Moree plains shire council financial statements 2014 15

Moree Plains Shire Council GENERAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2015

Leading the Way to a Better Community

Financial Statements 2015

Moree Plains Shire Council General Purpose Financial Statements for the financial year ended 30 June 2015

Contents

Page

1. Understanding Council's Financial Statements

2

2. Statement by Councillors & Management

3

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

4 5 6 7 8

4. Notes to the Financial Statements

9

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

84 86

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; ď Š 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, ď Š the responsibility for administering regulatory requirements under the LGA and ď Š a role in the management, improvement and development of the resources in the area.

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

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

(iv)

These financial statements were authorised for issue by the Council on 30 October 2015.

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

page 1

Financial Statements 2015

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 2015.

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

About the Councillor/Management Statement

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 14/15 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 2015

Moree Plains Shire Council Income Statement for the financial year ended 30 June 2015 Budget 2015

1

Actual 2015

Actual 2014

27,009 13,262 823 1,417 11,151 3,868

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

-

540

57,530

65,085

17,321 2,946 15,032 13,417 2,784 223

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

51,723

60,916

5,807

4,169

5,807

4,169

Net Operating Result attributable to Council

5,807

4,169

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

1,939

1,337

$ '000

Notes

Income from Continuing Operations 27,206 10,254 944 1,079 9,718 3,780 -

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

52,981

Total Income from Continuing Operations

17,773 3,546 13,005 10,936 2,925 1,000

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

49,185

Total Expenses from Continuing Operations

3a 3b 3c 3d 3e,f 3e,f 5

2

Expenses from Continuing Operations

3,796

3,796 3,796

16 1 2

Operating Result from Continuing Operations

Net Operating Result for the Year

4a 4b 4c 4d 4e 5

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

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

page 4

Financial Statements 2015

Moree Plains Shire Council Statement of Comprehensive Income for the financial year ended 30 June 2015

$ '000

Notes

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

Actual 2015

Actual 2014

5,807

4,169

13,464 -

45,992 10,806

13,464

56,798

109

-

109

-

13,573

56,798

19,380

60,967

19,380

60,967

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

20b (ii) 20b (ii)

Amounts which will be reclassified subsequently to the Operating Result when specific conditions are met Other Movements in reserves 20b (ii) Total Items which will be reclassified subsequently to the Operating Result when specific conditions are met

Total Other Comprehensive Income for the year

Total Comprehensive Income for the Year

Total Comprehensive Income attributable to Council

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

page 5

Financial Statements 2015

Moree Plains Shire Council Statement of Financial Position as at 30 June 2015

$ '000

ASSETS Current Assets Cash & Cash Equivalents Investments Receivables Inventories Other Total Current Assets Non-Current Assets Infrastructure, Property, Plant & Equipment Total Non-Current Assets

Notes

6a 6b 7 8 8

9

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

10 10 10

10 10

TOTAL LIABILITIES

Net Assets

Actual 2015

Actual 2014

15,415 12,000 5,483 3,220 77 36,195

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

506,107 506,107

481,894 481,894

542,302

512,444

5,574 1,159 6,576 13,309

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

52,502 1,593 54,095

41,261 2,708 43,969

67,404

56,926

474,898

455,518

121,752 353,146 474,898

115,945 339,573 455,518

474,898

455,518

EQUITY Retained Earnings Revaluation Reserves Council Equity Interest

Total Equity

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

20 20

page 6

Financial Statements 2015

Moree Plains Shire Council Statement of Changes in Equity for the financial year ended 30 June 2015

$ '000

Notes

Retained Reserves Earnings (Refer 20b)

NonCouncil controlling Interest Interest

Total Equity

2015 Opening Balance (as per Last Year's Audited Accounts)

115,945

339,573

455,518

-

455,518

a. Correction of Prior Period Errors

20 (c)

-

-

-

-

-

b. Changes in Accounting Policies (prior year effects)

20 (d)

115,945

339,573

455,518

-

455,518

5,807

-

5,807

-

5,807

Revised Opening Balance (as at 1/7/14) c. Net Operating Result for the Year

-

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

20b (ii)

-

13,464

13,464

-

13,464

- Other Reserves Movements

20b (ii)

-

109 13,573

109 13,573

-

13,573

5,807

13,573

19,380

-

19,380

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

-

-

-

-

-

f. Transfers between Equity

-

-

-

-

-

121,752

353,146

474,898

-

474,898

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

109

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

- 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

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

56,798

page 7

Financial Statements 2015

Moree Plains Shire Council Statement of Cash Flows for the financial year ended 30 June 2015 Budget 2015

$ '000

Notes

Actual 2015

Actual 2014

27,124 14,559 965 15,326 5,948

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

(17,223) (17,269) (3,531) (153) (4,862)

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

20,884

15,022

1,000 757

1,414 1,006

(6,000) (25,157) (1,527)

(6,000) 145 (27,123) (145)

(30,927)

(30,703)

Cash Flows from Operating Activities Receipts:

27,209 10,254 944 13,498 1,079

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

(17,773) (12,463) (3,546) (3,467)

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

15,735

Net Cash provided (or used in) Operating Activities

11b

Cash Flows from Investing Activities Receipts:

629

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

(36,962) -

(36,333)

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

Cash Flows from Financing Activities Receipts:

18,500

12,400

Proceeds from Borrowings & Advances

9,105

Payments:

(1,197)

(1,058)

Repayment of Borrowings & Advances

17,303

Net Cash Flow provided (used in) Financing Activities

(3,295)

Net Increase/(Decrease) in Cash & Cash Equivalents

20,475

plus:

17,180

(959)

11,342

8,146

1,299

(7,535)

Cash & Cash Equivalents - beginning of year

11a

14,116

21,651

Cash & Cash Equivalents - end of the year

11a

15,415

14,116

6b

12,000

6,989

27,415

21,105

Additional Information: plus:

Investments on hand - end of year

Total Cash, Cash Equivalents & Investments Please refer to Note 11 for additional cash flow information This Statement should be read in conjunction with the accompanying Notes.

page 8

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Contents of the Notes accompanying the Financial Statements Note

Details

Page 10 26 27 28 33 35 36 36 38 40 41 43 44 44 45 46 47 49

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 and Other Assets Infrastructure, Property, Plant & Equipment Externally Restricted Infrastructure, Property, Plant and Equipment Infrastructure, Property, Plant and Equipment - Current Year Impairments Payables, Borrowings and 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 Interests in Other Entities 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 and Restoration Liabilities Fair Value Measurement

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

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

Additional Council Disclosures 28 29

Financial Review Council Information and Contact Details

81 83

n/a - not applicable page 9

Financial Statements 2015

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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.

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 There were no accounting standards that became mandatory this year which materially impacted on Council’s financial statements.

(a) Basis of preparation (iv) Early adoption of Accounting Standards (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,

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

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

 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: 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

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.

(a) have

The accrual basis of accounting has also been applied in their preparation. (vi) Changes in Accounting Policies

(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.

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)].

page 10

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies (vii) Critical Accounting Estimates

criteria have been met for each of the Council’s activities as described below.

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.

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

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

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

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

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).

(b) Revenue recognition

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.

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

The Council has obligations to provide facilities from contribution revenues levied on developers under the provisions of S94 of the EPA Act 1979. page 11

Financial Statements 2015

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies 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.

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

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

User Charges, Fees and Other Income User charges, fees and other income (including parking fees and fines) are recognised as revenue when the service has been provided, the payment is received, or when the penalty has been applied, whichever first occurs.

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

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

In the process of reporting on Council’s activities as a single unit, all inter-entity year end balances and reporting period transactions have been eliminated in full between Council and its controlled entities. (i) The Consolidated Fund In accordance with the provisions of Section 409(1) of the LGA 1993, all money and property received by Council is held in the Council’s Consolidated Fund unless it is required to be held in the Council’s Trust Fund.

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.

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.

Sale of Infrastructure, Equipment

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

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.

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

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

    

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

(ii) The Trust Fund In accordance with the provisions of Section 411 of the Local Government Act 1993 (as amended), a separate and distinct Trust Fund is maintained to account for all money and property received by the Council in trust which must be applied only for the purposes of or in accordance with the trusts relating to those monies.

Trust monies and property subject to Council’s control have been included in these statements. page 12

Financial Statements 2015

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies Trust monies and property held by Council but not subject to the control of Council, have been excluded from these statements.

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

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.

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.

Big Sky Library The Big Sky Library is a contractual association between the Council’s of Moree Plains, 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. (iv) Associates Where Council has the power to participate in the financial and operating decisions of another entity, (ie. where Council is deemed to have “significant influence” over another entities operations but neither controls nor jointly controls the entity), then Council accounts for such interests using the equity method of accounting – in a similar fashion to Joint Ventures.

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.

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

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

Such entities are usually termed Associates.

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.

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

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

(v) County Councils Council is not a member of any County Councils.

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

(e) Cash and Cash Equivalents For Statement of Cash Flows (and Statement of Financial Position) presentation purposes, cash and cash equivalents includes;  cash on hand,  deposits held at call with financial institutions,  other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash page 13

Financial Statements 2015

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies and which are subject to an insignificant risk of changes in value, and Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position 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,  loans and receivables,  held-to-maturity investments, and  available-for-sale financial assets.

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

Management determines each Investment classification at the time of initial recognition and reevaluates this designation at each reporting date. (i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets that are “held for trading”.

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

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 non-derivatives that are either designated in this category or not classified in any of the other categories.

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

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

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.

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.

(ii) Loans and receivables

Financial Assets – Reclassification

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

Council may choose to reclassify a non-derivative trading financial asset out of the held-for-trading category if the financial asset is no longer held for the purpose of selling it in the near term. page 14

Financial Statements 2015

_

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies Financial assets other than loans and receivables are permitted to be reclassified out of the held-fortrading 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

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

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

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

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

Impairment Council assesses at each 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. (iii) Types of Investments

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

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Council has transferred substantially all the risks and rewards of ownership. (ii) Subsequent Measurement Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value.

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.

page 15

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies (g) Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of financial instruments traded in active markets is based on quoted market prices at the 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. page 16

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies Land Held for Resale/Capitalisation of Borrowing Costs Land held for resale is stated at the lower of cost and net realisable value.

-

Bulk Earthworks (Internal Valuation)

-

Stormwater Drainage (Internal Valuation)

-

Water and Sewerage Networks (Internal Valuation)

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

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

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

-

Swimming Pools (External Valuation)

-

Other Infrastructure (Internal Valuation)

-

Other Assets (as approximated by depreciated historical cost)

-

Investment Properties – refer Note 1(p),

Initial Recognition 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; -

Plant and Equipment (as approximated by depreciated historical cost)

-

Operational Land (External Valuation)

-

Community Land (External Valuation)

-

Land Improvements

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

(as approximated by depreciated historical cost)

-

Buildings – Specialised/Non Specialised (External Valuation)

-

Other Structures (as approximated by depreciated historical cost)

-

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

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

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

page 17

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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.

Buildings & Land Improvements Park Furniture & Equipment

> $2,000

Building - construction/extensions - renovations

> $10,000 > $10,000

Other Structures

> $2,000

 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.

Water & Sewer Assets Reticulation extensions Other

> $1,000 > $1,000

 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.

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

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.

Other Infrastructure Assets Swimming Pools Other Open Space/Recreational Assets

> $10,000 > $10,000

Other Infrastructure

> $10,000

Depreciation 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.

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

Capitalisation Thresholds

Land is not depreciated.

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

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

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

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

page 18

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies Buildings - Buildings :Masonry - Buildings :Other

50 to 100 years 20 to 40 years

Stormwater Drainage - Drains - Culverts - Flood Control Structures

100 years 60 years 100 years

Transportation Assets - Sealed Roads: Formation - Sealed Roads: Pavement - Sealed Roads: Surface - Unsealed roads

120 years 40 years 10 years 100 years

- Bridge Concrete

100 years

- Road Pavements - Kerb, Gutter - Footpaths

30 years 40 years 40 years

(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

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

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

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

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

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.

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 Council has not classified any assets as Intangible.

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

While ownership of the reserves remains with the Crown, Council retains operational control of the reserves and is responsible for their maintenance and use in accordance with the specific purposes to which the reserves are dedicated.

Improvements on Crown Reserves are also recorded as assets, while maintenance costs incurred by Council and revenues relating the reserves are recognised within Council’s Income Statement.

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

page 19

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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”.

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.

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 exclude the assets, their values and depreciation charges from 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.

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 30/06/15.

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

Provision is made for the estimated present value of the costs of environmental clean up obligations page 20

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies outstanding at the reporting date. These costs are charged to the income statement.

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, Plant and Equipment - unless the assets are to be traded in after 30 June and the replacement assets

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.

Non-financial assets (other than goodwill) that suffered a prior period impairment are reviewed for page 21

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies possible reversal of the impairment at each reporting date.

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

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

 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.

(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:

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.

page 22

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies All other short-term employee benefit obligations are presented as payables.

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

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

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

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

Defined Contribution Plans

(iii) Retirement benefit obligations

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.

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

(y) Self insurance

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

Council does not self insure.

page 23

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies (z) Allocation between current and non-current assets & liabilities In the determination of whether an asset or liability is classified as current or non-current, consideration is given to the time when each asset or liability is expected to be settled.

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

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

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

Exceptions

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

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.

(ab) New accounting standards and interpretations

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.

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

(aa) Taxes

Council has not adopted any of these standards early.

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

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

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

Apart from the AASB disclosures below, there are no other standards that are “not yet effective” which are expected to have a material impact on Council in the current or future reporting periods and on foreseeable future transactions.

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

Applicable to Local Government: AASB 9 - Financial Instruments (and associated amending standards) AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and has an effective date for reporting periods beginning on or after 1 January 2018 (and must be applied retrospectively).

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

Under the new requirements the four current categories of financial assets stipulated in AASB 139 will be replaced with two measurement categories: page 24

Financial Statements 2015

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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 1. Summary of Significant Accounting Policies 

fair value and



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

AASB 15 - Revenue from contracts with customers and associated amending standards AASB 15 will introduce a five step process for revenue recognition with the core principle of the new Standard being that entities recognise revenue so as to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the entity expects to be entitled in exchange for those goods or services.

(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.

The changes in revenue recognition requirements in AASB 15 may cause changes to accounting policies relating to the timing and amount of revenue recorded in the financial statements as well as additional disclosures.

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

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

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

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

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

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

Not applicable to Local Government per se; None

page 25

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

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

Total Functions & Activities

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

2015

2015

2014

2015

2015

2014

2015

2015

2014

2015

2014

2015

Actual 2014

570 720 10 4,424 1,299 634 4,835 3,478 1,889 6,784 586

680 884 76 4,580 1,249 460 5,808 3,691 1,399 10,409 666

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

954 6,538 1,526 279 4,709 1,888 3,108 4,733 3,027 4,586 170 15,780 1,887

931 7,564 1,626 311 3,910 1,708 1,906 4,583 2,450 4,824 363 19,767 1,780

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

(954) (5,968) (806) (269) (285) (589) (2,474) 102 451 (2,697) (170) (8,996) (1,301)

(931) (6,884) (742) (235) 670 (459) (1,446) 1,225 1,241 (3,425) (363) (9,358) (1,114)

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

17 598 365 592 274 151 1,365 65 4

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

1 61,258 5,124 3 3,021 24,116 50,974 29,345 32,652 138 310,171 25,499

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

25,229

29,902

41,105

49,185

51,723

60,916

(23,956)

(21,821)

(19,811)

3,431

12,276

542,302

512,444

27,752

27,628

23,980

-

-

-

27,752

27,628

23,980

6,599

3,307

-

-

52,981

57,530

65,085

49,185

51,723

60,916

3,796

5,807

4,169

10,030

15,583

542,302

512,444

Share of gains/(losses) in Associates &

page 26

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

Financial Statements 2015

Joint Ventures (using the Equity Method)

General Purpose Income 1 Operating Result from Continuing Operations

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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.

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

page 27

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 3. Income from Continuing Operations $ '000

Notes

Actual 2015

Actual 2014

4,229 14,137 2,331 20,697

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

1,973 1,388 2,613 338 6,312

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

27,009

26,180

(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 2015 year valuations provided by the NSW Valuer General in calculating its rates.

page 28

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Notes

Actual 2015

Actual 2014

921 3,347 329 4,597

907 3,835 395 5,137

176 228 404

260 123 383

637 174 634 548 5,451 16 750 51 8,261

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

13,262

15,939

(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 29

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Notes

Actual 2015

Actual 2014

142 600 72 9

162 539 84 16

(c) Interest & Investment Revenue (incl. losses) Interest & Dividends - Interest on Overdue Rates & Annual Charges (incl. Special Purpose Rates) - Interest earned on Investments (interest & coupon payment income) - Interest on Overdue User Charges and Fees - Interest & Dividend Income (Other) Fair Value Adjustments - Fair Valuation movements in Investments (at FV or Held for Trading)

-

56

823

857

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

101 208

97 361

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

23 14 179 206 80 12 823

13 12 125 190 59 857

135 158 204 173 175 93 223 256

118 221 27 124 195 68 221 265

1,417

1,239

TOTAL INTEREST & INVESTMENT REVENUE Interest Revenue is attributable to:

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

TOTAL OTHER REVENUE

page 30

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

2015 Operating

2014 Operating

2015 Capital

2014 Capital

3,828 2,712 59 6,599

1,912 1,333 62 3,307

-

-

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

Specific 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 Noxious Weeds Recreation & Culture Street Lighting Transport (Other Roads & Bridges Funding) Other Total Specific Purpose

Total Grants

22 21 16 331 471 41 51 22 251 129 219 166 1,740 8,339

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

252 130 1,236 73 1,691 1,691

16 136 152 152

7,138 1,201 8,339

3,738 11,693 15,431

1,691 1,691

136 16 152

Grant Revenue is attributable to:

- Commonwealth Funding - State Funding - Other Funding

page 31

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 3. Income from Continuing Operations (continued) 2015 Operating

2014 Operating

2015 Capital

2014 Capital

86 134 149 369

263 24 31 318

-

-

888 17 1,538 2,443

22 1,615 112 1,749

1,635 256 286 2,177

2,644 36 2,680

2,812

2,067

2,177

2,680

11,151

17,498

3,868

2,832

Actual 2015

Actual 2014

Unexpended at the Close of the Previous Reporting Period

1,981

2,749

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

3,174

847

$ '000

(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: Public Works Flood Damage 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:

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

(487) 2,687

(1,615) (768)

4,668

1,981

3,229 1,439 4,668

949 1,032 1,981

page 32

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 4. Expenses from Continuing Operations $ '000

Notes

Actual 2015

Actual 2014

12,190 3,088 1,127 386 539 168 45 398 244 18,185 (864)

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

(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

17,321

17,698

222

220

3,054 3,054

2,496 2,496

(b) Borrowing Costs (i) Interest Bearing Liability Costs Interest on Loans 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

(108) (108)

65 65

2,946

2,561

14,435 92 84

26,229 45 75

36 191 110

22 298 147

(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 Payment (2)

TOTAL MATERIALS & CONTRACTS

84

49

15,032

26,865 page 33

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Notes

Actual 2015

Actual 2014

49 35 84 84

59 16 75 75

84 84

49 49

(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

- Audit & review of financial statements: Council's Auditor - Auditors Remuneration - Council's Internal Auditor Remuneration for audit and other assurance services Total Auditor Remuneration 2. Operating Lease Payments are attributable to:

Other

Impairment Costs $ '000

Notes

Depreciation/Amortisation

Actual 2015

Actual 2014

Actual 2015

Actual 2014

-

-

1,873 269 50 429 352 341

1,349 259 46 365 344 317

7,258 318 185 213 1,039 1,029 34 27 13,417 -

5,260 246 100 207 1,028 1,003 22 37 10,583 -

13,417

10,583

(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 Asset Reinstatement Costs 9 & 26 Total Depreciation & Impairment Costs less: Impairments (to)/from ARR [Equity] 9a

TOTAL DEPRECIATION & IMPAIRMENT COSTS EXPENSED

-

-

(10,806) (10,806) 10,806

-

page 34

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Notes

Actual 2015

Actual 2014

333 24 97 123 98 938 642 249 280

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

2,784

3,209

Actual

Actual

757 (991) (234)

1,006 (1,193) (187)

(e) Other Expenses Other Expenses for the year include the following: 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) Electricity & Heating Insurance Street Lighting Telephone & Communications

TOTAL OTHER EXPENSES

Note 5. Gains or Losses from the Disposal of Assets 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

-

(9) (9)

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

1,000 (989) 11

1,414 (678) 736

NET GAIN/(LOSS) ON DISPOSAL OF ASSETS

(223)

540

* 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

11

736

11

736

page 35

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

$ '000

Notes

2015

2015

2014

2014

Actual Current

Actual Non Current

Actual Current

Actual Non Current

3,415

-

6,116

-

12,000 15,415

-

8,000 14,116

-

12,000 12,000

-

6,000 989 6,989

-

27,415

-

21,105

-

15,415

-

14,116

-

12,000 12,000

-

5,989 1,000 6,989

-

Cash & Cash Equivalents (Note 6a) Cash on Hand and at Bank Cash-Equivalent Assets 1 - Short Term Deposits Total Cash & Cash Equivalents

Investments (Note 6b) - Long Term Deposits - Equity Linked Notes/Capital Protected Notes Total Investments

TOTAL CASH ASSETS, CASH EQUIVALENTS & INVESTMENTS 1

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

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

6(b-i)

b. "Held to Maturity"

6(b-ii)

Investments

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

page 36

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 6b. Investments (continued) 2015

2015

2014

2014

$ '000

Actual Current

Actual Non Current

Actual Current

Actual Non Current

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

5,989 6,000 (989) 1,000 12,000

-

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

-

Total

12,000 12,000

-

989 5,000 5,989

-

Note 6(b-ii) Reconciliation of Investments classified as "Held to Maturity" Balance at the Beginning of the Year Additions Transfers from/(to) "At Fair Value" Balance at End of Year

1,000 (1,000) -

-

1,000 1,000

-

-

1,000 1,000

-

Comprising: - Equity Linked Notes - Other Long Term Financial Assets

Comprising: - Other Long Term Financial Assets

Total

-

page 37

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

$ '000

Total Cash, Cash Equivalents and Investments

2015

2015

2014

2014

Actual Current

Actual Non Current

Actual Current

Actual Non Current

27,415

-

21,105

-

17,275 7,052 3,088 27,415

-

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

-

Opening Balance

Transfers to Restrictions

2,928 803 147 3,878

11,400 243 11,643

(13,642) (13,642)

686 1,046 147 1,879

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

110 140 157 9,899 138 130 2,418 1,123 1,444 15,559 27,202

(7,849) (38) (474) (8,361) (22,003)

722 310 407 2,999 138 92 3,100 5,740 1,444 444 15,396 17,275

attributable to:

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

2015 $ '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 Specific Purpose Unexpended Grants

(D) (D) (D) (F) Specific Purpose Unexpended Grants-Water Fund (F) Specific Purpose Unexpended Grants-Sewer Fund (F) Water Supplies (G) Sewerage Services (G) Domestic Waste Management (G) Northern Regional Library External Restrictions - Other Total External Restrictions

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).

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 38

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 6c. Restricted Cash, Cash Equivalents & Investments - Details (continued) 2015 $ '000

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

Opening Balance

Transfers to Restrictions

Transfers from Restrictions

Closing Balance

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

1,299 30 137 50 60 115 667 880 140 16 11 27 324 342 4,098

(70) (92) (701) (130) (163) (300) (13) (4) (6) (334) (1,832) (146) (3,791)

1,499 930 137 150 115 12 83 1,039 1,261 7 140 80 18 50 47 611 80 201 592 7,052

18,821

31,300

(25,794)

24,327

page 39

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 7. Receivables $ '000

Notes

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

2015 Current Non Current

2014 Current Non Current

1,839 99 2,399 38

-

2,105 286 2,833 79

-

86 870 336 71 5,738

-

41 2,360 95 7,799

-

less: Provision for Impairment

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

TOTAL NET RECEIVABLES

(139) (116) (255)

-

(290) (120) (410)

-

5,483

-

7,389

-

202 1,409

-

197 1,784

-

443 222 2,276

-

454 156 2,591

-

3,207

-

4,798

-

5,483

-

7,389

-

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

Notes on Debtors above: (i) Rates & Annual Charges Outstanding are secured against the property. (ii) Doubtful Rates Debtors are provided for where the value of the property is less than the debt outstanding.

An allowance for other doubtful debts is made when there is objective evidence that a receivable is impaired. (iii) Interest was charged on overdue rates & charges at 8.50% (2014 9.00%).

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

page 40

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 8. Inventories & Other Assets $ '000

Notes

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

2015 Current Non Current

2014 Current Non Current

1,672 1,548 3,220

-

145 1,443 1,588

-

77 77

-

468 468

-

3,297

-

2,056

-

Water Stores & Materials Prepayments Total Water

115 115

-

105 1 106

-

Sewerage Stores & Materials Total Sewerage

115 115

-

105 105

-

230 3,067 3,297

-

211 1,845 2,056

-

Other Assets Prepayments Total Other Assets

TOTAL INVENTORIES / OTHER ASSETS

Externally Restricted Assets

Domestic Waste Management Nil Other Nil Total Externally Restricted Assets Total Internally Restricted Assets Total Unrestricted Assets TOTAL INVENTORIES & OTHER ASSETS

page 41

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 8. Inventories & Other Assets (continued) $ '000

2015 Current Non Current

2014 Current Non Current

Other Disclosures (a) Details for Real Estate Development Industrial/Commercial Total Real Estate for Resale

1,672 1,672

-

145 145

-

1,527 145 1,672 1,672

-

145 145 145

-

145 1,527 1,672

-

145 145

-

(Valued at the lower of cost and net realisable value)

Represented by:

Development Costs Other Properties - Book Value Total Costs Total Real Estate for Resale Movements: Real Estate assets at beginning of the year

- Purchases and other costs - Other Total Real Estate for Resale

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

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

page 42

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 9a. Infrastructure, Property, Plant & Equipment Asset Movements during the Reporting Period as at 30/6/2014

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

At

At

Cost

Fair Value

as at 30/6/2015

Accumulated Dep'n

Carrying

Impairment

Reinstatement Costs for Impaired Assets

Asset Additions

Value

WDV of Asset Disposals

Depreciation Expense

WIP Transfers

Adjustments & Transfers

-

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

10,538 3,054 951 -

-

12,373 5 1,299 242 438 13

1,526 199 18 40 3

-

(873) -

(1,873) (269) (50) -

335 (5) 152 (39) 155 (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

20 339 959 40 60 212 2,996

-

(118) -

(429) (352) (341) -

41 (41) 30 (220) 49 (142) 78 (7) 351 (724)

(3) -

-

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

125 16,587 226 283 75 58 19 881 972 39 13

-

-

(7,258) (318) (185) (213) (1,039) (1,029) (34)

167 (167) 58 (58) 998 (998) -

(24) -

-

365

1

-

364

-

-

-

-

3,265 66

1,638 21

-

1,627 45

7 2

(504) (11)

-

669,481

187,587

-

481,894

25,699

(515)

Revaluation Revaluation Decrements Increments to Equity to Equity (ARR) (ARR)

-

At

At

Cost

Fair Value

Accumulated Dep'n

Carrying

Impairment

Value

-

-

23,494 4,704 221 1,585 3

12,006 3,323 1,002 -

-

11,488 1,381 221 583 3

-

-

8,948 4 4,538 36,846 39 33,020 16,600 5,503

7,473 5,797 2,985 -

-

8,948 4 4,538 29,373 39 27,223 13,615 5,503

-

19,646 652 747 -

-

330,395 22,636 49,644 10,445 21,045 521 74,957 4,461 55,916 140 1,195

93,363 5,430 2,584 7,754 31,496 28,595 448

-

237,032 22,636 44,214 7,861 13,291 521 43,461 4,461 27,321 140 747

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)

(7,581)

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

Other Assets:

- Other

-

-

-

-

-

-

365

1

-

364

(25) (2)

-

-

-

-

-

2,785 55

1,680 21

-

1,105 34

(13,417)

-

21,045

-

710,065

203,958

-

506,107

Reinstatement, Rehabilitation & Restoration Assets (refer Note 26):

- Tip Assets - Quarry Assets

TOTAL INFRASTRUCTURE, PROPERTY, PLANT & EQUIP.

(991)

(27)

(7,581)

Additions to Buildings & Infrastructure Assets are made up of Asset Renewals ($15.950M) and New Assets ($9.749M).

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.

page 43

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Actual

Actual

2015

Class of Asset

2014

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

-

380

281

99

-

372

261

111

Office Equipment

-

86

67

19

-

75

64

11

Furniture & Fittings

-

7

6

1

-

7

6

1

- Operational Land

-

1,211

-

1,211

-

1,211

-

1,211

- Community Land

-

5

-

5

-

5

-

5

Land

Buildings

-

89

20

69

-

89

19

70

Infrastructure (WIP)

-

4,461

-

4,461

-

3,638

-

3,638

Infrastructure Total Water Supply

-

74,852

31,469

73,670

29,982

81,091

31,843

43,383 49,248

-

-

-

79,067

30,332

43,688 48,735

Plant & Equipment

-

304

120

184

-

294

101

193

Office Equipment

-

28

12

16

-

28

10

18

Furniture & Fittings

-

1

-

1

-

1

-

1

-

860

-

860

-

860

-

860

Buildings

-

61

12

49

-

61

11

50

Other Structures

-

50

10

40

-

50

9

41

Infrastructure (WIP)

-

142

-

142

-

1,099

-

1,099

Infrastructure Total Sewerage Services

-

55,865

28,592

-

53,070

27,485

-

57,311

28,746

27,273 28,565

-

55,463

27,616

25,585 27,847

-

138,402

60,589

77,813

-

134,530

57,948

76,582

Sewerage Services

Land - Operational Land

TOTAL RESTRICTED I,PP&E

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

Notes

Actual 2015

Actual 2014

-

10,806 10,806

-

10,806

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)

page 44

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Notes

2015 Current Non Current

2014 Current Non Current

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

3,122

-

3,751

-

370 1,273 350 459 5,574

-

340 463 503 918 5,975

-

1,159 1,159

52,502 52,502

1,058 1,058

41,261 41,261

1,661 387 2,409 119

89 -

1,522 364 2,407 131

89 -

Borrowings Loans - Secured 1 Total Borrowings

Provisions Employee Benefits;

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

Asset Remediation/Restoration (Future Works)

4,576

89

4,424

89

2,000 6,576

1,504 1,593

1,500 5,924

2,619 2,708

13,309

54,095

12,957

43,969

26

Total Provisions

Total Payables, Borrowings & Provisions

(i) Liabilities relating to Restricted Assets 2015 Current Non Current

2014 Current Non Current

Externally Restricted Assets

631 692 1,323

9,944 3,232 13,176

527 301 828

9,149 3,374 12,523

1,323 11,986

13,176 40,919

828 12,129

12,523 31,446

13,309

54,095

12,957

43,969

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 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Actual 2015

Actual 2014

2,785 2,785

2,896 2,896

(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 2014

Class of Provision Annual Leave Sick Leave Long Service Leave Other Leave (enter deta Asset Remediation

TOTAL

Opening Balance as at 1/7/14

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

2015 Additional Decrease due to Provisions Payments

912 9 390 132 1,443

(937) (13) (436) (163) (1,549)

Remeasurement effects due to Discounting

164 27 48 19 (615) (357)

Unused amounts reversed

Closing Balance as at 30/6/15

-

1,661 387 2,498 119 3,504 8,169

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 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Notes

Actual 2015

Actual 2014

15,415 15,415

14,116 14,116

5,807

4,169

13,417 223

10,583 (540)

(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

(615)

(56) 65

2,061 (155) (105) 391 (629) 30 810 (612) 152 -

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

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

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

20,884

15,022

page 47

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Notes

Actual 2015

Actual 2014

10 75 85

10 75 85

8 8

6 6

(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 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 12. Commitments for Expenditure $ '000

Notes

Actual 2015

Actual 2014

5,051 26,972 1,024 90 100,576 15,259 6,800 35,987 7,807 199,566

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

44,567 105,175 49,824 199,566

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

114,094 53,667 1,046 414 5,174 17,200 7,971 199,566

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

(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 Unexpended Grants Internally Restricted Reserves Unexpended and New Loans (to be raised) Other Funding Total Sources of Funding

page 49

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Notes

Actual 2015

Actual 2014

83 286 369

49 344 393

(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

page 50

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 13a(i). Statement of Performance Measurement - Indicators (Consolidated) Amounts 2015

$ '000

Indicator 2015

Prior Periods 2014 2013

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)

2,162 53,662

4.03%

1.20%

3.91%

42,511 57,530

73.89%

68.48%

51.08%

16,414 9,201

1.78x

1.70

2.29

18,525 4,004

4.63x

3.94

4.84

1,799 29,410

6.12%

7.31%

7.85%

27,415 3,675

7.46 mths

4.23

3.97

(excl. Capital Grants & Contributions)

2. Own Source Operating Revenue Ratio Total continuing operating revenue (1) (excl. 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 Principal Repayments (from the Statement of Cash Flows) + Borrowing 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 + 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 the net share of interests in joint ventures & associates.

(2)

Refer Notes 6-8 inclusive.

Also excludes any real estate & land for resale not expected to be sold in the next 12 months

(3)

Refer to Note 10(a).

(4)

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

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Purpose of Operating Performance Ratio

5.0%

Commentary on 2014/15 Result 2014/15 Ratio

4.03%

Ratio %

4.0% 3.0% 2.0%

4.03%

3.91%

1.0%

1.20%

1.10%

0.0%

2012

2013

―――

Benchmark:

2014

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

Council is reporting a strong consolidated surplus this financial year. This is reflected in a ratio of 4.03%. This strong result is attributable to the Water and Sewer operations of Council (see ratio by fund).

Work will continue to ensure General fund operations improve in future years.

2015

Ratio is within Benchmark

Minimum >=0.00%

Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 2. Own Source Operating Revenue Ratio 100% 90%

Purpose of Own Source Operating Revenue Ratio

Ratio is outside Benchmark Commentary on 2014/15 Result 2014/15 Ratio

73.89%

Ratio %

80% 70% 60% 50% 40% 30%

62.55%

20%

68.48%

73.89%

2014

2015

51.08%

10% 0%

2012

Benchmark:

2013

―――

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

Ratio is within Benchmark

Minimum >=60.00%

Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 3. Unrestricted Current Ratio

Purpose of Unrestricted Current Ratio

3.0

Council again exceeded the benchmark of 60% for this ratio and expects to continue doing so in future years.

Ratio is outside Benchmark Commentary on 2014/15 Result 2014/15 Ratio

1.78x

Ratio (x)

2.5 2.0 1.5

2.55

1.0

2.29 1.70

1.78

2014

2015

0.5 0.0

2012

Benchmark:

2013

―――

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

Minimum >=1.50

Source for Benchmark: Code of Accounting Practice and Financial Reporting #23

Council continues to maintain a satisfactory level of working capital to ensure it can meet short term debt obligations.

Ratio is within Benchmark Ratio is outside Benchmark

page 52

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 13a(ii). Local Government Industry Indicators - Graphs (Consolidated) Commentary on 2014/15 Result

4. Debt Service Cover Ratio

Purpose of Debt Service Cover Ratio

6.0

2014/15 Ratio

4.63x

Ratio (x)

5.0 4.0 3.0 2.0

4.84

4.26

4.63

3.94

1.0 0.0

2012

Benchmark:

2013

―――

2014

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

2015

Ratio is within Benchmark

Minimum >=2.00

Source for Benchmark: Code of Accounting Practice and Financial Reporting #23

10%

This ratio was expected to decline in the current financial year as a result of additional debt to be taken on for projects.

Deferral of some projects has seen postponement of loan draw downs, resulting in a higher than expected ratio.

These loans will be drawn down next financial year to complete projects.

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

9%

Purpose of Rates & Annual Charges Outstanding Ratio

Ratio is outside Benchmark Commentary on 2014/15 Result 2014/15 Ratio

6.12%

Ratio %

8% 7% 6% 5% 4%

9.15%

7.85%

3%

7.31%

6.12%

2% 1% 0%

2012

2013

2014

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

Continued efforts in debt recovery has seen a very positive trend in this ratio over the previous 3 years. Provision for doubtful debts was reduced by $151,000 for the current year - without this reduction the ratio would have been 5.6%. Efforts will continue in order to maintain this ratio at current levels.

2015

6. Cash Expense Cover Ratio

Purpose of Cash Expense Cover Ratio

10.0 9.0

Commentary on 2014/15 Result 2014/15 Ratio

7.46 mths

Ratio (mths)

8.0 7.0 6.0 5.0 4.0

7.46

3.0 2.0 1.0 0.0

3.74

3.97

4.23

2012

2013

2014

Benchmark:

―――

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

Council continues to maintain a strong cash position. Deferral of some projects saw a higher than expected cash balance at year end however these projects will be undertaken in the coming financial year.

2015

Minimum >=3.00

Source for Benchmark: Code of Accounting Practice and Financial Reporting #23

Ratio is within Benchmark Ratio is outside Benchmark

page 53

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Water 2015

Sewer 2015

General 5 2015

21.29%

28.81%

-0.19%

22.36%

-0.31%

-1.25%

90.97%

92.04%

70.15%

99.22%

97.89%

63.23%

7.65x

9.42x

1.78x

5.25

17.71

1.70

3.47x

6.17x

4.78x

4.21

3.37

3.95

12.79%

16.59%

4.59%

12.40%

19.08%

5.85%

14.83 mths

36.25 mths

5.15 mths

4.97

26.21

3.18

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) (excl. 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 Principal Repayments (from the Statement of Cash Flows) + Borrowing 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 + 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 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 14. Investment Properties $ '000

Notes

Actual 2015

Actual 2014

-

-

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

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

-

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 2015 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 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

2015

2014

2015

2014

15,415

14,116

15,415

14,116

12,000 5,483 32,898

5,989

12,000 5,483 32,898

5,989

5,574 53,661 59,235

1,000 7,389

28,494

5,975 42,319

48,294

5,574 53,661 59,235

1,000 7,389

28,494

5,975 42,319

48,294

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

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

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

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

page 56

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 2015 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

271

271

(271)

(271)

9 212

9 212

(9) (212)

(9) (212)

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

page 57

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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: 2015

2015

Rates &

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

Rates & Annual Charges

Other Receivables

Current

Current

> 5 years overdue

> 90 days overdue

(iii) Movement in Provision for Impairment of Receivables Balance at the beginning of the year - amounts already provided for & written off this year Balance at the end of the year

2014

Annual

Other

Annual

Other

Charges

Receivables

Charges

Receivables

0% 100% 100%

94% 6% 100%

0% 100% 100%

94% 6% 100%

Rates &

(ii) Ageing of Receivables - value

2014 Rates &

Rates &

Annual

Other

Annual

Other

Charges

Receivables

Charges

Receivables

1,839 1,839

3,665 234 3,899

2,105 2,105

5,328 366 5,694

2015

2014

410 (155) 255

410 410

page 58

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

350

5,224

-

-

-

-

-

5,574

5,574

-

6,387

3,812

16,312

3,772

3,732

56,794

90,809

53,661

350

11,611

3,812

16,312

3,772

3,732

56,794

96,383

59,235

503

5,472

-

-

-

-

-

5,975

5,975

-

3,430

3,758

3,758

3,682

3,682

78,112

96,422

42,319

503

8,902

3,758

3,758

3,682

3,682

78,112

102,397

48,294

2015 Trade/Other Payables Loans & Advances Total Financial Liabilities

2014 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

2015

2014

Carrying

Average

Carrying

Average

Value

Interest Rate

Value

Interest Rate

5,574 53,661 59,235

0.0% 6.9%

5,975 42,319 48,294

0.0% 7.0%

page 59

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 16. Material Budget Variations $ '000

Council's Original Financial Budget for 14/15 was adopted by the Council on 25 June 2015.

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

2015 Budget

2015 Actual

REVENUES Rates & Annual Charges

27,206

27,009

User Charges & Fees

10,254

13,262

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

(197) 3,008

(1%)

U

29%

F

Fees received for work undertaken on State Roads for the Roads and Maritime Services (RMS) for ordered work exceeded the original budget by approximately $2.8m. The value of these works is unknown at the time of budget adoption.

Interest & Investment Revenue

944

823

(121)

(13%)

U

338

31%

F

The fall in interest rates saw a reduction in interest revenue for the financial year.

Other Revenues

1,079

1,417

The favourable result in this area primarily relates to higher than expected insurance premium refunds of approximately $170,000 and increase in general sales.

9,718 11,151 1,433 Operating Grants & Contributions 15% There was no advance payment made in the 2013/14 financial year. This was paid in the 2014/15 financial year.

The original budget was resolved by Council prior to advice received regarding the advance payment.

Capital Grants & Contributions

3,780

3,868

88

2%

F

F

page 60

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

EXPENSES Employee Benefits & On-Costs Borrowing Costs

2015 Budget

2015 Actual

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

17,773

17,321

452

3%

F

3,546

2,946

600

17%

F

Loan funded projects were commenced late in the financial year. Draw down of funds was deferred until projects commenced to minimise interest expense for the year.

13,005 15,032 (2,027) U Materials & Contracts (16%) Additional expenditure in this area largely relates to work Council is contracted to underte on State Roads for the Roads and Maritime Services (RMS) for ordered works. Revenue generated from this work is recognised under User Charges and Fees.

10,936 13,417 (2,481) Depreciation & Amortisation (23%) This is the first year the 2014 revaluation of transport infrastructure assets impacting depreciation expense.

U

Other Expenses

2,925

2,784

141

5%

F

Net Losses from Disposal of Assets

1,000

223

777

78%

F

An audit is being undertaken on engineering infrastructure assets. Capitalisation of reseals and rehabilitation works on roads have been treated as work in progress in the 2015 financial year. This work will be capitalised next financial year and any loss on disposal will be recognised at that time.

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

15,735

20,884

5,149

32.7%

F

Increased cashflow from operating activites is attributed to a better than expected result for the year in addition to a significant reduction in outstanding debt as a result of ongoing efforts in debt recovery.

(36,333) (30,927) 5,406 Cash Flows from Investing Activities (14.9%) Capital works budget was not fully expended. Imcomplete projects will carry over to next financial year.

Cash Flows from Financing Activities

17,303

11,342

(5,961)

(34.5%)

F

U

Proceeds from borrowings down on budget. Loans for carry over projects not drawn down on in current financial year.

These loans will be drawn down as required in next financial year.

page 61

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

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

612

87

-

23

-

-

722

Total S94 Revenue Under Plans

612

87

-

23

-

-

722

S64 Contributions

420

283

-

14

-

-

717

100

(817)

1,032

370

-

37

-

-

1,439

600

(2,039)

Total Contributions

Cumulative

Projections

500

(1,222)

-

-

-

S94A LEVIES - UNDER A PLAN CONTRIBUTION PLAN NUMBER XX

Projections Contributions

PURPOSE

Opening Balance

Public Amenities Total

received during the Year Cash

Non Cash

Expenditure

Internal

Held as

earned

during

Borrowing

Restricted

Future

still

(under)

Borrowings

in Year

Year

(to)/from

Asset

income

outstanding

Funding

due/(payable)

612

87

-

23

-

-

722

612

87

-

23

-

-

722

Exp

Cumulative

Interest

-

Over or

Internal

-

-

page 62

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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.

The Local Government Superannuation Scheme 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.

Council has a contingent liability to contribute further equity in the event of the erosion of the Company's 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 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 30/6/08.

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. Interests in Other Entities Council has no interest in any Controlled Entities, Joint Arrangements or Associates. page 64

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

Notes

Actual 2015

Actual 2014

115,945 5,807

111,776 4,169

121,752

115,945

(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

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

353,146

339,573

353,146

339,573

339,573 13,464 353,146

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

353,146

339,573

(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 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 21. Financial Result & Financial Position by Fund Income Statement by Fund

Actual 2015

Actual 2015

Actual 2015

Actual 2015

Other

Water

Sewer

General1

969 12 471 1,452

1,579 3,798 185 249 157 421 6,389

2,671 395 214 191 170 130 3,771

22,938 8,510 412 977 10,353 3,317 46,507

801 225 267 159 1,452

877 675 1,617 1,037 372 4,578

470 233 416 1,032 322 2,473

15,173 1,813 13,321 11,348 1,931 223 43,809

Operating Result from Continuing Operations

-

1,811

1,298

2,698

Net Operating Result for the Year

-

1,811

1,298

2,698

Net Operating Result attributable to each Council Fund

-

1,811

1,298

2,698

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

-

1,390

1,168

$ '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

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

Total Expenses from Continuing Operations

1

(619)

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

page 66

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements as at 30 June 2015

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

Actual 2015

Actual 2015

Actual 2015

Actual 2015

Other

Water

Sewer

General1

348 348

4,594 1,611 115 6,320

6,386 665 115 7,166

4,435 12,000 2,859 2,990 77 22,361

TOTAL ASSETS

4,292 4,292 4,640

49,248 49,248 55,568

28,565 28,565 35,731

424,002 424,002 446,363

LIABILITIES Current Liabilities Payables Borrowings Provisions Total Current Liabilities

3,270 72 284 3,626

152 205 274 631

416 143 133 692

1,736 739 5,885 8,360

3,147 3,147 6,773

9,944 9,944 10,575

3,232 3,232 3,924

36,179 1,593 37,772 46,132

(2,133)

44,993

31,807

400,231

565 (2,698)

10,782 34,211

20,294 11,513

90,111 310,120

(2,133)

44,993

31,807

400,231

$ '000

ASSETS Current Assets Cash & Cash Equivalents Investments Receivables Inventories Other Total Current Assets Non-Current Assets Infrastructure, Property, Plant & Equipment Total Non-Current Assets

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

page 67

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

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

Note 23. Events occurring after the Reporting Date Events that occur between the end of the reporting period (ending 30 June 2015) and the date when the financial statements are "authorised for issue" have been taken into account in preparing these statements.

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

Accordingly, the "authorised for issue" date is 30/10/15.

Events that occur after the Reporting Period represent one of two types: (i) Events that provide evidence of conditions that existed at the Reporting Period These financial statements (and the figures therein) incorporate all "adjusting events" that provided evidence of conditions that existed at 30 June 2015. (ii) Events that provide evidence of conditions that arose after the Reporting Period These financial statements (& figures therein) do not incorporate any "non-adjusting events" that have occurred after 30 June 2015 and which are only indicative of conditions that arose after 30 June 2015.

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

Note 24. Discontinued Operations Council has not classified any of its Operations as "Discontinued".

Note 25. Intangible Assets Actual

Actual

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 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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)

2015

2014

3,091 413

3,527 592

3,504

4,119

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: Effect of a change in discount rates used in PV calculations Effect of a change in other calculation estimates used Amortisation of discount (expensed to borrowing costs) Total - Reinstatement, rehabilitation and restoration provision

4,119 (507) (108)

3,504

3,886 168 65

4,119

page 69

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 27. Fair Value Measurement $ '000

The Council measures the following asset and liability classes at fair value on a recurring basis: - Infrastructure, Property, Plant and Equipment - Financial Assets & 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 2015 Recurring Fair Value Measurements Financial Assets Investments - "Held for Trading" Receibables Cash on Hand and at Bank Total Financial Assets Financial Liabilities Loans / Advances Payables Total Financial Liabilities Infrastructure, Property, Plant & Equipment Plant & Equipment Office Equipment Furniture & Fittings Land Operational Land Community Building Non Specialised Building Specialised Other Structures Roads

Date of latest Valuation

Quoted prices in active mkts

30/06/15 30/06/15 30/06/15

12,000 5,483 15,415 32,898

30/06/15 30/06/15

30/06/15 30/06/15 30/06/15 30/06/14 30/06/14 30/06/14 30/06/14 30/06/14 30/06/15

53,661 5,574 59,235

11,488 1,602 587 8,952 4,538 29,411 27,223 19,118 -

Significant observable inputs

-

-

Significant unobservable inputs

-

12,000 5,483 15,415

32,898

-

-

59,235

-

259,668

11,488 1,602 587 8,952 4,538 29,411 27,223 19,118 259,668

-

53,661 5,574

(continued on the next pageâ&#x20AC;Ś)

page 70

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 2015 Recurring Fair Value Measurements

Date of latest Valuation (continued) 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15

Infrastructure, Property, Plant & Equipment Bridges Footpaths Stormwater Drainage Water Supply Network Sewerage Network Other Infrastructure Other Assets RR & R Assets - Tip RR & R Assets - Quarry Total Infrastructure, Property, Plant & Equipment 2014

Financial Liabilities Loans / Advances Payables Total Financial Liabilities

364 103,283 Level 1

Date

Financial Assets Investments - "Held for Trading" - "Held to Maturity" Receivables Cash on Hand and at Bank Total Financial Assets

Quoted prices in active mkts

30/06/14 30/06/14 30/06/14 30/06/14

dd/mm/yy dd/mm/yy

Infrastructure, Property, Plant & Equipment Plant & Equipment 30/06/14 Office Equipment 30/06/14 Furniture & Fittings 30/06/14 Land Operational 30/06/14 Land Community 30/06/14 Building Non Specialised 30/06/14 Building Specialised 30/06/14 Other Structures 30/06/14 Roads 30/06/14 Bridges 30/06/14 Footpaths 30/06/14 Stormwater Drainage 30/06/14 Water Supply Network 30/06/14 Sewerage Network 30/06/14 Other Infrastructure 30/06/14 Other Assets 30/06/14 RR & R Assets - Tip 30/06/14 RR & R Assets - Quarry 30/06/14 Total Infrastructure, Property, Plant & Equipment

Quoted

6,000 8,000 7,799 6,116 27,915 42,319 5,975 48,294 12,378 1,541 451 9,050 4,389 28,935 27,447 24,205 364 108,760

Significant observable inputs

Significant unobservable inputs

44,215 7,861 13,812 47,922 27,461 746 1,105 34 402,824

506,107

Level 2

Level 3

Total

Significant

Significant

-

-

989 -

989 -

-

-

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

44,215 7,861 13,812 47,922 27,461 746 364 1,105 34

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

28,904 42,319 5,975

48,294 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 page 71

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

(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.

(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 and Receivables.

The Term Deposits (Held to Maturity), Cash at Bank and Receivables are reported at face value.

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.

page 72

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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) 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.

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 consumption 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.

The 2015 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 2015 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 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 - 1/7/13

-

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

-

Closing Balance - 30/6/14

-

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

-

Closing Balance - 30/6/15

-

184,920 15,258 (5,260) 35,589 85 230,592 16,712 (24) (7,258) 19,646 259,668

Bridges

Footpaths

23,472

5,063

102 (246) 20,978 -

395 (100) 2,405 -

44,306

7,763

226 (318) 44,214

283 (185) 7,861

Stormwater Drainage

13,958 141 (207) 13,892 133 (213) 13,812

Water Supply Network

Sewerage Other Network Infrastructure

44,211

26,127

1,478

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

867 (9) (1,003) 750 -

74 (22) (762) -

47,409

26,732

768

900 (1,039) 652 -

1,011 (1,029) 747 -

13 (34) -

47,922

27,461

747

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

371,462 19,278 (24) (10,076) 21,045 -

401,685

page 74

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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

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

Class Here

Class Here

Class Here

Class Here

Class Here

Opening Balance - 1/7/13

-

-

-

-

-

-

Purchases (GBV) Depreciation & Impairment

-

-

-

-

-

-

Closing Balance - 30/6/14

-

-

-

-

-

-

Purchases (GBV) Depreciation & Impairment

-

-

-

-

-

-

Closing Balance - 30/6/15

-

-

-

-

-

-

Tip Assets

1,496 165 (34) 1,627 7 (529) 1,105

Quarry

47 1 (3) 45 2 (13) 34

Total 1,543 166 (37)

1,672 9 (542)

1,139

page 75

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 (30/6/15) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E

Roads

259,688 Cost Approach

Unit Rates Asset Condition Useful Life

Bridges

44,215 Cost Approach

Unit Rates Asset Condition Useful Life

Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years

Any change in the component pricing and asset condition will have an impact on fair value

Any change in the component pricing and asset condition will have an impact on fair value

page 76

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 (30/6/15) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E (continued)

Footpaths

Stormwater Drainage

7,861 Cost Approach

Unit Rates Asset Condition Useful Life

13,812 Cost Approach

Unit Rates Asset Condition Useful Life

Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years

Any change in the component pricing and asset condition will have an impact on fair value

Any change in the component pricing and asset condition will have an impact on fair value

page 77

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 (30/6/15) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E (continued)

Water Supply Network

47,922 Cost Approach

Unit Rates Asset Condition Useful Life

Sewerage Network

27,461 Cost Approach

Unit Rates Asset Condition Useful Life

Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years

Any change in the component pricing and asset condition will have an impact on fair value

Any change in the component pricing and asset condition will have an impact on fair value

page 78

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 (30/6/15) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E (continued)

Other Infrastructure

747 Cost Approach

Unit Rates Asset Condition Useful Life

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

3% Inflation Rate

Tip

1,105 Cost Approach

Discount Future Cashflows

Any change in the future cost estimates and discount rate will have an impact on 3% Discount fair value Rate

page 79

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

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 (30/6/15) $'000

Valuation Technique/s

Unobservable Inputs

Range of Inputs (incl. probable)

Relationship of unobservable inputs to Fair Value

I,PP&E (continued)

3% Inflation Rate

Quarry

34 Cost Approach

Discount Future Cashflows

Any change in the future cost estimates and discount rate will have an impact on 3% Discount fair value Rate

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

page 80

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 28. Financial Review Amounts 2015

$ '000

Indicator 2015

Prior Periods 2014 2013

Further to the Note 13(a) Industry Performance Measures, Council monitors the following : 1. Council Graph 1 - Debt Service Ratio 4,112 49,110

Debt Service Cost Income from Continuing Operations

1. Council Graph 1 - Debt Service Ratio 15.0 %

Ratio %

13.0 %

8.4 %

Purpose of 1.

Council Graph 1 Debt Service Ratio

7.2 %

7.0 %

Commentary on 2014/15 Result 2014/15 Ratio

8.4 %

11.0 % 9.0 % 7.0 %

7.0 %

7.2 %

2013

2014

8.4 %

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

5.0 % 3.0 % 1.0 % -1.0 %

Council aims to maintain this ratio at around 10%. The ratio has increased on previous years as a result of borrowings for capital projects. The ratio will continue an upward trend as further new loans are drawn down to complete significant capital works on water and sewer infrastructure and waste management activities.

2015

page 81

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 28. Financial Review (continued) $ '000

Key Financial Figures of Council over the past 5 years (consolidated) 2015

2014

2013

2012

2011

Inflows: Rates & Annual Charges Revenue User Charges Revenue Interest & Investment Revenue (Losses) Grants Income - Operating & Capital Total Income from Continuing Operations

27,009 13,262 823 10,030 57,530

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

Sale Proceeds from I,PP&E New Loan Borrowings & Advances

757 12,400

1,006 9,105

543 1,030

1,193 -

635 6,825

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

17,321 2,946 15,032 51,723

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

Total Cash purchases of I,PP&E Total Loan Repayments (incl. Finance Leases)

25,157 1,058

27,123 959

16,940 876

17,700 807

16,347 680

Operating Surplus/(Deficit) (excl. Capital Income)

1,939

1,337

4,126

467

(1,789)

Financial Position Figures

2015

2014

2013

2012

2011

36,195 13,309 22,886

30,550 12,957 17,593

33,226 12,906 20,320

25,447 10,286 15,161

26,567 9,921 16,646

3,111

2,280

2,270

6,453

4,056

Cash & Investments - Unrestricted Cash & Investments - Internal Restrictions Cash & Investments - Total

3,088 7,052 27,415

2,284 6,745 21,105

1,131 11,490 23,262

1,283 7,217 16,358

2,800 10,347 22,901

Total Borrowings Outstanding

53,661

42,319

34,173

34,019

34,826

696,579

656,307

583,781

518,651

537,204

203,958

187,587

187,194

186,222

179,370

Financial Performance Figures

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%

71%

68%

64%

67%

Source: Published audited financial statements of Council (current year & prior year) page 82

Financial Statements 2015

Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015

Note 29. Council Information & Contact Details Principal Place of Business: 21 Auburn Street Moree NSW 2400 Contact Details Mailing Address: PO Box 420 Moree NSW 2400

Opening Hours: 9am to 5pm Monday to Friday

Telephone: Facsimile:

Internet: Email:

02 6757 3222 02 6752 3934

http://www.mpsc.nsw.gov.au council@mpsc.nsw.gov.au

Officers GENERAL MANAGER L Rodgers

Elected Members MAYOR K Humphries

RESPONSIBLE ACCOUNTING OFFICER L Rodgers

COUNCILLORS S Price R Brazel M Cikota C Gall B Munn J Tramby J von Drehnen T Zannes

PUBLIC OFFICER M Johnson AUDITORS Luka Group 2 River Road Dubbo

Other Information ABN: 46 566 790 582

page 83

page 84

page 85

page 86

page 87

page 88

page 89

page 90

page 91

page 92

Moree Plains Shire Council SPECIAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2015

Leading the Way to a Better Community

SPFS 2015

Moree Plains Shire Council Special Purpose Financial Statements for the financial year ended 30 June 2015

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 2015

Moree Plains Shire Council Income Statement of Council's Water Supply Business Activity for the financial year ended 30 June 2015

$ '000

Actual 2015

Actual 2014

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

1,579 3,737 61 185 157 249 5,968

1,589 4,271 49 130 49 206 6,294

877 675 1,617 1,037 14 372 4,592 1,376

1,071 564 1,746 1,027 14 455 4,877 1,417

421 1,797

1,417

Surplus (deficit) from ALL Operations before tax less: Corporate Taxation Equivalent (30%) [based on result before capital]

1,797 (413)

1,417 (425)

SURPLUS (DEFICIT) AFTER TAX

1,384

992

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

9,239 -

7,822 -

14 413

14 425

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

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

(14) (254) 10,782

(14) 9,239

4.2% -

4.1% -

1,384 (421) 963 482

992 992 496 page 3

SPFS 2015

Moree Plains Shire Council Income Statement of Council's Sewerage Business Activity for the financial year ended 30 June 2015

$ '000

Actual 2015

Actual 2014

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

2,671 350 45 214 170 191 3,641

2,379 421 1 197 53 155 3,206

470 233 416 1,032 13 322 2,486 1,155

688 242 760 1,004 9 13 470 3,186 20

130 1,285

16 36

1,285 (347)

36 (6)

939

30

19,141 -

19,105 -

13 347

13 6

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 less: - Tax Equivalent Dividend paid - Surplus dividend paid Closing Retained Profits

(13) (132) 20,294

(13) 19,141

Return on Capital % Subsidy from Council

4.9% -

0.9% 729

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

939 (130) 809 404

30 (16) 14 7 page 4

SPFS 2015

Moree Plains Shire Council Income Statement of Council's Other Business Activities for the financial year ended 30 June 2015 GWYDIR DAY CARE

MAX CENTRE

Category 2

Category 2

$ '000

Actual 2015

Actual 2014

Actual 2015

Actual 2014

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

634 12 471 1,117

580 12 319 911

335 335

319 319

801 36 163 34 1,034 83

683 10 111 30 834 77

189 104 125 418 (83)

194 142 137 473 (154)

83

77

(83)

(154)

83 (25)

77 (23)

(83) -

(154) -

58

54

(83)

(154)

403 -

326 -

162 -

316 -

25

23

-

-

-

-

-

-

-

-

-

-

486

403

79

162

11.1% -

17.0% -

3.3% -

1.2% 78

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

page 5

SPFS 2015

Moree Plains Shire Council Statement of Financial Position - Council's Water Supply Business Activity as at 30 June 2015

$ '000

Actual 2015

Actual 2014

ASSETS Current Assets Cash and cash equivalents Investments Receivables Inventories Other Non-current assets classified as held for sale Total Current Assets

4,594 1,611 115 6,320

1,655 1,981 105 1 3,742

49,248 49,248 55,568

48,732 48,732 52,474

152 205 274 631

118 177 232 527

9,944 9,944 10,575

9,149 9,149 9,676

44,993

42,798

10,782 34,211 44,993 -

9,239 33,559 42,798 -

44,993

42,798

Non-Current Assets Investments Receivables Inventories Infrastructure, property, plant and equipment Investments accounted for using equity method Investment property Intangible Assets 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 2015

Moree Plains Shire Council Statement of Financial Position - Council's Sewerage Business Activity as at 30 June 2015

$ '000

Actual 2015

Actual 2014

ASSETS Current Assets Cash and cash equivalents Investments Receivables Inventories Other Non-current assets classified as held for sale Total Current Assets

6,386 665 115 7,166

5,014 610 105 5,729

28,565 28,565 35,731

27,849 27,849 33,578

416 143 133 692

113 135 53 301

3,232 3,232 3,924

3,374 3,374 3,675

31,807

29,903

20,294 11,513 31,807 -

19,141 10,762 29,903 -

31,807

29,903

Non-Current Assets Investments Receivables Inventories Infrastructure, property, plant and equipment Investments accounted for using equity method Investment property Intangible Assets 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 2015

Moree Plains Shire Council Statement of Financial Position - Council's Other Business Activities as at 30 June 2015 GWYDIR DAY CARE

MAX CENTRE

Category 2

Category 2

Actual 2015

Actual 2014

Actual 2015

Actual 2014

326 326

740 740

22 22

30 1 31

1,068 1,068 1,394

512 512 1,252

3,224 3,224 3,246

3,307 3,307 3,338

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

3 22 284 309

3 20 206 229

3,267 50 3,317

3,207 48 3,255

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

554 554 863

576 576 805

2,593 2,593 5,910

2,643 2,643 5,898

531

447

(2,664)

(2,560)

486 45 531 -

403 44 447 -

79 (2,743) (2,664) -

162 (2,722) (2,560) -

531

447

(2,664)

(2,560)

$ '000

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

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

TOTAL EQUITY

page 8

SPFS 2015

Moree Plains Shire Council Special Purpose Financial Statements for the financial year ended 30 June 2015

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 2015

_

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015

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) &

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

 Australian Accounting Interpretations.

(where gross operating turnover is over $2 million)

The disclosures in these special purpose financial statements have been prepared in accordance with:

a. Moree Water Supplies

 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.

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.

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 (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.

Monetary Amounts Amounts shown in the financial statements are in Australian currency and rounded to the nearest one page 10

SPFS 2015

_

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015

Note 1. Significant Accounting Policies 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.

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 $432,000 of combined land values attracts 0%. From $432,001 to $2,641,000 the rate is 1.6% + $100. For the remaining combined land value that exceeds $2,641,000, 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.

The payment of taxation equivalent charges, referred in the Best Practice Management of Water Supply and Sewerage Guides to as a “Dividend for Taxation

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 reporting 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 The debt guarantee fee is designed to ensure that council business activities face “true” commercial borrowing costs in line with private sector competitors. page 11

SPFS 2015

_

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015

Note 1. Significant Accounting Policies 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.

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 2015 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

As a minimum, business activities should generate a return equal to the Commonwealth 10 year bond rate which is 3.02% at 30/6/15.

page 12

SPFS 2015

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015

Note 2. Water Supply Business Best Practice Management disclosure requirements 2015

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

14,175

(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

481,600

[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 2015, less the cumulative dividends paid for the 2 years to 30 June 2014 & 30 June 2013 2015 Surplus

963,200

991,900 -

2014 Surplus 2014 Dividend

2013 Surplus 2013 Dividend

127,750

2,030,000

74,900 -

(iv)

Maximum dividend from surplus [least of (i), (ii) and (iii) above]

127,750

(v)

Dividend actually paid from surplus [refer below for required pre-dividend payment Criteria]

253,880

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 2015

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015

Note 2. Water Supply Business Best Practice Management disclosure requirements (continued) 2015

Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)

National Water Initiative (NWI) Financial Performance Indicators NWI F1

Total Revenue (Water)

$'000

5,785

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)

%

74.79%

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

49,148

$'000

2,751

$'000

77

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)

%

4.05%

[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

421

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 2015

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015

Note 3. Sewerage Business Best Practice Management disclosure requirements 2015

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

12,231

(iii)

Amounts payable for Tax Equivalents [lesser of (i) and (ii)]

12,231

(iv)

Amounts actually paid for Tax Equivalents

13,000

2. Dividend from Surplus (i)

404,250

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)

110,079

(iii)

Cumulative surplus before dividends for the 3 years to 30 June 2015, less the cumulative dividends paid for the 2 years to 30 June 2014 & 30 June 2013

853,300

2015 Surplus

808,500

2014 Surplus 2014 Dividend

14,000 -

2013 Surplus 2013 Dividend

30,800 -

(iv)

Maximum dividend from surplus [least of (i), (ii) and (iii) above]

110,079

(v)

Dividend actually paid from surplus [refer below for required pre-dividend payment Criteria]

132,479

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 2015

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015

Note 3. Sewerage Business Best Practice Management disclosure requirements (continued) 2015

Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)

National Water Initiative (NWI) Financial Performance Indicators NWI F2

Total Revenue (Sewerage)

$'000

3,959

$'000

28,381

$'000

1,753

$'000

1,978

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)

%

4.11%

[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

130

$'000

9,744

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)

%

0.44%

Community Service Obligations (NWI F25) x 100 divided by Total Income (NWI F3)

NWI F16

Capital Expenditure (Water & Sewerage)

$'000

2,055

Acquisition of Fixed Assets (w16 + s17)

NWI F19

Economic Real Rate of Return (Water & Sewerage)

%

4.08%

[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

386

Dividend paid from surplus (2(v) of Note 2 + 2(v) of Note 3)

NWI F21

Dividend Payout Ratio (Water & Sewerage)

%

15.43%

Dividend (NWI F20) x 100 divided by Net Profit after tax (NWI F24)

page 16

SPFS 2015

Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015

Note 3. Sewerage Business Best Practice Management disclosure requirements (continued) 2015

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)

%

3.31%

Overdraft (w36 + s37) + Borrowings (w38 + s39) - Cash & Investments (w30 + s31) x 100 divided by [Total Assets (w35 + s36) - Total Liabilities (w40 + s41)]

NWI F23

6

Interest Cover (Water & Sewerage) Earnings before Interest & Tax (EBIT) divided by Net Interest Earnings before Interest & Tax (EBIT):

3,040

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:

509

Interest Expense (w4a + s4a) - Interest Income (w9 + s10)

NWI F24

Net Profit After Tax (Water & Sewerage)

$'000

2,504

$'000

43

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 2015

Leading the Way to a Better Community

Special Schedules 2015

Moree Plains Shire Council Special Schedules for the financial year ended 30 June 2015

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)

4 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

15

- Notes to Special Schedules No. 3 & 5 - Special Schedule No. 7

Report on Infrastructure Assets (as at 30 June 2015)

16

- Special Schedule No. 8

Financial Projections

n/a

- Special Schedule No. 9

Permissible Income Calculation

22

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 2015

Moree Plains Shire Council Special Schedule No. 1 - Net Cost of Services for the financial year ended 30 June 2015

$'000 Function or Activity

Expenses from.

Continuing.

Operations.

Income from continuing operations Non Capital.

Net Cost. of Services.

Capital.

931

-

-

(931)

Administration

7,564

680

-

(6,884)

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

707 521 283 115 1,626

331 513 29 873

11 11

(365) (8) (254) (115) (742)

311

76

-

(235)

Environment Noxious Plants and Insect/Vermin Control Other Environmental Protection Solid Waste Management Street Cleaning Drainage Stormwater Management Total Environment

306 340 3,111 153 3,910

273 107 4,083 4,463

117 117

(33) (116) 972 (153) 670

Community Services and Education Administration & Education Social Protection (Welfare) Aged Persons and Disabled Children's Services Total Community Services & Education

576 79 14 1,039 1,708

121 10 1 1,117 1,249

-

(455) (69) (13) 78 (459)

Total Housing and Community Amenities

297 64 249 558 738 1,906

191 269 460

-

(106) (64) (249) (289) (738) (1,446)

Water Supplies

4,583

5,387

421

1,225

Sewerage Services

2,450

3,561

130

1,241

Governance

Health

Housing and Community Amenities Public Cemeteries Public Conveniences Street Lighting Town Planning Other Community Amenities

page 2

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 1 - Net Cost of Services (continued) for the financial year ended 30 June 2015

$'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.

(540) (229) (286) (13) 326 (1,329) (1,499) 145 (3,425)

714 229 308 20 568 1,345 1,538 102 4,824

16 22 7 16 37 2 100

158 894 2 245 1,299

Fuel & Energy

-

-

-

-

Agriculture

-

-

-

-

163 200 363

-

-

(163) (200) (363)

1,774 3 7,599 1,107 2,589 53 38 181 376 6,047 19,767

5 1,538 637 6,339 8,519

675 559 400 256 1,890

(1,094) (3) (7,040) 831 (2,589) (53) (38) 75 261 292 (9,358)

16 1,764 1,780

666 666

-

(16) (1,098) (1,114)

51,723

26,034

3,868

(21,821)

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

27,628

27,628

-

-

-

51,723

53,662

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,

3,868

5,807

Interest on Investments (excl. Ext. Restricted Assets) & Interest on overdue Rates & Annual Charges

page 3

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 2(a) - Statement of Long Term Debt (all purpose) for the financial year ended 30 June 2015

$'000 Principal outstanding at beginning of the year

Other Long Term Debt Ratepayers Advances Government Advances Finance Leases Deferred Payments Total Long Term Debt

Total Debt

From Revenue

Sinking Funds

Principal outstanding

Debt redemption during the year

Transfers Interest to Sinking applicable for Year Funds

Current

Non Current

1,058 1,058

41,261 41,261

42,319 42,319

12,400 12,400

1,058 1,058

-

-

-

-

-

-

-

-

1,058

41,261

42,319

12,400

1,058

-

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

Total

at the end of the year Current

Non Current

3,054 3,054

1,159 1,159

52,502 52,502

53,661 53,661

-

-

-

-

-

-

3,054

1,159

52,502

53,661

Total

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). page 4

Special Schedules 2015

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 2015

$'000

Actuals 2015

Actuals 2014

A

Expenses and Income Expenses

1.

Management expenses a. Administration b. Engineering and Supervision

871 85

1,188 102

Operation and Maintenance expenses - Dams & Weirs a. Operation expenses b. Maintenance expenses

319 65

369 92

- Mains c. Operation expenses d. Maintenance expenses

738

712

- Reservoirs e. Operation expenses f. Maintenance expenses

11

12

- Pumping Stations g. Operation expenses (excluding energy costs) h. Energy costs i. Maintenance expenses

25 21

2 40 34

357 41 131 181

350 53 114 154

18 19 -

30 34 -

1,017 20

1,007 20

675 -

564 -

4,594

4,877

2.

- Treatment j. Operation expenses (excluding chemical costs) k1. Energy costs k2. Chemical costs l. Maintenance expenses - Other m. Operation expenses n. Maintenance expenses o. Purchase of water 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 2015

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 2015 Actuals 2015

Actuals 2014

Residential charges a. Access (including rates) b. Usage charges

1,036 3,074

1,062 3,258

Non-residential charges a. Access (including rates) b. Usage charges

544 799

527 1,144

-

-

185

130

10. Other income 10a. Aboriginal Communities Water and Sewerage Program

176 -

124 -

11. Grants a. Grants for acquisition of assets b. Grants for pensioner rebates c. Other grants

421 22 -

25 -

12. Contributions a. Developer charges b. Developer provided assets c. Other contributions

134 -

24 -

6,391

6,294

-

-

15. Operating Result

1,797

1,417

15a. Operating Result (less grants for acquisition of assets)

1,376

1,417

$'000

Income 6.

7.

8.

Extra charges

9.

Interest income

13. Total income 14. Gain (or loss) on disposal of assets

page 6

Special Schedules 2015

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 2015

$'000

B

Actuals 2015

Actuals 2014

77 -

1 226 -

177 -

145 -

-

-

254

372

-

-

719 -

2,640 -

-

-

719

2,640

3,885 840 -

3,899 218 529 25

Capital transactions Non-operating expenditures

16. Acquisition of Fixed Assets a. New Assets for Improved Standards b. New Assets for Growth c. Renewals d. Plant and equipment 17. Repayment of debt a. Loans b. Advances c. Finance leases 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

24. Number of assessments a. Residential (occupied) b. Residential (unoccupied, ie. vacant lot) c. Non-residential (occupied) d. Non-residential (unoccupied, ie. vacant lot)

36

25. Number of ETs for which developer charges were received 26. Total amount of pensioner rebates (actual dollars)

$

ET

42,415

$

ET

43,815

page 7

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 3 - Water Supply Cross Subsidies for the financial year ended 30 June 2015

$'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 2014/15 (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 2015

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 2015 Actuals Current

Actuals Non Current

Actuals Total

ASSETS 30. Cash and investments a. Developer charges b. Special purpose grants c. Accrued leave d. Unexpended loans e. Sinking fund f. Other

310 138 1,046 3,100

-

310 138 1,046 3,100

31. Receivables a. Specific purpose grants b. Rates and Availability Charges c. User Charges d. Other

202 1,289 120

-

202 1,289 120

115

-

115

33. Property, plant and equipment a. System assets b. Plant and equipment

-

49,148 100

49,148 100

34. Other assets

-

-

-

35. Total assets

6,320

49,248

55,568

152

-

152

205 -

9,944 -

10,149 -

39. Provisions a. Tax equivalents b. Dividend c. Other

274

-

274

40. Total liabilities

631

9,944

10,575

5,689

39,304

44,993

$'000

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

10,782 34,211

44. TOTAL EQUITY

44,993

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

80,710 (31,562) 49,148 page 9

Special Schedules 2015

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 2015

$'000

Actuals 2015

Actuals 2014

A

Expenses and Income Expenses

1.

Management expenses a. Administration b. Engineering and Supervision

447 67

370 94

Operation and Maintenance expenses - Mains a. Operation expenses b. Maintenance expenses

350

260

- Pumping Stations c. Operation expenses (excluding energy costs) d. Energy costs e. Maintenance expenses

95 73 189

107 104 231

- 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

55 193 14 3 217

46 275 1 3 218

50 -

220 -

1,013 19

986 18

233 -

242 -

3,018

3,175

2.

- Other l. Operation expenses m. 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 10

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 5 - Sewerage Service Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2015

$'000

Actuals 2015

Actuals 2014

2,158

1,920

Income 6.

Residential charges (including rates)

7.

Non-residential charges a. Access (including rates) b. Usage charges

514 350

458 418

Trade Waste Charges a. Annual Fees b. Usage charges c. Excess mass charges d. Re-inspection fees

236 -

159 -

-

-

10. Interest income

214

197

11. Other income 11a. Aboriginal Communities Water & Sewerage Program

531 -

-

12. Grants a. Grants for acquisition of assets b. Grants for pensioner rebates c. Other grants

130 21 -

22 -

13. Contributions a. Developer charges b. Developer provided assets c. Other contributions

149 -

46 -

4,303

3,220

8.

9.

Extra charges

14. Total income 15. Gain (or loss) on disposal of assets

-

(9)

16. Operating Result

1,285

36

16a. Operating Result (less grants for acquisition of assets)

1,155

36

page 11

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 5 - Sewerage Service Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2015 Actuals 2015

Actuals 2014

1,978 -

54 74 -

135 -

125 -

-

-

2,113

253

21. Proceeds from disposal of assets

-

-

22. Borrowing utilised a. Loans b. Advances c. Finance leases

-

-

23. Transfer from sinking fund

-

-

24. Totals

-

-

3,484 593 -

3,496 161 520 25

$'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

25. Number of assessments a. Residential (occupied) b. Residential (unoccupied, ie. vacant lot) c. Non-residential (occupied) d. Non-residential (unoccupied, ie. vacant lot)

36

26. Number of ETs for which developer charges were received 27. Total amount of pensioner rebates (actual dollars)

$

ET

38,730

$

ET

39,462

page 12

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 5 - Sewerage Service Cross Subsidies for the financial year ended 30 June 2015

$'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 2014/15 (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 2015

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 2015 Actuals Current

Actuals Non Current

Actuals Total

407 92 147 5,740

-

407 92 147 5,740

32. Receivables a. Specific purpose grants b. Rates and Availability Charges c. User Charges d. Other

443 221 1

-

443 221 1

33. Inventories

115

-

115

34. Property, plant and equipment a. System assets b. Plant and equipment

-

28,381 184

28,381 184

35. Other assets

-

-

-

36. Total Assets

7,166

28,565

35,731

416

-

416

143 -

3,232 -

3,375 -

40. Provisions a. Tax equivalents b. Dividend c. Other

133

-

133

41. Total Liabilities

692

3,232

3,924

6,474

25,333

31,807

$'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

42. NET ASSETS COMMITTED EQUITY 42. Accumulated surplus 44. Asset revaluation reserve

20,294 11,513

45. TOTAL EQUITY

31,807

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

57,007 (28,626) 28,381 page 14

Special Schedules 2015

Moree Plains Shire Council Notes to Special Schedule No.'s 3 & 5 for the financial year ended 30 June 2015

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

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets as at 30 June 2015

$'000

Asset Class

Buildings

Asset Category Council Offices / Administration Centres Council Houses Libraries Cultural Facilities Other Buildings Other sub total

Other Structures Other Structures sub total Roads

Sealed Roads Surface Sealed Roads Structure Unsealed Roads Bridges Footpaths Kerb and Gutter Carparks Other sub total

Estimated cost to bring up to a satisfactory standard refer (1)

Required Annual Maintenance refer (2)

Actual Maintenance 2014/15 refer (3)

Written Down Value (WDV) refer (4)

24 24

165 24 48 40 10 492 779

28 21 23 49 22 488 631

12,877 1,655 2,775 3,018 1,346 34,925 56,596

1% 0.7%

98% 98.9%

-

341 341

196 196

13,615 13,615

7% 7.1%

93% 92.9%

716 6,490 129 186 7,521

2,110 178 2,439 86 110 164 10 68 5,165

2,110 178 1,913 86 110 164 10 68 4,639

25,775 99,565 98,065 44,215 7,861 11,864 312 1,450 289,107

24%

38%

24%

71%

0%

21%

16%

70%

39%

24%

19%

Assets in Condition as a % of WDV 1

2

3 refer (4) & (5)

4

5

100%

0%

100%

0%

100%

0%

100%

0%

100%

0% 0% 0.3%

0% 0.0%

0% 0.1%

0.0%

0.0%

0% 0.0%

32%

4%

2%

5%

0%

0%

53%

25%

0%

14%

0%

0%

31%

6%

0%

40%

37%

2%

1%

0%

64%

36%

0%

0%

14% 14.7%

64% 48.5%

23% 27.4%

0% 9.2%

0% 0.2%

page 16

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) as at 30 June 2015

$'000 Estimated cost to bring up to a satisfactory standard refer (1)

Required Annual Maintenance refer (2)

Actual Maintenance 2014/15 refer (3)

Written Down Value (WDV) refer (4)

Asset Class

Asset Category

Water Supply Network

Dams/Weirs Mains Reservoirs Treatment sub total

-

155 325 394 164 1,038

64 741 11 154 970

3,643 12,536 23,871 3,411 43,461

Mains Pumping Station/s Treatment sub total

-

551 197 281 1,029

350 164 203 717

15,907 4,419 6,995 27,321

Sewerage Network

Assets in Condition as a % of WDV 1

2

3 refer (4) & (5)

4

5

8%

35%

24%

20%

13%

8%

20%

39%

20%

13%

8%

35%

32%

15%

10%

0% 7.4%

35% 30.7%

32% 33.3%

20% 17.3%

13% 11.4%

26%

7%

47%

10%

10%

26%

7%

40%

17%

10%

26% 26.0%

7% 7.0%

50% 46.6%

17% 12.9%

0% 7.4%

page 17

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) as at 30 June 2015

$'000

Asset Class

Asset Category

Stormwater Drainage

Other sub total

Estimated cost to bring up to a satisfactory standard refer (1)

Required Annual Maintenance refer (2)

Actual Maintenance 2014/15 refer (3)

Written Down Value (WDV) refer (4)

421 421

213 213

265 265

13,291 13,291

7,966

8,565

7,418

443,391

TOTAL - ALL ASSETS

Assets in Condition as a % of WDV 1

2

3 refer (4) & (5)

4

5

7% 7.0%

78% 78.0%

8% 8.0%

4% 4.0%

3% 3.0%

12.4%

52.9%

24.3%

8.6%

1.8%

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

Excellent

2

Good

3

Average

4

Poor

5

Very Poor

No work required (normal maintenance) Only minor maintenance work required Maintenance work required Renewal required Urgent renewal/upgrading required

6

Condition

7

Condition

8

Condition

9

Condition

10

Condition

Description here…

Description here…

Description here…

Description here…

Description here…

page 18

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) for the financial year ended 30 June 2015

$ '000

Amounts 2015

Indicator 2015

Prior Periods 2014 2013

Infrastructure Asset Performance Indicators Consolidated 1. Building, Infrastructure & Other Structures Renewals Ratio Asset Renewals (Building, Infrastructure & Other Structures) (1) Depreciation, Amortisation & Impairment

142.44%

216.60%

129.53%

1.79%

2.56%

6.00%

7,418 8,565

0.87

0.79

0.66

24,193 13,417

1.80

2.45

1.38

15,950 11,198

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

7,966 444,138

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, infrastructure & Other Structure assets only.

(2)

Written Down Value

page 19

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) for the financial year ended 30 June 2015

250%

1. Building, Infrastructure & Other Structures Renewals Ratio

Commentary on 2014/15 Result Purpose of Asset Renewals Ratio

2014/15 Ratio

142.44%

Ratio %

200% 150% 216.60%

100% 50% 0%

131.53%

129.53%

2012

2013

142.44%

2014

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

2015

Benchmark: ――― Minimum >=100.00% Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 Purpose of Infrastructure Backlog Ratio

2. Infrastructure Backlog Ratio 12.0%

Ratio %

10.0% 8.0% 6.0%

11.0%

4.0%

6.0%

2.0% 0.0%

2012

2013

2.6%

1.8%

2014

2015

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

Benchmark: ――― Maximum <0.02 Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 Purpose of Asset Maintenance Ratio

1.20

Ratio (x)

1.00 0.80 0.60 0.20 0.00

0.51

2012

0.66

2013

0.79

0.87

2014

2015

Compares actual vs. required annual asset maintenance. A ratio above 1.0 indicates Council is investing enough funds to stop the Infrastructure Backlog growing.

Benchmark: ――― Minimum >1.00 Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 Purpose of Capital Expenditure Ratio

3.00

Ratio (x)

2.50 2.00 1.00 0.50 0.00

2.45 1.38

1.38

2012

2013

2014

Commentary on 2014/15 Result 2014/15 Ratio

1.79%

This ratio continues to improve, with the majority of the backlog in the unsealed roads area. As detailed in Council's Fit for the Future submission backlog works will no longer be undertaken on gravel roads allowing them to revert to natural surface roads. The backlog figure in this schedule will continue to reduce as gravel roads become reclassified to natural surface roads over the next three years.

Ratio is within Benchmark Ratio is outside Benchmark

2014/15 Ratio

0.87 x

While this ratio continues to improve there remains a shortfall in maintenance funding over several asset classes. This will continue to be addressed and improved into the future.

Ratio is within Benchmark Ratio is outside Benchmark Commentary on 2014/15 Result

4. Capital Expenditure Ratio

1.50

Ratio is within Benchmark Ratio is outside Benchmark

Commentary on 2014/15 Result

3. Asset Maintenance Ratio

0.40

This ratio continues to be high due to significant capital works on the road network and the finalisation of the Moree Artesian Acquatic Centre project. Expected to reduce in future years.

1.80

2015

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.

Benchmark: ――― Minimum >1.10 Source for Benchmark: Code of Accounting Practice and Financial Reporting #23

2014/15 Ratio

1.80 x

Significant investment in Council's existing assets and the construction of new assets has seen this ratio remain high. This ratio will continue to decrease as major projects are completed.

Ratio is within Benchmark Ratio is outside Benchmark page 20

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) for the financial year ended 30 June 2015

$ '000

Water 2015

Sewer 2015

General(1) 2015

77.29%

60.54%

159.08%

221.60%

68.59%

236.63%

0.00%

0.00%

2.13%

0.00%

0.00%

3.05%

0.93

0.70

0.88

0.94

0.68

0.78

0.07

1.92

1.95

0.22

0.13

2.99

Infrastructure Asset Performance Indicators

By Fund 1. Building, Infrastructure & Other Structures Renewals Ratio Asset Renewals (Building, Infrastructure & Other Structures) (2) 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, infrastructure & Other Structure assets only.

(3)

Written Down Value

page 21

Special Schedules 2015

Moree Plains Shire Council Special Schedule No. 9 - Permissible Income Calculation for the financial year ended 30 June 2016 Calculation 2014/15

$'000

Calculation 2015/16

Notional General Income Calculation (1) Last Year Notional General Income Yield Plus or minus Adjustments (2) Notional General Income

a b c = (a + b)

20,582 (13) 20,569

20,967 20,967

Permissible Income Calculation Special variation percentage (3) or Rate peg percentage or Crown land adjustment (incl. rate peg percentage)

d

expiring Special variation amount plus Special variation amount or plus Rate peg amount or plus Crown land adjustment and rate peg amount sub-total

g

less

(or minus) last year's Carry Forward Total less Valuation Objections claimed in the previous year sub-total plus

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

e f

0.00% 2.30% 0.00%

0.00% 2.40% 0.00%

473 21,043

503 21,470

15 15

91 91

o=k+n

21,058

21,561

p

20,967 91

21,257 304

h = d x (c-g) i=cxe j=cxf k = (c+g+h+i+j) l m n = (l + m)

q=o-p r s t=q+r-s

91

(16) 288

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.

6

Carry forward amounts which are in excess (an amount that exceeds the permissible income) require Ministerial approval by order published in the NSW Government Gazette in accordance with section 512 of the Local Government Act 1993.

The OLG will extract these amounts from councilsâ&#x20AC;&#x2122; Special Schedule 9 in the Financial Data Return (FDR) to administer this process. page 22

page 23

page 24