general purpose financial statements for the financial … · · 2014-12-04general purpose...

General Purpose Financial Statements

For the Financial Year ended

30th June 2012

CITY of BOTANY BAY

General Purpose Financial Reportsfor the year ended 30th June 2012

TABLE OF CONTENTSPage

Council Certificate [s 413 (2)(c)] 1

Principal Financial Statements

Income Statement 2Statement of Comprehensive Income 3Balance Sheet 4Statement of Changes in Equity 5Cash Flow Statement 6

Notes to, and forming part of, the Principal Financial Statements

Note 1 - Significant Accounting Policies N1Note 2 - Functions N7Note 3 - Income N9Note 4 - Expenses N13Note 5 - Gain or Loss on Disposal of Assets N15Note 6 - Cash and Investment Securities N16Note 7 - Receivables N18Note 8 - Inventories & Other Assets N19Note 9 - Infrastructure, Property, Plant & Equipment N20Note 10 - Liabilities N25Note 11 - Reconciliation to Statement of Cash Flows N27Note 12 - Commitments for Expenditure N29Note 13 - Statement of Performance Measures N31Note 14 - Investment Property N32Note 15 - Financial Risk Management N33Note 16 - Material Budget Variations N35Note 17 - Statement of Developer Contributions N37Note 18 - Contingencies & Assets & Liabilities not Recognised N39Note 19 - Interests in Joint Ventures & Associates N41Note 20 - Revaluation Reserves & Retained Earnings N48

Auditors Report on the Financial Statements [s 417 (2)]

Auditors Report on the Conduct of the Audit [s 417 (3)]

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CITY OF BOTANY BAY

ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2OI2

STATEMENT BY COUNCILLORS AND MANAGEMENTMADE PURSUANT TO SECTION 413 (2Xc)

OF THE LOCAL GOVERNMENT ACT 1993 (as amended)

The attached Annual Financial Statements have been drawn up in accordance witho The Local Government Act 1993 (as amended) and the Regulations made

thereundero The Local Government Code of Accounting Practice and Financial Reportingo The Australian Accounting Standards and professional pronouncements

To the best of our knowledge and belief, these reportso Present fairly the Council's financial position and operating result for the year,

ando Accord with Council's accounting and other records

We are not aware of any matter that would render the reports false or misleading inany way.

Signed in accordance with a resolution of Council made on24 october 2012

I,/' \

t/ --n-'Q11'e'.Fge Lilrnastls

MAYOR

Lara KirchnerGENERAL MAI\AGER

ILLOR

r Ben Keneally

GaryRESPONSIBLE ACCOUNTING

OFFICER

Budget Actual Actual2012 2012 2011$'000 Notes $'000 $'000

INCOMERevenue:

27,734 Rates & Annual Charges 3 27,866 26,5566,149 User Charges & Fees 3 10,721 11,004

640 Investment Revenues 3 1,450 1,5614,287 Other Revenues 3 580 5904,819 Grants & Contributions - Operating 3 6,220 6,5123,390 Grants & Contributions - Capital 3 5,587 2,970

Other Income:100 Profit from Disposal of Assets 5 80 102

Profit from interests in Joint Ventures & Associates 19 - -

47,119 Total Income from Continuing Operations 52,504 49,295

EXPENSES20,135 Employee Benefits and oncosts 4 25,191 22,87118,794 Materials & Contracts 4 17,197 16,509

Borrowing Costs 4 - -3,853 Depreciation & Amortisation 4 5,435 5,743

Impairment 4 - -4,334 Other Expenses 4 4,064 4,248

Interest and investment losses 3 - -Loss from Disposal of Assets 5 - -Loss from interests in Joint Ventures & Associates 19 321 141

47,116 Total expenses from continuing operations 52,208 49,512

3OPERATING RESULT FROM CONTINUING OPERATIONS

296 (217)

Operating result from discontinued operations 24

3 NET OPERATING RESULT FOR YEAR 296 (217)

Attributable to:3 CITY of BOTANY BAY 296 (217)

Minority Interests 19

3 296 (217)

(3,387) Net operating result before capital grants and contributions

(5,291) (3,187)

This Statement is to be read in conjunction with the attached Notes.

CITY of BOTANY BAY

INCOME STATEMENTfor the year ended 30th June 2012

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2012 2011Notes $'000 $'000

Net operating result for year from Income Statement

296 (217)

Other comprehensive incomeRevaluation of infrastructure, property, plant & equipment

- -

Revaluation of available-for-sale investments - -Realised available-for-sale investments gains recognised in revenue

- -

Share of other comprehensive income - joint ventures & associates

- -

Impairment (expense) / recoupments offset to asset revaluation reserve

- -

Transfer to accumulated surplus on sale of revalued infrastructure, property, plant & equipment

- -

Land under roads recognised (de-recognised)

- -

Adjustment to correct prior period depreciation errors

- -

Total other comprehensive income - -

TOTAL COMPREHENSIVE INCOME 296 (217)

Attributable to:CITY of BOTANY BAY 296 (217)Minority Interests 19

$ 296 $ (217)

This Statement is to be read in conjunction with the attached Notes.

CITY of BOTANY BAY

STATEMENT OF COMPREHENSIVE INCOMEfor the year ended 30th June 2012


2012 2011Notes $'000 $'000

CURRENT ASSETSCash & cash equivalents 6 1,856 2,023 Investments 6 17,355 18,743 Receivables 7 4,653 4,877 Inventories 8 234 274 Other 8 - - Non-current assets held for sale 22

TOTAL CURRENT ASSETS 24,098 25,917

NON-CURRENT ASSETSInvestments 6 560 590 Receivables 7 393 404 Inventories 8 - - Infrastructure, Property, Plant & Equipment 9 287,284 284,684 Equity accounted investments 19 1,237 963 Investment Property 14 - - Intangible Assets 25

Other 8 - - TOTAL NON-CURRENT ASSETS 289,474 286,641 TOTAL ASSETS 313,572 312,558

CURRENT LIABILITIESPayables 10 9,441 9,523 Borrowings 10 - - Provisions 10 7,062 6,531 TOTAL CURRENT LIABILITIES 16,503 16,054

NON-CURRENT LIABILITIESPayables 10 - - Borrowings 10 - - Provisions 10 507 238 TOTAL NON CURRENT LIABILITIES 507 238 TOTAL LIABILITIES 17,010 16,292

NET ASSETS $ 296,562 296,266

EQUITYAccumulated Surplus 20 207,808 207,512 Revaluation Reserves 20 88,754 88,754 Council Equity Interest 296,562 296,266 Minority Equity Interest 19 - - TOTAL EQUITY $ 296,562 296,266

This Statement is to be read in conjunction with the attached Notes

CITY of BOTANY BAY

BALANCE SHEETas at 30th June 2012


CITY of BOTANY BAY

STATEMENT OF CHANGES IN EQUITYfor the year ended 30th June 2012

2012Retained Earnings

Asset Reval.

Reserve

Other Reserves

Council Equity

Interest

Minority Interest

Total

Note

Balance at end of previous reporting period 207,512 88,754 - 296,266 - 296,266

Effect of correction of errors in previous years on retained earnings

- - -

Effect of accounting policy changes on retained earnings - - -

Change in associated entities recognised 19

$'000

Change in associated entities recognised 19 - - - -

Restated opening balance 207,512 88,754 - 296,266 - 296,266

Net Operating Result for the year 296 296 - 296

Other comprehensive incomeRevaluation of infrastructure, property, plant & equipment 20 - - - - Revaluation of available-for-sale investments 20 - - - Realised available-for-sale investments gains recognised in revenue

20 - - -

Share of other comprehensive income - joint ventures & associates

- - - - associatesImpairment (expense) / recoupments offset to asset revaluation reserve

- - -

Transfer to retained earnings on sale of revalued infrastructure, property, plant & equipment

- - - -

Land under roads recognised (de-recognised)

20 - - - -

Adjustment to correct prior period depreciation errors - - - -

Total other comprehensive income - - - - - -

Transactions with owners as ownersCash Contributions by Outside Equity Interests 19 - - Cas Co t but o s by Outs de qu ty te estsCash Distributions to Outside Equity Interests 19 - - Other Adjustments to Outside Equity Interest 19 - -

Total transactions with owners as owners - - - - - -

Balance at end of the reporting period 207,808 88,754 - 296,562 - 296,562

2011Retained Earnings

Asset Reval.

Reserve

Other Reserves

Council Equity

Interest

Minority Interest

Total

Note

Balance at end of previous reporting period 207,729 88,754 296,483 296,483$'000

Effect of correction of errors in previous years on retained earnings

- - -

Effect of accounting policy changes on retained earnings - - - Change in associated entities recognised 19 - - - -

Restated opening balance 207,729 88,754 - 296,483 - 296,483

Net Operating Result for the year (217) (217) - (217)

Other comprehensive incomeRevaluation of infrastructure, property, plant & equipment 20 - - - - Revaluation of available-for-sale investments 20 - - - Realised available-for-sale investments gains recognised in revenue

20 - - - in revenueShare of other comprehensive income - joint ventures & associates

- - - -

Impairment (expense) / recoupments offset to asset revaluation reserve

- - -


- - - -

Land under roads recognised (de-recognised) 20 - - - - Adjustment to correct prior period depreciation errors - - - -

Total other comprehensive income - - - - - - Transactions with owners as owners

Cash Contributions by Outside Equity Interests 19 - - - Cash Distributions to Outside Equity Interests 19 - - - Other Adjustments to Outside Equity Interest 19 - - -

Total transactions with owners as owners - - - - - - Balance at end of the reporting period 207,512 88,754 - 296,266 - 296,266


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CITY of BOTANY BAY

CASH FLOW STATEMENTfor the year ended 30th June 2012

Budget Actual Actual2012 2012 2011$'000 CASH FLOWS FROM OPERATING ACTIVITIES Notes $'000 $'000

Receipts27,800 Rates & Annual Charges 27,801 25,623

6,049 User Charges & Fees 10,956 11,262 840 Investment Income 1,672 1,278

8,267 Grants & Contributions 9,406 10,633 Deposits and retentions received 1,547

4,308 Other operating receipts 1,562 2,349 Payments

(20,165) Employee Benefits and oncosts (24,992) (22,719) (14,879) Materials & Contracts (18,515) (18,397)

Borrowing Costs - Deposits and retentions refunded (705)

(1,067) Other operating payments (5,050) (4,926)

11,153 Net Cash provided by (or used in) Operating Activities

11 3,682 5,103

CASH FLOWS FROM INVESTING ACTIVITIESReceipts

250 Proceeds from sale of Infrastructure, Property, Plant & Equipment

317 143

Proceeds from sale of Investment PropertyProceeds from sale of Real Estate - Proceeds from sale of Investment Securities 2,518 1,247 Repayments from Deferred Debtors - Contributions to joint ventures by minority interests 19 - Distribution received from associated entities 19 -

Payments

(3,640) Purchase of Infrastructure, Property, Plant & Equipment

(5,089) (4,808)

Purchase of Investment PropertyPurchase of Real Estate - Purchase of Investment Securities (1,000) (1,000) Loans to Deferred Debtors - Distributions from joint ventures to minority interests 19 - Capital contributed to associated entities 19 (595) (486)

(3,390) Net Cash provided by (or used in) Investing Activities

(3,849) (4,904)

CASH FLOWS FROM FINANCING ACTIVITIESReceipts

Proceeds from Borrowings & Advances - Proceeds from Retirement Home Contributions -

PaymentsRepayments of Borrowings & Advances - Repayment of Finance Lease Liabilities - Repayment of Retirement Home Contributions -

- Net Cash provided by (or used in) Financing Activities

- -

7,763 Net Increase (Decrease) in cash held (167) 199

2,023 Cash Assets at beginning of reporting period 11 2,023 1,824 Change in associated entities recognised 1 - -

9,786 Cash Assets at end of reporting period 11 1,856 2,023



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CITY OF BOTANY BAY

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the year ended 30 June 2012

Note 1 - SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Preparation

1.1 Compliance with Australian equivalents to International Financial Reporting Standards This general purpose financial report has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS) as they apply to not-for-profit entities, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations, the NSW Local Government Act 1993 and regulations thereunder and the Local Government Code of Accounting Practice and Financial Reporting.

1.2 Compliance with International Financial Reporting Standards

AIFRS include certain specific provisions relating to not-for-profit entities that are not included in the International Financial Reporting Standards. In addition, Australian Accounting Standard AAS 27 Financial Reporting by Local Governments also applies. Except to the extent that these special provisions require, these financial statements comply with International Financial Reporting Standards.

1.3 Critical Accounting Estimates The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates, and requires management to exercise its judgement in applying Council’s accounting policies. The areas involving a higher degree of judgement or complexity, or cases where assumptions and estimates are significant to the financial statements are specifically referred to in the relevant sections of this Note. Nothing contained within this report may be taken to be an admission of any liability to any person under any circumstance.

2. The Local Government Reporting Entity

The City of Botany Bay is incorporated under the NSW Local Government Act 1993 (as amended) and has its principal place of business at 141 Coward Street, Mascot. These financial statements include the consolidated fund and other entities through which the Council controls resources to carry on its functions. In the process of reporting on the Council as a single unit, all transactions and balances between activity areas and controlled entities have been eliminated. The following Local Rate funds established pursuant to the Act are included:

Mascot Mainstreet Mascot Local Parking

Other joint ventures and associated entities in which Council is involved are included to the extent set out in Note 19.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the year ended 30 June 2012 Note 1 - Significant Accounting Policies (cont)

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2.1 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 monies 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 these monies. Trust monies and property subject to Council’s control have been included in these reports.

Trust monies and property held by Council but subject to the control of other persons have been excluded from these reports. A separate statement of moneys held in the Trust Fund is available for inspection at the Council Office by any person free of charge.

3. Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised when the Council obtains control over the assets comprising the revenue, or when the amount becomes an enforceable debt, whichever first occurs. Where grants, contributions and donations recognised as revenues during the reporting period were obtained on the condition that they be expended in a particular manner or used over a particular period, and those conditions were undischarged as at the reporting date, the amounts subject to those undischarged conditions are disclosed in these notes as restricted assets. Also disclosed is the amount of grants, contributions and receivables recognised as revenues in a previous reporting period which were obtained in respect of the Council's operations for the current reporting period.

4. Cash Assets and other Financial Instruments Cash Assets include all amounts readily convertible to cash on hand at Council’s option with an insignificant risk of changes in value with a maturity of three months or less from the date of acquisition. Receivables for rates and annual charges are secured over the subject land, and bear interest at rates determined in accordance with the Local Government Act 1993 (as amended) and the Regulations and Determinations made thereunder. Other receivables are generally unsecured and do not bear interest. Loans made to sporting and community groups at concessional interest rates are recognised at their nominal amounts; interest revenues foregone by the Council effectively being a reduction of interest revenue in the period to which it relates. All receivables are reviewed as at the reporting date and adequate provision made for amounts the receipt of which is considered doubtful. All financial instruments are recognised at fair value at the date of recognition. Financial instruments classified as loans and receivables and held-to-maturity are subsequently measured at amortised cost using the effective interest method. Other financial instruments classified as fair value through profit and loss and available-for-sale, are subsequently measured at fair value where an active market exists, or at cost. Details of classifications of financial instruments are given in Note 15.

5. Inventories Inventories held in respect of stores have been valued by using the weighted average cost on a continual basis, after adjustment for loss of service potential. Inventories held in respect of business undertakings have been valued at the lower of cost and net realisable value.

5.1 Real Estate Assets Developments Real Estate Assets developments have been classified as Inventory in accordance with AASB 102 and are valued at the lower of cost or net realisable value. Cost includes the costs of acquisition, development, borrowing and other costs incurred on financing of that acquisition and up to the time of sale. Any amount by which cost exceeds the net realisable value has been recognised as an expense. Revenues arising from the sale of property are recognised in the operating statement when settlement is completed.


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5.2 Other Real Estate held for resale

Properties not acquired for development, but which Council has decided to sell as surplus to requirements, are carried at the carrying value at the time of that decision. Certain properties, auctioned for non-payment of rates in accordance with Chapter 17 of the Local Government Act but which failed to meet the reserve set by Council and are available for sale by private treaty, are recorded at the lower of the unpaid rates and charges at the time of auction or the reserve set by Council. Holding costs in relation to these properties are recognised as an expense when incurred.

6. Infrastructure, Property, Plant & Equipment 6.1 Transitional Provisions

Council has elected not to recognise land under roads in accordance with the deferral arrangements under AASB 1045.

6.2 Recognition All non-current assets purchased or constructed are capitalised as the expenditure is incurred and depreciated as soon as the asset is held “ready for use”. Crown reserves, and improvements thereon, 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. Council included on Note 9 the transfer to Council from Sydney Ports Authority of an overhead rail bridge valued at $3,450,000, which was included as a capital contribution to income.

6.3 Materiality Assets with an economic life in excess of one year are only capitalised where the cost of acquisition exceeds materiality thresholds established by Council for each type of asset. In determining (and in annually reviewing) such thresholds, regard is had to the nature of the asset and its estimated service life. Examples of capitalisation thresholds applied during the year under review are provided in Note 9 to these accounts.

6.4 Valuation

Detail of valuations, methods and valuers are provided at Note 9. Council is adopting fair value for all asset classes on a staged basis in accordance with the requirements of the Code of Accounting Practice. Asset acquisitions subsequent to the most recent revaluation date are recognised at cost.

6.5 Depreciation of Non-Current Assets Other than land, all assets recognised are systematically depreciated over their useful lives in a manner which reflects the consumption of the service potential embodied in those assets.

Depreciation is recognised on a straight-line basis. Major depreciation periods for each class of asset are provided in Note 9 to these accounts. Depreciation periods for infrastructure assets have been estimated based on the best information available to Council, but appropriate records covering the entire life cycle of these assets are not available, and extreme care should be used in interpreting financial information based on these estimates.

6.6 Impairment Assets that have an indefinite useful life are not subject to depreciation and are reviewed annually for impairment. Assets that are subject to depreciation 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 (which is the higher of the present value of future cash inflows or value in use. For assets whose future economic benefits are not dependent on the ability to generate cash flows, and where the future economic benefits would be replaced if Council were deprived thereof, the value in use is the depreciated replacement cost. In assessing impairment for these assets, a rebuttable presumption is made that the current replacement cost exceeds the original cost of acquisition.


Page N4

6.7 Borrowing Costs Borrowing costs in relation to qualifying assets (net of offsetting investment revenue) have been capitalised in accordance with AASB 1023 Borrowing Costs. The amounts of borrowing costs recognised as an expense or as part of the carrying amount of qualifying assets are disclosed in Note 4, and the amount (if any) of interest revenue offset against borrowing costs in Note 3.

7. Payables 7.1 Goods & Services

Creditors are amounts due to external parties for the supply of goods and services and are recognised as liabilities when the goods and services are received. Creditors are normally paid 30 days after the month of invoice. No interest is payable on these amounts.

7.2 Payments Received in Advance & Deposits Amounts received from external parties in advance of service delivery, and security deposits held against possible damage to Council assets, are recognised as liabilities until the service is delivered or damage reinstated, or the amount is refunded as the case may be.

8 Borrowings Loans are carried at their principal amounts which represent the present value of future cash flows associated with servicing the debt. Interest is accrued over the period to which it relates, and is recorded as part of “Payables”.

9. Employee Benefits 9.1 Salaries, Wages & Compensated Absences

Liabilities for employees’ entitlements to salaries, wages and compensated absences expected to be paid or settled within 12 months of reporting date are accrued at nominal amounts (including payroll based oncosts) measured in accordance with AASB 119 Employee Benefits. Liabilities for employee benefits not expected to be paid or settled within 12 months are measured as the present value of the estimated future cash outflows (including payroll based oncosts) to be made in respect of services provided by employees up to the reporting date. Present values are calculated using government guaranteed securities rates with similar maturity terms.

No accrual is made for sick leave as Council experience indicates that, on average, sick leave taken in each reporting period is less than the entitlement accruing in that period, and this experience is expected to recur in future reporting periods. Council does not make payment for untaken sick leave.

9.2 Superannuation The Council makes employer superannuation contributions in respect of its employees to the Local Government Superannuation Scheme. The Scheme has two types of membership, each of which is funded differently. Accumulation Fund Members The accumulation fund receives both employer and employee contributions on a progressive basis. Employer contributions are normally based on a fixed percentage of employee earnings in accordance with Superannuation Guarantee Legislation (9% in 2011/12; 9% in 2010/11). No further liability accrues to the employer as the superannuation benefits accruing to employees are represented by their share of the net assets of the Fund.

Defined Benefit Members Council makes employer contributions to the defined benefits categories of the Scheme at rates determined by the Scheme's Trustee. The rate during the reporting period was 1.9 times members’ contributions (1.9 times members’ contributions in 2010/11). Employees also make member contributions to the Fund. As such, assets accumulate in the Fund to meet the member's benefits, as defined in the Trust Deed, as they accrue. The Fund’s Defined Benefit Plan is a multi-employer sponsored plan. As the Fund’s assets and liabilities are pooled and are not allocated by employer, the Actuary is unable to allocate benefit liabilities, assets and costs between employers. As provided by AASB 119.32(b), Council does not use defined benefit accounting for these contributions.


Page N5

The Trustees have advised that, as a result of the global financial crisis, an unrealised deficiency of assets over liabilities exists at 30 June 2012 in relation to all Councils involved in the Fund. The Trustees have significantly increased contributions rates from 1 July 2009, and a contingent liability has been reported in Note 18 to reflect a possible requirement for immediate payment to the scheme to correct the deficiency.

10. Construction Contracts Construction works undertaken by Council for third parties (principally the Roads & Traffic Authority for works on national and state highways) are generally on an agency basis where the third party reimburses Council for actual costs incurred, and usually do not extend beyond the reporting period. As there is no profit component, such works are treated as 100% completed. Reimbursements not received are recognised as receivables and reimbursements received in advance are recognised as “payments received in advance”.

11. Joint Ventures and Associated Entities Council participates in cooperative arrangements with other Councils for the provision of services and facilities. Council is a member of Metropool and United Independent Pools for the provision of insurance cover, and these joint ventures have been accounted for on Note 19 in accordance with the Australian Accounting Standards.

12. Leases Lease arrangements have been accounted for in accordance with AASB 117. In respect of finance leases, where Council substantially carries all of the risks incident to ownership, the leased items are initially recognised as assets and liabilities equal in amount to the present value of the minimum lease payments. The assets are disclosed as assets under lease, and are amortised to expense over the period during which the Council is expected to benefit from the use of the leased assets. Lease payments are allocated between interest expense and reduction of the lease liability, according to the interest rate implicit in the lease. In respect of operating leases, where the lessor substantially retains all of the risks and benefits incident to ownership of the leased items, lease payments are charged to expense over the lease term.

13. GST Implications

In accordance with UIG Abstract 1031 “Accounting for the Goods & Services Tax” Receivables and Creditors include GST receivable and payable. Except in relation to input taxed activities, revenues and operating expenditures exclude GST receivable

and payable. Non-current assets and capital expenditures include GST net of any recoupment. Amounts included in the Statement of Cash Flows are disclosed on a gross basis.

14. Budget Information The Statement of Financial Performance, Statement of Cash Flows and Note 2 provide budget information of revenues and expenditures by type and for each of the major activities of the Council. Budget figures presented are those approved by Council at the beginning of the financial year and do not include Council approved variations throughout the year. Short explanations of the most significant variations are given in Note 16, and further information of the nature and amount of all variations is available from the Council office upon request.


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15. Rounding

In accordance with the Code of Accounting Practice all amounts shown in the Financial Statements are in Australian currency and have been rounded to the nearest thousand dollars.

16. New Accounting Standards & UIG Interpretations Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2012 reporting period. AASB 1 First-time Adoption of Australian Accounting Standards AASB 3 Business Combinations AASB 5 Non-current Assets Held for Sale and Discontinued Operations AASB 7 Financial Instruments: Disclosures AASB 8 Operating Segments AASB 9 Financial Instruments AASB 101 Presentation of Financial Statements AASB 107 Statement of Cash Flows AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors AASB 110 Events after the Reporting Period AASB 118 Revenue AASB 119 Employee Benefits AASB 132 Financial Instruments: Presentation AASB 137 Provisions, Contingent Liabilities and Contingent Assets AASB 139 Financial Instruments: Recognition and Measurement AASB 140 Investment Property AASB 1031 Materiality AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4,

5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12]

AASB 2009-12 Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 1023 & 1032 and Interpretations 2, 4, 16, 1039 &1052]

AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASBs 3. 7, 121, 128, 131, 132 & 139]

AASB 2010-5 Amendments to Australian Accounting Standards [AASBs 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042]

AASB 2010-6 Amendments to Australian Accounting Standards [AASBs 1 & 7] AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 [AASBs 1, 3, 4,

5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023, & 1038 and Interpretations 2, 5, 10, 12, 19, & 127]

Interpretation 14 AASB 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

(Standards not affecting local government have been excluded from the above list.) Council is of the view that none of the above new standards or interpretations will affect any of the amounts recognised in the financial statements, but that they may impact certain information otherwise disclosed. The Australian Accounting Standards Board is currently reviewing AASB 1004 Contributions. It is anticipated that the changes resulting from this review may have a material effect on the timing of the recognition of grants and contributions, but the financial consequences cannot be estimated until a revised accounting standard is issued.

CITY of BOTANY BAY

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 30th June 2012for the year ended 30th June 2012

DE CREVENUES, EXPENSES AND ASSETS HAVE BEEN DIRECTLY ATTRIBUTED TO THE FOLLOWING FUNCTIONS & ACTIVITIES

Note 2 - FUNCTIONS

GRANTS INCLUDED IN

TOTAL ASSETS HELD

Operating result from continuing operations

Income from continuing operations Expenses from continuing operations

ORIGINAL BUDGET

ACTUAL ACTUALORIGINAL BUDGET

ACTUAL ACTUALORIGINAL BUDGET

ACTUAL ACTUAL

2012 2012 2011 2012 2012 2011 2012 2012 2011 2012 2011 2012 2011

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

GOVERNANCE - - - - - ADMINISTRATION 31,979 6,992 3,306 15,385 12,909 10,777 16,594 (5,917) (7,471) 4 40,460 43,142 PUBLIC ORDER & SAFETY 655 332 10 968 1,087 1,050 (313) (755) (1,040)

INCLUDED IN INCOME (CURRENT &

NON-CURRENT)

PUBLIC ORDER & SAFETY 655 332 10 968 1,087 1,050 (313) (755) (1,040)HEALTH 209 - 83 12 3 68 197 (3) 15 ENVIRONMENT 4,406 4,778 4,748 7,998 8,440 7,176 (3,592) (3,662) (2,428) 206 198 COMMUNITY SERVICES & EDUCATION

2,946 3,372 3,094 3,477 3,303 3,082 (531) 69 12 1,522 1,228 12,591 12,591

HOUSING & COMMUNITY AMENITIES

201 492 2,886 690 2,396 1,700 (489) (1,904) 1,186 184 107 28,033 28,033

WATER SUPPLIES - - - - -WATER SUPPLIES SEWERAGE SERVICES - - - - - RECREATION & CULTURE 1,672 1,827 1,553 8,005 9,594 9,674 (6,333) (7,767) (8,121) 232 291 60,375 58,926 FUEL & ENERGY - - - - - MINING, MANUFACTURING & CONSTRUCTION

4,029 2,659 1,166 2,266 2,515 2,312 1,763 144 (1,146)

TRANSPORT & COMMUNICATION

1,022 410 627 8,315 6,165 8,033 (7,293) (5,755) (7,406) 476 355 170,876 168,903 COMMUNICATIONECONOMIC AFFAIRS 4,430 4,772 5,475 5,499 - (1,045) (727)

TOTALS - FUNCTIONS 47,119 25,292 22,245 47,116 51,887 49,371 3 (26,595) (27,126) 2,624 2,179 312,335 311,595 JOINT VENTURES & ASSOCIATES

- - 321 141 - (321) (141) 1,237 963

GENERAL PURPOSE REVENUES

27,212 27,050 27,212 27,050 1,606 1,298

TOTALS 47,119 52,504 49,295 47,116 52,208 49,512 3 296 (217) 4,230 3,477 313,572 312,558

The above functions conform to those used by the Australian Bureau of Statistics and provide a basis for comparison with other Councils.

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CITY OF BOTANY BAY

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the year ended 30 June 2012

Note 2 (cont) - COMPONENTS OF FUNCTIONS The activities relating to Council functions are as follows: Administration

Costs relating to Council’s role as a component of democratic government, including elections, meetings and associated activities, area representation, and public disclosure and compliance, together with related administration costs, costs not otherwise attributed to functions.

Public Order & Safety

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

Health Administration and inspection, immunisations, food control, health centres, other.

Environment Noxious plants, insect & vermin control, environmental protection, solid waste management, street cleaning, drainage, stormwater management.

Community Services & Education Administration, education, migrant services, Aboriginal services, aged and disabled, family day care, child-care, youth services, other services to families and children, other community services.

Housing & Community Amenities Public cemeteries, public conveniences, street lighting, town planning, housing, other community amenities.

Water Supplies Sewerage Services Recreation & Culture

Public libraries, museums, art galleries, community centres, public halls, performing arts venues, other performing arts, sporting grounds and venues, swimming pools, parks and gardens, lakes, other sport and recreation.

Fuel & Energy Mining, Manufacturing & Construction

Building control, other.

Transport & Communication Roads and streets, bridges, footpaths, aerodromes, parking areas, bus shelters and services, water transport, works undertaken for Roads & Transport Authority, other.

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

CITY of BOTANY BAY

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 30th June 2012

Note 3 - INCOME

RATES & ANNUAL CHARGES 2012 2011$'000 $'000

Ordinary RatesResidential 8,144 8,059 FarmlandBusiness 14,393 13,465 Mi iMining

22,537 21,524 Special Rates

Water SuppliesSewerage ServicesEnvironmentalInfrastructureDrainageTown improvementParking 88 87 gMainstreet 88 87 TourismOther

176 174 Annual Charges

Domestic Waste Management 4,465 4,221 Water SupplySewerage ServicesDrainageStormwater Management 688 637Stormwater Management 688 637 Other Waste ManagementCoastal protectionSection 611 chargesOther

5,153 4,858 Total Rates & Annual Charges 27,866 26,556

USER CHARGES & FEESUser Chargesg

B/A School Fees 328 364 Long Day Care 1,374 1,415 Golf Course 469 458 Meals On Wheels 133 124 Contract Services 4,452 4,772 Other 18 25

6,774 7,158 Fees

Private WorksRTA Claims State RoadsRTA Claims - State RoadsBuilding services - otherPlanning & Building - regulatory 741 878 Inspection fees 77 148 Section 603 certificate ffes 51 44 Registration fees 2 25 Private Works 187 53 Restorations 410 411 Road Openings 105 57 Swimming Centre 402 417 Section 611 Charges 299 287 Rents and hire of Property 25 68 Advertising 676 531 Hire and Usage Fees 671 623 MuseumCemeteriesOther 301 304

3,947 3,846 Total User Charges & Fees 10,721 11,004

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CITY of BOTANY BAY


Note 3 - REVENUES (cont)2012 2011$'000 $'000

INVESTMENT REVENUESInterest receivable- overdue rates & charges 221 198 - cash & investments 1,010 1,058 - other 119 96 Fair value adjustments - investments 100 209 - otherImpairment losses - investments- otherAvailable for sale revaluation reserves realisedPremiums recognised on financial instrumentsAmortisation of discounts and premiumsGross Investment Revenues 1,450 1,561 Less: Interest deducted from capitalised borrowing costsT t l I t t R 1 450 1 561Total Investment Revenues 1,450 1,561

OTHER REVENUESFair value adjustments - investment propertyReversal of Revaluation DecrementsParking fines 326 221 Other fines

Council's net return on investments during both reporting periods has been materially affected by the potential loss in value ofcertain financial instruments, full details of which have been provided in Note 15.

Recycling Income (Non domestic)Rental income - Investment Property - Other property Insurance Claims 50 121 Commissions & Agency FeesComputer Bureau IncomeMiscellaneous sales 9 9 Miscellaneous charges - overdue rates & chargesLegal Fees Recovery 34 11 Adj t i t t i i t d titiAdjust interest in associated entities Note 19 - - Other 161 228 Total Other Revenues 580 590


CITY of BOTANY BAY


Note 3 - INCOME (cont)OPERATING CAPITAL

Notes 2012 2011 2012 2011GRANTS $'000 $'000 $'000 $'000General Purpose (Untied)

Financial Assistance 1,368 1,055

Individually significant item- additional Grants Commission payment

see below

Pensioner Rates Subsidies (General) 238 243Pensioner Rates Subsidies (General) 238 243 Specific Purpose

Pensioner Rates SubsidiesWater SuppliesSewerage ServicesDomestic Waste Management 104 107

Water SuppliesSewerage ServicesCommunity Centres 35 Street Lighting 244 238Street Lighting 244 238 Roads & Bridges 172 355 Employment & Training ProgramsHeritage & Cultural Services 194 105 Community Care Services 1,522 1,193 NSW Rural Fire ServicesRecreation 118 186 Other 270 198

Total Grants & Subsidies 3,940 3,174 290 541

Comprising:- Commonwealth funding 1,368 1,055 - State funding 2,572 2,119 290 541 - Other funding

3,940 3,174 290 541

- - - -

Individually significant itemOn 26 June 2011, Council received payment of the firstquarter instalment of the 2011/12 Grant Commission (FAG)grant. Similarly, on 28 June 2012Council received payment

CONTRIBUTIONS & DONATIONSDeveloper Contributions

Section 94 17 1,710 2,429 Section 94A levies 17

grant. Similarly, on 28 June 2012Council received paymentof the first two instalments of the 2012/13 grant. It is notknown when the timing of these grant payments will return tonormal schedule, but this will materially adversely affectCouncil's operating results as these amounts are recognisedas income upon receipt.

Section 94A levies 17

Planning agreements 17

RTA ContributionsSection 64

Water 17

Sewer 17

Stormwater 17

Subdivider dedications 11

PavingKerb & GutterKerb & GutterEx-Gratia Rates 2,280 3,338 Other 3,587 Total Contributions & Donations 2,280 3,338 5,297 2,429

TOTAL GRANTS & CONTRIBUTIONS 6,220 6,512 5,587 2,970


CITY of BOTANY BAY


Note 3 - INCOME (cont)

CONDITIONS OVER GRANTS & CONTRIBUTIONS

2012 2011

Grants and contributions which were obtained on the condition that they be expended for specified purposes or in a future period, but which are not yet expended in accordance with those conditions, are as follows:

2012 2011$'000 $'000

Grants Contrib Grants Contrib

Unexpended at the close of the previous reporting period 198 11,815 349 9,095

Section 94/64 Developer Contributions 317Roads Infrastructure

Less: expended during the current period from revenues recognised in previous reporting periods

Heritage & Cultural ServicesCommunity Care ServicesOther 349

Subtotal 0 317 349 0

Section 94/64 Developer Contributions 2,720Roads InfrastructureHeritage & Cultural Services

Plus: amounts recognised as revenues in this reporting period but not yet expended in accordance with the conditions

Heritage & Cultural ServicesCommunity Care ServicesOther 191 198

Subtotal 191 0 198 2,720

389 11,366 198 11,815

191 -449 -151 2,720Net increase (decrease) in restricted assets in the current

Unexpended at the close of this reporting period and held as restricted assets

OPERATING LEASES providing revenue to the Council

Council owns various buildings, plant and other facilities that are available for hire or lease (on a non-cancellablebasis whereever practicable) in accordance with the published revenue policy. Rentals received from such leases aredisclosed as rent and hire of non-investment property above.

Investment PropertyRentals received, and outgoings reimbursed, in relation to Investment Property are also included above. These leaseagreements, all of which are classified as operating leases, are made on a non-cancellable basis whereverpracticable.

2012 2011$'000 $'000

Not later than one yearLater than one year and not later than 5 yearsLater than 5 years

- -

Lessees commitments under all non-cancellable lease agreements, including those relating to Investmentproperty, are as follows:


CITY of BOTANY BAY


2012 2011EMPLOYEE BENEFITS AND ONCOSTS $'000 $'000

Salaries and Wages 18,435 17,207 Travelling 127 346 Employee Leave Entitlements 3 284 2 638

y

Note 4 - EXPENSES

Employee Leave Entitlements 3,284 2,638 Superannuation - defined contribution plan contributions 2,130 2,198 Superannuation - defined benefit plan contributions

Workers' Compensation Insurance 1,058 291 Fringe Benefits Tax 72 89 Payroll TaxTraining Costs (excluding Salaries) 85 102 OtherLess: Capitalised and distributed costsT t l O ti E l C t 25 191 22 871Total Operating Employee Costs 25,191 22,871

Total Number of Employees 307 273 (Full time equivalent at end of reporting period)

BORROWING COSTSInterest on OverdraftInterest on Loans - Interest on Advances - Charges on Finance Leases - Interest on other debts - Discounts on financial instruments transactionsUnwinding of present value discounts & premiumsGross Interest Charges - - Less: Borrowing Costs capitalisedTotal Interest Charges - -

MATERIALS & CONTRACTSMATERIALS & CONTRACTSRaw materials & consumables 10,330 9,777 Contractor and consultancy costs 6,116 6,091 Auditor's Remuneration

- Audit Services 53 50 - Other Services

Legal Expenses- Planning & Development 488 515 - Other Legal Expenses 210 76

Operating LeasesOperating Leases- Buildings- Computers- Motor vehicles- Other

OtherTotal Materials & Contracts 17,197 16,509


CITY of BOTANY BAY


Note 4 - EXPENSES (cont) 2012 2011$'000 $'000

DEPRECIATION & AMORTISATIONIntangible Assets (Note 25)

Plant and Equipment 1,099 796 Office Equipment 128 385 Furniture & Fittings - Leased Property, Plant & Equipment - LandLand - Land Improvements - Buildings - non-specialised 1,168 1,214 Buildings - specialised 16 20 Other Structures 10 Infrastructure- roads, bridges & footpaths 2,756 2,761 - bulk earthworks - - stormwater drainage 184 399 - water supply network not elsewhere included - - sewerage network not elsewhere included - Other assets- heritage collections - - library books 51 168 - other 23 Future Reinstatement Costs- Tips - - Quarries - - Other remediation assets - Less: Capitalised and distributed costsTotal Depreciation & Amortisation 5,435 5,743

IMPAIRMENTIntangible Assets (Note 25)

Plant and Equipment - Office Equipment - Furniture & Fittings -Furniture & Fittings - Leased Property, Plant & Equipment - Land - Land Improvements - Buildings - non-specialised - Buildings - specialised - Other Structures - Infrastructure- roads, bridges & footpaths -

b lk th k- bulk earthworks - - stormwater drainage - - water supply network not elsewhere included - - sewerage network not elsewhere included - Other assets- heritage collections - - library books - - other - Future Reinstatement Costs- Tips - - Quarries - - Other remediation assets - Less: Offset to Asset Revaluation ReserveTotal Impairment - -


OTHER EXPENSESRevaluation Decrements expensedBad and Doubtful Debts 53 34 Mayoral fee 36 35 Councillors' Fees & Allowances 116 112 Councillors' (incl. Mayor) Expenses 255 328 Insurances 76 197 Street Lighting 803 853 Light, Power & Heating 621 638 Telephone & Communications 573 453 Donations & Contributions to Local & Regional Bodies 34 46 Planning levy 77 68 Waste levyEmergency services levy 613 623 Other leviesAdvertising 202 113 Child Care - Parent FeesElection Expenses 20 Individually Significant ItemProvision for Insurance LossesSubscriptions & Publications 154 134 Adjust interest in associated entities - - Other 431 614 Total Other Expenses 4 064 4 248Total Other Expenses 4,064 4,248

Individually Significant Item

Provide an explanation of the nature of any item disclosed as significant in either year.(Individually significant items are generally those items that would previously have been disclosed asABNORMAL or EXTRAORDINARY items.)Hide this box (and the row above) if there are no such items.


CITY of BOTANY BAY


Note 5 - GAIN OR LOSS ON DISPOSAL OF ASSETS

2012 2011$'000 $'000

DISPOSAL OF PROPERTYProceeds from disposalLess: Carrying amount of assets soldGain (Loss) on disposal - -

DISPOSAL OF INFRASTRUCTURE, PLANT & EQUIPMENTProceeds from disposal 317 143 Less: Carrying amount of assets sold 237 41 Gain (Loss) on disposal 80 102

DISPOSAL OF REAL ESTATE DEVELOPMENT ASSETSProceeds from disposalLess: Carrying amount of assets soldGain (Loss) on disposal - -

DISPOSAL OF INVESTMENT PROPERTYProceeds from disposalLess: Carrying amount of assets soldGain (Loss) on disposal - -

DISPOSAL OF FINANCIAL INSTRUMENTSProceeds from disposal 1,518 1,247 Less: Carrying amount of assets sold 1,518 1,247 Gain (Loss) on disposal - -

TOTAL GAIN (LOSS) ON DISPOSAL OF ASSETS 80 102


CITY of BOTANY BAY

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSf th d d 30th J 2012for the year ended 30th June 2012

Note 6 - CASH ASSETS & INVESTMENT SECURITIES2012 2011$'000 $'000

Current Non-Current Current Non-CurrentCASH ASSETSCash on Hand and at Bank 1,856 2,023 Deposits at CallShort Term Deposits & Bills, etcOtherTotal Cash Assets 1,856 2,023

Cash Assets comprise short term highly liquid investments readily convertible to known amounts of

INVESTMENT SECURITIESSummaryFinancial assets at fair value through profit and loss - held for trading

2,355 560 2,743 590

Held to maturity investments 15,000 - 16,000 - Available for sale financial assets - - - - Total 17,355 560 18,743 590

Financial assets at fair value through profit and loss - held for tradingAt beginning of year 2,743 590 2,146 2,225

Cash Assets comprise short-term, highly liquid investments readily convertible to known amounts ofcash that are subject to insignificant risk of changes of value.

g g y , , ,Revaluation to Income Statement 112 (12) 105 104 AdditionsDisposals (500) (18) (1,247)ReclassificationsTransfers Current/Non-current - 492 (492)At end of year 2,355 560 2,743 590

Held for trading:- Managed Funds 2,355 2,251 - CDOs 560 590 - FRNs 492 - Equity linked notes

2,355 560 2,743 590

Held to Maturity InvestmentsAt beginning of year 16,000 - 15,000 Amortisation of discounts and premiumsAdditions 1,000 1,000 Disposals (2,000)ReclassificationsTransfers Current/Non-current - At end of year 15,000 - 16,000 -

Fair values for financial assets at fair value through profit or loss -held for trading are determined byquoted prices in active markets for identical investments.

Comprising:- Government Bonds- Term Deposits 15,000 16,000 - Bank Bills- Other

15,000 - 16,000 -

Available-for-sale Financial AssetsAt beginning of year - - AdditionsDisposalsRevaluation surplus transferred to equityReclassificationsTransfers Current/Non-current - At end of year - - - -

Comprising:- NCDs- Term Deposits- Bank Bills- Other

- - - -

Fair values for available-for-sale financial instruments are determined by quoted prices in activemarkets for identical investments.

The permitted forms of investment in financial instruments of the Council are defined in an order madeby the Minister for Local Government on 12 January 2011, and may broadly be described as "TrusteeSecurities". Deposits and Bills are with, or have been accepted by, banks and credit unions and bearvarious rates of interest between b% and c% (2011- d% and e%). NCDs, CDOs, FRNs and ManagedFunds are all with organisations with credit ratings that complied wiith the Minister's Order at the timeof acquisition and bear various rates of rates of return between f% and g% (2011 - h% and i%).For further information refer to Note 15 below.

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CITY of BOTANY BAY


Note 6 CASH ASSETS & INVESTMENT SECURITIES (cont)Note 6 - CASH ASSETS & INVESTMENT SECURITIES (cont)

RESTRICTED CASH ASSETS & INVESTMENT SECURITIES2012 2011$'000 $'000

Current Non-Current Current Non-Current

Cash & Cash Equivalent Assets 1,856 2,023 Investment Securities 17,355 560 18,743 590 TOTAL CASH & INVESTMENT SECURITIES

19,211 560 20,766 590

External Restrictions 13,476 560 14,096 590 Internal Restrictions 4,080 5,560 Unrestricted 1,655 - 1,110 -

19,211 560 20,766 590

Notes

DETAILS OF MOVEMENTS OFRESTRICTED CASH ASSETS & INVESTMENT SECURITIES

Closing Balance 30 June 2012

Opening Balance 30 June 2011

Movements

Transfers To Restriction

Transfers From Restriction

$'000 $'000 $'000 $'000External RestrictionsIncluded in liabilities

Unexpended Loans - RTA Advances - Self Insurance Claims - Other -

- - - -

OtherDeveloper Contributions 17 11,815 2,371 2,820 11,366 RTA C t ib tiRTA Contributions - Unexpended Grants 198 191 - 389 Mascot Main Street 290 86 - 376 Sewerage funds - Domestic Waste Management 788 788 Stormwater Management 1,595 636 326 1,905 Coastal Protection - Other -

14,686 3,284 3,934 14,036 Total External Restrictions 14,686 3,284 3,934 14,036

External Restrictions arise pursuant to section 409(3) of the Local Government Act, the Local Government

Internal RestrictionsEmployee Leave Entitlements 1,200 - 1,200 Infrastructure Replacement 1,000 800 200 Plant replacement 500 200 300 Office Equipment 900 700 200 Asset Replacement 300 - 300 Bonds and Deposits 1,580 220 - 1,800 M O l 80 80

p ( ) ,(General) Regulation 2005 and other applicable legislation. Further information relating to DeveloperContributions is provided in Note 17 and Unexpended Grants in Note 3. Amounts raised by special rates(eg. Water & Sewer) and certain annual charges may only be used for those purposes.

Mascot Oval 80 - 80 Other - Other - Other - Other - Other - Other - Other - Other - Other - Other -

Total Internal Restrictions 5,560 220 1,700 4,080

Internal Restrictions arise pursuant to resolutions of Council to set aside reserves of cash resources eitherrelating to liabilities recognised in these reports or to fund future expenditure for the stated purpose. Suchreserves are not permitted to exceed the amounts of cash assets and cash investments not otherwise

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CITY of BOTANY BAY


Note 7 - RECEIVABLES

2012 2011$'000 $'000


Rates & Annual Charges 2,613 227 2,543 232 Interest & Extra Charges 241 60 258 65 User Charges & Fees 1,320 252 1,331 167 Accrued Revenues 101 401 Deferred Debtors - Other levels of Government 38 238 Retirement Home ContributionsOther 340 106 140 107 Total 4,653 645 4,911 571

Less: Allowance for Doubtful DebtsR t & A l Ch Rates & Annual Charges

Interest & Extra Charges User Charges & Fees 252 34 167 Other

4,653 393 4,877 404 Total ReceivablesRates, Annual Charges, Interest & Extra ChargesOverdue rates and annual charges (being amounts not paid on or before the due date determined inaccordance with the Local Government Act) are secured over the relevant land and are subject to simpleinterest at a rate of 9.00% (2010: 9.00%). Although Council is not materially exposed to any individualratepayer credit risk exposure is concentrated within the Council boundaries in the State of New Southratepayer, credit risk exposure is concentrated within the Council boundaries in the State of New SouthWales.

Deferred DebtorsLoans made to ratepayers under the assisted housing scheme and to local organisations bear interest atrates varying between NIL and ....%. Council is not materially exposed to any individual debtor, andcredit risk exposure is concentrated within the Council boundaries in the State of New South Wales.

Other levels of GovernmentAmounts due have been calculated in accordance with the terms and conditions of the respectiveprograms following advice of approvals and do not bear interest All amounts are due by Departmentsprograms following advice of approvals, and do not bear interest. All amounts are due by Departmentsand Agencies of the Government of New South Wales and the Government of Australia.

Other ReceivablesAmounts due (other than User Charges which are secured over the relevant land) are unsecured and do

Retirement Home ContributionsPursuant to Commonwealth legislation certain intending residents are required to contribute amounts onan interest free basis. The amounts are subject to certain deductions as prescribed by the legislation, thebalace being repaid on termination of tenancy. Compliance with these procedures is subject to separateaudit in accordance with that Act.

AGGREGATE ASSET ARISING FROM EMPLOYEE BENEFITS0 0

RESTRICTED RECEIVABLES

Water Supply - -

Amounts due (other than User Charges which are secured over the relevant land) are unsecured and donot bear interest. Although Council is not materially exposed to any individual debtor, credit risk exposureis concentrated within the Council's boundaries in the State of New South Wales.

pp ySewerage Services - - Domestic Waste Management 613 267 Stormwater Management Services 123 37 Mascot Main Street 6 6 OtherTotal Restrictions 742 - 310 -

Unrestricted Receivables 3,911 393 4,567 404 Total Receivables 4,653 393 4,877 404


CITY of BOTANY BAY


Note 8 - INVENTORIES & OTHER ASSETS

2012 2011$'000 $'000


INVENTORIES

Stores & Materials 161 199 Trading Stock 73 75 Real Estate Developments - - OtherTotal Inventories 234 - 274 -

Inventories not expected to be realised within the next 12 months.

- -

OTHER ASSETSPrepaymentsOtherTotal Other Assets - - - -

Real Estate Developments

Aggregate write-downs and other losses recognised as an expense, and reversals of these, were notmaterial in amount in either year. All such reversals occurred principally as a result of clerical

Real Estate Developments(Valued at the lower of cost and net realisable value)Residential Industrial & CommercialOther Properties surplus to requirementsTotal Real Estate for Resale - - - -

Represented by:Acquisition CostsDevelopment CostsBorrowing CostsOther Holding CostsOther Properties - Book Value

- - - - Less: Allowance for Under-RecoveryTotal Real Estate for Resale - - - -

RESTRICTIONS EXIST IN RESPECT OF THE FOLLOWING:RESTRICTIONS EXIST IN RESPECT OF THE FOLLOWING:Inventories Water Supplies - - Sewerage Services - - Domestic Waste Management OtherOther Assets Water Supplies - - Sewerage Services - -

Domestic Waste Management Domestic Waste Management Other

- - - -


CITY of BOTANY BAY


Note 9 - INFRASTRUCTURE, PROPERTY, PLANT & EQUIPMENT

AT AT ACCUM CARRYING Asset Asset Net AT AT ACCUM CARRYINGCOST FAIR VALUE DEPN AMOUNT Purchases Disposals Revaluation COST FAIR VALUE DEPN AMOUNT

Capital Work-in-progress - - - - - - - - - - - - - - Plant & Equipment - 10,204 (7,133) 3,071 1,309 (237) (1,099) - - - - 11,525 (8,481) 3,044 Office Equipment - 11,359 (9,528) 1,831 161 - (128) - - - - 11,520 (9,656) 1,864 Furniture & Fittings - - - - - - - - - - - - - - Leased Plant & Equipment - - - - - - - - - - - - - - Land - Operational Land - 72,379 - 72,379 - - - - - - - 72,379 - 72,379 - Community Land - 58,375 - 58,375 - - - - - - - 58,375 - 58,375 Land under roads- pre 1 July 2008 - - - - - - - - - - - - - - - post 1 July 2008 - - - - - - - - - - - - - - Land Improvements - non-depreciable - - - - - - - - - - - - - - Land Improvements - depreciable - - - - - - - - - - - - - - Buildings - non-specialised - 10,386 (5,613) 4,773 81 - (1,168) - - - - 10,467 (6,781) 3,686 Buildings - specialised - 53,810 (21,127) 32,683 180 - (16) - - - - 53,990 (21,143) 32,847 Other Structures - - - - 1,369 - (10) - - - - 1,369 (10) 1,359 Infrastructure - Roads, bridges, footpaths - 129,647 (38,492) 91,155 4,986 - (2,756) - - - - 134,633 (41,248) 93,385 - Bulk earthworks (non-deprec.) - - - - - - - - - - - - - - - Stormwater drainage - 28,016 (8,192) 19,824 52 - (184) - - - - 28,068 (8,376) 19,692 - Water Supply Network - - - - - - - - - - - - - - - Sewerage Network - - - - - - - - - - - - - - Other Assets - Heritage Collections - - - - - - - - - - - - - - - Library Books - 3,111 (2,742) 369 120 - (51) - - - - 3,231 (2,793) 438 - Other - 999 (775) 224 14 - (23) - - - - 1,013 (798) 215 Future Reinstatement Costs - Tips - - - - - - - - - - - - - - - Quarries - - - - - - - - - - - - - - - Other remediation assets - - - - - - - - - - - - - -

Totals - 378,286 (93,602) 284,684 8,272 (237) (5,435) - - - - 386,570 (99,286) 287,284 Building & Infrastructure Renewals 1,719

Building & Infrastructure New Assets 3,580 Other Assets 2,973

2011$'000

Asset acquisitions were apportioned between:

ImpairmentTransfers,

etc.

2012$'000

CARRYING AMOUNT MOVEMENTS DURING YEAR$'000

Depreciation


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CITY OF BOTANY BAY


Note 9 (cont) - PROPERTY, PLANT & EQUIPMENT Valuation of Assets Plant & Equipment, Office Equipment, Furniture & Fittings and similar

Plant & equipment, office equipment, furniture and fittings and similar items are recognised at fair value calculated in accordance with the Code of Accounting Practice as being equivalent to depreciated historical cost. Major depreciation periods are:

Office Equipment 5 to 10 years Office Furniture 10 to 20 years Vehicles & Road-making Equip 5 to 8 years Other Plant & Equipment 5 to 15 years

Asset capitalisation thresholds include: Office Furniture & Equipment $1,000 Other Plant & Equipment $1,000

Leased Plant & Equipment In accordance with AASB 117, leased plant and equipment is initially recognised at the lower of the fair value of the leased item or the present value of the minimum lease payments, and is subsequently amortised over the term of the lease.

Land – Operational Land Land classified in accordance with Division 1, Part 2, Chapter 6 of the Local Government Act was revalued during the reporting period in accordance with the requirements of the Code of Accounting Practice. The independent valuation, based on market value, was undertaken as at 30 June 2009 by Mr Scott Fullerton of Scott Fullerton Valuations Pty Ltd. All land subsequently acquired is recognised at cost. No capitalisation threshold is applied to the acquisition of land or interests in land.

Land – Community Land Land classified as community land was valued by Council officers at municipal site value during the reporting period ended 30 June 1995. Pursuant to Council’s election on adoption of AIFRS, these amounts are disclosed at deemed cost. Community Land was revalued in 2010/2011 based on the valuations supplied by the Valuer-General.

Land under roads Council, being of the opinion that it is not possible to reliably determine fair value for land under roads, and it being impracticable to determine actual cost of acquisition, has elected not to recognise land under roads, whether acquired before or after the commencement of AASB 1051 Land under roads.

Buildings – non-specialised Buildings were valued by Mr Scott Fullerton of Scott Fullerton Valuations Pty Ltd on a market value basis as at 30 June 2008. All acquisitions made after the respective dates of valuation are recorded at cost. Major depreciation periods are:

Buildings - masonry 50 to 100 years Buildings – other construction 20 to 40 years

Asset capitalisation thresholds include: New construction/extensions $10,000

Buildings – specialised

Specialised buildings – designed for a specific limited public purpose – have been revalued during the reporting period in accordance with the guidelines contained in the Code of Accounting Practice and NSW Treasury Accounting Policy TPP07-1. The valuations were done by Mr Scott Fullerton of Scott Fullerton Valuations Pty Ltd as at 1 January 2008. All subsequent additions are recognised at cost.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS for the year ended 30 June 2012 Note 9 – Property, Plant & Equipment (cont)

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Land Improvements and Other Structures Land improvements and other structures were valued by independent valuation during the reporting period ended 30 June 1996 and pursuant to Council’s election on the commencement of AIFRS are disclosed at deemed cost. All acquisitions made after the respective dates of valuation are recorded at cost. Major depreciation periods are:

Park Structures - masonry 50 to 100 years Park Structures – other construction 20 to 40 years Playground equipment 5 to 15 years Benches, seats, etc 10 to 20 years

Asset capitalisation thresholds include: Park Furniture & Equipment $2,000

It is anticipated that these assets will be revalued to fair value in the next reporting period.

Transportation and other Infrastructure Transportation assets were valued by Council officers at written down current replacement cost as at 30 June 2010 (2009: deemed cost on transition to AIFRS) using the guidelines contained in the Australian Infrastructure Financial Management Guidelines. All acquisitions made after the respective dates of valuation are recorded at cost. Major depreciation periods are:

Sealed Roads - Surface 15 to 25 years Sealed Roads – Structure 20 to 50 years Unsealed Roads 10 to 20 years Bridges – Concrete 80 to 100 years Bulk Earthworks indefinite

Asset capitalisation thresholds include: Road construction & reconstruction $10,000

Stormwater drainage infrastructure was valued by Council officers at written down current replacement cost as at 30 June 2010 (2009: deemed cost on transition to AIFRS) using the guidelines contained in the Australian Infrastructure Financial Management Guidelines. All acquisitions made after the respective dates of valuation are recorded at cost. Major depreciation periods are:

Drains 80 to 100 years Culverts 50 to 75 years Flood Control Structures 80 to 100 years

Asset capitalisation thresholds include: Drains & Culverts $5,000

All other assets

Assets acquired after 1 January 1993 are recorded at cost. Assets acquired prior to that date and depreciated in accordance with the Local Government Accounting Regulations 1979 are recorded at deemed cost, being the carrying value of those assets at 31 December 1992.

Major depreciation periods are:

Library Books 5 to 15 years Artworks indefinite

CITY of BOTANY BAY


Note 10 - LIABILITIES

2012 2011$'000 $'000

Current Non-Current Current Non-CurrentPAYABLESGoods & Services 2,205 2,512 Payments received in advanceAccrued salaries & wages 279Accrued salaries & wages 279 Accrued interest payableAccrued expenses - other 418 AdvancesRetirement Home ContributionsDeposits, Retentions & Bonds 6,709 5,867 Other 527 447 Total Payables 9,441 - 9,523 -

Current payables not expected to 4 000 3 000be settled within the next 12

months.4,000 3,000

BORROWINGSBank OverdraftLoans- Secured - UnsecuredGovernment AdvancesRatepayer AdvancesRatepayer AdvancesFinance Lease LiabilityDeferred Payment LiabilitiesOtherTotal Borrowings - - - -

PROVISIONSEmployee benefits - annual leave 2,285 2,280

i k l 886 894

All interest bearing liabilities are secured over the future revenues of the Council.

- sick leave 886 894 - long service leave 3,726 507 3,219 238 - gratuities 165 138

Self insurance - workers compensation- public liability- other

Reinstatement, Remediation, etc. (see also Note 21)

OtherTotal Provisions 7,062 507 6,531 238Total Provisions 7,062 507 6,531 238

Current payables not expected to be settled within the next 12 months.

5,334 4,731

Movements in ProvisionsEmployee Benefits

Self Insurance

Reinstate-ment, etc.

Other

2012 2012 2012 2012

$'000 $'000 $'000 $'000

O i B l 6 769Opening Balance 6,769 - - -

Add Additional amounts recognised 2,299

Unwinding of present value discounts 322 - - -

(Less) Payments (1,821)

Add (Less) Remeasurement Adjustments

Add (Less) Transfer on Council restructure

Closing Balance 7,569 - - -


CITY of BOTANY BAY


NOTE 10 - LIABILITIES (cont)

Provision for Self InsuranceIn accordance with the relevant licences, Council makes provision for the actuarial estimate of the probable costs it will incur relating to unpaid reported claims, claims incurred but not reported (IBNR), claims incurred but not enough reported (IBNER) and directa nd indirect claims settlement costs.

Prrovision for Reinstatement, rehabilitation & restoration liabilitiesCouncil is required by law to reinstate/ rehabilitate the areas of certain tips and quarries for roadmaking materials when it ceases to use each facility. Engineering estimates have been made based on current reinstatement standards and discounted to its present value over the estimated remaining life of each facility at the rates

2012 2011$'000 $'000


AGGREGATE LIABILITY ARISING FROM EMPLOYEE BENEFITS7 062 507 6 810 238

applicable to government securities.

7,062 507 6,810 238

LIABILITIES relating to RESTRICTED ASSETSDomestic Waste ManagementPayablesInterest Bearing LiabilitiesProvisions

Subtotal - - - - Water SuppliesPayables - - Interest Bearing LiabilitiesInterest Bearing Liabilities - - Provisions - -

Subtotal - - - - Sewerage ServicesPayables - - Interest Bearing Liabilities - - Provisions - -

Subtotal - - - - Stormwater Drainage ServicesPayablesInterest Bearing LiabilitiesInterest Bearing LiabilitiesProvisions

Subtotal - - - - OtherPayablesInterest Bearing LiabilitiesProvisions

Subtotal - - - - TOTAL - - - -


CITY of BOTANY BAY


Note 11 - RECONCILIATION TO CASH FLOW STATEMENT

(a) Reconciliation of Cash

Cash Assets comprise short-term, highly liquid investments readily convertible toknown amounts of cash that are subject to insignificant risk of changes of value. Cashat the end of the reporting period as shown in the Statement of Cash Flows is

il d t th l t d it i th B l Sh t f ll

2012 2011$'000 $'000

Total Cash Assets (Note 6) 1,856 2,023 Less: Bank Overdraft (Note 10) - - Balances per Statement of Cash Flows 1,856 2,023

(b) Reconciliation of Change in Net Assets to Cash

reconciled to the related items in the Balance Sheet as follows:

from Operating ActivitiesNet Operating Result from Income Statement 296 (217) Add: Depreciation, Amortisation & Impairment 5,435 5,743 Unwinding of present value discounts & premiums 322 13 Investments - impairment & fair value adjustments (100) (209) Increase in provision for doubtful debts 51 34 Increase in employee benefits provisions 478 115 Increase in other provisions - Decrease in receivables 184 Decrease in inventories 40 Decrease in other assets - Increase in trade creditors & other accruals - Increase in accrued interest payable - Increase in other payables 922 425 Loss on Sale of Assets - Equity share of loss in Associates 321 141 Equity adjustment in Associates (decrease) - Decrements from Revaluations -

L C il t t Loss on Council restructure - 7,949 6,045

Less: Decrease in provision for doubtful debts - Present value discounts & premiums recognised - Decrease in employee benefits provisions - Decrease in other provisions - Increase in receivables - 484 Increase in inventories - 31 Increase in other assets -

Decrease in trade creditors & other accruals 737 325 Decrease in trade creditors & other accruals 737 325 Decrease in accrued interest payable - Decrease in other payables - Gain on Sale of Assets 80 102 Equity share of profit in Associates - Equity adjustment in Associates (increase) - Fair value adjustments as revenue items - Investment Revaluation Reserve realised - Reversal of previous Revaluation Decrements - Non-cash Capital Grants and Contributions 3,450 p , Gain on Council restructure - Net Cash provided by (or used in) operations 3,682 5,103


CITY of BOTANY BAY


Note 11 (cont) - RECONCILIATION TO CASH FLOW STATEMENT

2012 2011$'000 $'000

(c) Non-Cash Financing and Investing Activities

Acquisition of assets by means of: - PWD Construction -

B shfire Grants - Bushfire Grants - - Developer Contributions received in kind - - Non-cash issues of Shares in Other Companies - - Estimated future reinstatement, etc costs - - Other 3,450

3,450 - - Finance Leases - - Land taken over for non-payment of Rates - -

3,450 -

(d) Financing Arrangements

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

Bank Overdrafts Total Facilities 540 540 Credit Facilities 60 60

The bank overdraft facilities may be drawn at any time and may be terminated by thebank without notice. Interest rates on overdrafts are variable while the rates for loansare fixed for the period of the loan.


CITY of BOTANY BAY


2012 2011$'000 $'000

(a) Capital Commitments

Note 12 - COMMITMENTS FOR EXPENDITURE

Capital expenditure committed for at the reporting date but not recognised in thefinancial statements as liabilities:

LandConstruction of Investment PropertyBuildingsPlant & Equipment 342 436

342 436

Commitments for Capital Expenditures relating to Joint Ventures and Partnerships are set outin Note 19.

(b) Finance Lease Commitments

Not later than one yearLater than one year and not later than 5 yearsLater than 5 yearsMinimum lease payments - - Less: future finance chargesNet Lease Liability - -

Commitments under finance leases at the reporting date are as follows:

y

Representing lease liabilities:Current - - Non-Current - -

- -

(c) Operating Lease Commitments (Non-Cancellable)

No Joint Ventures or Partnerships have any finance lease arrangements.

Total Future Minimum Lease PaymentsNot later than one yearLater than one year and not later than 5 yearsLater than 5 years

- -

Commitments under non-cancellable operating leases at the reporting date but notrecognised in the financial statements are payable as follows:

Council has entered into non-cancellable operating leases for various items ofcomputer and other plant and equipment.Contingent rental payments exist in relation to the lease of one grader if utilisationexceeds 250 hours during any month. No contingent rentals were paid during thecurrent or previous reporting periods.No lease imposes any additional restrictions on Council in relation to additional debtor further leasing.Leases in relation to computer and office equipment permit Council, at expiry of thelease, to elect to re-lease, return or acquire the equipment leased.

(d) Repairs & Maintenance - Investment PropertyContractual obligations for future repairs and maintenance

Commitments for Operating Lease Expenditures relating to Joint Ventures and Partnershipsare set out in Note 19.

No lease contains any escalation clause.


CITY of BOTANY BAY


Note 13 - STATEMENT OF PERFORMANCE MEASUREMENT

2012 2011 2010Amounts Indicators

Unrestricted Current RatioUnrestricted Current Assets* $9,880 1.38:1 1.38:1 1.71:1

$7,169

Debt Service RatioNet Debt Service Cost* $0 0:1 0:1 0:1Operating Revenue* $42,303

Rate & Annual Charges Coverage RatioRates & Annual Charges Revenues $27,866 0.53:1 0.54:1 0.53:1Revenue from continuing operations $52,504

Rates & Annual Charges Outstanding PercentageRates & Annual Charges Outstanding $3,141 10.07% 10.74% 7.59%Rates & Annual Charges Collectible $31,185

Building & Infrastructure Renewals RatioAsset renewals* $1,719 0.42:1 0.62:1 0.36:1Depreciation, Amortisation, Impairment $4,124

Building, Infrastructure & Open Space Renewals RatioAsset renewals* $3,088 0.74:1Depreciation, Amortisation, Impairment $4,134

* Detailed methods of calculation of these indicators is defined in the Code.

Current Liabilities not relating to Restricted Assets

INDICATORS - CONSOLIDATED


CITY of BOTANY BAY


Note 14 - INVESTMENT PROPERTY

Council has no properties classified as investment propertiesCouncil has no properties classified as investment properties.


CITY of BOTANY BAY


Note 15 - FINANCIAL RISK MANAGEMENT

Council's activities expose it to a variety of financial risks including price risk, credit risk, liquidity risk and interest rate risk.All financial instruments are denominated in Australian dollars, and hence currency risk does not apply.

Financial risk management is carried out by Finance section in accordance with policies approved by Council and inaccordance with statutory requirements, and seeks to maximise revenue while protecting the corpus of the funds invested.

Council held the following financial instruments at balance date:

2012 2011 2012 2011$'000 $'000 $'000 $'000

Financial AssetsCash and Cash Equivalents 1,856 2,023 1,856 2,023 Receivables 5,046 5,281 5,046 5,281 Financial assets at fair value through profit & loss 2,915 3,333 2,915 3,333 Availaible-for-sale financial assets 15,000 16,000 15,000 16,000 Held-to-maturity investments - - - -

Carrying Value Fair Value

Held to maturity investments 24,817 26,637 24,817 26,637

Financial LiabilitiesPayables 9,441 9,523 9,441 9,523 Borrowings - - - -

9,441 9,523 9,441 9,523

Fair value is estimated as follows:* Cash & equivalents, receivables & payables - due to the short-term nature, face value (carrying value) approximates

Cash and cash equivalentsFinancial assets at fair value through profit & loss

fair value.* Held-to-maturity investments and borrowings - anticipated future cah flows discounted by current market interestrates applicable to assets and liabilities with similar risk profiles.

* Financial assets at fair value through profit & loss, and available-for-sale - based on quoted market prices (where aliquid market exists) or independent valuation. Particular difficulties were experienced in assessing fair value of CDOs, andthese have been reported in Note 1.

Financial assets at fair value through profit & lossAvailable-for-sale financial assetsHeld-to-maturity investmentsCouncil's objective is to maximise its return on cash and investments whilst maintaining an adequate level of liquidity andpreserving capital.The investment portfolio is managed in accordance with Council's policy (which complies with the Local Government Act &Regulations), and the Minister's Order. The investment policy is reviewed regularly, and a report in accordance with section625 of the Act provided to Council monthly.The investment portfolio is managed so as to provide adequate liquidity at all times, particularly during the periods betweenthe quarterly receipt of rates instalments and grants. In addition, Council has access to overdraft facilities set out in Note 12.

Less than 5% of Council's portfolio is invested in products that are subject to price risk, principally CDOs. Council views theloss in market value - which has been recognised in these reports - as deriving principally from a lack of liquidity in themarket. Council has now determined to retain these financial instruments on a long term basis, and has reviewed its liquidityprojections to confirm that it will be able to do so. Council expects to recoup the full amounts of principal and interest overthe life of the investment, and has not received any information that would indicate to the contrary.

The remainder of Council's investment portfolio consists of deposits at fixed and variable interest rates, generally for periodsof less than 120 days. Whilst these are subject to interest rate risk, this is minimised by the short term of the financial assetsh ld

the quarterly receipt of rates instalments and grants. In addition, Council has access to overdraft facilities set out in Note 12.

held.


CITY of BOTANY BAY


Note 15 - FINANCIAL RISK MANAGEMENT (cont)

Interest Sensitivity Analysis 2012 2011$'000 $'000

- Equity 56 440 - Income Statement 56 440

Impact of a 10% movement in price of investments(for assets subject to price risk only)

- Equity 123 137 - Income Statement 123 137

Impact of a 1% change in interest rates on cash & investments

ReceivablesCredit risk on receivables for rates, annual charges and service charges made under section 502 is minimised as these aresecured over the subject land. The security extends to interest levied for late payment.

2012 2011

At reporting date, all amounts receivable were reviewed, and adequate allowance made for amounts considered doubtful.

Council receives regular summary reports of receivables due, and detailed reports where appropriate.

Other receivables are subject to a range of credit risk minimisation procedures as appropriate, varying from credit checks tospecific security pledges. Council is not materially exposed to any individual debtor, and credit risk exposure is concentratedwithin the Council boundaries in the State of New South Wales. There are no material receivables that have been subject tore-negotiation of repayment terms.

$'000 $'000

- Current 82% 52%- Overdue 18% 48%

Percentage of Rates & Annual Charges

PayablesBorrowingsPayables and borrowings are subject to liquidity risk - the risk that insufficient funds may be on hand to meet paymentobligations as they fall due The investment portfolio is managed so as to provide adequate liquidity at all times particularly

Liquidity Sensitivity Table

2012

'000 < 1 year 2 - 5 years > 5 years

The contractual undiscounted cash flows of Council's payables and borrowings are shown below:

Due CarryingValue

TotalContractua

l

obligations as they fall due. The investment portfolio is managed so as to provide adequate liquidity at all times, particularlyduring the periods between the quarterly receipt of rates instalments and grants. In addition, Council has access to overdraftfacilities set out in Note 12.

Payables 5,441 4,000 9,441 9,441 Borrowings - -

5,441 4,000 - 9,441 9,441

2011

'000 < 1 year 2 - 5 years > 5 years

Payables 6 523 3 000 9 523 9 523

Due TotalContractualCash Flows

CarryingValue

Payables 6,523 3,000 9,523 9,523 Borrowings - -

6,523 3,000 - 9,523 9,523


CITY of BOTANY BAY


Note 15 - FINANCIAL RISK MANAGEMENT (cont)

The following interest rates were applicable to Council's borrowings at balance date:

Borrowings are also subject to interest rate risk - the risk that changes in interest rates could adversely affect funding costs.Council manages this risk by generally borrowing long term, commonly at rates fixed for the duration of the loan. Bankoverdraft and less than 10% of borrowings are at variable rates; the associated interest rate risk is not considered material.

Wtd aveinterest

rate

BalanceWtd aveinterest

rateBalance

Overdraft 9.48% - 10.14% - Loans - fixed interest rate - - Loans - variable interest rate

- -

2012 2011


Another Coalface Software Solution 07/11/12 15:51 Page N

35

CITY OF BOTANY BAY


Note 16 – MATERIAL BUDGET VARIATIONS Council’s original budget comprised part of the Management Plan adopted by Council on 27 June 2011. The original projections on which the budget was based have been affected by decisions and new grant programs initiated by State and Federal Governments, and by decisions made by the Council. This Note sets out the principal variations between the original Budget and Actual results for the Statement of Financial Performance. Further information of the nature and amount of all variations is available from the Council office upon request.

Revenues 1.1 User Charges & Fees

Revenue was up $4,572,000 on budget (74.6%). Variations arose from changes in the level of economic activity. This item should be read in conjunction with item 1.3 which shows a decrease of $3,707,000. The nett effect is an increase of $865,000. This item was reported in Council’s quarterly reviews.

1.2 Interest Received Revenue was up $810,000 on budget (226.5%) due to a interest earned on Section 94 funds being paid back to the applicable plan. The original estimate of $800,000 is all that is attributable to general Fund. This item was reported in Council’s quarterly reviews.

1.3 Other Revenues A decrease of $3,707,000. This decrease (86.4%) is offset by an increase in user fees and charges, and is due to allocation of revenues in the original budget.

1.4 Grants & Contributions Received – Operating & Capital A increase of $3,598,000 (43.8%). In many instances, the actual amount of grants received depends on decisions made by State and Federal governments after the original Budget was adopted. This included a prepayment by the Federal Government of the Financial Assistance Grant, also included is an amount of $3,450,000 as a capital income contribution of a bridge in Botany from Sydney Ports Authority.

Expenses 1.1 Employee Costs

An increase of $5,056,000 or 25.1%, over the original budget. During the year Council employees are engaged in both maintenance and capital works, the proportions of which vary from year to year. Costs in relation to the capital works are excluded from the Operating Statement, and it is not Council’s practice to make detailed calculations for this as part of its budgeting procedures. Accordingly, significant variations will often arise in this area.

1.2 Materials & Contracts A decrease of $1,597,000 on original budget (8.49%). Council’s budget is based on a “normal” mix of self-constructed and contract works. The expenditure on materials was less than budgeted for.

1.3 Depreciation and Amortisation

An increase of $1,582,000 or 41% due to significant asset purchases over past years.

CITY of BOTANY BAY

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 30th June 2012y

SUMMARY OF CONTRIBUTIONS

PURPOSE CASH NON-CASH$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Drainage 88 5 93 2,612 2,500 20538 2 0 10 0 10 200 2

Note 17 - STATEMENT OF CONTRIBUTION PLANS

BALANCE INTERNAL BORROW-

INGS

EST. WORKS

OUT-STANDIN

EST. OVER/

(UNDER) FUNDING

INTERNAL BORROW-

INGS (to)/from

HELD AS RESTR-ICTED ASSET

EST. FUTURE CONTRIB

S

OPENING BALANCE

CONTRIBUTIONS RECEIVED DURING

YEAR

INTEREST EARNED DURING

YEAR

EXPENDED

DURING YEAR

Roads 38 2 40 10,407 10,200 247Traffic Facilities 1,078 149 60 1,287 631 1,870 48Parking 371 21 392 149 520 21Open Space 4,555 670 255 (932) 4,548 13,940 17,900 588Community facilities 1,639 271 92 (75) 1,927 2,063 979 3,011Other 4,046 620 226 (1,813) 3,079 3,674 2,261 4,492Subtotal S94 under plans 11,815 1,710 661 (2,820) 11,366 33,476 36,230 8,612Sec 94 not under plansSec 94A leviesPlanning AgreementsSec 64 ContributionsTotal Contributions 11 815 1 710 661 (2 820) 11 366Total Contributions 11,815 1,710 661 (2,820) 11,366

CONTRIBUTION PLAN - XXX



INGS

EST. WORKS

OUT-STANDIN

EST. OVER/

(UNDER) FUNDING


YEAR


YEAR

EXPENDED

DURING YEAR

INTERNAL BORROW-

INGS (to)/from


EST. FUTURE CONTRIB

S

OPENING BALANCE

Note: The above summary of contribution plans represents the total of Council's individual contribution plans. Individual plan details areshown below.

Drainage 88 5 93 2,612 2,500 205Roads 38 2 40 10,407 10,200 247Traffic Facilities 1,078 149 60 1,287 631 1,870 48Parking 371 21 392 149 520 21Open Space 4,555 670 255 -932 4,548 13,940 17,900 588Community facilities 1,639 271 92 -75 1,927 2,063 979 3,011Other 4,046 620 226 -1,813 3,079 3,674 2,261 4,492Total 11,815 1,710 661 (2,820) 11,366 33,476 36,230 8,612

CONTRIBUTION PLAN - XXXEST. EST. BALANCEEST.CONTRIBUTIONS INTEREST EXPENDE INTERNAL HELD AS


DrainageRoadsTraffic FacilitiesParkingOpen SpaceCommunity facilitiesOtherT t l

EST. FUTURE CONTRIB

S

EST. WORKS

OUT-STANDIN


INGS

EST. OVER/

(UNDER) FUNDING

OPENING BALANCE


YEAR


YEAR

EXPENDED

DURING YEAR

INTERNAL BORROW-

INGS (to)/from


Total


Page N39

CITY OF BOTANY BAY


Note 18 - CONTINGENCIES & ASSETS & LIABILITIES NOT RECOGNISED IN THE BALANCE SHEET The following assets and liabilities do not qualify for recognition in the Statement of Financial Position but knowledge of those items is considered relevant to user of the financial report in making and evaluating decisions about the allocation of scarce resources. 1. INSURANCE POOLS

Council is a member of Metropool, a mutual pool scheme providing public liability and professional indemnity risk insurance to its Local Government authority members. Membership includes the potential to share in either the net assets or liabilities of the fund dependent on its past performance. Council’s share of the Net Assets or Liabilities reflects our contributions to the pool and insurance claims within each of the Fund Years. Council’s accounting policy regarding the measurement and disclosure of the potential liability or benefit is to book Council’s share of the net asset or liability value, as advised by Metropool taking into account their audited figures for the year ended 30 June 2012. It should be noted however, that any assessment of the financial position of Metropool is highly uncertain as regards the nature of assessing both (1) the value of claims incurred & reported but not finalised, as well as (2) predicting the value of claims incurred but not reported as at each reporting date. Accordingly the true financial position of Metropool may differ from that which is disclosed in these accounts, should future results differ from central assumptions used by the actuary in arriving at his claims estimate.

2. SUPERANNUATION – Defined Benefits Schemes 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. The Local Government Superannuation Scheme has advised member councils that the deficiency of assets over liabilities attributed to the City of Botany Bay was estimated to be in the order of $1,671,621 at 30 June 2012. 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 Contribution Plans.

CITY of BOTANY BAYCITY of BOTANY BAY


Note 19 - JOINT VENTURES & ASSOCIATED ENTITIES

Council participates in a number of cooperative arrangements with other Councils and other bodies.Depending on the extent of Council's interest and "control", these are set out in the following parts tothis Note Entities controlled by Council have been consolidated in accordance with AASB 127

(b) - Entities not "Controlled" by any member

United Independent Pools 2012 2011Council's respective interests are: - interest in outputs of the joint operation 3% 3% - ownership interest in the joint operation 3% 3%

- the proportion of voting power in the joint operation 3% 3%

this Note. Entities controlled by Council have been consolidated in accordance with AASB 127Consolidated and Separate Financial Statements -see Note 1.

- the proportion of voting power in the joint operation 3% 3%

Movements in Investment in Joint Operation $'000 $'000 Opening Balance 48 49 Amount recognised on inclusion in Council's accounts New Capital Contributions 276 192 Share in Operating Result -179 -193 Distributions Received Adjustment to Equity Share Share in Equity of Joint Operation 145 48

Expenditure Commitments

Capital Expenditures payableNot later than one year

Expenditure committed for (excluding inventories) at the reporting date but not recognised in the financial statementsas liabilities:

In accordance with the Code of Accounting Practice, reserves other than Asset Revaluation Reserve have beentreated as internal restrictions of cash and investments, and are included in the Share in Equity of the JointOperation.

Later than one year and not later than 5 yearsLater than 5 years

0 0Operating Expenditures payableNot later than one yearLater than one year and not later than 5 yearsLater than 5 years

0 0Contingent LiabilitiesEach member of the operation is jointly and severally liable for the debts of the operation

arising from Co ncil's share of the joint operation- arising from Council's share of the joint operation- arising from joint and several liability of all members


CITY of BOTANY BAY


Note 19 (b) (cont) - Entities not "Controlled" by any member

Metropool 2012 2011Council's respective interests are: - interest in outputs of the joint operation 15% 15%

- ownership interest in the joint operation 15% 15% ownership interest in the joint operation 15% 15% - the proportion of voting power in the joint operation 15% 15%

Movements in Investment in Joint Operation $'000 $'000 Opening Balance 915 569 Amount recognised on inclusion in Council's accounts New Capital Contributions 319 294 Share in Operating Result -142 52 Distributions Received Adjustment to Equity Share Share in Equity of Joint Operation 1,092 915

Expenditure Commitments

Capital Expenditures payableN t l t th

Expenditure committed for (including capital expenditure) at the reporting date but not recognised in the financialstatements as liabilities:

In accordance with the Code of Accounting Practice, reserves other than Asset Revaluation Reserve have beentreated as internal restrictions of cash and investments, and are included in the Share in Equity of the JointOperation.

Expenditure committed for (excluding inventories) at the reporting date but not recognised in the financial statementsas liabilities:

Not later than one yearLater than one year and not later than 5 yearsLater than 5 years

0 0Operating Expenditures payableNot later than one yearLater than one year and not later than 5 yearsLater than 5 years

0 0Contingent LiabilitiesEach member of the operation is jointly and severally liable for the debts of the operationEach member of the operation is jointly and severally liable for the debts of the operation- arising from Council's share of the joint operation- arising from joint and several liability of all members

Revenues, expenses, assets and liabilities of these operations have been consolidated within these reports inaccordance with Australian Accounting Standard AAS 24 "Consolidated Financial Reports". Reporting periods andaccounting policies adopted by both joint operations conform to those adopted by Council. No events have occurredafter balance date the financial effects of which may materially affect the financial or operating performance of thejoint operations for the next reporting period.


CITY of BOTANY BAY


2012 2011$'000 $'000

Operating StatementShare of joint venture revenues in operating revenues 199 301Share of joint venture costs in operating expenses 520 442j p g pNet Contribution -321 -141

Statement of Financial PositionCurrent Assets 2,500 2,214Non-Current Assets 15Share of Assets employed in Joint Ventures 2,500 2,229Current Liabilities 1,263 395Non-Current Liabilities 871Share of Liabilities incurred in Joint Ventures 1,263 1,266NET INTEREST IN JOINT VENTURES 1,237 963


CITY of BOTANY BAY

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 30th June 2012

RETAINED EARNINGS 2012 2011$'000 $'000

Balance at end of previous reporting period 207,512 207,729 Effect of correction of errors in previous years (see below)

Effect of accounting policy changes

Note 20 - RETAINED EARNINGS & REVALUATION RESERVES

Change in associated entities recognised - - Restated opening balance 207,512 207,729 Net operating result for the year 296 (217) Other comprehensive income

Share of other comprehensive income - joint ventures & associatesTransfer to retained earnings on sale of revalued infrastructure, property, plant & equipmentLand under roads recognised (de-recognised)Adjustment to correct prior period depreciation errors

Balance at end of the reporting period 207,808 207,512 p g p , ,

REVALUATION RESERVESInfrastructure, Property, Plant & EquipmentBalance at end of previous reporting period 88,754 88,754

Revaluation of infrastructure, property, plant & equipmentShare of other comprehensive income (revaluations) - joint ventures & associatesImpairment (expense) / recoupments offset to asset revaluation reserve

- -


Balance at end of reporting period 88,754 88,754

Plant & EquipmentOffice EquipmentFurniture & FittingsLeased Plant & EquipmentLand

At the end of the reporting period, the amount held in the reserve related to the following asset classes:

Land - Operational Land 52,601 52,601 - Community LandLand under roads- pre 1 July 2008- post 1 July 2008Land Improvements - non-depreciableLand Improvements - depreciableBuildings - non-specialised 1,805 1,805 Buildings - specialised 14,006 14,006 Other StructuresI f t tInfrastructure - Roads, bridges, footpaths 11,266 11,266 - Bulk earthworks (non-deprec.) 9,076 9,076 - Stormwater drainage - Water Supply Network - Sewerage NetworkOther Assets - Heritage Collections - Library Books - OtherFuture Reinstatement Costs - Tips - Quarries - Other remediation assets

Balance at end of reporting period 88,754 88,754


CITY of BOTANY BAY

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSNOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 30th June 2012

Note 20 - REVALUATION RESERVES & RETAINED EARNINGS (CONT)

2012 2011$'000 $'000

Available-for Sale Financial AssetsBalance at end of previous reporting period -

Revaluation of available-for-sale investments - - Realised available-for-sale investments gains

i d i- -

recognised in revenueBalance at end of reporting period - -

Nature and purpose of reservesInfrastructure, property, plant & equipment revaluation reserveUsed to record increments (net of decrements) on the revaluation of infrastructure, property, plant & equipment.

Available-for-sale investments revaluation reserveChanges in fair value of investments categorised in this manner are held in this reserve pending sale. Amounts are recognised in profit and loss when the relevant investments are sold.

MOVEMENTS IN RETAINED EARNINGSCorrection of errors in previous years

(i)

(ii)In previous years Council had not consistently reviewed theestimates of useful lives of certain assets. In the course of therevaluations carried out in the current reporting period, it was

Certain investments containing embedded derivatives were previouslyincorrectly categorised as available-for-sale instead of fair value throughprofit & loss . As fair value equalled carrying value there was no effect onthe Income Statement, and the categorisation has been corrected on Note 6.

found that the combined effect resulted in a significantreduction in the depreciation that had previously beencharged.It was found to be impracticable to calculate the distortionoccurring in each of the previous years, and the adjustmenthas been made to current year balances.

(iii) In the course of the revaluations carried out in the currentreporting period, it was found that a number of buildings hadnot previously been recognised.An estimate has been made of the depreciation that shouldhave been charged in the previous year had they beencorrectly recognised at the appropriate time, and thecomparative amounts have been adjusted accordingly.

Commencement of AASB 1051 - Land under roads

- -

As at 1 July 2008, Council determined that it was of theopinion that it was not possible to reliably measure the fairvalue of land under roads previously acquired, and that it wasimpracticable to determine the original cost of acquisition.

In accordance with AASB 1051.9, the carrying value of landIn accordance with AASB 1051.9, the carrying value of landunder roads previously recognised has been made againstthe opening balance of retained earnings.

As at 1 July 2008, Council determined that it although it wasimpracticable to determine the original cost of acquisition ofland under roads previously acquired, it was of the opinionthat it was possible to reliably measure the fair value as at thatdate on the basis set out in Note 9 above.

In accordance with AASB 1051.9, the resulting adjustmenthas been made against the opening balance of retainedearnings.


IkCITY OF BOTANY BAY

GENERAL PURPOSE FINANCIAL STATEMENTS

INDEPENDENT AUDITORS' REPORT

Report on the Financial statements

We have audited the accompanying general purpose financial statements of City of Botany Bay,which comprises the Balance Sheet as at 30 June 2012, Income Statement, Statement ofComprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the yearended on that date, a summary of significant accounting policies and other explanatory notes and theStatement by Councillors and Management. The financial statements include the consolidated financialstatements of the economic entity and the entities it controlled at year end or from time to timeduring the year.

Responsibility of Council for the Financial Statements

The Council is responsible for the preparation and fair presentation of the financial statements inaccordance with Australian Accounting Standards (including the Australian AccountingInterpretations) and the Local Government Act 1993. This responsibility includes the maintenance ofadequate accounting records and internal controls designed to prevent and detect fraud and error;designing, implementing and maintaining internal controls relevant to the preparation and fairpresentation of the financial statements that are free from material misstatement, whether due tofraud or error; selecting and applying appropriate accounting policies; and making accountingestimates that are reasonable in the circumstances.

Auditors' Responsibility

Our responsibility is to express an opinion on the financial statements based on our audit. Weconducted our audit in accordance with Australian Auditing Standards. These Auditing Standardsrequire that we comply with relevant ethical requirements relating to audit engagements and plan andperform the audit to obtain reasonable assurance whether the financial statements are free frommaterial misstatement. Our audit responsibility does not extend to the original budget informationdisclosed in the Income Statement, Statement of Cash Flows, and Note 2(a) or the budget variationexplanations disclosed in Note 16. Nor does our responsibility extend to the projected futuredeveloper contributions and costs disclosed in Note 17. Accordingly, no opinion is expressed onthese matters.

Assurance Partners

T.+61 2 9232 5111Level 5, I Chifley SquareGPO Box 7066www.hr-ss.com.au Practising as Hill Rogers Spencer ABN 56 435 338 966F. +61 2 9233 7950 Sydney NSW 2000 Australia Sydney NSW 2001 [email protected] Steer Assurance Partners

Member of KS International, an association of global independent accounting firms

Liability limited by a scheme approved under Professional Standards Legislation

in the financial statements. The procedures selected depend on the auditor's judgement, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity'spreparation and fair presentation of the financial statements in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Council's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by the Council, as wellas evaluating the overall presentation of the financial statements. Our audit did not involve an analysisof the prudence of business decisions made by Council or management.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professionalethical pronouncements.

Auditor's Opinion

In our opinion,

(a)the Council's accounting records have been kept in accordance with the requirements of theLocal Government Act 1993, Chapter 13 part 3 Division 2; and

(b)the financial statements:(i)have been presented in accordance with the requirements of this Division;(ii)are consistent with the Council's accounting records;(iii)present fairly the Council's financial position, the results of its operations and its cash

flows; and(iv)are in accordance with applicable Accounting Standards and other mandatory

professional reporting requirements in Australia.

(c)all information relevant to the conduct of the audit has been obtained; and

(d)there are no material deficiencies in the accounting records or financial statements that we havebecome aware of during the course of the audit.

Emphasis of Matter

Without qualification to the opinion expressed above, we draw attention to the mandatoryrequirement for councils to prepare financial reports and have them audited within four (4) months ofthe end of the financial year.

HILL ROGERS SPEMCER STEER

Partner

Dated at Sydney this 7th day of November 2012

City of Botany BayGeneral Purpose Financial Statements

Independent Auditors' Report Page 2

•j-a

7 November 2012

The MayorCity of Botany Bay141 Coward StreetMASCOT NSW 2020

Mayor,

We are pleased to advise completion of the audit of Council's books and records for theyear ended 30 June 2012 and that all information required by us was readily available. Wehave signed our reports as required under Section 417(1) of the Local Government Act,1993 and the Local Government Code of Accounting Practice and Financial Reporting to theGeneral and Special Purpose Financial Statements.

Our audit has been conducted in accordance with Australian Auditing Standards so as toexpress an opinion on both the General and Special Purpose Financial Statements of theCouncil. We have ensured that the accounts have been prepared in accordance withAustralian equivalents to International Financial Reporting Standards (AIFRS) and the LocalGovernment Code of Accounting Practice and Financial Reporting.

This report on the conduct of the audit is also issued under Section 417(1) and we nowoffer the following comments on the financial statements and the audit;

1. RESULTS FOR THE YEAR

I.I Operating Result

The operating result for the year was a surplus of $296,000 and compares with a deficit of$217,000 in the previous year.

Audit Report - Year Ended 30 June 2012

T. +61 2 9232 5111Level 5, I Chifley SquareGPO Box 7066www.hr-ss.com.au Practising as Hill Rogers Spencer ABN 56 435 338 966F. +61 2 9233 7950 Sydney NSW 2000 Australia Sydney NSW 2001 [email protected] Steer Assurance Partners

Member of KS International, an association of global independent accounting firms

Liability limited by a scheme approved under Professional Standards Legislation

The following table sets out the results for the year and the extent (%) that each category ofrevenue and expenses contributed to the total.

2012

$'000

%of

Total 201 I% of Increase

Total (Decrease)$'000$'000

Revenues before capital items

Rates & annual charges 27,866 59% 26,556 57% 1,310User charges, fees & other revenues 1 1,38! 24% 1 1,696 25% (315)Grants & contributions provided for operating

purposes 6,220 13% 6,512 14% (292)Interest & investment revenue 1,450 3% 1,56! 3% (III)

46,917 100% 46,325 100% 592

ExpensesEmployee benefits & costs 25,191 48% 22,871 46% 2,320

Materials, contracts & other expenses 21,582 41% 20,898 42% 684Depreciation, amortisation & Impairment 5,435 10% 5,743 12% (308)

52,208 100% 49,512 100% 2,696

Surpliis/(Deficit) before capital items (5,291) (3,187) (2,104)

Grants & contributions provided for capital

purposes 5,587 2,970 2,617

Net Surplus/(Deficit) for the year 296 (217) 513

The table above shows an overall increase compared with the previous year of $513,000 andcan mainly be attributed to the dedication of the Banksia Street pedestrian bridge ($3.45million) offset by an increase in premiums for workers compensation insurance ($767,000).

1.2 Funding Result

The operating result does not take into account all revenues and all expenditures and inreviewing the overall financial performance of Council it is useful to take into account thetotal source of revenues and where they were spent during the year which is illustrated inthe table below.

The Mayor, City of Botany Bay

Audit Report for the year ended 30 June 2012 Page 2

2012 2011

Funds were provided by:- $'000 $'000

Operating Result (as above)Add back non funding items:-

296 (217)

-Depreciation, amortisation & impairment

-Book value of non-current assets sold

5,435237

5,74341

- (Surplus)/Deficit in joint ventures 321 1416,289 5,708

Decrease/Redemption in Non-current Investments 30 1,635Transfers from externally restricted assets (net) 188 0Transfers from internal reserves (net) 1,480 350Net Changes in current/non-current assets & liabilities 1,653 25!

9,640 7,944Funds were applied to:-Purchase and construction of assets

Transfers to externally restricted assets (net)(8,272)

0(4,999)(4,329)

Capital contributions to joint ventures (595) (486)(8,867) (9,814)

lncrease/(Decrease) in Available Working Capital 773 (1,870)

2. FINANCIAL POSITION

2.1 Unrestricted Current Ratio

The Unrestricted Current Ratio is a financialindicator specific to local government andrepresents Council's ability to meet its debtsand obligations as they fall due.

After eliminating externally restricted assetsand current liabilities not expected to bepaid within the next 12 months net currentassets amounted to $2,711 millionrepresenting a factor of 1.38 to I.

f\Unrestricted Current Ratio

il1 1 1 I2009 2010 2011 2012

| Ratio 1.51 1.71 1.38 1.38

\,J

2.2 Available Working Capital - (Working Funds)

A more meaningful financial indicator specific to local government is the level of AvailableWorking Capital. Net Current Assets are adjusted by eliminating both external and internalreserves held for future purposes.



At the close of the year the Available Working Capital of Council stood at $3,068 million asdetailed below;

Net Current Assets (Working Capital) as

per Accounts

Add: Payables & provisions not expected to be

realised in the next 12 months included above

Adjusted Net Current Assets

Add: Budgeted & expected to pay in the next 12

months

-Employees leave entitlements

-Deposits & retention moneys

Less: Externally restricted assets

Less: Internally restricted assets

Available Working Capital as at 30 June

2012$'000

20! I$'000

Change

$'000

7,595 9,863 (2,268)

9,334 7,731 1,603

16,929 17,594 (665)

1,728 1,800 (72)2,709 2,867 (158)

(14,218) (14,406) 188(4,080) (5,560) 1,480

3,068 2,295 773

The balance of Available Working Capital should be at a level to manage Council's day today operations including the financing of hard core debtors and inventories and to provide abuffer against unforeseen and unbudgeted expenditures. Taking into consideration the natureand level of the internally restricted assets (Reserves) set aside we are of the opinion thatAvailable Working Capital as at 30 June 2012 was satisfactory.

2.3 Debt

Council has no debt and has been free of debt since 1994.

2.4 Summary

Council's overall financial position, when taking into account the above financial indicators is,

in our opinion, sound.

The Mayor, City of Botany BayAudit Report for the year ended 30 June 2012 Page 4

3. CASH ASSETS

3.1 Cash sB investments

Cash and investments held at the close of the year amounted to $19.77! million ascompared with $21,356 million and $21,195 million at the close of financial years 201 I and2010 respectively.

The chart alongsidesummarises the purposes

for which cash andinvestments were held.

Cash & Investments

201012011

0 2012

ExternalRestrictions

11.99514.68614.036

InternalRestrictions

5.9105.5604.080

UncommittedFunds3.2901.110

1,655

Externally restricted cash and investments are restricted in their use by externallyimposed requirements and consisted of unexpended development contributions underSection 94 ($11,366 million), specific purpose grants ($389,000) and special rate levies($2,281 million).

Internally restricted cash and investments have been restricted in their use by resolutionor policy of Council to reflect forward plans, identified programs of works, and are, in fact.Council's "Reserves". These Reserves totalled $4,080 million and their purposes are morefully disclosed in Note 6 of the financial statements.

Unrestricted cash and investments amounted to $1,655 million which is available toprovide liquidity for day to day operations.

3.2 Cash Flows

The Statement of Cash Flows illustrates the flow of cash moving in and out of Council duringthe year and reveals that Cash Assets decreased by $167,000 to $1,856 million at the closeof the year.

In addition to operating activities which contributed net cash of $3,682 million were theproceeds from the sale of investment securities ($2,518 million) and other assets ($3 17,000).Cash outflows other than operating activities were used contribute capital to insurancepools ($595,000), purchase investment securities ($ 1 million) and to purchase and constructassets ($5,089 million).



4. RECEIVABLES

4.1 Rates cS Annual Charges (excluding interest c£ extra charges)

Net rates and annual charges levied during the year totalled $27,866 million and represented53.07% of Council's total revenues.

Including arrears, the total rates and annual charges collectible was $30,641 million of which$27.801 million (90.73%) was collected.

4,2 Rates, Annual S. Extra Charges

Arrears of rates, annual & extra charges

stood at $3.14! million at the end of theyear & represented 10.07% of thosereceivables.

The high rate of arrears is highlighted by asignificant ratepayer owing $850,000 at yearend.

43 Other Receivables

Receivables (other than rates, annual & extra charges) totalled $2,157 million. Thoseconsidered to be uncertain of collection have been provided for as doubtful debts and thisprovision amounted to $252,000.

5. PAYABLES

S. I Employees Leave Entitlements

Council's provision for its liability toward employees leave entitlements and associated oncosts amounted to $7,569 million. A cash reserve of $1,200 million was held at year endrepresenting 15.85% of Council's obligation to their employees and, was in our opinion,sufficient to enable Council to meet unbudgeted and unanticipated retirements.

5.2 Deposits, Retentions £ Bonds

Deposits, Retentions and Bonds held at year end amounted to $6,709 million. A cashreserve of $1,800 million was held at year end representing 26.83% of this liability and was,in our opinion, adequate.


Audit Report for the year ended 30 Juno 2012 Page 6

¦|u

6.MANAGEMENT LETTER

A letter was issued to management In respect of our examination of certain aspects ofCouncil's accounting systems and internal controls necessary to produce reliable financialreports that we considered warrant attention.

7.CONCLUSION!

We wish to record our appreciation to your General Manager and her staff for their readyco-operation and the courtesies extended to us during the conduct of the audit.

Yours faithfully,

HILL ROGERS SPEMCER STEER

GARY MOTTAUPartner

The Mayor, City of Botany BayAudit Report for the year ended 30 June 2012 Page 7

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