,583 709 71,545 961 51,608 350 1,856

74,121 6,558 3,116 7,334 28,295 25,831 378

10,806 -

176,563 8,357 23,472 5,063 13,249 709 43,250 961 25,777 350 1,478

10,119 5,139 102 395 141 93 2,806 102 765 74

-

3,100 65 365

1,604 18 1

-

1,496 47 364

165 1 -

-

596,952

176,388

10,806

409,758

27,123

(1,193) -

(1,349) (259) (46) -

-

(135) (182) 9 3,061

-

(365) (344) (317) -

-

11 (26) 10 (10,953) 497 7,623

(5,260) (246) (100) (207) (1,028) (1,003) (22)

10,806 -

7,532 (7,447) 220 (220) 129 (129) 16 (16) -

(34) (3) -

-

-

-

(10,583)

10,806

-

-

Revaluation Decrements to Equity (ARR)

(3,489)

Revaluation Increments to Equity (ARR)

as at 30/6/2014 At

At

Cost

Fair Value

Accumulated Dep'n

Carrying

Impairment

Value

-

-

22,911 5 4,353 242 1,389 13

10,538 3,054 951 -

-

12,373 5 1,299 242 438 13

-

-

9,005 45 4,169 220 35,839 141 32,882 10 16,037 10,812

7,045 5,445 2,644 -

-

9,005 45 4,169 220 28,794 141 27,437 10 13,393 10,812

24,783 20,978 2,405 1,327 750 -

-

307,837 6,049 49,417 10,162 20,803 630 73,774 3,638 53,121 1,099 1,182

83,294 5,111 2,399 7,541 30,003 27,488 414

-

224,543 6,049 44,306 7,763 13,262 630 43,771 3,638 25,633 1,099 768

-

-

3,265 66 365

1,638 21 1

-

1,627 45 364

50,243

-

669,481

187,587

-

481,894

Land:

- Operational Land - Operational Land (WIP) - Community Land - Community Land (WIP) Buildings - Non Specialised Buildings - Non Specialised (WIP) Buildings - Specialised Buildings - Specialised (WIP) Other Structures Other Structures (WIP)

-

13 (13) (1,320) 309 1,011 -

-

Infrastructure:

-

Roads Roads (WIP) Bridges Footpaths Stormwater Drainage Stormwater Drainage (WIP) Water Supply Network Water Supply Network (WIP) Sewerage Network Sewerage Network (WIP) Other Infrastructure

(9) -

-

(762)

Other Assets:

- Tip Assets - Quarry Assets - Other Assets

Additions to Buildings & Infrastructure Assets are made up of Asset Renewals ($20.0M) and New Assets ($7.1M).

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

Refer to Note 27 - Fair Value Measurement for information regarding the fair value of other Infrastructure, Property, Plant & Equipment.

(1,202)

(4,251)

page 43

Financial Statements 2014

TOTAL INFRASTRUCTURE, PROPERTY, PLANT & EQUIP.

-

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Actual

Actual

2014

Class of Asset

2013

Carrying Value Fair Value Impairm't

At

At

Cost

A/Dep &

At

At

Cost

A/Dep &

Fair Value Impairm't

Carrying Value

Water Supply Plant & Equipment

-

372

261

111

-

372

240

132

Office Equipment

-

75

64

11

-

74

61

13

Furniture & Fittings

-

7

6

1

-

7

6

1

- Operational Land

-

1,211

-

1,211

-

557

-

557

- Community Land

-

5

-

5

-

6

-

6

Buildings

-

89

19

70

-

878

395

483

Other Structures

-

-

-

-

-

6

3

3

Infrastructure (WIP)

-

3,638

-

3,638

962

-

-

962

Infrastructure Total Water Supply

-

73,670

29,982

-

71,441

28,280

-

79,067

30,332

43,688 48,735

962

73,341

28,985

43,161 45,318

Plant & Equipment

-

294

101

193

-

294

82

212

Office Equipment

-

28

10

18

-

17

9

8

Furniture & Fittings

-

1

-

1

-

1

-

1

- Operational Land

-

860

-

860

-

301

-

301

- Community Land

-

-

-

-

5

-

5

Land

Sewerage Services

Land

Buildings

-

61

11

50

-

1,404

585

819

Other Structures

-

50

9

41

-

266

105

161

Infrastructure (WIP)

-

1,099

-

1,099

350

-

-

350

Infrastructure Total Sewerage Services

-

53,070

27,485

-

51,557

25,829

-

55,463

27,616

25,585 27,847

350

53,845

26,610

25,728 27,585

-

134,530

57,948

76,582

1,312

127,186

55,595

72,903

TOTAL RESTRICTED I,PP&E

Note 9c. Infrastructure, Property, Plant & Equipment - Current Year Impairments $ '000

Notes

Reversals of Impairment Losses previously recognised direct to Equity (ARR): - Impaired Road Asset reversal

Total Impairment Reversals

IMPAIRMENT of ASSETS - DIRECT to EQUITY (ARR)

20 (ii)

Actual 2014

Actual 2013

10,806 10,806

23,904 23,904

10,806

23,904 page 44

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Notes

2014 Current Non Current

Payables

Goods & Services - operating expenditure Accrued Expenses: - Borrowings - Other Expenditure Accruals Northern Regional Library Security Bonds, Deposits & Retentions Total Payables

Borrowings

Loans - Secured 1 Total Borrowings

2013 Current Non Current

3,751

-

4,577

-

340 463 918 503 5,975

-

336 260 818 497 6,488

-

1,058 1,058

41,261 41,261

959 959

33,214 33,214

1,522 364 2,407 131

89 -

1,428 350 2,011 170

72 -

Provisions Employee Benefits;

Annual Leave Sick Leave Long Service Leave Other Leave Sub Total - Aggregate Employee Benefits

Asset Remediation/Restoration (Future Works)

4,424

89

3,959

72

1,500 5,924

2,619 2,708

1,500 5,459

2,386 2,458

12,957

43,969

12,906

35,672

26

Total Provisions

Total Payables, Borrowings & Provisions

(i) Liabilities relating to Restricted Assets

2014 Current Non Current

2013 Current Non Current

Externally Restricted Assets

527 301 828

9,149 3,374 12,523

1,448 236 1,684

7,576 3,509 11,085

828 12,129

12,523 31,446

1,684 11,222

11,085 24,587

12,957

43,969

12,906

35,672

Water Sewer 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 45

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Actual 2014

Actual 2013

2,896 2,896

2,462 2,462

(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

Note 10b. Description of and movements in Provisions 2013

Class of Provision Annual Leave Sick Leave Long Service Leave Other Leave Asset Remediation

TOTAL

Opening Balance as at 1/7/13

1,428 350 2,083 170 3,886 7,917

2014 Additional Decrease due to Provisions Payments

827 8 411 132 233 1,611

(989) (14) (296) (171) (1,470)

Remeasurement effects due to Discounting

256 20 298 574

Unused amounts reversed

Closing Balance as at 30/6/14

-

1,522 364 2,496 131 4,119 8,632

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

page 46

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Notes

Actual 2014

Actual 2013

14,116 14,116

21,651 21,651

4,169

6,475

10,583 (540)

11,317 299

(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 Losses/(Gains) recognised on Fair Value Re-measurements through the P&L: - Investments classified as "At Fair Value" or "Held for Trading" Unwinding of Discount Rates on Reinstatement Provisions

(56) 65

(1,424) 160

1,093 (366) (63) (826) 4 203 106 482 168

960 89 (100) 2,163 (11) (218) (119) 224 1,415

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

Decrease/(Increase) in Receivables 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

15,022

21,230

page 47

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Notes

Actual 2014

Actual 2013

100 75 175

100 75 175

6 6

9 9

(c) Non-Cash Investing & Financing Activities Nil

(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 Amounts utilised as at Balance Date: - Credit Cards / Purchase Cards Total Financing Arrangements Utilised 1. The Bank overdraft facility may be drawn at any time and may be terminated by the bank without notice.

Interest rates on overdrafts are Interest Rates on Loans & Other Payables are disclosed in Note 15.

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

page 48

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 12. Commitments for Expenditure $ '000

Notes

Actual 2014

Actual 2013

2,875 27,068 5,601 340 107,172 8,550 6,200 10,711 10,722 360 179,599

1,370 140 2,595 84,871 6,470 6,235 4,070 16,891 122,642

36,963 63,690 78,946 179,599

29,123 41,636 51,883 122,642

112,741 24,464 1,446 7,888 24,321 8,739 179,599

65,503 22,132 13,337 21,580 90 122,642

(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 Structures Land Engineering Infrastructure Sewer Infrastructure Waste Infrastructure Water Infrastructure Other Infrastructure Other Total Commitments These expenditures are payable as follows:

Within the next year Later than one year and not later than 5 years Later than 5 years Total Payable Sources for Funding of Capital Commitments:

Unrestricted General Funds Future Grants & Contributions Sect 64 & 94 Funds/Reserves Internally and Externally Restricted Reserves Unexpended and New Loans (to be raised) Other Funding Total Sources of Funding

page 49

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 12. Commitments for Expenditure (continued) $ '000

Notes

Actual 2014

Actual 2013

49 344 393

99 133 232

(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 Later than 5 years Total Non Cancellable Operating Lease Commitments

b. Non Cancellable Operating Leases include the following assets: Computer Equipment, Miscellaneous Plant & Equipment 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

(e) Investment in Associates / Joint Ventures - Commitments For Capital Commitments and Other Commitments relating to Investments in Associates & Joint Ventures, refer to Note 19 (b)

page 50

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 13a(i). Statement of Performance Measurement - Indicators (Consolidated) Amounts 2014

$ '000

Indicator 2014

Prior Periods 2013 2012

Local Government Industry Indicators - Consolidated 1. Operating Performance Ratio Total continuing operating revenue (1) (excl. Capital Grants & Contributions) - Operating Expenses

Total continuing operating revenue (1)

741 61,657

1.20%

3.91%

1.10%

44,159 64,489

68.48%

51.08%

62.55%

15,672 9,233

1.70 : 1

2.29

2.55

13,885 3,520

3.94

4.84

4.26

2,101 28,735

7.31%

7.85%

9.15%

20,116 4,758

4.23

3.97

3.74

(excl. Capital Grants & Contributions)

2. Own Source Operating Revenue Ratio Total continuing operating revenue (1) (less ALL Grants & Contributions)

Total continuing operating revenue

(1)

3. Unrestricted Current Ratio Current Assets less all External Restrictions (2) Current Liabilities less Specific Purpose Liabilities

(3, 4)

4. Debt Service Cover Ratio Operating Result (1) before capital excluding interest and depreciation / impairment / amortisation (EBITDA) Principal Repayments (from the Statement of Cash Flows) + Borrowing Interest Costs (from the Income Statement)

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

6. Cash Expense Cover Ratio Current Year's Cash and Cash Equivalents including All Term Deposits Payments from cash flow of operating and

x12

financing activities Notes (1)

Excludes fair value adjustments and reversal of revaluation decrements, net gain/(loss) on sale of assets and net share of interests in joint ventures.

(2)

Refer Notes 6-8 inclusive.

Also excludes any Real Estate & Land for resale not expected to be sold in the next 12 months

(3)

Refer to Note 10(a).

(4)

Refer to Note 10(a)(ii) - excludes all payables & provisions not expected to be paid in the next 12 months (incl. ELE). page 51

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 13a(ii). Local Government Industry Indicators - Graphs (Consolidated) 1. Operating Performance Ratio

Purpose of Operating Performance Ratio

5.0% 3.91%

Ratio %

4.0% 3.0% 2.0%

1.20%

1.10%

1.0% 0.0% 2012

―― Minimum

2013

This ratio measures Council’s achievement of containing operating expenditure within operating revenue.

Commentary on 2013/14 Result 2013/14 Ratio

1.20%

The benchmark for this ratio is greater than -4.00%. Council has exceeded this benchmark for the last three years.

2014

-4.00%

Source for Benchmark: Code of Accounting Practice and Financial Reporting

Ratio %

2. Own Source Operating Revenue Ratio 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

This ratio measures fiscal flexibility. It is the degree of reliance on external funding sources such as operating grants & contributions.

51.08%

―― Minimum

Commentary on 2013/14 Result 2013/14 Ratio

68.48%

68.48%

62.55%

2012

Purpose of Own Source Operating Revenue Ratio

2013

With the completion of the flood damage program this ratio has normalised in the current financial year.

2014

60.00%

Source for Benchmark: Code of Accounting Practice and Financial Reporting

Ratio : 1

3. Unrestricted Current Ratio 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

2.55

Purpose of Unrestricted Current Ratio

2.29 1.70

2012

―― Minimum

2013

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 2013/14 Result 2013/14 Ratio

1.70 : 1

This ratio has declined for the last 4 years however still remains above the benchmark, indicating that Council's working capital is at a satisfactory level to meet short term debt obligations.

2014

1.50

Source for Benchmark: Code of Accounting Practice and Financial Reporting

page 52

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 13a(ii). Local Government Industry Indicators - Graphs (Consolidated) Commentary on 2013/14 Result

4. Debt Service Cover Ratio

Purpose of Debt Service Cover Ratio

6.0

Ratio (x)

5.0

4.84 4.26

3.94

3.94

4.0

This ratio measures the availability of operating cash to service debt including interest, principal and lease payments

3.0 2.0 1.0 0.0 2012

―― Minimum

2013/14 Ratio

2013

This ratio remains above the benchmark of 2:1. This ratio will again decrease in the coming year due to additional loan funding utilised for major capital projects.

2014

2.00

Source for Benchmark: NSW Treasury Corporation

5. Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage 12%

Ratio %

10%

Purpose of Rates & Annual Charges Outstanding Ratio

Commentary on 2013/14 Result 2013/14 Ratio

7.31%

9.15% 7.85%

8%

7.31%

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

6% 4% 2% 0% 2012

―― Maximum

2013

Council's continued efforts to reduce outstanding debts is evident in the reduction of this ratio over the past two years. This ratio is expected to remain at current levels.

2014

10.00%

Source for Benchmark: Office of Local Govt - Comparative Information (10/11)

6. Cash Expense Cover Ratio 5.0

Ratio (mths)

4.0

3.97

3.74

4.23

Purpose of Cash Expense Cover Ratio

This liquidity ratio indicates the number of months a Council can continue paying for its immediate expenses without additional cash inflow.

3.0 2.0 1.0 0.0 2012

―― Minimum

2013

Commentary on Result 2013/14 Ratio

4.23

The benchmark for this ratio is greater than 3 months. Council has achieved this for the last three years.

2014

3.00

Source for Benchmark: Code of Accounting Practice and Financial Reporting

page 53

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 13b. Statement of Performance Measurement - Indicators (by Fund) $ '000

Water 2014

Sewer 2014

General 5 2014

22.36%

-0.31%

-1.25%

2.19%

1.14%

4.16%

99.22%

97.89%

63.23%

99.26%

97.18%

45.58%

5.25 : 1

17.71 : 1

1.70 : 1

1.17

22.25

2.29

4.21

3.37

3.95

2.37

3.39

5.78

12.40%

19.08%

5.85%

11.84%

18.09%

6.49%

4.97

26.21

3.18

0.00

0.00

2.76

Local Government Industry Indicators - by Fund 1. Operating Performance Ratio Total continuing operating revenue (1) (excl. Capital Grants & Contributions) - Operating Expenses

Total continuing operating revenue (1) (excl. Capital Grants & Contributions)

prior period:

2. Own Source Operating Revenue Ratio Total continuing operating revenue (1) (less ALL Grants & Contributions)

Total continuing operating revenue (1)

prior period:

3. Unrestricted Current Ratio Current Assets less all External Restrictions (2) Current Liabilities less Specific Purpose Liabilities (3, 4) prior period:

4. Debt Service Cover Ratio Operating Result (1) before capital excluding interest and depreciation / impairment / amortisation (EBITDA) Principal Repayments (from the Statement of Cash Flows) + Borrowing Interest Costs (from the Income Statement)

prior period:

5. Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage Rates, Annual and Extra Charges Outstanding Rates, Annual and Extra Charges Collectible prior period:

6. Cash Expense Cover Ratio Current Year's Cash and Cash Equivalents including All Term Deposits Payments from cash flow of operating and financing activities

x12 prior period:

Notes (1) - (4) (5)

Refer to Notes at Note 13a(i) above.

General Fund refers to all of Council's activities except for its Water & Sewer activities which are listed separately. page 54

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 14. Investment Properties $ '000

Notes

Actual 2014

Actual 2013

-

145

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

- Transfers from/(to) Inventories (Note 8) - Transfers from/(to) Owner Occupied (Note 9) CLOSING BALANCE - INVESTMENT PROPERTIES

145 (145) -

145 145

(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 2014 revaluations were based on Independent Assessments made by: APV Valuers & Asset Management (Registered Valuers, Engineers and CPA's)

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

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

page 55

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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 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 - "Held for Trading" - "Held to Maturity" Receivables Total Financial Assets Financial Liabilities Payables Loans / Advances Total Financial Liabilities

Fair Value

2014

2013

2014

2013

14,116

21,651

14,116

21,651

5,989 1,000 7,389 28,494

1,611

5,989 1,000 7,389 28,494

1,611

5,975 42,319 48,294

8,482

31,744

6,488 34,173

40,661

5,975 42,319 48,294

8,482

31,744

6,488 34,173

40,661

Fair Value is determined as follows: - Cash & Cash Equivalents, Receivables, Payables - estimated to be the carrying value which approximates market value.

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

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

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

page 56

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

(a) Cash & Cash Equivalents, Financial assets 'at fair value through the profit & loss' "Available-for-sale" financial assets & "Held-to-maturity" Investments Council's objective is to maximise its return on cash & investments whilst maintaining an adequate level 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 risks associated with the investments held are: - Price Risk - the risk that the capital value of Investments may fluctuate due to changes in market prices, whether there changes are caused by factors specific to individual financial instruments or their issuers or are caused by factors affecting similar instruments traded in a market.

- Interest Rate Risk - the risk that movements in interest rates could affect returns and income.

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

Council manages these risks (amongst other measures) by diversifying its portfolio and only 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 2014 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

9 212

9 212

(9) (212)

(9) (212)

161 217

161 217

(161) (217)

(161) (217)

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

page 57

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

(b) Receivables Council's major receivables comprise (i) Rates & Annual charges and (ii) User Charges & Fees.

The major risk associated with these receivables is credit risk - the risk that debts due and payable to 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.

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

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

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

A profile of Council's receivables credit risk at balance date follows: 2014

2014

Rates &

(i) Ageing of Receivables - % Current (not yet overdue) Overdue

(ii) Ageing of Receivables - value Current (not yet overdue) Past due by more than 90 days

(iii) Movement in Provision for Impairment of Receivables Balance at the beginning of the year Balance at the end of the year

2013

2013

Rates &

Annual

Other

Annual

Other

Charges

Receivables

Charges

Receivables

0% 100% 100%

94% 6% 100%

0% 100% 100%

96% 4% 100%

2,105 2,105

5,328 366 5,694

2,233 2,233

6,386 273 6,659

2014

2013

410 410

410 410 page 58

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

(c) 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 maturity table below: $ '000

Subject to no

payable in:

Total

Actual

Cash

Carrying

Outflows

Values

maturity

â&#x2030;¤ 1 Year

1-2 Yrs

2-3 Yrs

3-4 Yrs

4-5 Yrs

> 5 Yrs

503

5,472

-

-

-

-

-

5,975

5,975

Loans & Advances

-

3,430

3,758

3,758

3,682

3,682

78,112

96,422

42,319

Lease Liabilities

-

-

-

2014 Trade/Other Payables

Total Financial Liabilities

503

8,902

3,758

3,758

3,682

3,682

78,112

102,397

48,294

497

5,991

-

-

-

-

-

6,488

6,488

-

3,351

3,431

4,292

3,392

3,316

55,800

73,582

34,173

497

9,342

3,431

4,292

3,392

3,316

55,800

80,070

40,661

2013 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

2014

2013

Carrying

Average

Carrying

Average

Value

Interest Rate

Value

Interest Rate

5,975 42,319 48,294

0.0% 7.0%

6,488 34,173 40,661

0.0% 7.2%

page 59

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 16. Material Budget Variations $ '000

Council's Original Financial Budget for 13/14 was adopted by the Council on 26 June 2014.

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

REVENUES Rates & Annual Charges User Charges & Fees

2014 Budget

2014 Actual

26,261

26,180

9,465

15,939

2014 ---------- Variance* ----------

(81) 6,474

(0%)

U

68%

F

Fees received for work undertaken on State Roads for the Roads and Maritime Services (RMS) for routine maintenance and ordered works exceeded budget by approximately $4.5m. The value of ordered works undertaken for the RMS in any given year is unknown at the time of budget adoption.

Interest & Investment Revenue

1,025

857

(168)

(16%)

U

18%

F

Lower than forecast cash balance for part of the year combined with lower than expected interest rates.

Other Revenues

1,048

1,239

191

Weight of Loads (WOL) contributions from member Councils exceeded budget and legal fees recoveries exceeded the adopted budget by approximately $100,000 as a direct result of debt recovery action taken during the year.

21,073 17,498 (3,575) U Operating Grants & Contributions (17%) The advance payment for the Financial Assistance Grant was not received in the current financial year resulting in a $2.6m reduction to income in this area. This payment will be included in the 2014/15 quarterly payments.

The remainder of the variance primarily relates to the timing of flood damage restoration payments which were received in the previous financial year.

8%

F

540 540 Net Gains from Disposal of Assets 0% This gain relates to the disposal of financial investments and was not known at the time of budget adoption.

F

Capital Grants & Contributions

2,618

2,832

214

page 60

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

EXPENSES Employee Benefits & On-Costs Borrowing Costs

2014 Budget

2014 Actual

2014 ---------- Variance* ----------

18,682

17,698

984

5%

F

2,993

2,561

432

14%

F

This variance relates to the timing of draw down of loan funds. New loans were not drawn down until June therefore borrowing costs included in the adopted budget were overstated.

21,474 26,865 (5,391) Materials & Contracts This variation relates to the additional works undertaken under the RMCC contract for ordered works.

(25%)

U

10,724

10,583

141

1%

F

Other Expenses

3,483

3,209

274

8%

F

Net Losses from Disposal of Assets

1,500

-

1,500

100%

F

Depreciation & Amortisation

The timing of the revaluation of Council's road infrastructure assets resulted in the variance to this line item.

Budget Variations relating to Council's Cash Flow Statement include: 14,859 15,022 Cash Flows from Operating Activities

163

1.1%

F

Cash Flows from Investing Activities

(33,221)

(30,703)

2,518

(7.6%)

F

Cash Flows from Financing Activities

18,121

8,146

(9,975)

(55.0%)

U

Loan funds budgeted to be drawn down during the financial year for capital works were deferred and will be drawn down in the 2014/15 financial year.

page 61

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Cumulative

Projections

Opening Balance

Contributions

Interest

Expenditure

Internal

Held as

Exp

Over or

Internal

received during the Year

earned

during

Borrowing

Restricted

Future

still

(under)

Borrowings

in Year

Year

(to)/from

Asset

income

outstanding

Funding

due/(payable)

Cash

Non Cash

S94A Levies - under a Plan

356

263

-

13

(20)

-

612

500

(1,112)

-

-

Total S94 Revenue Under Plans

356

263

-

13

(20)

-

612

500

(1,112)

-

-

S64 Contributions

353

55

-

12

-

420

100

(520)

-

Total Contributions

709

318

-

25

-

1,032

600

(1,632)

-

(20)

-

S94A LEVIES - UNDER A PLAN Cumulative

Projections Contributions Opening Balance

Public Amenities Total

received during the Year Cash

Non Cash

Over or

Internal

Expenditure

Internal

Held as

earned

during

Borrowing

Restricted

Future

still

(under)

Borrowings

in Year

Year

(to)/from

Asset

income

outstanding

Funding

due/(payable)

356

263

-

13

(20)

-

612

500

(1,112)

-

-

356

263

-

13

(20)

-

612

500

(1,112)

-

-

page 62

Financial Statements 2014

PURPOSE

Exp

Interest

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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.

(ii) Statewide Limited

LIABILITIES NOT RECOGNISED:

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.

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.

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

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. however is unable to provide Council with an accurate estimate of its share of the net deficit and accordingly Council has not recorded any net liability from it's Defined Benefit Scheme obligations in accordance with AASB 119.

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.

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

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

StateCover is a company providing workers compensation insurance cover to the NSW Local Government Industry and specifically Council. capital base as a result of the company's past performance and/or claims experience or as a result of any increased prudential requirements from APRA. These future equity contributions would be required to maintain the companyâ&#x20AC;&#x2122;s minimum level of Net Assets in accordance with its Licence Requirements. (iv) Other Guarantees Council has provided no other Guarantees other than those listed above.

page 63

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

LIABILITIES NOT RECOGNISED (continued):

(iii) Potential Land Acquisitions due to Planning Restrictions imposed by Council (continued)

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

Council believes that it is appropriately covered for all claims through its Insurance Coverage and does not expect any material liabilities to eventuate.

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.

ASSETS NOT RECOGNISED:

(ii) S94 Plans

(i) Land Under Roads

Council levies Section 94/94A Contributions upon various development across the Council area through the required Contributions 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 30/06/08.

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

(ii) Infringement Notices/Fines

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.

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. (iii) Potential Land Acquisitions due to Planning Restrictions imposed by Council

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.

Council has classified a number of privately owned land parcels as Local Open Space or Bushland.

Note 19. Controlled Entities, Associated Entities & Interests in Joint Ventures Council has no interest in any Controlled Entities, Associated Entities or Joint Ventures. page 64

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Notes

Actual 2014

Actual 2013

111,776 4,169

105,301 6,475

(a) Retained Earnings Movements in Retained Earnings were as follows: Balance at beginning of Year (from previous years audited accounts) a. Net Operating Result for the Year

Balance at End of the Reporting Period

115,945

111,776

(b) Reserves (i) Reserves are represented by: - Infrastructure, Property, Plant & Equipment Revaluation Reserve Total

339,573

282,775

339,573

282,775

282,775 45,992 10,806 339,573

226,451 32,420 23,904 282,775

339,573

282,775

(ii) Reconciliation of movements in Reserves: Infrastructure, Property, Plant & Equipment Revaluation Reserve - Opening Balance - Revaluations for the year 9(a) - (Impairment of revalued assets) / Impairment reversals 9(a),(c) - Balance at End of Year TOTAL VALUE OF RESERVES (iii) Nature & Purpose of Reserves Infrastructure, Property, Plant & Equipment Revaluation Reserve

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

(c) Correction of Error/s relating to a Previous Reporting Period Council made no correction of errors during the current reporting period.

(d) Voluntary Changes in Accounting Policies Council made no voluntary changes in any accounting policies during the year.

page 65

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

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

Continuing Operations Income from Continuing Operations Rates & Annual Charges User Charges & Fees Interest & Investment Revenue Other Revenues Grants & Contributions provided for Operating Purposes Grants & Contributions provided for Capital Purposes Other Income Net Gains from Disposal of Assets Share of interests in Joint Ventures & Associates using the Equity Method

Total Income from Continuing Operations Expenses from Continuing Operations Employee Benefits & on-costs Borrowing Costs Materials & Contracts Depreciation & Amortisation Impairment Other Expenses Net Losses from the Disposal of Assets

Total Expenses from Continuing Operations

Operating Result from Continuing Operations

Actual 2014

Actual 2014

Actual 2014

Actual 2014

Other

Water

Sewer

General1

899 12 319 -

1,589 4,320 130 206 49 -

2,379 422 197 155 53 16

22,212 10,298 518 559 17,396 2,816

-

-

-

549

1,230

6,294

3,222

54,348

683 204 253 167 1,307

1,071 564 1,746 1,027 455 4,863

688 242 760 1,004 470 9 3,173

49

15,256 1,551 24,106 8,552 2,117 51,582

2,766

-

-

-

(77)

1,431

49

2,766

(77)

1,431

49

-

-

2,766 -

1,431

33

(77)

1,431

Discontinued Operations Net Profit/(Loss) from Discontinued Operations

Net Operating Result for the Year

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

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

-

-

(77)

(50)

1

General Fund refers to all Council's activities other than Water, Sewer & Other * Other represents Gwydir Day Care & Max Centre.

NB. All amounts disclosed above are Gross - that is, they include internal charges & recoveries made between the Funds.

page 66

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements as at 30 June 2014

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

Actual 2014

Actual 2014

Actual 2014

Actual 2014

Other

Water

Sewer

General1

770 1 771

1,655 1,981 105 1 3,742

5,014 610 105 5,729

7,447 6,989 4,028 1,378 466 20,308

TOTAL ASSETS

3,819 3,819 4,590

48,732 48,732 52,474

27,849 27,849 33,578

401,494 401,494 421,802

LIABILITIES Current Liabilities Payables Borrowings Provisions Total Current Liabilities

3,210 68 206 3,484

118 177 232 527

113 135 53 301

2,534 678 5,433 8,645

3,219 3,219 6,703

9,149 9,149 9,676

3,374 3,374 3,675

25,519 2,708 28,227 36,872

(2,113)

42,798

29,903

384,930

565 (2,678)

9,239 33,559

19,141 10,762

87,000 297,930

(2,113)

42,798

29,903

384,930

$ '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

Non-Current Liabilities Payables Borrowings Provisions Total Non-Current Liabilities

TOTAL LIABILITIES

Net Assets

EQUITY Retained Earnings Revaluation Reserves

Total Equity 1

General Fund refers to all Council's activities other than Water, Sewer & Other * Other represents Gwydir Day Care & Max Centre.

NB. All amounts disclosed above are Gross - that is, they include internal receivables & payables between the Funds. page 67

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 22. "Held for Sale" Non Current Assets & Disposal Groups $ '000

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

Note 23. Events occurring after the Reporting Date Events that occur between the end of the reporting period (ending 30 June 2014) 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 31/10/14.

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 2014. (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 2014 and which are only indicative of conditions that arose after 30 June 2014.

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

Note 24. Discontinued Operations Actual

Actual

Actual

Actual

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

Note 25. Intangible Assets Intangible Assets represent identifiable non-monetary asset without physical substance.

Council is unaware of any control over Intangible Assets that warrant recognition in the Financial Statements, including either internally generated and developed assets or purchased assets. page 68

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 26. Reinstatement, Rehabilitation & Restoration Liabilities $ '000

Council has legal/public obligations to make restore, rehabilitate and reinstate the following assets/operations: Estimated year of Asset/Operation

NPV of Provision

restoration

Tips Quarries

Balance at End of the Reporting Period

10(a)

2014

2013

3,527 592

3,315 571

4,119

3,886

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

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

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

Reconciliation of movement in Provision for year: Balance at beginning of year Amounts capitalised to new or existing assets: Increase in tip remediation cost Effect of a change in other calculation estimates used Amortisation of discount (expensed to borrowing costs) Total - Reinstatement, rehabilitation and restoration provision

3,886

2,311

168 65

500 915 160

4,119

3,886

page 69

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement $ '000

The Council measures the following asset and liability classes at fair value on a recurring basis: - Infrastructure, Property, Plant and Equipment - Investment Property - Financial Assets & Liabilities The fair value of assets and liabilities must be estimated in accordance with various Accounting Standards for either recognition and measurement requirements or for disclosure purposes.

AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a "level" in the fair value hierarchy as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

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

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

(1) The following table presents all assets and liabilities that have been measured & recognised at fair values: Fair Value Measurement Hierarchy Level 1 Level 2 Level 3 Total 2014 Recurring Fair Value Measurements Financial Assets Investments - "Held for Trading" - "Held to Maturity" Receivables Cash on hand and at bank Total Financial Assets Financial Liabilities Payables Loans / Advances Total Financial Liabilities

Date of latest Valuation

30/6/14 30/6/14 30/6/14 30/6/14

Quoted prices in active mkts

Significant observable inputs

Significant unobservable inputs

6,000 8,000 7,799 6,116 27,915

989 989

-

6,989 8,000 7,799 6,116 28,904

5,975 42,319 48,294

-

-

5,975 42,319 48,294

page 70

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement (continued) $ '000

(1) The following table presents all assets and liabilities that have been measured & recognised at fair values (continued): Fair Value Measurement Hierarchy Level 1 Level 2 Level 3 Total 2014 Date

Recurring Fair Value Measurements (continued) of latest Valuation

Infrastructure, Property, Plant & Equipment Plant & Equipment 30/6/14 Office Equipment 30/6/14 Furniture & Fittings 30/6/14 Land Operational 30/6/14 Land Community 30/6/14 Building Non Specialised 30/6/14 Building Specialised 30/6/14 Other Structures 30/6/14 Roads 30/6/14 Bridges 30/6/14 Footpaths 30/6/14 Stormwater Drainage 30/6/14 Water Supply Network 30/6/14 Sewerage Network 30/6/14 Other Infrastructure 30/6/14 Other Assets 30/6/14 RR & R Assets - Tip 30/6/14 RR & R Assets - Quarry 30/6/14 Total Infrastructure, Property, Plant & Equipment

Quoted prices in active mkts

12,378 1,541 451 9,050 4,389 28,935 27,447 24,205 364 108,760

Significant observable inputs

-

Significant unobservable inputs

230,592 44,306 7,763 13,892 47,409 26,732 768 1,627 45 373,134

12,378 1,541 451 9,050 4,389 28,935 27,447 24,205 230,592 44,306 7,763 13,892 47,409 26,732 768 364 1,627 45 481,894

(2) Transfers between Level 1 & Level 2 Fair Value Hierarchies During the year, there were no transfers between Level 1 and Level 2 Fair Value hierarchies for recurring fair value measurements.

page 71

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement (continued) $ '000

(3) Valuation techniques used to derive Level 2 and Level 3 Fair Values Where Council is unable to derive Fair Valuations using quoted market prices of identical assets (ie. Level 1 inputs) Council instead utilises a spread of both observable inputs (Level 2 inputs) and unobservable inputs (Level 3 inputs).

The Fair Valuation techniques Council has employed while utilising Level 2 and Level 3 inputs are as follows: Financial Assets Councilâ&#x20AC;&#x2122;s financial assets are Cash and Cash Equivalents, Term Deposits, Receivables and Capital Protect Notes.

The Term Deposits (Held to Maturity), Cash at Bank and Receivables are reported at face value. The Capital Protected Note is valued monthly by Longreach Global Capital Pty Limited. The monthly valuation represents the mid point valuation provided by the Calculation Agent and do not take into account any unpaid fees due on the issue or any other costs that the issuer may charge by way of a bid/offer spread to buy back the stock. Redemption prices can be obtained from Longreach Global Capital Pty Limited. All issues can be redeemed early. As this asset is identified as Capital Protected At Maturity it will be subject to market prices at that time and the redemption price may result in receiving less than the principal invested.

Infrastructure, Property, Plant & Equipment Land Level 2 valuation inputs were used to value land held in freehold title (investment and noninvestment) as well as land used for special purposes which is restricted in use under current zoning rules. Sales prices of comparable land sites in close proximity are adjusted for differences in key attributes such as property size. The most significant inputs into this valuation approach are price per square metre.

There were also some parks and reserves for which there was no observable market evidence of sales prices for comparable sites in close proximity. These were subsequently valued at the level 3 valuation input hierarchy by using the professional judgment of a Registered Valuer who adjusted the price per square metre of sales from sites not in close proximity which provided only a low level of comparability.

Buildings Level 2 valuation inputs These were used to determine the fair value of a range of properties. This included the bulk of residential and commercial properties. The residential properties fair value has been derived from sales prices of comparable properties after adjusting for differences in key attributes such as property size. The most significant inputs into this valuation approach are price per square metre.

Level 3 valuation inputs Specialised buildings were valued using the cost approach using professionally qualified Registered Valuers. The approach estimated the replacement cost for each building by componentising the buildings into significant parts with different useful lives and taking into account a range of factors. While the unit rates based on square metres could be supported from market evidence (level 2) other inputs (such as estimates of residual value, useful life, pattern of consumption and asset condition) required extensive professional judgement and impacted significantly on the final determination of fair value. As such these assets were classified as having been valued using level 3 valuation inputs. page 72

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement (continued) $ '000

(3) Valuation techniques used to derive Level 2 and Level 3 Fair Values (continued) Infrastructure, Property, Plant & Equipment (continued) Roads As at 01 July 2013 a comprehensive revaluation was undertaken by APV only for all sealed road assets and associated classes.

The main level 3 inputs used are derived and evaluated as follows – Asset Condition – APV inspected 100% sample of each asset type of this comprehensive valuation.

Relationship between asset consumption rating scale and the level of consumed service potential – Under the cost approach the estimated cost to replace the asset is calculated and then adjusted to take account of an accumulated depreciation. In order to achieve this valuer determines an asset consumption rating scale for each asset type based on the inter-relationship between a range of factors. These factors and their relationship to the fair value require professional judgment and include asset condition, legal and commercial obsolescence and the determination of key depreciation related assumptions such as residual value, useful life and pattern of consumptio of the future economic benefit.

The consumption rating scales were based initially on the past experience of the valuation firm and industry guides and were then updated to take into account the experience and understanding of council’s own engineers, asset management and finance staff. The results of the valuation were further evaluated by confirmation against council’s own understanding of the assets and the level of remaining service potential.

Water and Sewer Council completed a revaluation of its water supply, sererage and stormwater assets in 2007 using the unit rate as published in the Department of Primary Industries - Office of Water - NSW Reference Rates Manual of valuation.

This 2014 Reference Rates Manual for Valuation of Water Supply, Sewerage and Stormwater Assets updates the 2003 edition of the manual and was prepared by the Urban Water branch of the NSW Office of Water. NSW Local Water Utilities are required to determine the fair value and current replacement cost depreciation for their water supply, sewerage and stormwater assets in accordance with this Manual.

The Reference Rates shown are for June 2014 and are based on competitive contract prices obtained by NSW Public Works for water supply and sewerage projects within NSW, supplemented by published rates for water supply, sewerage and stormwater works and also rates obtained from a number of Local Water Utilities and other agencies.

page 73

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement (continued) $ '000

(4). Fair value measurements using significant unobservable inputs (Level 3) a. The following tables present the changes in Level 3 Fair Value Asset Classes.

Roads

Opening Balance - 1/7/12

157,288

Net Movement for 2012/13

27,632

Closing Balance - 30/6/13

184,920 15,258 (5,260) 35,589 85

Purchases (GBV) Disposals (WDV) Depreciation & Impairment FV Gains - Other Comprehensive Income WIP Movements

230,592

Closing Balance - 30/6/14

Bridges

23,597 (125)

Footpaths

4,942 121

23,472

5,063

102 (246) 20,978 -

395 (100) 2,405 -

44,306

7,763

Stormwater Drainage

14,041 (83) 13,958 141 (207) 13,892

Water Supply Network

43,846 365

Sewerage Network

26,224

Other Infrastructure

-

(97)

269,938 27,813

44,211

26,127

2,899 (1,028) 1,327 -

867 (9) (1,003) 750 -

74 (22) (762) -

47,409

26,732

768

Tip Assets

Total

1,478

299,229 19,736 (9) (7,866) 60,287 85

371,462

Quarry

Total

Opening Balance - 1/7/12

-

-

-

-

-

-

633

28

661

Other movement (details here)

-

-

-

-

-

-

863

19

882

Closing Balance - 30/6/13

-

-

-

-

-

-

1,496

47

1,543

Purchases (GBV) Depreciation & Impairment

-

-

-

-

-

-

Closing Balance - 30/6/14

-

-

-

-

-

-

165 (34) 1,627

1 (3) 45

166 (37)

1,672 page 74

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement (continued) $ '000

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

The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.

Class

Fair Value (30/6/14) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E

Roads

Bridges

230,592

44,306

Cost Approach

Cost Approach

Unit Rates Asset Condition Useful Life

Unit Rates Vary from asset to asset Asset Condition Any change in the component pricing and 1-5 representing asset condition will have an impact on fair excellent to very value poor Useful Life 15-40 years

Unit Rates Asset Condition Useful Life

Unit Rates Vary from asset to asset Asset Condition Any change in the component pricing and 1-5 representing asset condition will have an impact on fair excellent to very value poor Useful Life 15-40 years page 75

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement (continued) $ '000

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

The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.

Class

Fair Value (30/6/14) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E

Footpaths

Stormwater Drainage

7,763

13,892

Cost Approach

Cost Approach

Unit Rates Asset Condition Useful Life

Unit Rates Vary from asset to asset Asset Condition Any change in the component pricing and 1-5 representing asset condition will have an impact on fair excellent to very value poor Useful Life 15-40 years

Unit Rates Asset Condition Useful Life

Unit Rates Vary from asset to asset Asset Condition Any change in the component pricing and 1-5 representing asset condition will have an impact on fair excellent to very value poor Useful Life 15-40 years page 76

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement (continued) $ '000

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

The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.

Class

Fair Value (30/6/14) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E

Water Supply Network

Sewerage Network

47,409

26,732

Cost Approach

Cost Approach

Unit Rates Asset Condition Useful Life

Unit Rates Vary from asset to asset Asset Condition Any change in the component pricing and 1-5 representing asset condition will have an impact on fair excellent to very value poor Useful Life 15-40 years

Unit Rates Asset Condition Useful Life

Unit Rates Vary from asset to asset Asset Condition Any change in the component pricing and 1-5 representing asset condition will have an impact on fair excellent to very value poor Useful Life 15-40 years page 77

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement (continued) $ '000

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

The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.

Class

Fair Value (30/6/14) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E

Other Infrastructure

Tip

768

1,627

Cost Approach

Cost Approach

Unit Rates Asset Condition Useful Life

Discount Future Cashflows

Unit Rates Vary from asset to asset Asset Condition Any change in the component pricing and 1-5 representing asset condition will have an impact on fair excellent to very value poor Useful Life 15-40 years

2.99% Inflation Rate 2.5% Discount Rate

Any change in the future cost estimates and discount rate will have an impact on fair value

page 78

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 27. Fair Value Measurement (continued) $ '000

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

The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.

Class

Fair Value (30/6/14) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E

Quarry

45

Cost Approach

Discount Future Cashflows

2.99% Inflation Rate 2.5% Discount Rate

Any change in the future cost estimates and discount rate will have an impact on fair value

(4). Fair value measurements using significant unobservable inputs (Level 3) (continued) c. The Valuation Process for Level 3 Fair Value Measurements As detailed at Note 27 (3) above.

(5). Highest and best use There were no assets valued where it was assumed that the highest and best use was other than its current use. page 79

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 28. Financial Commentary & Review Amounts 2014

$ '000

(continued) Indicator 2014

Prior Periods 2013 2012

Further to the Note 13(a) Industry Performance Measures, Council monitors the following : 1. Council Graph 1 - Debt Service Ratio Debt Service Cost

3,455 48,062

Income from Continuing Operations

7.19%

7.02 %

7.62 %

(excluding Capital Items & Specific Purpose Grants/Contributions)

1. Council Graph 1 - Debt Service Ratio 9% 7.62 %

8%

Ratio %

7%

6.65 %

7.02 %

7.19 %

Purpose of 1.

Council Graph 1 Debt Service Ratio

Commentary on 2013/14 Result 2013/14 Ratio

7%

6% 5%

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

4% 3% 2% 1%

Council aims to maintain this ratio below 10%. The ratio will increase further over the next 2 years as further loans are drawn down to complete signfiicant capital works including the Gateway development, Ski Lakes and waste management activities.

0% 2011

2012

2013

2014

page 80

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 28. Financial Commentary & Review

(continued)

Amounts 2014

$ '000

Indicator 2014

Prior Periods 2013 2012

TCorp Performance Measures - Consolidated a. Operating Performance Operating Revenue 1 (excl. Capital Grants & Contributions) - Operating Expenses 1 Operating Revenue (excl. Capital Grants & Contributions)

1,281 62,197

2.06%

3.52%

1.10%

42,119 65,029

64.77%

48.49%

62.55%

15,672 9,233

1.70

2.29

2.55

14,425 3,520

4.10

4.75

4.26

25,921 10,583

2.45

1.38

1.38

10,992 429,670

0.03

0.06

0.11

7,428 9,415

0.79

0.66

0.51

19,899 8,870

2.24

1.30

1.32

14,116 3,981

3.55

4.32

3.74

14,425 2,561

5.63

6.34

5.57

b. Own Source Operating Revenue Rates & Annual Charges + User Charges & Fees 1 Total Operating Revenue (incl. Capital Grants & Contributions)

c. Unrestricted Current Ratio Current Assets less all External Restrictions Current Liabilities less Specific Purpose Liabilities

d. Debt Service Cover Ratio Operating Result 1 before Interest & Depreciation (EBITDA) Principal Repayments (from the Statement of Cash Flows) + Borrowing Interest Costs (from the Income Statement)

e. Capital Expenditure Ratio Annual Capital Expenditure Annual Depreciation

f. Infrastructure Backlog Ratio Estimated Cost to bring Assets to a Satisfactory Condition Total value of Infrastructure, Building, Other Structures & Depreciable Land Improvement Assets

g. Asset Maintenance Ratio Actual Asset Maintenance Required Asset Maintenance

h. Building & Infrastructure Renewals Ratio Asset Renewals Depreciation of Building and Infrastructure Assets

i. Cash Expense Cover Ratio Current Year's Cash & Cash Equivalents (Total Expenses - Depreciation - Interest Costs)

x12

j. Interest Cover Ratio Operating Results before Interest & Depreciation (EBITDA) Borrowing Interest Costs (from the income statement) 1

Excludes fair value adjustments and reversal of revaluation decrements

page 81

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 28. Financial Commentary & Review

Ratio %

a. Operating Performance 4% 3% 2% 1% 0% -1% -2% -3% -4% -5%

3.52% 2.06%

(continued)

Purpose of Operating Performance Ratio

Commentary on 2013/14 Result 2013/14 Ratio

2.06%

1.10%

2012

―― Minimum

2013

2014

This ratio measures Council’s achievement of containing operating expenditure within operating revenue.

Tcorp has set the benchmark for this ratio at greater than -4.00%. Council has met this benchmark over the last three years.

-4.00%

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) b. Own Source Operating Revenue 70% 60% Ratio %

64.77%

62.55%

Purpose of Own Source Operating Revenue Ratio

Commentary on 2013/14 Result

This ratio measures fiscal flexibility. It is the degree of reliance on external funding sources such as operating grants & contributions.

Tcorp has set the benchmark for this ratio at greater than 60.00%. Council achieved this benchmark in two of the last three years. Excluding flood damage funding Council in 2013 the ratio for that year would have been approximately 68%.

2013/14 Ratio

64.77%

48.49%

50% 40% 30% 20% 10% 0% 2012

―― Minimum

2013

2014

60.00%

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) c. Unrestricted Current Ratio 3.0

2.55

2.29

Ratio (x)

2.5 2.0

1.70

1.5 1.0 0.5 0.0 2012

―― Minimum

2013

2014

Purpose of Unrestricted Current Ratio To assess the adequacy of unrestricted working capital and Council's ability to meet short term obligations as they fall due.

Commentary on 2013/14 Result 2013/14 Ratio

1.70

Tcorp has set the benchmark for this ratio at greater than 1.50. Council has met this benchmark over the last three years.

1.50

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) d. Debt Service Cover Ratio 5.0

4.75

4.26

4.10

Commentary on 2013/14 Result Purpose of Debt Service Cover Ratio

2013/14 Ratio

4.10 x

Ratio (x)

4.0

This ratio measures the availability of operating cash to service debt including interest, principal and lease payments

3.0 2.0 1.0 0.0 2012

―― Minimum

2013

Tcorp has set the benchmark for this ratio at greater than 2.00. Council has met this benchmark over the last three years.

2014

2.00

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013)

page 82

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 28. Financial Commentary & Review

Commentary on 2013/14 Result

e. Capital Expenditure Ratio 3.0

2.45

Ratio (x)

2.5 2.0 1.5

1.38

1.0 0.5 0.0

―― Minimum

2013

Purpose of Capital Expenditure Ratio This ratio assesses the extent to which a Council is expanding its asset base with capital expenditure

1.38

2012

(continued)

2014

(on new assets, replacement & renewal of existing assets).

2013/14 Ratio

2.45 x

Tcorp has set the benchmark for this ratio at greater than 1.10. Council has met this benchmark over the last three years.

1.10

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) f. Infrastructure Backlog Ratio 0.12

0.11

Purpose of Infrastructure Backlog Ratio

Commentary on 2013/14 Result

This ratio shows what proportion the backlog is against the total value of a Council’s infrastructure.

Tcorp has set the benchmark for this ratio at less than 0.02. Council has not met this benchmark over the last three years however there has been a gradual improvement as a result of additional funds being directed to the sealed road network.

2013/14 Ratio

0.03 x

Ratio (x)

0.10 0.08

0.06

0.06 0.04

0.03

0.02 0.00 2012

―― Minimum

2013 0.01

2014

―― Maximum

0.02

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) Commentary on 2013/14 Result

g. Asset Maintenance Ratio

Purpose of Asset Maintenance Ratio

1.20

Ratio (x)

1.00

0.79

0.80 0.60

0.66 0.51

0.40 0.20 0.00 2012

―― Minimum

2013

2014

Compares actual vs. required annual asset maintenance. A ratio of > 1.0x indicates enough has been spent to stop the Infrastructure Backlog from growing.

2013/14 Ratio

0.79 x

Tcorp has set the benchmark for this ratio at greater than 1.00. Council has not met this benchmark over the last three years.

Council is seeing a gradual improvement due to increased road resealing program.

1.00

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013)

2.50

h. Building & Infrastructure Renewals Ratio 2.24

Commentary on 2013/14 Result Purpose of Asset Renewals Ratio

2013/14 Ratio

2.24 x

Ratio (x)

2.00 1.50

1.32

1.30

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

1.00 0.50 0.00 2012

―― Minimum

2013

Tcorp has set the benchmark for this ratio at greater than 1.00. Council has met this benchmark over the last three years.

2014

1.00

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013)

page 83

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 28. Financial Commentary & Review i. Cash Expense Cover Ratio 5.0

Ratio (mths)

4.0

4.32 3.74

3.55

3.0 2.0 1.0 0.0 2012

―― Minimum

2013

2014

(continued)

Purpose of Cash Expense Cover Ratio This liquidity ratio indicates the number of months a Council can continue paying for its immediate expenses without additional cash inflow.

Commentary on 2013/14 Result 2013/14 Ratio

3.55 mths

Tcorp has set the benchmark for this ratio at greater than 3 months. Council has achieved this over the last three years.

3.00

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) Commentary on 2013/14 Result

j. Interest Cover Ratio 7.00

Ratio (x)

6.00

6.34 5.57

5.63

5.00 4.00 3.00 2.00 1.00 0.00 2012

―― Minimum

2013

2014

Purpose of Interest Cover Ratio This ratio indicates the extent to which a Council can service (thru operating cash) its interest bearing debt & take on additional borrowings.

2013/14 Ratio

0.00 x

Tcorp has set the benchmark for this ratio at greater than 4.00. Council has met this benchmark for the last three years.

4.00

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013)

page 84

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 28. Financial Commentary & Review

(continued)

$ '000

1

Water 2014

Sewer 2014

General 2014

22.22%

-0.31%

-0.19%

2.19%

1.14%

3.73%

93.88%

86.93%

60.18%

91.14%

85.86%

43.60%

5.25

17.71

0.82

1.17

22.25

2.29

11.09

12.05

0.88

8.86

12.63

2.36

0.22

0.13

2.99

0.21

0.20

1.63

0.00

0.00

0.03

0.00

0.00

0.08

0.94

0.68

0.78

1.23

1.28

0.59

2.22

0.69

-3.97

0.13

0.09

1.65

6.04

31.01

2.10

7.27

26.23

4.73

5.29

5.11

5.81

2.94

4.99

7.61

TCorp Performance Measures - by Fund a. Operating Performance Operating Revenue (excl. Capital Grants & Contributions) Operating Expenses Operating Revenue (excl. Capital Grants & Contributions) prior period:

b. Own Source Operating Revenue Rates & Annual Charges + User Charges & Fees Total Operating Revenue (incl. Capital Grants & Contributions) prior period:

c. Unrestricted Current Ratio Current Assets less all External Restrictions Current Liabilities less Specific Purpose Liabilities prior period:

d. Debt Service Cover Ratio Operating Result before Interest & Depreciation (EBITDA) Principal Repayments (from the Statement of Cash Flows) + Borrowing Interest Costs (from the Income Statement)

prior period:

e. Capital Expenditure Ratio Annual Capital Expenditure Annual Depreciation prior period:

f. Infrastructure Backlog Ratio Estimated Cost to bring Assets to a Satisfactory Condition (from Special Schedule 7) Total value of Infrastructure, Building, Other Structures & Depreciable Land Improvement Assets

prior period:

g. Asset Maintenance Ratio Actual Asset Maintenance Required Asset Maintenance prior period:

h. Building and Infrastructure Renewals Ratio Asset Renewals Depreciation of Building and Infrastructure Assets prior period:

i. Cash Expense Cover Ratio Current Year's Cash & Cash Equivalents (Total Expenses - Depreciation - Interest Costs)

x12 prior period:

j. Interest Cover Ratio Operating Results before Interest & Depreciation (EBITDA) Borrowing Interest Costs (from the income statement) prior period: Notes (1)

General Fund refers to all of Council's activities except for its Water & Sewer activities which are listed separately.

page 85

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 28. Financial Review $ '000

Key Financial Figures of Council over the past 5 years (consolidated) 2014

2013

2012

2011

2010

26,180 15,939 857 15,583 65,085

25,017 13,358 2,279 31,660 80,568

23,309 11,434 946 15,031 55,400

21,517 10,655 2,063 9,351 48,490

19,616 10,444 1,502 10,769 47,102

1,006 9,105

543 1,030

1,193 -

635 6,825

451 1,000

Outflows: Employee Benefits & On-cost Expenses Borrowing Costs Materials & Contracts Expenses Total Expenses from Continuing Operations

17,698 2,561 26,865 60,916

17,227 2,625 39,407 74,093

15,695 2,624 21,718 54,579

14,635 2,476 14,174 46,345

14,607 2,498 13,228 43,079

Total Cash purchases of I,PP&E Total Loan Repayments (incl. Finance Leases)

27,123 959

16,940 876

17,700 807

16,347 680

12,517 625

Operating Surplus/(Deficit) (excl. Capital Income)

1,337

4,126

467

(1,789)

(526)

Financial Position Figures

2014

2013

2012

2011

2010

30,550 12,957 17,593

33,226 12,906 20,320

25,447 10,286 15,161

26,567 9,921 16,646

22,816 9,176 13,640

2,280

2,270

6,453

4,056

5,873

Cash & Investments - Unrestricted Cash & Investments - Internal Restrictions Cash & Investments - Total

2,284 6,745 21,105

1,131 11,490 23,262

1,283 7,217 16,358

2,800 10,347 22,901

2,779 6,907 15,697

Total Borrowings Outstanding

42,319

34,173

34,019

34,826

28,681

656,307 187,587

583,781 187,194

518,651 186,222

537,204 179,370

514,550 163,008

Financial Performance Figures Inflows: Rates & Annual Charges Revenue User Charges Revenue Interest & Investment Revenue (Losses) Grants Income - Operating & Capital Total Income from Continuing Operations Sale Proceeds from I,PP&E New Loan Borrowings & Advances

Current Assets Current Liabilities Net Current Assets Available Working Capital (Unrestricted Net Current Assets)

(Loans, Advances & Finance Leases)

Total Value of I,PP&E (excl. Land & Earthworks) Total Accumulated Depreciation Indicative Remaining Useful Life (as a % of GBV)

71%

68%

64%

67%

68%

Source: Published audited financial statements of Council (current year & prior year)

page 86

Financial Statements 2014

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2014

Note 29. Council Information & Contact Details Principal Place of Business: Level 2, Max Centre 30 Heber Street Moree NSW 2400 Contact Details Mailing Address: PO Box 420 Moree NSW 2400

Telephone: Facsimile:

02 6757 3222 02 6752 3934

Opening Hours: 9am to 5pm Monday to Friday

Internet: Email:

http://www.mpsc.nsw.gov.au council@mpsc.nsw.gov.au

Officers GENERAL MANAGER D Aber

Elected Members MAYOR K Humphries

RESPONSIBLE ACCOUNTING OFFICER D Aber

COUNCILLORS R Brazel M Cikota C Gall B Munn S Price J Tramby T Zannes J von Drehnen

PUBLIC OFFICER name hereâ&#x20AC;Ś AUDITORS Luka Group 2 River Road Dubbo

Other Information ABN: 46 566 790 582

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Moree Plains Shire Council SPECIAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2014

Leading the Way to a Better Community

SPFS 2014

Moree Plains Shire Council Special Purpose Financial Statements for the financial year ended 30 June 2014

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

3 4 5

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

6 7 8

3. Notes to the Special Purpose Financial Statements

9

4. Auditor's Report

18

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 2014

Moree Plains Shire Council Income Statement of Council's Water Supply Business Activity for the financial year ended 30 June 2014

$ '000

Actual 2014

Actual 2013

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

1,589 4,271 49 130 49 206 6,294

1,258 3,185 4 64 28 178 4,717

1,071 564 1,746 1,027 14 455 4,877 1,417

1,449 573 1,195 1,008 14 371 4,610 107

1,417

7 114

1,417 (425)

114 (32)

992

82

7,822 -

7,708 -

14 425

14 32

Expenses from continuing operations Employee benefits and on-costs Borrowing costs Materials and contracts Depreciation and impairment Water purchase charges 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 less: Corporate Taxation Equivalent (30%) [based on result before capital]

SURPLUS (DEFICIT) AFTER TAX plus Opening Retained Profits plus/less: Prior Period Adjustments plus Adjustments for amounts unpaid: - Taxation equivalent payments - Debt guarantee fees - Corporate taxation equivalent less: - Tax Equivalent Dividend paid - Surplus dividend paid Closing Retained Profits

(14) 9,239

(14) 7,822

Return on Capital % Subsidy from Council

4.1% -

1.5% 1,028

Calculation of dividend payable: Surplus (deficit) after tax less: Capital grants and contributions (excluding developer contributions) Surplus for dividend calculation purposes Potential Dividend calculated from surplus

992 992 496

82 (7) 75 37 page 3

SPFS 2014

Moree Plains Shire Council Income Statement of Council's Sewerage Business Activity for the financial year ended 30 June 2014

$ '000

Actual 2014

Actual 2013

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

2,379 421 1 197 53 155 3,206

2,653 360 270 26 128 3,437

688 242 760 1,004 9 13 470 3,186 20

879 249 871 955 13 426 3,393 44

16 36

72 116

Surplus (deficit) from ALL Operations before tax less: Corporate Taxation Equivalent (30%) [based on result before capital]

36 (6)

116 (13)

SURPLUS (DEFICIT) AFTER TAX

30

103

19,105 -

18,989 -

13 6

13 13

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

plus Opening Retained Profits plus/less: Prior Period Adjustments plus Adjustments for amounts unpaid: - Taxation equivalent payments - Debt guarantee fees - Corporate taxation equivalent less: - Tax Equivalent Dividend paid - Surplus dividend paid Closing Retained Profits Return on Capital % Subsidy from Council Calculation of dividend payable: Surplus (deficit) after tax less: Capital grants and contributions (excluding developer contributions) Surplus for dividend calculation purposes Potential Dividend calculated from surplus

(13) 19,141

(13) 19,105

0.9% 729

1.1% 747

30 (16) 14 7

103 (72) 31 15 page 4

SPFS 2014

Moree Plains Shire Council Income Statement of Council's Other Business Activities for the financial year ended 30 June 2014

$ '000

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

SURPLUS (DEFICIT) AFTER 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

GWYDIR DAY CARE

MAX CENTRE

Category 2

Category 2

Actual 2014

Actual 2013

Actual 2014

Actual 2013

580 12 319 911

564 276 840

319 319

342 342

683 10 111 30 834 77

613 10 135 758 82

194 142 137 473 (154)

196 393 589 (247)

77

82

(154)

(247)

77 (23)

82 (25)

(154) -

(247) -

54

57

(154)

(247)

326 -

244 -

316 -

563 -

23

25

-

-

-

-

-

-

-

-

-

-

403

326

162

316

17.0% -

19.2% -

1.2% 78

-0.7% 309

page 5

SPFS 2014

Moree Plains Shire Council Statement of Financial Position - Council's Water Supply Business Activity as at 30 June 2014

$ '000

Actual 2014

Actual 2013

ASSETS Current Assets Cash and cash equivalents Investments Receivables Inventories Other Non-current assets classified as held for sale Total Current Assets

1,655 1,981 105 1 3,742

1,835 1,580 116 1 3,532

48,732 48,732 52,474

45,318 45,318 48,850

118 177 232 527

1,118 145 185 1,448

9,149 9,149 9,676

7,576 7,576 9,024

42,798

39,826

9,239 33,559 42,798 -

7,822 32,004 39,826 -

42,798

39,826

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

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

TOTAL EQUITY

page 6

SPFS 2014

Moree Plains Shire Council Statement of Financial Position - Council's Sewerage Business Activity as at 30 June 2014

$ '000

Actual 2014

Actual 2013

ASSETS Current Assets Cash and cash equivalents Investments Receivables Inventories Other Non-current assets classified as held for sale Total Current Assets

5,014 610 105 5,729

4,785 708 116 5,609

27,849 27,849 33,578

27,585 27,585 33,194

113 135 53 301

69 125 42 236

3,374 3,374 3,675

3,509 3,509 3,745

29,903

29,449

19,141 10,762 29,903 -

19,105 10,344 29,449 -

29,903

29,449

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

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

TOTAL EQUITY

page 7

SPFS 2014

Moree Plains Shire Council Statement of Financial Position - Council's Other Business Activities as at 30 June 2014

$ '000

ASSETS Current Assets Cash and cash equivalents Investments Receivables Inventories Other Non-current assets classified as held for sale Total Current Assets

GWYDIR DAY CARE

MAX CENTRE

Category 2

Category 2

Actual 2014

Actual 2013

Actual 2014

Actual 2013

740 740

216 216

30 1 31

23 23

512 512 1,252

478 478 694

3,307 3,307 3,338

6,849 6,849 6,872

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

3 20 206 229

1 8 167 176

3,207 48 3,255

3,078 42 3,120

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

576 576 805

146 146 322

2,643 2,643 5,898

2,691 2,691 5,811

447

372

(2,560)

1,061

403 44 447 -

326 46 372 -

162 (2,722) (2,560) -

316 745 1,061 -

447

372

(2,560)

1,061

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

page 8

SPFS 2014

Moree Plains Shire Council Special Purpose Financial Statements for the financial year ended 30 June 2014

Contents of the Notes accompanying the Financial Statements Note

Details

Page

1

Summary of Significant Accounting Policies

10

2

Water Supply Business Best Practice Management disclosure requirements

13

3

Sewerage Business Best Practice Management disclosure requirements

15

page 9

SPFS 2014

_

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2014

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

a. Moree Water Supplies Comprising the net assets & operations of the water supply systems servicing the towns of Moree, Mungindi, Boggabilla, Pallamallawa and surrounding villages of Moree Plains Shire, each of which is established as a separate Special Rate Fund. b. Moree Sewerage Service Comprising the net assets & operations of the sewerage reticulation and treatment system servicing the towns of Moree, Mungindi, and surrounding villages of Moree Plains Shire, which is established as a separate Special Rate Fund.

Category 2 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 Office of Local Government in July 1997 has also been adopted.

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

a. Gwydir Day Care Centre Comprising the net assets & operations of Gwydir Day Care which provides low cost day care services to the town of Moree. b. Max Centre Comprising the net assets & operations of the Max Centre which is a large commercial building containing retail outlets, service providers and restaurants that provides rental income to the Council.

page 10

SPFS 2014

_

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2014

Note 1. Significant Accounting Policies Monetary Amounts Amounts shown in the financial statements are in Australian currency and rounded to the nearest one thousand dollars, with the exception of some figures disclosed in Note 2 (Water Supply Best Practice Management Disclosures) and Note 3 (Sewerage Best Practice Management Disclosures).

As required by the NSW Office of Water (Department of Primary Industries) the amounts shown in Notes 2 and Note 3 are disclosed in whole dollars.

The payment of taxation equivalent charges, referred in the Best Practice Management of Water Supply and Sewerage Guides to as a “Dividend for Taxation equivalent”, may be applied for any purpose allowed under the Local Government Act, 1993.

Achievement of substantial compliance against the guidelines for Best Practice Management of Water Supply and Sewerage is not a prerequisite for the payment of the tax equivalent charges, however the payment must not exceed $3 per assessment.

Income Tax

(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.

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): Notional Rate Applied % Corporate Income Tax Rate – 30% Land Tax – The first $412,000 of combined land values attracts 0%. From $412,001 to $2,519,000 the rate is 1.6% + $100. For the remaining combined land value that exceeds $2,519,000, a premium marginal rate of 2.0% applies.

Payroll Tax – 5.45% on the value of taxable salaries and wages in excess of $750,000.

In accordance with the guidelines for Best Practice Management of Water Supply and Sewerage, a payment for the amount calculated as the annual tax equivalent charges (excluding income tax) must be paid from Water Supply and Sewerage Business activities.

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.

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.

Loan & Debt Guarantee Fees

page 11

SPFS 2014

_

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2014

Note 1. Significant Accounting Policies The debt guarantee fee is designed to ensure that council business activities face “true” commercial borrowing costs in line with private sector competitors.

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.

As a minimum, business activities should generate a return equal to the Commonwealth 10 year bond rate which is 3.56% at 30/6/14.

The actual rate of return achieved by each Business Activity is disclosed at the foot of each respective Income Statement.

(iv) Dividends (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”.

Council is not required to pay dividends to either itself (as owner of a range of businesses) or to any external entities.

Local Government Water Supply and Sewerage Businesses are permitted to pay an annual dividend from its water supply or sewerage business surplus.

The dividend, calculated and approved in accordance with the Best Practice Management Guidelines, must not exceed either: (i)

50% of this surplus in any one year, or

(ii) the number of water supply or sewerage assessments at 30 June 2014 multiplied by $30 (less the payment for tax equivalent charges, not exceeding $3 per assessment).

In accordance with the guidelines for Best Practice Management of Water Supply and Sewerage, a Dividend Payment form, Statement of Compliance, Unqualified Independent Financial Audit Report and Compliance Audit Report are required to be submitted to the NSW Office of Water prior to making the dividend and only after it has approved the payment.

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

page 12

SPFS 2014

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2014

Note 2. Water Supply Business Best Practice Management disclosure requirements 2014

Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)

1. Calculation and Payment of Tax-Equivalents [All Local Government Local Water Utilities must pay this dividend for tax-equivalents]

(i)

Calculated Tax Equivalents

14,000

(ii)

No of assessments multiplied by $3/assessment

14,013

(iii)

Amounts payable for Tax Equivalents [lesser of (i) and (ii)]

14,000

(iv)

Amounts actually paid for Tax Equivalents

14,000

2. Dividend from Surplus (i) 50% of Surplus before Dividends

495,950

[Calculated in accordance with Best Practice Management for Water Supply and Sewerage Guidelines]

(ii)

No. of assessments multiplied by $30/assessment, less tax equivalent charges/assessment

(iii)

Cumulative surplus before Dividends for the 3 years to 30 June 2014, less the cumulative dividends paid for the 2 years to 30 June 2013 & 30 June 2012 2014 Surplus

991,900

74,900 -

2013 Surplus 2013 Dividend

2012 Surplus 2012 Dividend

126,130

495,800

(571,000) -

(iv)

Maximum dividend from surplus [least of (i), (ii) and (iii) above]

(v)

Dividend actually paid from surplus [refer below for required pre-dividend payment Criteria]

126,130 -

3. Required outcomes for 6 Criteria [To be eligible for the payment of a "Dividend from Surplus", ALL the Criteria below need a "YES"]

(i) (ii)

Completion of Strategic Business Plan (including Financial Plan)

YES

Full Cost Recovery, without significant cross subsidies

YES

[Refer Item 2(a) in Table 1 on page 22 of the Best Practice Guidelines]

- Complying charges [Item 2(b) in Table 1]

YES

- DSP with Commercial Developer Charges [Item 2(e) in Table 1]

YES

- If Dual Water Supplies, Complying Charges [Item 2(g) in Table 1]

YES

(iii)

Sound Water Conservation and Demand Management implemented

YES

(iv)

Sound Drought Management implemented

YES

(v)

Complete Performance Reporting Form

YES

(vi)

a. Integrated Water Cycle Management Evaluation

YES

b. Complete and implement Integrated Water Cycle Management Strategy

YES

(by 15 September each year)

page 13

SPFS 2014

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2014

Note 2. Water Supply Business Best Practice Management disclosure requirements (continued) 2014

Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)

National Water Initiative (NWI) Financial Performance Indicators NWI F1

Total Revenue (Water)

$'000

6,164

Total Income (w13) - Grants for the Acquisition of Assets (w11a) - Interest Income (w9) - Aboriginal Communities W&S Program Income (w10a)

NWI F4

Revenue from Residential Usage Charges (Water)

%

75.42%

Income from Residential Usage Charges (w6b) x 100 divided by the sum of [Income from Residential Usage Charges (w6a) + Income from Residential Access Charges (w6b)]

NWI F9

Written Down Replacement Cost of Fixed Assets (Water)

$'000

48,621

$'000

3,233

$'000

227

Written down current cost of system assets (w47)

NWI F11

Operating Cost (OMA) (Water) Management Expenses (w1) + Operational & Maintenance Expenses (w2)

NWI F14

Capital Expenditure (Water) Acquisition of fixed assets (w16)

NWI F17

Economic Real Rate of Return (Water)

%

3.91%

[Total Income (w13) - Interest Income (w9) - Grants for acquisition of assets (w11a) Operating Costs (NWI F11) - Current Cost Depreciation (w3)] x 100 divided by [Written Down Current Cost of System Assets (w47) + Plant & Equipment (w33b)]

NWI F26

Capital Works Grants (Water)

-

$'000

Grants for the Acquisition of Assets (w11a)

Notes:

1.

References to w (eg. w12) refer to item numbers within Special Schedules No. 3 & 4 of Council's Annual Financial Statements.

2.

The NWI Performance Indicators are based upon the National Performance Framework Handbook for Urban Performance Reporting Indicators & Definitions. page 14

SPFS 2014

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2014

Note 3. Sewerage Business Best Practice Management disclosure requirements 2014

Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)

1. Calculation and Payment of Tax-Equivalents [All Local Government Local Water Utilities must pay this dividend for tax-equivalents]

(i)

Calculated Tax Equivalents

13,000

(ii)

No of assessments multiplied by $3/assessment

12,606

(iii)

Amounts payable for Tax Equivalents [lesser of (i) and (ii)]

12,606

(iv)

Amounts actually paid for Tax Equivalents

13,000

2. Dividend from Surplus (i)

7,000

50% of Surplus before Dividends [Calculated in accordance with Best Practice Management for Water Supply and Sewerage Guidelines]

(ii)

No. of assessments x ($30 less tax equivalent charges per assessment)

113,454

(iii)

Cumulative surplus before dividends for the 3 years to 30 June 2014, less the cumulative dividends paid for the 2 years to 30 June 2013 & 30 June 2012

179,200

2014 Surplus

14,000

2013 Surplus 2013 Dividend

30,800 -

2012 Surplus 2012 Dividend

246,400 112,000

(iv)

Maximum dividend from surplus [least of (i), (ii) and (iii) above]

(v)

Dividend actually paid from surplus [refer below for required pre-dividend payment Criteria]

7,000 -

3. Required outcomes for 4 Criteria [To be eligible for the payment of a "Dividend from Surplus", ALL the Criteria below need a "YES"]

(i) (ii)

Completion of Strategic Business Plan (including Financial Plan)

YES

Pricing with full cost-recovery, without significant cross subsidies

YES

[Refer Item 2(a) in Table 1 on page 22 of the Best Practice Guidelines]

Complying charges

(a)

Residential [Item 2(c) in Table 1]

YES

(b)

Non Residential [Item 2(c) in Table 1]

YES

(c)

Trade Waste [Item 2(d) in Table 1]

YES

DSP with Commercial Developer Charges [Item 2(e) in Table 1]

YES

Liquid Trade Waste Approvals & Policy [Item 2(f) in Table 1]

YES

(iii)

Complete Performance Reporting Form

YES

(iv)

a. Integrated Water Cycle Management Evaluation

YES

b. Complete and implement Integrated Water Cycle Management Strategy

YES

(by 15 September each year)

page 15

SPFS 2014

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2014

Note 3. Sewerage Business Best Practice Management disclosure requirements (continued) 2014

Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)

National Water Initiative (NWI) Financial Performance Indicators NWI F2

Total Revenue (Sewerage)

$'000

3,023

$'000

27,656

$'000

1,929

$'000

128

Total Income (s14) - Grants for Acquisition of Assets (s12a) - Interest Income (s10) - Aboriginal Communities W&S Program Income (w10a)

NWI F10

Written Down Replacement Cost of Fixed Assets (Sewerage) Written down current cost of system assets (s48)

NWI F12

Operating Cost (Sewerage) Management Expenses (s1) + Operational & Maintenance Expenses (s2)

NWI F15

Capital Expenditure (Sewerage) Acquisition of Fixed Assets (s17)

NWI F18

Economic Real Rate of Return (Sewerage)

%

0.32%

[Total Income (s14) - Interest Income (s10) - Grants for acquisition of Assets (s12a) - Operating cost (NWI F12) - Current cost depreciation (s3)] x 100 divided by [Written down current cost (ie. WDCC) of System Assets (s48) + Plant & Equipment (s34b)]

NWI F27

Capital Works Grants (Sewerage)

$'000

-

$'000

9,178

Grants for the Acquisition of Assets (12a)

National Water Initiative (NWI) Financial Performance Indicators Water & Sewer (combined) NWI F3

Total Income (Water & Sewerage) Total Income (w13 + s14) + Gain/Loss on disposal of assets (w14 + s15) minus Grants for acquisition of assets (w11a + s12a) - Interest Income (w9 + s10)

NWI F8

Revenue from Community Service Obligations (Water & Sewerage)

%

0.51%

Community Service Obligations (NWI F25) x 100 divided by Total Income (NWI F3)

NWI F16

Capital Expenditure (Water & Sewerage)

$'000

355

Acquisition of Fixed Assets (w16 + s17)

NWI F19

Economic Real Rate of Return (Water & Sewerage)

%

2.60%

[Total Income (w13 + s14) - Interest Income (w9 + s10) - Grants for acquisition of assets (w11a + s12a) - Operating Cost (NWI F11 + NWI F12) - Current cost depreciation (w3 + s3)] x 100 divided by [Written down replacement cost of fixed assets (NWI F9 + NWI F10) + Plant & equipment (w33b + s34b)]

NWI F20

Dividend (Water & Sewerage)

-

$'000

Dividend paid from surplus (2(v) of Note 2 + 2(v) of Note 3)

NWI F21

Dividend Payout Ratio (Water & Sewerage)

%

0.00%

Dividend (NWI F20) x 100 divided by Net Profit after tax (NWI F24)

page 16

SPFS 2014

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2014

Note 3. Sewerage Business Best Practice Management disclosure requirements (continued) 2014

Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)

National Water Initiative (NWI) Financial Performance Indicators Water & Sewer (combined) NWI F22

Net Debt to Equity (Water & Sewerage)

%

8.48%

Overdraft (w36 + s37) + Borrowings (w38 + s39) - Cash & Investments (w30 + s31) x 100 divided by [Total Assets (w35 + s36) - Total Liabilities (w40 + s41)]

NWI F23

4

Interest Cover (Water & Sewerage) Earnings before Interest & Tax (EBIT) divided by Net Interest Earnings before Interest & Tax (EBIT):

1,941

Operating Result (w15a + s16a) + Interest expense (w4a + s4a) - Interest Income (w9 + s10) - Gain/Loss on disposal of assets (w14 + s15) + Miscellaneous Expenses (w4b + w4c + s4b + s4c) Net Interest:

479

Interest Expense (w4a + s4a) - Interest Income (w9 + s10)

NWI F24

Net Profit After Tax (Water & Sewerage)

$'000

1,426

$'000

47

Surplus before dividends (w15a + s16a) - Tax equivalents paid (Note 2-1(iv) + Note 3-1(iv))

NWI F25

Community Service Obligations (Water & Sewerage) Grants for Pensioner Rebates (w11b + s12b)

Notes:

1.

References to w (eg. s12) refer to item numbers within Special Schedules No. 5 & 6 of Council's Annual Financial Statements.

2.

The NWI Performance Indicators are based upon the National Performance Framework Handbook for Urban Performance Reporting Indicators & Definitions. page 17

page 18

page 19

Moree Plains Shire Council SPECIAL SCHEDULES for the year ended 30 June 2014

Leading the Way to a Better Community

Special Schedules 2014

Moree Plains Shire Council Special Schedules for the financial year ended 30 June 2014

Contents

Page

Special Schedules1 - 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)

n/a

- Special Schedule No. 3 - Special Schedule No. 4

Water Supply Operations - incl. Income Statement Water Supply - Statement of Financial Position

5 9

- Special Schedule No. 5 - Special Schedule No. 6

Sewerage Service Operations - incl. Income Statement Sewerage Service - Statement of Financial Position

10 14

2 4

15

- Notes to Special Schedules No. 3 & 5 - Special Schedule No. 7

Report on Infrastructure Assets (as at 30 June 2014)

16

- Special Schedule No. 8

Financial Projections

22

- Special Schedule No. 9

Permissible Income Calculation

23

1

Special Schedules are not audited (with the exception of Special Schedule 9).

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 (NOW), and the Office of Local Government (OLG).

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 2014

Moree Plains Shire Council Special Schedule No. 1 - Net Cost of Services for the financial year ended 30 June 2014

$'000 Function or Activity

Expenses from.

Continuing.

Operations.

Income from continuing operations Non Capital.

Net Cost. of Services.

Capital.

698

33

-

(665)

Administration

6,035

1,121

-

(4,914)

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

689 529 284 133 1,635

329 559 12 900

-

(360) 30 (272) (133) (735)

354

138

-

(216)

Environment Noxious Plants and Insect/Vermin Control Other Environmental Protection Solid Waste Management Street Cleaning Drainage Stormwater Management Total Environment

324 203 3,344 126 3,997

127 12 3,880 4,019

-

(197) (191) 536 (126) 22

Community Services and Education Administration & Education Social Protection (Welfare) Aged Persons and Disabled Children's Services Total Community Services & Education

588 86 14 835 1,523

137 9 8 912 1,066

-

(451) (77) (6) 77 (457)

Total Housing and Community Amenities

254 53 350 325 610 1,592

210 61 500 771

47 47

(44) (53) (289) 175 (563) (774)

Water Supplies

4,772

5,682

-

910

Sewerage Services

3,152

3,136

16

-

Governance

Health

Housing and Community Amenities Public Cemeteries Public Conveniences Street Lighting Town Planning Other Community Amenities

page 2

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 1 - Net Cost of Services (continued) for the financial year ended 30 June 2014

$'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.

Net Cost. of Services.

Capital.

(615) (194) (263) (41) (438) (886) (1,479) (9) (3,925)

657 194 284 73 583 1,687 1,504 102 5,084

33 21 32 145 801 25 14 1,071

9 79 88

Fuel & Energy

-

-

-

-

Agriculture

-

-

-

-

153 165 318

-

-

(153) (165) (318)

4,223 3 13,536 1,542 2,579 97 209 418 7,691 30,298

1 10,520 1,615 363 7,201 19,700

1,377 325 943 36 2,681

(2,845) (3) (2,691) 1,016 (2,579) (97) (173) (55) (490) (7,917)

16 1,442 1,458

636 636

-

(16) (806) (822)

60,916

38,273

2,832

(19,811)

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 General Purpose Revenues

(2)

Share of interests - joint ventures & associates using the equity method

23,980

23,980

-

-

-

60,916

62,253

NET OPERATING RESULT

(1)

(1) As reported in the Income Statement

(2) Includes: Rates & Annual Charges (incl. Ex Gratia, excl. Water & Sewer), Non Capital General Purpose Grants,

2,832

4,169

Interest on Investments (excl. Ext. Restricted Assets) & Interest on overdue Rates & Annual Charges

page 3

Moree Plains Shire Council Special Schedule No. 2(a) - Statement of Long Term Debt (all purpose) for the financial year ended 30 June 2014

$'000 Principal outstanding at beginning of the year

Other Long Term Debt Ratepayers Advances Government Advances Finance Leases Deferred Payments Total Long Term Debt

Sinking Funds

Transfers Interest to Sinking applicable for Year Funds

Non Current

959 959

33,214 33,214

34,173 34,173

9,105 9,105

959 959

-

-

-

-

-

-

-

-

959

33,214

34,173

9,105

959

-

Total

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).

at the end of the year Current

Non Current

2,496 2,496

1,058 1,058

41,261 41,261

42,319 42,319

-

-

-

-

-

-

2,496

1,058

41,261

42,319

Total

Special Schedules 2014

Total Debt

From Revenue

Principal outstanding

Debt redemption during the year

Current Classification of Debt Loans (by Source) Commonwealth Government Treasury Corporation Other State Government Public Subscription Financial Institutions Other Total Loans

New Loans raised during the year

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 3 - Water Supply Income Statement Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2014 Actuals 2014

Actuals 2013

1,188 102

971 95

Operation and Maintenance expenses - Dams & Weirs a. Operation expenses b. Maintenance expenses

369 92

281 236

- Mains c. Operation expenses d. Maintenance expenses

712

615

- Reservoirs e. Operation expenses f. Maintenance expenses

12

7

- Pumping Stations g. Operation expenses (excluding energy costs) h. Energy costs i. Maintenance expenses

2 40 34

11 45 27

350 53 114 154

316 46 147 178

30 34

21 33

1,007 20

995 13

564 -

573 -

4,877

4,610

$'000

A

Expenses and Income Expenses

1.

Management expenses a. Administration b. Engineering and Supervision

2.

- Treatment j. Operation expenses (excluding chemical costs) k. Energy costs l. Chemical costs m. Maintenance expenses - Other n. Operation expenses o. Maintenance expenses 3.

4.

5.

Depreciation expenses a. System assets b. Plant and equipment Miscellaneous expenses a. Interest expenses b. Revaluation Decrements c. Other expenses d. Impairment - System assets e. Impairment - Plant and equipment f. Aboriginal Communities Water & Sewerage Program g. Tax Equivalents Dividends (actually paid) Total expenses

page 5

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 3 - Water Supply Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2014 Actuals 2014

Actuals 2013

Residential charges a. Access (including rates) b. Usage charges

1,062 3,258

956 2,381

Non-residential charges a. Access (including rates) b. Usage charges

527 1,144

303 870

-

-

130

64

124 -

115 -

11. Grants a. Grants for acquisition of assets b. Grants for pensioner rebates c. Other grants

25 -

7 24 -

12. Contributions a. Developer charges b. Developer provided assets c. Other contributions

24 -

4 -

6,294

4,724

-

-

15. Operating Result

1,417

114

15a. Operating Result (less grants for acquisition of assets)

1,417

107

$'000

Income 6.

7.

8.

Extra charges

9.

Interest income

10. Other income 10a. Aboriginal Communities Water and Sewerage Program

13. Total income 14. Gain (or loss) on disposal of assets

page 6

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 3 - Water Supply Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2014 Actuals 2014

Actuals 2013

16. Acquisition of Fixed Assets a. New Assets for Improved Standards b. New Assets for Growth c. Renewals d. Plant and equipment

1 226 -

198 11 -

17. Repayment of debt a. Loans b. Advances c. Finance leases

145 -

137 -

-

-

372

346

-

-

2,640 -

44 -

-

-

2,640

44

24. Number of assessments a. Residential (occupied) b. Residential (unoccupied, ie. vacant lot) c. Non-residential (occupied) d. Non-residential (unoccupied, ie. vacant lot)

3,899 218 529 25

3,914 151 553 35

25. Number of ETs for which developer charges were received

-

$'000

B

Capital transactions Non-operating expenditures

18. Transfer to sinking fund 19. Totals

Non-operating funds employed 20. Proceeds from disposal of assets 21. Borrowing utilised a. Loans b. Advances c. Finance leases 22. Transfer from sinking fund 23. Totals

C

Rates and charges

26. Total amount of pensioner rebates (actual dollars)

$

ET

43,815

1 $

ET

44,850

page 7

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 3 - Water Supply Cross Subsidies for the financial year ended 30 June 2014

$'000

D

Yes

No

Amount

Best practice annual charges and developer charges*

27. Annual charges a. Does Council have best-practice water supply annual charges and usage charges*?

Yes

If Yes, go to 28a.

If No, please report if council has removed land value from access charges (ie rates)?

NB. Such

charges for both residential customers and non-residential customers comply with section 3.2 of Water Supply, Sewerage and Trade Waste Pricing Guidelines, NSW Office of Water, December, 2002. Such charges do not involve significant cross subsidies.

b. Cross-subsidy from residential customers using less than allowance (page 25 of Guidelines) c. Cross-subsidy to non-residential customers (page 24 of Guidelines) d. Cross-subsidy to large connections in unmetered supplies (page 26 of Guidelines) 28. Developer charges a. Has council completed a water supply Development Servicing** Plan?

Yes

b. Total cross-subsidy in water supply developer charges for 2012/13 (page 47 of Guidelines) ** In accordance with page 9 of Developer Charges Guidelines for Water Supply, Sewerage and Stormwater, NSW Office of Water, December, 2002.

29. Disclosure of cross-subsidies Total of cross-subsidies (27b +27c + 27d + 28b)

-

* Councils which have not yet implemented best practice water supply pricing should disclose cross-subsidies in items 27b, 27c and 27d above.

However, disclosure of cross-subsidies is not required where a Council has implemented best practice pricing and is phasing in such pricing over a period of 3 years. page 8

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 4 - Water Supply Statement of Financial Position Includes INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. as at 30 June 2014 Actuals Current

Actuals Non Current

Actuals Total

170 803 682

-

170 803 682

197 1,657 127

-

197 1,657 127

105

-

105

33. Property, plant and equipment a. System assets b. Plant and equipment

-

48,621 111

48,621 111

34. Other assets

1

-

1

35. Total assets

3,742

48,732

52,474

118

-

118

177 -

9,149 -

9,326 -

39. Provisions a. Tax equivalents b. Dividend c. Other

232

-

232

40. Total liabilities

527

9,149

9,676

3,215

39,583

42,798

$'000

ASSETS 30. Cash and investments a. Developer charges b. Special purpose grants c. Accrued leave d. Unexpended loans e. Sinking fund f. Other 31. Receivables a. Specific purpose grants b. Rates and Availability Charges c. User Charges d. Other 32. Inventories

LIABILITIES 36. Bank overdraft 37. Creditors 38. Borrowings a. Loans b. Advances c. Finance leases

41. NET ASSETS COMMITTED EQUITY 42. Accumulated surplus 43 Asset revaluation reserve

9,239 33,559

44. TOTAL EQUITY

42,798

45.

46.

47.

Note to system assets: Current replacement cost of system assets Accumulated current cost depreciation of system assets Written down current cost of system assets

78,692 (30,071) 48,621 page 9

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 5 - Sewerage Service Income Statement Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2014

$'000

Actuals 2014

Actuals 2013

A

Expenses and Income Expenses

1.

Management expenses a. Administration b. Engineering and Supervision

370 94

441 66

Operation and Maintenance expenses - Mains a. Operation expenses b. Maintenance expenses

260

1 293

- Pumping Stations c. Operation expenses (excluding energy costs) d. Energy costs e. Maintenance expenses

107 104 231

106 92 190

- Treatment f. Operation expenses (excl. chemical, energy, effluent & biosolids management costs) g. Chemical costs h. Energy costs i. Effluent Management j. Biosolids Management k. Maintenance expenses

46 275 1 3 218

75 239 1 15 220

- Other l. Operation expenses m. Maintenance expenses

220 -

450 -

Depreciation expenses a. System assets b. Plant and equipment

986 18

931 24

Miscellaneous expenses a. Interest expenses b. Revaluation Decrements c. Other expenses d. Impairment - System assets e. Impairment - Plant and equipment f. Aboriginal Communities Water & Sewerage Program g. Tax Equivalents Dividends (actually paid)

242 -

249 -

3,175

3,393

2.

3.

4.

5.

Total expenses

page 10

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 5 - Sewerage Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2014

$'000

Actuals 2014

Actuals 2013

1,920

2,132

Income 6.

Residential charges (including rates)

7.

Non-residential charges a. Access (including rates) b. Usage charges

458 418

520 357

Trade Waste Charges a. Annual Fees b. Usage charges c. Excess mass charges d. Re-inspection fees

159 -

131 -

-

-

197

270

-

-

12. Grants a. Grants for acquisition of assets b. Grants for pensioner rebates c. Other grants

22 -

22 -

13. Contributions a. Developer charges b. Developer provided assets c. Other contributions

46 -

77 -

3,220

3,509

8.

9.

Extra charges

10. Interest income 11. Other income 11a. Aboriginal Communities Water & Sewerage Program

14. Total income 15. Gain (or loss) on disposal of assets

(9)

-

16. Operating Result

36

116

16a. Operating Result (less grants for acquisition of assets)

36

116

page 11

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 5 - Sewerage Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2014 Actuals 2014

Actuals 2013

54 74 -

118 77 -

125 -

118 -

-

-

253

313

21. Proceeds from disposal of assets

-

-

22. Borrowing utilised a. Loans b. Advances c. Finance leases

-

-

23. Transfer from sinking fund

-

-

24. Totals

-

-

25. Number of assessments a. Residential (occupied) b. Residential (unoccupied, ie. vacant lot) c. Non-residential (occupied) d. Non-residential (unoccupied, ie. vacant lot)

3,496 161 520 25

3,487 140 540 38

26. Number of ETs for which developer charges were received

-

$'000

B

Capital transactions Non-operating expenditures

17. Acquisition of Fixed Assets a. New Assets for Improved Standards b. New Assets for Growth c. Renewals d. Plant and equipment 18. Repayment of debt a. Loans b. Advances c. Finance leases 19. Transfer to sinking fund 20. Totals Non-operating funds employed

C

Rates and charges

27. Total amount of pensioner rebates (actual dollars)

$

ET

39,462

1 $

ET

40,519

page 12

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 5 - Sewerage Cross Subsidies for the financial year ended 30 June 2014

$'000

D

Yes

No

Amount

Best practice annual charges and developer charges*

28. Annual charges a. Does Council have best-practice sewerage annual charges, usage charges and trade waste fees & charges*?

Yes

If Yes, go to 29a.

If No, please report if council has removed land value from access charges (ie rates)?

NB. Such

charges for both residential customers and non-residential customers comply with section 4.2 & 4.3 of the Water Supply, Sewerage and Trade Waste Pricing Guidelines, NSW Office of Water, December, 2002. Such charges do not involve significant cross subsidies.

b. Cross-subsidy to non-residential customers (page 45 of Guidelines) c. Cross-subsidy to trade waste discharges (page 46 of Guidelines) 29. Developer charges a. Has council completed a sewerage Development Servicing** Plan?

Yes

b. Total cross-subsidy in sewerage developer charges for 2012/13 (page 47 of Guidelines) ** In accordance with page 9 of Developer Charges Guidelines for Water Supply, Sewerage and Stormwater, NSW Office of Water, December, 2002.

30. Disclosure of cross-subsidies Total of cross-subsidies (28b + 28c + 29b)

-

* Councils which have not yet implemented best practice sewer pricing & liquid waste prising should disclose cross-subsidies in items 28b and 28c above.

However, disclosure of cross-subsidies is not required where a Council has implemented best practice sewerage and liquid waste pricing and is phasing in such pricing over a period of 3 years. page 13

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 6 - Sewerage Service Statement of Financial Position Includes INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. as at 30 June 2014 Actuals Current

Actuals Non Current

Actuals Total

250 147 4,617

-

250 147 4,617

32. Receivables a. Specific purpose grants b. Rates and Availability Charges c. User Charges d. Other

454 150 6

-

454 150 6

33. Inventories

105

-

105

34. Property, plant and equipment a. System assets b. Plant and equipment

-

27,656 193

27,656 193

35. Other assets

-

-

-

36. Total Assets

5,729

27,849

33,578

113

-

113

135 -

3,374 -

3,509 -

53

-

53

301

3,374

3,675

5,428

24,475

29,903

$'000

ASSETS 31. Cash and investments a. Developer charges b. Special purpose grants c. Accrued leave d. Unexpended loans e. Sinking fund f. Other

LIABILITIES 37. Bank overdraft 38. Creditors 39. Borrowings a. Loans b. Advances c. Finance leases 40. Provisions a. Tax equivalents b. Dividend c. Other 41. Total Liabilities 42. NET ASSETS COMMITTED EQUITY 42. Accumulated surplus 44. Asset revaluation reserve

19,137 10,766

45. TOTAL EQUITY

29,903

46.

47.

48.

Note to system assets: Current replacement cost of system assets Accumulated current cost depreciation of system assets Written down current cost of system assets

55,172 (27,516) 27,656 page 14

Special Schedules 2014

Moree Plains Shire Council Notes to Special Schedule No.'s 3 & 5 for the financial year ended 30 June 2014

Administration

(1)

Engineering and supervision

(1)

(item 1a of Special Schedules 3 and 5) comprises the following:

(item 1b of Special Schedules 3 and 5) comprises the following:

•

Administration staff: − Salaries and allowance − Travelling expenses − Accrual of leave entitlements − Employment overheads.

•

Engineering staff: − Salaries and allowance − Travelling expenses − Accrual of leave entitlements − Employment overheads.

•

Meter reading.

•

•

Bad and doubtful debts.

•

Other administrative/corporate support services.

Other technical and supervision staff: − Salaries and allowance − Travelling expenses − Accrual of leave entitlements − Employment overheads.

Operational expenses (item 2 of Special Schedules 3 and 5) comprise the day to day operational expenses excluding maintenance expenses.

Maintenance expenses (item 2 of Special Schedules 3 and 5) comprise the day to day repair and maintenance expenses. (Refer to Section 5 of the Local Government Asset Accounting Manual regarding capitalisation principles and the distinction between capital and maintenance expenditure).

Other expenses (item 4c of Special Schedules 3 and 5) includes all expenses not recorded elsewhere.

Revaluation decrements (item 4b of Special Schedules 3 and 5) is to be used when I,PP&E decreases in FV. Impairment Losses (item 4d & 4e of Special Schedules 3 and 5) are to be used when the carrying amount of an asset exceeds its recoverable amount (refer to page D-31).

Aboriginal Communities Water and Sewerage Program (item 4f of Special Schedules 3 and 5) is to be used when operation and maintenance work has been undertaken on behalf of the Aboriginal Communities Water and Sewerage Program. Similarly, income for item 11a of Special Schedule 3 and item 12a of Special Schedule 5 are for services provided to the Aboriginal Communities Water and Sewerage Program and is not part of Council’s water supply and sewerage revenue.

Residential charges (2) (items 6a, 6b and item 6 of Special Schedules 3 and 5 respectively) include all income from residential charges. Item 6 of Schedule 3 should be separated into 6a Access Charges (including rates if applicable) and 6b Usage Charges.

Non-residential charges (2) (items 7a, 7b of Special Schedules 3 and 5) include all income from non-residential charges separated into 7a Access Charges (including rates if applicable) and 7b Usage Charges.

Trade waste charges (item 8 of Special Schedule 5) include all income from trade waste charges separated into 8a Annual Fees, 8b Usage Charges and 8c Excess Mass Charges and 8d Re-inspection Fees.

Other income (items 10 and 11 of Special Schedules 3 and 5 respectively) include all income not recorded elsewhere.

Other contributions (items 12c and 13c of Special Schedules 3 and 5 respectively) incl. capital contributions for water supply or sewerage services received by Council under Section 565 of the Local Government Act. Notes: Administration and engineering costs for the development of capital works projects should be reported as part of the capital cost of the project and not as part of the recurrent expenditure (ie. in item 16 for water supply and item 17 for sewerage, and not in items 1a and 1b).

(1)

(2)

To enable accurate reporting of residential revenue from usage charges, it is essential for councils to accurately separate their residential (item 6) charges and non-residential (item 7) charges. page 15

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets as at 30 June 2014

$'000 Estimated cost to bring up to a satisfactory standard (1)_

Asset Class

Buildings

Actual (3)-Maintenance 2013/14

Written Down Value (WDV) (4)-

Assets in Condition as a % of WDV (4), (5) 1

2

3

4

5

Asset Category Council Offices / Administration Centres Council Works Depot Libraries Cultural Facilities Other Buildings Other sub total

Other Structures Other Structures sub total Roads

Required (2)Annual Maintenance

165 19 31 40 10 444 709

20 26 12 4 28 562 652

13,032 1,333 2,819 3,058 775 35,214 56,231

0% 0% 0% 0% 0% 1% 0.7%

100% 100% 100% 100% 100% 98% 98.9%

0% 0% 0% 0% 0% 0% 0.3%

0% 0% 0% 0% 0% 0% 0.0%

0% 0% 0% 0% 0% 0% 0.1%

-

317 317

236 236

13,393 13,393

6% 6.1%

94% 93.9%

0% 0.0%

0% 0.0%

0% 0.0%

716 9,521 129 186

2,505 188 2,989 62 100 307

2,169 188 1,913 86 110 164

10,552

6,151

4,630

30,118 101,345 78,984 44,306 7,763 12,265 1,831 276,612

24% 24% 5% 15% 38% 19% 14% 17.2%

38% 71% 19% 70% 24% 40% 64% 49.8%

32% 5% 46% 14% 32% 37% 23% 23.5%

4% 0% 15% 0% 6% 2% 0% 5.0%

2% 0% 15% 0% 0% 1% 0% 4.5%

page 16

Special Schedules 2014

Sealed Roads Surface Sealed Roads Structure Unsealed Roads Bridges Footpaths Kerb and Gutter Other sub total

24 24

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets

(continued)

as at 30 June 2014

$'000 Estimated cost to bring up to a satisfactory standard (1)_

Required (2)Annual Maintenance

Actual (3)-Maintenance 2013/14

Written Down Value (WDV) (4)-

Asset Class

Asset Category

Water Supply Network

Dams/Weirs Mains Reservoirs Treatment sub total

-

148 312 383 185 1,028

93 734 12 124 963

3,739 12,606 23,912 3,514 43,771

Mains Pumping Station/s Treatment sub total

-

536 195 272 1,003

260 212 210 682

14,916 3,545 7,172 25,633

Sewerage Network

Assets in Condition as a % of WDV (4), (5) 1

2

3

4

5

8%

35% 20% 35% 35% 30.7%

20% 20%

13%

8% 8% 0% 7.4%

24% 39% 32% 32% 33.3%

15% 20% 17.3%

13% 10% 13% 11.4%

26% 26% 26% 26.0%

7% 7% 7% 7.0%

47% 40% 50% 46.9%

10% 17% 17% 12.9%

10% 10% 0% 7.2%

Special Schedules 2014

page 17

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets

(continued)

as at 30 June 2014

$'000 Estimated cost to bring up to a satisfactory standard (1)_

Asset Class

Asset Category

Stormwater Drainage

Other sub total TOTAL - ALL ASSETS

Required (2)Annual Maintenance

Actual (3)-Maintenance 2013/14

Written Down Value (WDV) (4)-

416 416

207 207

265 265

13,262 13,262

10,992

9,415

7,428

429,670

Assets in Condition as a % of WDV (4), (5) 1

2

3

4

5

7%

8%

4%

7.0%

78% 78.0%

8.0%

4.0%

3% 3.0%

13.9%

53.9%

21.6%

5.9%

4.8%

Notes: (1).

(4).

Satisfactory is defined as “satisfying expectations or needs, leaving no room for complaint, causing satisfaction, adequate”.

The estimated cost to bring assets to a satisfactory standard is the amount of money that is required to be spent on an asset to ensure that it is in a satisfactory standard.

This estimated cost should not include any planned enhancements (ie.to heighten, intensify or improve the facilities).

Required Annual Maintenance is “what should be spent to maintain assets in a satisfactory standard.

Actual Maintenance is what has been spent in the current year to maintain the assets.

Actual Maintenance may be higher or lower than the required annual maintenance due to the timing of when the maintenance actually occurs.

Written Down Value is in accordance with Note 9 of Council's General Purpose Financial Statements

(5).

Infrastructure Asset Condition Assessment "Key"

(2).

(3).

1 2 3

No work required (normal maintenance) Only minor maintenance work required Maintenance work required Renewal required Urgent renewal/upgrading required

6 7 8 9 10

Condition Condition Condition Condition Condition

Description here…

Description here…

Description here…

Description here…

Description here…

page 18

Special Schedules 2014

4 5

Excellent Good Average Poor Very Poor

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) for the financial year ended 30 June 2014

$ '000

Amounts 2014

Indicator 2014

Prior Periods 2013 2012

Infrastructure Asset Performance Indicators Consolidated 1. Building and Infrastructure Renewals Ratio Asset Renewals (Building and Infrastructure) (1) Depreciation, Amortisation & Impairment

19,899 8,870

224.34%

129.53%

131.53%

10,992 429,670

0.03

0.06

0.11

7,428 9,415

0.79

0.66

0.51

25,921 10,583

2.45

1.38

1.38

2. Infrastructure Backlog Ratio Estimated Cost to bring Assets to a Satisfactory Condition Total value(2) of Infrastructure, Building, Other Structures & depreciable Land Improvement Assets

3. Asset Maintenance Ratio Actual Asset Maintenance Required Asset Maintenance

4. Capital Expenditure Ratio Annual Capital Expenditure Annual Depreciation

Notes (1)

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.

(2)

Written down value

page 19

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) for the financial year ended 30 June 2014

1. Building and Infrastructure Renewals Ratio 300%

Ratio %

2013/14 Ratio

224.34%

224.34%

250% 200% 150%

Commentary on 2013/14 Result Purpose of Asset Renewals Ratio

131.53%

129.53%

2012

2013

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

100% 50% 0%

―― Minimum

This ratio has increased from the previous years due to significant capital works undertaken on the road network and water infrastructure. The ratio is expected to return to levels seen in previous years.

2014

100.00%

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) 2. Infrastructure Backlog Ratio 0.14 Ratio (x)

0.12

Purpose of Infrastructure Backlog Ratio

Commentary on 2013/14 Result

This ratio shows what proportion the backlog is against the total value of a Council’s infrastructure.

A gradual improvement can be seen in this ratio due largely to the investment in the sealed road network. The unsealed road network continues to be an area where significant backlog remains.

2013/14 Ratio

0.03 x

0.11

0.10 0.08

0.06

0.06 0.04

0.03

0.02 0.00 2012

―― Maximum

2013

2014

.02

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) Commentary on 2013/14 Result

3. Asset Maintenance Ratio

Purpose of Asset Maintenance Ratio

1.20

Ratio (x)

1.00

0.79

0.80 0.60

0.66 0.51

0.40 0.20 0.00 2012

―― Minimum

2013

2014

Compares actual vs. required annual asset maintenance. A ratio above 1.0 indicates Council is investing enough funds to stop the Infrastructure Backlog growing.

2013/14 Ratio

0.79 x

While this ratio continues to improve there remains a shortfall in maintenance funding over several asset classes, in particular the road network.

1.00

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) Commentary on 2013/14 Result

4. Capital Expenditure Ratio 3.00

2.45

Ratio (x)

2.50 2.00 1.50

1.38

1.38

2012

2013

1.00 0.50 0.00

―― Minimum

2014

Purpose of Capital Expenditure Ratio To assess the extent to which a Council is expanding its asset base thru capital expenditure on both new assets and the replacement and renewal of existing assets.

2013/14 Ratio

2.45 x

Significant investment in Council's existing assets and the construction of new assets has seen this ratio increase significantly for the current year. This ratio will remain high in the coming year due to significant ongoing developments.

1.10

Source for Benchmark: TCorp Sustainability Review of NSW Local Govt. (2013) page 20

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) for the financial year ended 30 June 2014

$ '000

Water 2014

Sewer 2014

General(1) 2014

221.60%

68.59%

247.59%

12.66%

8.59%

164.98%

0.00

0.00

0.03

0.00

0.00

0.08

0.94

0.68

0.78

1.23

1.28

0.59

0.22

0.13

2.99

0.21

0.20

1.63

Infrastructure Asset Performance Indicators

By Fund 1. Building and Infrastructure Renewals Ratio Asset Renewals (Building and Infrastructure) (1) Depreciation, Amortisation & Impairment prior period:

2. Infrastructure Backlog Ratio Estimated Cost to bring Assets to a Satisfactory Condition Total value(3) of Infrastructure, Building, Other Structures & Depreciable Land Improvement Assets

prior period:

3. Asset Maintenance Ratio Actual Asset Maintenance Required Asset Maintenance prior period:

4. Capital Expenditure Ratio Annual Capital Expenditure Annual Depreciation prior period:

Notes (1)

General Fund refers to all of Council's activities except for its Water & Sewer activities which are listed separately.

(2)

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.

(3)

Written down value

page 21

Moree Plains Shire Council Special Schedule No. 8 - Financial Projections as at 30 June 2014 Actual(1) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3) Forecast(3)

$'000 (i) OPERATING BUDGET Income from continuing operations Expenses from continuing operations Operating Result from Continuing Operations

(ii) CAPITAL BUDGET New Capital Works (2) Replacement/Refurbishment of Existing Assets Total Capital Budget

Funded by: – Loans – Asset sales – Reserves – Grants/Contributions – Recurrent revenue – Other

14/15

15/16

16/17

17/18

18/19

19/20

20/21

21/22

22/23

23/24

65,085 60,916

52,984 49,185

52,240 49,949

53,310 50,720

54,733 51,865

56,825 53,085

58,760 54,324

60,456 55,893

62,535 57,249

64,546 58,938

65,822 60,518

4,169

3,799

2,291

2,590

2,868

3,740

4,436

4,563

5,286

5,608

5,304

7,100 20,000 27,100

17,342 19,620 36,962

1,394 15,787 17,181

864 13,632 14,496

793 14,506 15,299

1,289 15,425 16,714

773 14,774 15,547

341 15,459 15,800

737 14,772 15,509

869 15,129 15,998

720 15,283 16,003

7,425 1,006 3,169 2,832 12,648 20 27,100

21,077 629 1,760 3,978 9,118 400 36,962

2,245 1,003 547 1,898 11,385 103 17,181

707 1,257 2,104 10,322 106 14,496

1,030 526 2,021 11,613 109 15,299

1,204 698 2,184 12,515 113 16,714

846 934 2,494 11,157 116 15,547

1,000 804 500 2,170 11,207 119 15,800

825 532 2,500 11,529 123 15,509

845 555 2,618 11,853 127 15,998

845 580 2,495 11,953 130 16,003

page 22

Notes: (1) From 13/14 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.

Special Schedules 2014

13/14

Special Schedules 2014

Moree Plains Shire Council Special Schedule No. 9 - Permissible Income Calculation for the financial year ended 30 June 2015

$'000

Calculation 2013/14

Calculation 2014/15

19,955 19,955

20,582 20,582

Notional General Income Calculation (1) Last Year Notional General Income Yield Plus or minus Adjustments (2) Notional General Income

a b c

Permissible Income Calculation Special variation percentage (3) or Rate peg percentage or Crown land adjustment incl. rate peg percentage expiring Special variation amount Special variation amount or plus Rate peg amount or plus Crown land adjustment and rate peg amount sub-total

d e

g

plus

h=cxd i=cxe j=cxf k = (c+g+h+i+j)

plus

l

less

m

Total Permissible income Notional General Income Yield Catch-up or (excess) result less

Income lost due to valuation objections claimed (4) (5) less Unused catch-up Carry forward to next year plus

2.30%

f

less

(or minus) last year's Carry Forward Total Valuation Objections claimed in the previous year sub-total

3.40%

n = (l + m)

678 20,633 (36) (36)

473 21,055 15 15

o=k+n

20,597

21,071

p

20,582 15

20,994 77

15

77

q=o-p r s t=q+r-s

Notes 1

The Notional General Income will not reconcile with rate income in the financial statements in the corresponding year. The statements are reported on an accrual accounting basis which include amounts that relate to prior years' rates income.

2

Adjustments account for changes in the number of assessments and any increase or decrease in land value occurring during the year. The adjustments are called "supplementary valuations" as defined in the Valuation of Land Act 1916.

3

The Special Variation Percentage is inclusive of the Rate Peg percentage and where applicable crown land adjustment.

4

Valuation objections are unexpected changes in land values as a result of land owners successfully objecting to the land value issued by the Valuer-General. Councils can claim the value of the income lost due to valuation objections in any single year.

5

Unused catch-up amounts will be deducted if they are not caught up within 2 years. Usually councils will have a nominal carry forward figure. These amounts can be adjusted for in setting the rates in a future year. page 23

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