l5 t7 l8 )n - maranoa.qld.gov.au · Notes to the Financial Statemenrs For the year ended 30 June...

Financial Statements

For the year ended 30 June

MARANOA REGIONAL COUNCIL

Note

Statement of Comprehensive Income

Statement of Financial position

Statement of Changes in EquityStatement of Cash Flows

Table of contents

I

2

A

f

61

8

9

l0ll12

t3

t4

l5l6t7l8t9)n

2l22

23

24

z)26

27

28

29

Notes to the financial statemenrs

Signifi cant accounting policies

Analysis ofresults by function

Revenue analysis

Grants, subsidies, contributions and donationsCapital income

Gain (loss) on the disposal ofcapital assets

Employee benefits

Materials and services

Finance costs

Depreciation

Capital expenses

Loss on write-offofcapital assets

Cash assets and cash equivalents

Trade and other receivables

Inventories

Non-current assets classified as held for sale

Property, plant and equipment

Trade and other payables

Provisions

Borrowings

Asset revaluation surplus

Retained surplus

Reserves

Commitrnents for expenditure

Events after balance date

Contingent liabilities

Superannuation

Trust funds

Reconciliation ofnet result for the year to net cash inflow (outflow) from operating activities


30

3l

Iable of Contents - continued

Financial Instruments

National competition policy comprising:

(a) Activities to which the code of competitive conduct is applied(b) Financial perfomiance of activities subject to competirion reformsManagement Certificate

Independent Audito/s Report

For the year ended 30 June 2012


Statement of Comprehensive Income


Income

Revenue

Recurrent revenue

Rates and levies

Sale of goods and major sewices

Fees and charges

Rental and levies

Interest received

Sales ofcontract and recoverable worksOther recurrent income

Reimbursement of expenditure

Grants, subsidies, contributions and donations

Total recurrent revenue

Capital revenue

Grants, subsidies, contributions and donations

Total revenue

Capital income

Total income

Expenses

Recurrent expenses

Employee benefits

Materials and services

Finance costs

Depreciation

Total recunent expenses

Capital expenses

Other capital expenses

Total expenses

Net result

Other comprehensive income

Increase in asset revaluation surplus

Total other comprehensive income

Total comprehensive income for the period

The above statentent should be reacl in conjztnction

2012

Note $

20t I

t6\627,t20

8,643,460

2,900,264

557,263

|,t94,494

7,117,054

426,1t4

75,209

4 (i) 59,303,270 53,214,t81

109,253,085 90,815,159

4 (ii) 6,222,516 8,77s,670

6,222,5t6 8,779,670

n5,475,601 99,594,829

5 167,722 l,l19,5302 1t5,643,323 t}O,7l4,35g

7 (23,89t,77r) (22,549,22s)

8 (69,379,602) (34,980,s02)

9 (887,643) (960,386)

l0 (9,4s8:708) (7,960,0s8)

(t03,6t7,724) (66,7s0,20t)

r l (80,300)

(t03,698,024) (66,7s0,201)

ll,g45,2gg 33,964,15g

406,456,031

406,456.03 I

___JJj! s,2e2_ ___ 4 49,420. | 82_

with the accompan.ying notes and Stnnmrtn of Signifcant Accounting policies.

3 (a)

3 (b)

3 (c)

3 (d)

3 (e)

3(03 (e)

21,08t,498

I 1,735, I 50

1,900,002

r,093,909

1,679,785

tt,758,629

700,842


Statement of Financial position

As at 30 June2012

Current Assets

Cash assets and cash equivalents

Trade and other receivables

Inventories

Non-current assets classified as held f,or sale

Non-current Assets

, Properry, plant and equipment

TOTAL ASSETS

Current Liabilities


Provisions

Borrowings

Non-current Liabilities


Provisions

Borrowings

TOTAL LIABILITIES

NET COMMUNITY ASSETS

Community Equity

Asset revaluation zurplus. Retained surplus

Reserves

20t2

Note $

20tl

13 27,645,660 38,9t2.691t4 28,703,479 t7,599,287

15 4,5t6,098 2,885,419

60,865,237 59,397,397

t6 853,615 853,615

6t,7t8,852 60,251,012

t7 (a) 917,436,683 965,008,206

9'17,436,683 96s,008,206

1,039,155,535 t,025,259,218

r 8 8,754,531 9,483,780

19 796,818 503,854

20 898,403 1,091.703

10,449,752 11,079,337

t8

19 2,425,484 |,702,07020 12,143,368 t0,286,179

14,568,852 11,988,249

25,0t8,604 23,067,586

_1,014,136,931 1,002,191,632

21 649,942,7t6 649,942,7t6

22 322,172,2s2 3n,708,92923 42,02t,963 40,539,987

TOTAL COMMUNTTy EeUITy 1,014,136,931 _Jp02,tgl,63l_The above statement should be read in conilnction v'ith the accompanying notes ancr strmmary of signifcaffiounting pori"i"r.

'5

= 6-

?=d>oo

EezI

I

II

I

s€

.i

5es-N

a raloo

ro$=4o:;<o

rol

6

3o>Nge&z

r

5eo^NS

d: +9r6tnN

r

o

q,Ng=era-al v'l

6.d' +r

od

d

do

E;ENE5t'=-A

oI

I

II

o€r6€-n,?

-€\d56ryq^NV6

:i,3Sldlr '-:Nvi

N

€r

60dolqdN 9e!35 * ir 4.N ;.-

o-9d

6t

NNro.iN

F

o€rsh6

- rG ii

- .^ ':r o:, so''-6t;'N96oe)s

d

s

6

IoN

d6-o9d._i qi

^,ov5e.t:6to-

-:

6cl

o

gz r at clal al

aE2 5 fi, g'.

Etr

- g EZ E E? 2 =

g .j 5I E 5.= ; "E;27s.sl.E.ai i e'i EfiEZ i=_ ; =_4 ;:;'i. ts-E ?, E+

=i i=-ax EEE: :s BEr? oa;E E;=iEit :e:s ;SduE?? .b:.bE 'EgoacE u: EZ- IzEEc - i ; s6>dG

b0

\i

o06o'i

V)

B

sbo

t

a

\p

s

c

c

H

I

o

U

Q

o

U)

JUz

QJ

z

z

:


Statement of Cash FlowsFor the year ended 30 June 20 I 2

2012 20tlNote $ $

Cash flows from operating activities :

Receipts

Receipts from customers

Interest received

Payments

Payments to suppliers

Interest expense

Net cash inflow (outflow) from operating activities

Cash flows from investing activities:Commonwealth goverffnent grants

State Government subsidies & grants

Other Non-Govemment Subsidies

Capital contributions

Payments for property, plant and equipment

Proceeds from sale ofproperty plant and equipment

Net movement ir] Ioans to community organisations

Net cash inflow (outflow) from investing activities

Cash flows from financing activities:

Proceeds from borrowrngs

Repayment of borrowings

Net cash inflow (outflow) from financing activities

Net increase (decrease) in cash and cash equivalents heldCash and cash equivalents at beginning of the financial year

Cash and gash equivalents at end of the linancial year

29

95,0t1,754

t,679,785

82,704,39s

|,t94,494

(93,3t3,262) (56,859,939)

(730,140) (788,234)

2,648,137 26,250,716

2,082,860 t,208,029

2,795,466 7,003,621

t,227,273

n6,9t'7 568,020

(22,10t,694) (10,427,996)

301,931 2,759,061

/l Rl0)

(t5,579,057) 1,110,735

3,000,000

(1,336,111) (1,s72,05t)

1,663,889 (1,s72,051)

(11,267,03r) 2s,789,400

38,9t2,691 t3,123,291

__ry4s$60_ __38,e&!1!_

20

20

l3

The above statement should be read in coniunction with the accompanying notes and summary of signficant Accounting policies

Notes to the Financial StatemenrsFor the year ended 30 June 2012


l. l

1.2

l. 3

1.4

Signilicant accounting policies

Basis of preparationThese general purpose financial statements are fbr the period I Jul1..20l I to 30 June ?012 andhave becn prepared in cornpliance with the requiremerrts ofthe Local Covernrnenr Act 2009and the Local covernrnent (Finance. plans and Reponing) Regulatitu 2010. consequentry,these financial statements have been prepared in accordance rvirh all Australian Accountingstandards' Australian Accounting lnterpretations antl orher authoritative pronouncementsissued by rhe Australian Accounting Standards Board.

These financial stalements hare been prepared uncler the historical cost conventlon except fbl.the revaluation ofcertain non_curent assets.

Statement of complianceThese general purpose financial statements comply rvith all accounting stanclarcls an6interpretations issued by the Australian Accounting Standards eoarct 1,a.esey that are relevantto Council's operations and effective fbr the current reporting period. Because the council is anot-tbr-profit entitv and the Australian Accounting Standarcls lnclude requirements fior not-for-profil entities which are inconsistent with International Financial Reporting Standards (IFRS),to the extent these inconsistencies are appried, these financial statem;nts di not compll, rvithIFRS' The main impacts are the offselring of revalualion and impairment gains and lossesrvithin a class ofassets' anrl the timing ofrhe recognition ofnon-reciprocal*grant revenue.

ConstifutionThe Maranoa Regional Council is constiftrted under the eueensland [.ocal Govemment Act2009 and is dorniciled in Auslralia.

Date of authorisationThe financial stalements are authorisecl for issue on rhe date it rvas submitted to the Auditors forfinal signature. This is the date rhe managemerrt certificate is sisned.

CurrencyThe council uses the Australian dollar as its functional currency and its presentation curency.

Adoption of new and revised Accounting StandardsIn the current year. council adopretl ali of the neu' and revised Standards and Interpretatronsissued by the Australian Accounting Standanls l3oard (AASB) that are relevant to rts operationsande{fectiveforthecurrentreportingperiod.1"headoptionofthenovandrevisedStandardsand lnterpretations has not resultecl in any r.Daterial changes to Council's accounting policies.

At the dateofauthorisation oflhe financial stilternents. the Standanls and luterpretations listedbelorv rvere in issrre but not yef effective

AASB 9 Financial Instnrmenrs (December 1009rAASB l0 Consolidatecl Financiai Srarernr,ntsAASts I i Joint Arrangr:nrentsAASB l2 Disclosure of interests in orher enriliesAASB l3 Fair Value \,leasuremenrAASB I l9 Empkryee beneiits (compietel-v, r.eplzrces eristing stanciarcl)AASB 127 $1:parate Financial Slatements (replaces thc errstrng standarcl together wit6 Az\sB l())

AASB ll8 Iuveslrnents in Associates antl Joint Ventures (replaces the e.,tisting slandard)A.A,sts 1053 Application of Tiers.f Ausrralian Accounti'q Stantlarcls?0o9-ll Alnendmellts to Atrstralian Accrrunting Standards arising lronr AASB 9 (Det:enrbc:r z0()9)

'A'ASB 2010-2 Amendtnenfs to,Australian Accourtins Stanrlards ansirrg liorn Redr,rcetl pisclosureKequIrentents

l. -<

1.6

Effective forannual reportperiods beginningon are after:

I January 201-i

I January 2013

I January 2013I January 2013

I January 2013I Januar_v 201-1

I Januar_v 201.)

I January 20ljI July 2013I January 201 3

I Jul-v- 20l3

.SffFffH*R.


Notes to the Financial StatementsFor theyear ended 30 June 2012

AASB 2010-7 Arnendments to Australian Accounting Standards arising lrom AASB 9 (December I January 20132010)

AASB 2010-8 Amendments to Australian Accounting standards - Deferred rax: Recovery of.Llndellying Assets

AAstl 2010-10 Further Amendments to Australian Accounting Standards - Remoyal of FixedDares ftrr Firsftime AdoptersAASB 201 l -2 Amendmenrs to Austral.ian Accounting Standards arising frcm the Trans-TasmanConvergence Project - Reduced Disclosure RecluirementsAASB 201 l-3 Amendrnents to Australian Accounting Standards - Orderlv Adoption of Changes tothe ABS GFS Manual and Related AmendmenrsAASB 201 l-4 Amendme,ts to Australian Accounting Standards ro Remove Indivitrual KeylVlanagement Pcrsorutel Disclosure RequirementsAAsll 201 l-6 Amendments to Australian Accounring Standar.ds - Hxtending Relief frornconsolidation, the Equiq, Merhod and proportionate consolidarion - Reduced f)iscrosureRequirements

AASB 201l-7 Alnendrnents to Australian Accounting Staudards arising from the consolidation and I January 2013Joint Arrang€ments StandardsAASB 201l-8 Amendments to Austrarian Accounting standards arising frorn AASB 13 l January 2013A'\sB 201I-9 Arnendments to Australian Accounting Standards - Presentation of ltens of other I July 2012Comprehensive IncomeAASB 201l-10 Amendmenrs to Austrarian Accounting standanrs arising fronr AASB l r9 l January 2013(September 201 I )

*111,'ll]:tl Amendmentsto AASB ll9 (september20l l) arising from Reduced Disclosure I July20l3Keourrements

AASB 201I-12 Amerrdments to Australian Accounting Standards arising frorn Interpretation 70 I January 201-j(AASB l)AASB 201 I - | 3 Amendrnents to Australian Accounting Standard - hnprovements to AASB 1049 I July 201 2

Interpretation 20 Stripping costs in the production phase of a surface Mine

AASB 9. which replaces AASB 139 Financial Instruments: Recognition and Measuremenr, rseffective fbr reporting'periods beginning on or after l January 2oi3 and must be appriedretrospectively The main impact of AASB g is to change the requiremenls fbr theclassification, measurement and disclosures associated with financial assets. Under the newrequlrenents the four current categories of financial assets stipulated in AASB I 39 rvill berqrlacal. with two measurement categories: fair value and amortised cost and financial assetsrvill onlv be able to be measured at amonised cost wlrere very specific conclitions are mer.As a result. council wilr be required to measure its financiar assets at f'air varue.Consolidation StandardsThe AASB issued a suite of six relatecl accountiug standards w.hich are effective for annualreporting periods begin'ing on or after I January 2013. These standards:' AASB l0 Consolidated Financial Statemenfs' AASB I I Joint Arrangements' AASB l2 Disclosurc of Interests in Other Entities. AASB 127 Separate Financial Staternenrs' AASB 128 Investments in Associates ancl Joinr Ventures

AASB l0l r-7 Amendments to Ausrralian Accounting standards arising fi-om rheConsoliclation antt Joirrt Arrangetnents Stanttarclsalln to llnprove the accounting requiremenls lbr consolidated linancial statements. iolnrarangemellts and off balance sheet i,ehicies. The AASB is strll considering rvherherthesestandards need to be modified lbr application by not-for-prnfit entities. Coisequently. n6t-tbr-protit ertities are uot currently pe.nitted to apply these standards pr.ior to the nrandaroryapplication date. As council is a notfirr-proiit entiry. nn asscssrncnt has been rnade of thepotential impact. ;\n assessJuent of'the irnpact wili he r"nacle rvhen the norfbr_nroiitrccluircr ncnrs arc firral jscd.

I January 20 I 2

I January 2013

I July'2013

I July 2012

I July 2013

I July20l3

I January 2013

QAOCERTIFIED


Notes to the Financial StatementsFor the year ended 30 June 2012

AASB 13 Fair Value Nleasurenrent (AASB 13)AASB l3 applies to reporting periods beginning on or afier I January 2013. The standard sersout a new deflnition of "fairvalue". as well as new principles to be applied when tJetermlmngrhe lair value o1'assets and liabilities. The net requirements rvill apply to all of the C6uncil,sassets and liabilities (excluding leases) thal are measured ancl/or disclosed al f'air value oranother rndasurement based on lbir value. The potential irnpacts oi AASB I 3 relate ro the fairvalue nteasurement melhodologies usecl. and financial statemenr disclosures rnade in respect ol,such assets and liabiliries.'l he Maranoa Regio[al Council has comrnenced revicu,ing its f'air value methodorogies(including instructi.ns to valuers. data used and assu*ptio.s rnade) tbr all items oflrup.rry,plant and equiprnent measured at fair value to determine rvhether those nrethodologies cornolvwith AASB 13.

To the extent that the rnethodologies don't cor'ply.. changes wilr be neessary. while rrreCor'rncil is yet to complete this revierv, no significant changes are anticipated, based on the fbirvalue rnethodologies presently used. Therefore, and at thls stage. no consequential nraterialrnrpacts are expected tbr the Maranoa Regional courrcil's properr_v, plant and equiprnent in2013-r4.

A ASB I 3 rvill require an increased arnount of information to be disclosed in relation to lairvalue measurements for both assets and liabilities. Trr the extenr that any fai' valuen'leasurement for an asset or liability uses data that is not "observable" outside tlre Council. theamount of information to be disclosed will be relatively grealer.

Amendments to AASB l0l presentation of Financial StatementsThe AASB l0l Amendrnents require council to group items presented in other compre6ensiveincome into those that, i' .ccordance with other standards: (a) will not be reclassifiedsubsequenrly to profit or loss ancl (b) will be reclassif.ied subsequently to prof.it or loss wlrenspecific conditions are met. It is applicable fbr annual periods beginning on or after I July2012 The Council's mimogement expeots this rvill change the cunent presentation ol items inother comprehensive income; however. it will not affect the measurement or recog-nition of suchitems.

Amendments to AASB Il9 Employee BenefitsA revised version of AASB r l9 Empl..'-ee Benefits applies frorn reporting periods beginningon or after I January'20,l3. The revised AASB I l9 is generally to be applied retrospec-trvely.

The revised stanclard includes changed criteria for accounling for employee benefits as ',short-term emp.loyee benef-its,'.

Had the Maranoa Regional councir appried the revised standarcr this year annual leave curgnllyclassilied as a'shon-tenn benefit'would have been reclassified as a ,rong-term

benefrt,.However, no reported anlounts rvoulcl have been ermenclcd as the Council already cliscounts theannual leave liabilit-v to prcsutt value in respcr t of arnounts not expected to be settlecl rvithin I 2months (ref'er Note 1.20).

The concept of "termination benefits" is clarified anrl the recognition criteria lbr liahilities fortemrinatiotls beneflts r.vill be different. lf tennination benetlts nieet the tirnefrarne critenon fbr"short-tenn ernployee benefits", they *iil be nreasured according to the AASB il9requiretnents fbr "sirort-terrrr ertrployee benefits". Othenvise, ternunation benefi-ts rvill necd tt-rbe tneasured according to the A A S B I I 9 requirenrenrs for' "other long-tem ernployee benefits,,.Ljnder the revised standard, the recoenition and nreasurernent ofernployer oblrgatiols fbr ,,6therlo,g-ternr emphvee berreflts" wili need to bc accounted lnr according t'rnost of tlrcrequirernents fbr defirred benefit nlans.The revised AA s B I I 9 also inc ludes c hangc-d req ui'emerts fbr the nreasuremenr of erlploverliabilitics/assets arising f'ronr clefined bcneflt plans, a'd rhr'nreasureirent andchanges in such liabilities/assers.i\4aranoa Regional Council ct'utnbures t(r the Local Govenrmelrt Sul)eralmuation Schenre (e1l)as disclosetl in note 27. The reviseci sranclarrl s,iil require N{aranoa Regional Cgupcil tp rnakeadditi.nal discl.sures regarding the Deflned Beneilts Fu'd elernenr .f the scherne.

The reponed results atrd posttion of thc councii rvill not change on adoption of the otherpronouncer)lenls as the\ clo not result in an! changes to the council's existing accountrngpolicies. Adoptlorl will. however, result irr chirnges ro infonnatiorr cun-enrly ciisclosed in thefinancial slittelrlents. Tlre councrl tioes nol intend to atlopt an-r.. olthesc piol.rouncernents belbretheir el'l'ecti ve dates.

preselttation of

Notes to the Financial StatemenrsFor the year ended 30 June 2012

MARANOA REGIONAL COI.NCIL

l. 8

critical accounting judgements and key sources of estimation uncerttinry-In the applicatiou of Council's accn.nting policies, management is requirecl to makejudgements, estimates and assumptions aboul carrying values ofassets ancl liabilitres that arenol readily apparent from other sources. The estimates and associated assumptions are basedon historical experience and orher tbctors that are considered to be relevant. Acfual results maydiffer from these estimates. The estimates a'd ongoing assumplions are reviewed on anongoing basis. Revisions to accounting estimates are recognised in the period in which theesttmate is revised and in furure periods as relevant.

Judgements, estimates and assumptions that have a potential significant ell-ect are outlined inthe following flnancial statement notes:

Val'arion and dqrreciation ofpr.perty, prant and equipment - n.te l.r6 and note r7 (b)Impainnent of propertv, plant and equipment - note l.l7 antl note I7 (a)Prclvisions - note 1.22 and note 19

Contingencies - note 26

RevenueRates, levies. grants and other revenue are recognised as revenue on receipt offunds or earlierupon unconditional entitlement to the funds.

Rates and levieswhere rate monies are received prior to the cornrnencement of the ratinlevying period, theamount is recognised as revenue in the period in which they are received, othenvise rates arereccrgnised at the corrunencement ofrating period.

Grnnts and subsidiesGrants, subsidies and contributions that are non-reciprocal in nature are recognised as reveluein the year in which Council obtains control over them. An equivalent arnount is transf-erredfiorn retained eamings to the relevant resen.e until the fu'ds are expended. unspent non-reciprocal capital grants are placed in the Contrained grants, subsidies ancl contributionsresen'e.

cou,cil spends all recurent grants in the year received and therefore council has notestablished a resene for this purpose.

Where grants are received that are reciprocal in nature, revenue is recognised as the vanousperfbnnance obligations under the fi.rnding agreernent are fulfllled. Council does not currentlyhave any retiprocal glants.

Non-cash contributionsNon-cash contributions with a value in excess ofthe recognition thresholds. are recognised asrevenue attd as non-currenl assets. Non-cash contributions below the thresholds are recordetl asrevenue atrd expenses.

Physical assets contributed to Council by developers in the fonn ofroacl rvorks. stornrs,arer,rvater and wastewater infrastructure and park ecluipnrent are recognised as revenue rvhen t6edeveloptnenl bectltnes "on mainfenance" (i.e. tire Council obtains control ofthe assets andbecomes liable ftir any trngoing maintenance) and there is sufllcienr ciata in the lonn oidrarvings and plans to detenttine the approximate specilications and values ofsuch assets. Allnon-cash contributions are recognised at the lair value olrhe contribution received on the dateof acquisttion

(.-irsh contributionsDevelopers also pay- infrastructure cltarges ft'rr trunk infrastucture. such as pr.unping statioils.trealnlent rvorks. rnains. servers itnd rvater ptrllution control u.'orks. These inltastnrcture chargesaretlotivithinthescopeof AASBlnterpretation l8becatrsethereisnoperfonrranceobligationassociated with thern. Consequently. the infrastructure charges irre recognised as income whenrec er'" ed.

l. 8 (a)

l. I (b)

t.8 rc)

QAOCERTIFIED

l. i (d)

MARANOA RtrGIONAL COI.INCIL

Notes to the Financial Statemenrs

For lhe year ended 30 June2012

l. 8 (e)

l.s (0

l. 8 (e)

l. 8 (h)

l. e

Rental incomeRental revenue fiom investment and other properf.v is recognised as income on a periodicstraight line basis trver the lease tenn.

Intelest and dividendsInterest received lrom term deposits is accruecl over (he term of the investment. Diyiclencls arererognised once they are fbrmally declared by the directors ol the confrolled enriry.

Sales revenueSale o1 gootls is re,;ognised when the the significant risks and rewards oforvnership aretransferred to tile buver, generally when the customer has taken undisputed delivery ofthegootls.

The council generates revenues frorn a nurnber of services inclucling chil<l qare, motor vehiclerepairs and contracts for road and eanhworks. Revenue from contracts ancl recoverable rvorksgenerally cornprises a recoupment ofmaterial costs rogether with an hourly charge for use ofequipmenl and ernployees. Contract revenue and associated costs are recognised by reference fothe stage ofcompletion of the contract activity at the reporting dare. Revenue is measurecl al thelair value ofcorrsideration received or receivable in relation to that activity. whereconsideration is received fbr the service in advance it is included in orher liabilities ancl isrecognised as revenue in the period when the service is performed.

Fces and ChargesFees and charges are recognised upon unconditional entitlement to the funcls. Generally, this isupon Iodgement of the relevant applications or documents, issuing of rhe infringemenr notice orrvhen the sen'ice is provided.

Financial rssets and liabilitiesCouncil recognises a flnancial asset or a finarrcial liability in its Statemenr of Financiil positionwhen, and only rvlten. Council becomes a party to the contracnral provisions of t6e rnstrument.

Maranoa Regional Council has categorised and measured the {inancial assets and tirrancialliabilities held at balance date as fbllows:

Financial assets

Cash and cash equivalcnts (note L I 0)Receivables - rneasured at anrortised cost less any irnpairment (note L I I )

olher financial assets 1 finance leases) - measurecr at fair value (note l . r ti )

Financial liabilitiesPayables - measured at arnttrtised cost (note I. I 9)Borrowings - nreasured at amortised cost (note l.2l )

Financial assets and financial liabilities are prescnted scparately liorn cach orhcr and otfsctlinehas not trecn applied.

The lair value of financial instruments is cletennined as follorvs:The fair value ofcash and cash equivaleuts and non_interest bearing ntonetary flnancialassets and financial liabilities approxintatc their can-ving amounts and are not discbsedseparately.

The lair value ofborrorvings. as disclosecl in note 2() to the llnancial statements, isdeterlrinetl by rel'erence to publishecl price quorations in an ercti.r,e marker an6/pr-byrel'erencetrrpricingmotlelsandvaluationtechniques. Itreflectsthevaiueol'thedebtiftheCouncil reparditintlll atbalancedate. AsitistheintentionoftheCouncil toltolcl itsbonorvings lbr their full tenl. no acl.justnrent prcrvision is rnade in these financialstalentents.

'Ihe iair valuc of tladc receivables approximates rhe arnortisecl cost less anv ilrpainncnt.'l-he tair value ofpayahles approximares the arnortisecl cost.

N'faranoa Regionai Cottncil docs nol rcctrgnisc financial asscts or financial iiabilities at Iairvalut: in the Statcnrcnt of Financtal position.



l. l0

l.il

All other disclosures relating to the measurernent and financial risk management of financialInstruments are included in note 30.

Cash and cash equivalentsCash and cash equivalents includes cash on hand, all cash and cherlues receipted but not bankedat the year end, deposits held at call with financial insriturions. other shorr-term, highly liquidinvestments with original maturities of three months or less that are readily convenible toknown amounts ofcash and which are subject to an insignificant risk ofchanges in value. andbank overdrafts.

ReceivablesTrade receivables are recognised at the anrounts due at the tirne of sale or sen ice delivery i.e.the agteed purchase price / contract price. Settlement of these amounts is required rvithin 30days frorn invoice date.

The collectability of receivables is assessed periodically and if there is objective evidence thatcouncil rvill not be able to collect all arnounts due, the carrying amount is reduced forirnpairment. The loss is recognised in finance costs. The amount of the impairment is thedifl'erence betrveen the asset's carrfing arnount and the present valge ofthe estimated cashflows discounted at the effective interest rate.

All known bad debts were written-off at 30 June. Subsequent recoveries of amounts previouslywritten off in the same period are recogniserJ as finance costs in the Starernent ofComprehensive Income. lf an alnount is r@overed in a subsequent period it is recognised asreVenue.

Because Council is empowered under the provisions of the Local Covemment Act 2009 ro sellan owner's property ro recover outstanding rate debts, council does not impair any rarerecejvables.

Loans and advances are recognised in the same way as other receivables. Tenns are usually amaximum of five years with interest charged at negotiated rates. Security is not normallyobtained.

InyentoriesStotes and ralv nlaterials held for resale are valued at the lower ofcost and net realisable valueand include, where applicable, direct material. direct labour and an appropriate portion ofvariable and fixed overheads. Costs are assigncd on the basis of weightcd average c,rst.

Inventories held fbr distribrnion (intemal cotrsumprion) are:. goods to be supplied at no. or nonrinal. charge, and. goods to bc used fbr the provision ofservices at no. or nonrinal. charge.

ltiventory lor distribution is valued at cost. ad.justed ivhen applicable fbr any loss of ser-v.icepotential.

Land acquired by Council with the inteution o1'reselling i1 (with or without lurtherdeveloprnent) is classified as ilventory. This lancl is valued at lhe lorver 6fcost or net realisablevaltre. As an inventoty itern. this land held 1br resale is treatetl as a cun.ent asset. proceeds lifinthe sale ol'this lanci rvill be recognised as snles revenue on the signing ol'a vaji6 uncgn6itionalcontract of sale.

Other linancial assets

Olher financial assets are recogniserl at cost.At present Council does not have any other financial assets.

l. l2

QAOCERTIFIED

l. l3


Notes to the Financial StatementsFor the year ended 30 June 201 2

l. 14

l. 15

l. l6

Non current assets held for saleIterns ofproperty, plant and equipment are reclirssified as non-current assets as held for salewhen the carrying amount of these assers will be recovered principally through a salestransaction rather than cultinuing use. Non-currenl assets classiljed as held lor sale areavailable for immediate sale in their present condition ancl managemenr believe the sale ishighly probable. Non-current assets held for sale are measurecl at rhe lower of theil carryingamounl aud lair value less cost to sell and are not depreciated. On the evenlual sale erftheseassets a gain or loss is recognised.

InvestmentsTerm deposils in excess oftluee months are reported as invs5gry,sp15, tvith cleposits rrfless thanthree months being reported as cash equivalents.

Propert-v, plant and equipmentEach class ofproperty, plant and equipment is stared at cosf or fair value less, where applicable,any accumulated depreciation and accumulatecl irnpairment loss. ltems of plant and equipmentwith a tcrtal value of less than 55,000, ancl infrastructure assets and buildings with a total valueof less than 5 I 0,000 are treated as an expense in the year of acquisition. All other items ofproperty. plant and equipment are capitalised.The classes of property plant and equipment rcrognised by the council ale reported in note I 7(a).

Acquisition of assets

Acquisitions ofassets are initially recordcd at cost. Cost is detemrined as rhe fair value oftheassets given as consideralion plus costs incidental to the acquisitiorl. including ireight in,architect's fees and engineering design f'ees and all other establishment costs.Property. plant and equipment received in the form ofphysical contributions, are recggnised asassets and revenues at fair value by Council valualion rvhere that value exceeds the recognitionthresholds for the respective asset class. Fair value lneans the arnount tbr wfiich an asset couldbe exchanged, or a liability settled, befween knowledgeable, rvilling parties in an ann's lengthtransaction.

Capital and operating expenditure!tr/age and rnaterials expendihrre incurred lbr the acquisition or construction of assets are treateclas capiral expenditure. Routine operating maintenance, repair costs and minor renewals tontaintain the operational capacity ofthe non-currenl. asset is expensed as incurrecl. ghileexpendifure that relates to replacernent of a major colnponent of an asset to maintain its servicepotential is capitalised.

ValuationLand and itrprovements, buildings. rnajor plant and all infrastructure assets are nreasured on therevaluation basis, at lair value, in accordance rvith AASB I I 6 properry, plant & Equrprnent.Other plant and equiJlnent and rvork in progress ar.e Ineasured at cost.

Non-current physical assets tnc-asured at fair value arrr revalued, w.here requirrrd, so that thecarrying arnount of each class of asset does not materiallv difter ti'orn its fair value at thereportingdate. This is achieved by engagirrg independent, prof'essionally qualified valuers krdetennine the fair valtre for each class ofproperty. plant and equipmenr assels at least onceevety 3 years. This process involvcrs the valuer physrcally sighting a representative sarnple ofCouncil assets across all asset classes and nraking their or,r'n assessments ol the condition of theasscts at tht' date of insllectitrrr.

In thc intclvening vears. Council uses internal enginecrs to assess rire condition aud c(rsr

assulltptlons associatcd with all infi'astnrcture assets. thc rcsults of u'hich are considcrccl inccirnbination rvith thc constnrcrion indcr dcveloped b-v the eld. Locai GovernnrenrAssociation. Togethcr these arc used to lirrm the basis of a managcrnent virluation firr'infiastructule assct classes in each of the ilrtcn,cnlug years. With respect to thc laluation of'land and ilrprovcllcnts. bLrilclings and trajor plant asset class*s inanagcrncnt eitqaqeindependent, prof'cssionally quaiifiecl'alucrs to perlbrur a "dcsktop" valuatiorr. A desktopI'aluation involves man?lgclnent ptoviciinq updated infonnation hr the valucr rcganling clrangesin assurnptions strch as uscfirl lil'e. residual valuc and condirion ratinq. Valucrs then dctr:nrirnessuitablc inclices which arc applied to each of thesc .rsset classes.

(a)

(b)

(c,

s'g#";

MARANOA REGIONAL COI.INCIL

Notes to the Financial StatementsFor the year ended 30 June 20 I 2

(d)

An analysis performed by management has indicatecl that, on average, the variance berw.--,een anindexed asset value and the valuation by an irrdepenrjent valuer rvhen perfomred is notsignificant and the indices used by Council are sound.

Any revahtation increntent arisirrg on the revaluation ofan asset is credited to the appropriateclass of the asset revaluadorr surplus. except to the extent it reverses a revalualion Grement fbrthe class previously recognised as an expense. A decrease in the carrving amount onrevaluation is charged as an expense ro the extent it exceeds the Lralance. ifany. in rherevaluation surplus oithat asset class.

on'evaluation, accumulated depreciation is restated proportionately with thc change in thecarryillg amount of the asset and any change in tlre estimate of remaining useful lif-e.

separately identified components ofassers are nreasured on the same basis as the assers rowhich they relate.

Funher details in relation to valuers, the urethods ofvaluation anrJ the key assumptions use6 aredisclosed in note l7 (b).

Capital rvork in progressThe cost ofproperty, plant and equipment being construcred by the Council includes the cost ofpurchased services. materials, direct labour and an appropriate proportion of labour overheads.

Investment property under construction is classified as investment properf-v.

(e) DepreciationLandisnotdepreciatedasithasanunlinriteduseful life. Depreciationonotherproperty,plantand equipment assets is calculated on a straight-line basis so as to write-offthe ner cosr orrevalued amount ofeach depreciable asset, Iess its estirnated residual value. progressively overits estimated useful life to the Counci.l. Managernent believe that the straight-line basisappropriately reflects the paftem of consumption of all Council assets.During20l0ill themefhodofdepreciationchosenrvasusedinconjunctionwithan

assessment of the condition ofthe assets being depreciated.This method ol depreciation isoften referred to as a modified staright line depreciation or consumption based depreciation. Due rothe difficulty ofobtaining and applying the resources require<] to continually assess the condition ofall Council's depreciated assets to maintain this rnerhod ofdepreciation . Cc,uncil has chosen tou{ilise straight line depra;iation as the methocl of depreciation without cordition based assessments1br the l0 | l/ 12 year.

Assets are depreciated from the date ofacquisition or. in respect of intenlally constructedassets, f'rom the tirne an asset is cornpreted arrd colnrnissionr:d ready for use.

whcre assets have separately idcntifiable componcnts that are subject to regular replacement,these cotnponents are assigned useful lives <iistinct fiom the asset to whichihey relate. Anyexpenditure that increases the originally assessecl capacity or sen,ice porential ofan asset iscapitalised and the new depreciabre amount is depreciated over rhe rerraining ussful lif'e of theasset to the Council.

Major spares purchased specifically for particulal assets that are above t6e asset reicogritierntlrreshold are capitalised and depreciated trn tlre sanre basis as the asset trr which rhev relate.

Tht: depreciable anlount of itnproverncrnts to or on leaseholc'l land is aliocated progressrvety overthe estilnated useful liles o1'the improverlents to the Council or the unerpired periorl ofthelease, rvhichever is the shorter.

Depreciation nlethods, estirnated useful lives and residuai vaiues of properr-v-. plant alclequlptnent assets are revic'wed at the end ofeach rc-porting period and acljustecl rvhere necessaryIo reflect an1' changes in the pattern ofcon5u1np1166. physical wear ancl tear, technical 6rcotnmetcial ohsolescence, or nranagelllent intentior.rs. The conclition assessrnents peribnned aspart ofthe annual valuatiorl process lbr assets rleasurecl at dellreciated cun.ent replacerllent costare used to estimate the useful lives ofthese assets at each r.eporting clate.DetailsoI-therangectf estirnateduseluI lives{breachclassof asselareshowrinnote I7(a). CERTIFIED

MARANOA REGIONAT COTINCIL

Notes to the Financial Statementsended 30 lune2012For the

l. lti

(f) Unfunded depreciation' The Council has elected not to fund depreciation expeuses fbr assets that will not be replaced or

where extemal funding sources (rther than loans rvill be obtaino-d to fund their replacemenr.Depreciation is funded to the extent neccssary to meet council defined fi:ntre sen,ice deliverylevels to the conlmunity unless insuflicient revcnue sources ale available to cover-thisclepreciation amoul'lt. hr this case the unfunded depreciation reflects a more sedous decline tothe council's capital value and sustained shortfblls rnay affbct the council's abiliw to maintainthis level of senice into the {uture.

(e) Land under roadsLand under roads acquired before 30 June 2008 is recognised as a non-current asset where theCouncil holds title or a financial lcase over tbe asset. The N{aranoa Regional Council currentlydoes not have any such land holdings.

Land under the road network within the Council area that has been dedicated and opened fbrpublic use under the Land Act 1994 or the Land Title Act 1994 is not controlled by council butis controlled by the state pumuant to the relevant legislation. Tberefor.e this lancl is notre'cognised in these financial statements.

l. l7 lmpairment ofnon current assetsEach non-current physical and intangible asset and group ofassets is assessed for indicators ofimpairment annually. If an indicator of possible impairment exists, the Council derennines theasset's recoverable amount. Any amount by which the assel's carrying amount exceeds therecoverableamountisrecordedasanimpairmentloss. Therecoverableamountofanassetisthe higher ofits fair value less cosrs to sell and irs value in use.

An impaimlent krss is recognised inrnediately in the Statement of Comprehensive Income.unless the asset is canied at a revalued amount. When the asset is measured at a revaluedalnount, the impainnent loss is ofl'set against the asset revaluation surplus ofthe relevant classto the extent available.

Where an impainlent loss subsequently reverses, the carrying arnount of the asset is iucreasedto the revised estimate of its recoverable alnounl. but so that the increased carrying amount doesnot exceed the carrying amount that would have been detennined had no impairment loss beenrecognised fbr the asset in prior years. A reversal of an impairment loss is recognised astttcome unless the asset is carried at a revalued amount, in which case the reversal oftheitnpairment loss is treated as a revaluation surplus increase.

l. l9

Leases

Leases ofplant and equipment under which the Council as lesseer'lessor assulnes/transferssubstantiaily all the risks and beneflts incidental ft) the ownership ofthe asset, but not the legaloutership' are classifiecl as flnance leases. Other leases, rvhere substantially all the risks an<lbenetits rcnrain rvith the lessor, are classifletl as operating leases.The council has no finance lcases.

Operating leases

Paylnents rnade under operating leases are expensecl in eclual inslalments over t5e acLr)untrngperiocls covered by the lease tenn, excepl ivhere an altemative btrsis is mqre representalive ofthe pattem ofbenellts to be derived lrom the leased properry.

Pa3.'ables

Tradc creclitors arc recognised upon rcceipt ot thc gtrocls or sen,ices ordercd ancl arc nrcasurcdat thc aqreed purchasercontract pncc net of applicabie cliscounts other than ( ontingcltcliscounts. ArnL)unts L)wing are unsecureti and are gcncrally settled on i0 dav terrns.

l,iabilitics - enrplol'ee benefitsl-iabilities are recognised lbr ernployee berrefits such zrs rvages aircl salaries. annual leave andlong service leave in respecl olsen.ices proriclecl b1, the ernployees up ro fhe repoding clate.Liabiliries for etnployee benefils are assessecl ar each reporlirrg t1ate. \vhere it is expected fhatthe leave rvill be paicl in the next lrvelve nronlhs the liabilitf is treatetl as a culrer)t liabiiitv.

, Otherwise the liabilitl,is treated as n()n-cun.ent.

1.20


Notes to the Financial Statements

lune2012For the year ended 30

l. 2l

t. ll

ta)

(b)

(d)

(e)

Salaries and wagesA liabilit-v" fbr salaries and wages is recognised ancl nreasured as rhe amount uupaid at thereporting date at curent pav rates iu respect o1' empkryees' sen,ices up k) that date. Thisliability represents an accrued expense and is included in nore lg as a payable.

Annual leaveA liability ibr annual leave is recognised. Arnounts expsted to be settled rvithin l2 months (thecurrent poftion) are calculated on current wage and salary levels and includes related ernployeeon-costs. Amounts not expected to be settled within l2 months (the non-current portion) arecalculated on prqected f'uture rvage and salary levels and related errfiloyee on_costs. and arediscounted to present values-

SuperannuationThe superannuation exFense for the reporting period is the amount ofthe contribution the localgovemment makes to the superannuation plan which provides benelits to its employees.Details o[ those arrangements are set out in rcte 27.

Long sen'ice leaveA liability for long service leave is measured as the present value of the estimated future cashoutflows ro be made in respect of services provided by employees up to the reporting dare. Thevalue ofthe liability is calculated using current pay rates and projected hrture increases in thoserates and includes related employee on-costs. The estimates are acljusted for the probability ofthe employee rernaining irr the Council's employmenl or other associated employmenl whichrvould result in the Council being required to meet the liability. Adjustments are rhen made toallow lor the proportion of the benefit earnecl to date. and the resull is discounted to presentvalue. The interest rates attaching to Colnmonwealth Covernment guaranteed securities at thereporting date are used to discount the estimated future cash outflows to their.present value.

This liability is reported in note l9 as a provision.

BorrowingsBorrowings are initially reognised at fair value plus any direcrly attributable transacnon costs.Subsequent to initial recognition these liabilities are rneasured at arnortised cosrIn accordance with the Local Govemment (Finance, Plans and Reporting) Regulation 2010council adopts an annual debt policy that sets out council's planrled bom;*,ings for the next nineyears Council's curent policy is to only bonow fbr capital projects and fbr a temr no longerthan the expected lifeof the asset. Council also airns to comply rvith the Queensland TreasuryCorporation's borrorving guidelines and cnsure that sustainability indicators remain rvithinacceptable levels at all times.

All borrow'ing costs are expensed in the period in rvhich they are incurred. No borrorvrnq costsare capitalised on qualifuing asscts.

Restoration provisionA provision is nrade for the cost ofrestoration in respect of'refirsr: dumps and quarries rvhere itis probable the Cotrncil will be liable. or required, to incur such a cost on the cessation rrfuse ofthr-se facilities. 1'he provisiorr is nreasured at the expected cost ofthe work requjred. discountedto current day values using the interest rates anaching to Comtnonrvealtli G6vemrnenrguaranteed securities rvirh a maruritu date corresponding to the anticipated dare of therestoration.

\Vithin each restoration provision Ilrere may be nranv site locations sorne o1'rvhic6 cail be or.)

council controlled land and sorne rvhich are not. The lbllorvirrg accounting treatrnents appl.v''

deperrding on lhe site locatitrrr:

Restoration on land not controlled by CouncilWhere the restoration stte is on State resen,es which the council does not control, the cost o[.theprovisions for restoratiot.t trl-these *siles has t(r be treated as an expense in the year the pnrvrsrtrnis first recognisecl. (-hanges in llte provision clue to either tinre, discounl rate or erpectecl firturecost are trealed as an expellse t.rr incorne in the reporting inu.hich they arise.

QAOCERTIFIED


Notes to the Financial StatementsFor the year ended 30 lune2012

(a)

Restoration on land controlled by CouncilRestoration sites that are situated on Council controlled land and are classified as land andlmprovement assets. The provision ibr resloration is, therefore, included in the cost ofthe landand amortised over the expecled useful life. Changes in the provision not arising llorn thepassing of time are added to or deducted lrom fhe asset revaluation surplus lor land. 11, there isno available revaluation surplus, increases in the provision are treated as an exTrense alilrecovered out of future decreases (if any).Changes to the provision resulting lrom the passing ol' tinre (the unwinding ot' the discount ) aretreated as a finance cost.

The council has the lcrllowing reslontion provisions:Depot and SawmillThe provisiorr represents the present value of the anricipated future costs associated wirh theclosure of tlre depot and sawmill, decontarnination and rronitoring of historical residues andleaching on these sites.

The calculation of this provision requires assurnptions such as application of environmentallegislation, site closure dates, available technologies and engineering cost estimates. T6eseuncertainties may result in future actual expenditure diff'ering f'rom amounts currently provided.Because of the long-term nanrre of the iiability, the most signilicant uncertainty in estimatlngthe provision is the costs that rvill be incurred.The provision recognised tbr depot and sawmill is reviewed at leasr annually and updated basedon the facts and circumstances available at the tirne. Management estirnates that tlre site willclose in 201 7 and that the restoration will occur progressively over the subsequent four years.

Asset revaluation surplusThe asset revaluation surplus cornprises adjustrnents relating to clranges in value ofprt-rperty.

. plantandequipnrentthatdonotresultfiorntheuseofthoseasse(s. Netincrementalchangesinthe carrying value ofclasses of non-current assets since their initial recognition are accurnulatedin the asset revaluation surplus.

Increases and decreases on revaluation are offset within a class ofassets.

lVhere a class ofasscts is decreased on revaluation, that decrease is o|let first against thealnount remzrining in the asset revaluation surplus in respect of that class. Any excess is trcateclas an expense.

When an asset is disllosed of, the amount reported in surpltrs in respect of that asset is retainedin the asset revaluation surplus and not transfen.ed to rctained sumlus.

Retained surplus (deficit)This reprcsents the amount of Council's nct funds not set aside in reserves to mcet sDecllicfuturc nceds.

Reserves held for funding future capital expenditrrreThese resewes are backed by cash and receivables ancl represent funds. fiorn r.evenue sourses.that arc acculnulatecl to mcet anticipated firture capital assct funding requiremelts. In each casethe amount relates ttl a poceived firture recluiretnent rvhich is not currentlv a liabilirv.

Rcstrictcd capital resert,esThe amountsshownintlreFulurecapital assetsustainabilityresene.Unspentloancashresen,eand the Constrained grants and subsidy contriburions resen.e represent funding sourcds tharCouncil is constrained in the rnanner that it applies these unrour)ts lo firncl capital expendilure.

Other ReservesRepresents amounts resolved by council to provide for each of the purposes of thespecific reserve. The nature and arnount of these reserves can be adiusted to meetthe needs ofCouncil in an accounting period.

I.2-1

t. 24

l. 25

CE^Qdf?,



Future capital ssset sustainability reserveWhere the council has accumulated unspent cash arising from the funding ofdepreciatiol. 1i.e.I'evenues have been received to fund the wnte down in tlre capital assets value through use(depreciation)), but this cash has not been reinvested in capital assets at the reporting date; thecouncil restricts the future use of thrs cash to capital asset purchases only, to ensure themaintenance its capital capaciry to deliver future services. (future sustainabilit),). The amountsreported in this reserve at balance date corespond to the amount ofcash (reported within cashand cash equivalents) that is held for this purpose. Should the asset management plans ildicatea shonfbll in f'unding, additional funding can be transferred trom the retained surplusaccount.The tinring of future expenditure fi'om this rcsen'e is based on the council,s l0 vearasset managenlenl plans.

Unspent loan cash reserveThe arnounts reported in this reserve at balance date correspond to the amount ofcash (reportedrvithin cash and cash equivalents) which has been received in respect ofapprove4 loan fundsfrom QTC that have been drawn down but no1 expanded on the specific capital projecm. As thefunds are expende.d they are transferred to Council's retained surplus account. Retbr notes I 3and 23 (a) .

Constrained grants and subsidy contributions r€serveThe amouuts reported in this reserve at balance date correspond to the antount ofcash (reportedwithin cash and cash equivalents) which has been received in respect of capital works whe.rethe required capital works have not yet been carried out. Where non-reciprocal grants, subsidiesand contributions are received for specific capital proiects, amounts equivalent to the capitatgrants received are transferred from retained surplus to the constrained works reserve. When thegrant rnonies are expended on the respective projects, an equivalent amount is transferred out ofthe constl'ained works reserve to retained surplus. The Council does not reallocate uunounts lnthis reserve to any other rese.rve or fbr any otlter purpose.

Future Capital Works reserveThis resen'e represents amounts set aside for the furure replacement of the Council's capitalassets.

Wrter reserveThis reserve represents funds set aside for the replacement, renewal and purchase ofnew waterinfrastructurc assets.

Sewerage reserveThis reserve represdnts funds set aside lor the replacement, renewal and purchase ofnew sewerinfrastructure assets.

Plant reserve

This reserve represents funds set aside for the replacernent, renewal and purchase ofnew planland equipment assers.

Roads reserveThis resen'e represenls funds set aside for tlre replacement, renewal antl purchase ofrrew roads"bndges and drainage inlrastructure assets.

Buildings reserveThis resen'e represerrts funds set aside for the replacernent, renerval and purchase ofnervLrui lclirrgs and l'acilities.

Airports reserveThis reserve reprdsents lunds set aside lcrr the replacement. renewal and purchase of airporrassets.

QAOCERTIFIED


Notes to the Financial Statements


t. 26

l. 27

1.28

1.29

t.30

r. 3l

Reserves held for funding fufure recurrent expenditure:These are cash backed resen'es and represent funcls tlrat are accumulated within the Council tolneet anticipated furure recurrent or operating expendinrre nee<is. In each case the arnountrelates to a perceived firrure requiretlent whiclr is not cunentl-y- a liabilitv.

Consfrained Operational Grants & Contributions reserveThis reserve holds constained grant and contribution nronies tlrat was unst)ent at balance date.

Prepaid Grants reserveThis reserves lrolds grant monies paid in advance by the Federal Govemment

National competition policyThe Council has reviewed its activities and has identified 6 activities that are business activities.Details of these activities can be fbund in note 3 I .

Rounding and comparativesThe financial statelnents have been r(runded to the nearest S l.Comparative infonnation lras been restated where necessary to be consistent rvith disclosures inthe current reporting perid.

Trust funds held for outside partiesFunds held in the trust account on behalfofoutside parties include those funds liorn the sale ofland for arrears in rates, deposits tbr the contracted sale ofland, security deposits lodged toguarantee performance and unclaimed monies (e.g. rvages) paid into the trust account by theCouncil. The Council perfbnns only a custodian role in respect ofthese monies and becausetlre monies cannot be used for Council purposes, tlrey are not considered revenue nor brought toaccount in the financial statetnents.

For details see note 28.Taxation

Income of local authorities and public authorities is exernpt from Cornmonwealth taxarionexcept for Fringe Benefits Tax and Coods and Sen'ices Tax (,GST'). The net amount of CS-l-recoverable frorn the ATO or pavable to the ATO is shown as an asset or liability respectively.

The council pays payroll tax to the eueensland Govemment on cerlain activities.

Changes in accounting policy

Council capital

In previous years council reported capital as a component of community equity. Given thatthere is no legislative or accounting standard requirement to maitain and separately account forCapital , Council has decided to retrospeclively allocate the balance to other equity accounts asfollows- Council capital of$314,662,2'19 reportd as ar 3Oth June 2010 has been allocared toRetaine surplus (s309,271,746), unspent loan cash reserve ($g72,06g) and Future capitalsustainabilityreserve($4,478,865)asat lstJuly20l0.Thecomparativeshavebeenad.justedinthese fi nancial statements.

QAOCERTIFIED


Not€E to tbe ftrancial statementsFor the ),ear ended 30 June 2012

2 (a) Componentsofcouncilfunctlons

The activities relating to the council's components reported on in Note 2 (a) are as follows :

Corporate GovernanceThis comprises the support functions for the lviayor and Councillors, Couniil and committee rreetings and statutoryrcqufemenls.

Corporate ServicesThe suppo( functions of Cotrncil's firancial management. information technology, customer service and adminis6ation

Community ServicesCornmunity sewices and facilities including cultural, health, welfare, environmental and recrcational services.This function includes.

LibrariesEntertainment venues

Planning rnd DcvelopmcntManagernent ofthe approval processes for development and building applications within the Council boundaries.

Transport lnfrrstructureProviding and maintaining Council's roads bridges and drainage infi-astructure.

Wastc ManagementProviding and maiirtailing Council's waste management infrastructure and waste management services.

GasProviding and mainaining Council's gas supply and services.

Wster InfirstructureProviding and maintaining Council's water supply infrastructure and water supply services.

Seweragc InfrastrutcureProviding and maintaining Council's sewerage infastructure and associated services.

QuarryProviding quarry material and roadbase to local industy and Council.

Roma AirportProviding and maintaining Council's airport infrastructure atd associated services accross the region.

Roma SaleyardsThe sale yards function is responsible for the managernent and provision oflilestock selling facilities in Roma.


Notes to the financial statements


2 Analysis of results by function

Kevenue, expenses and assets have been attributed to the ollowins functio n5

Functions Income Total

lncome

Total

expenses

Net

result

for period

Assets

Grants Other

2012

$

20t2

$

20t2

$

20t2 20t2

$

20t2

S

Corporate Covemance t49.562 8.036 l)/ 598 5.301.887 (5.144.289) (9.07 5.333\

I Corporqlglgrv,qes t3,306,243 t4,2t6,576 27,522,8t9 s )44 157 22.278.066 '12,444,t02

Community Services 3.918.553 I ,80 l ,591 5,720,t44 9,877 ,7 t5 (4,t57 ,57 | 58,884.005

Planning and Development 77,667 l,848,970 |,926,63'7 2.709.393 (782,7s6) 409,570

Igrypq4_!{rry!*gn,r. 44,662,046 l 2,092,80 I s6,754,84"1 67 ,623,544 ( 10,868,697 833,220,650

Waste Manasement 3,073,033 3.073.033 1,584,200 t.4E8.833 286,464

Gas 514,737 \14711 526.U0 ( r l ,903) 2.041

Water Infrastructure ( 15,3 r4) 1 \9,1 r1t 3,567,95 8 3.789.30 l 221,343) 34,440,777

Sewerage Infrastrutcure 2,t28,t99 2,128,t99 l,423,838 704,361 12.t7 |.626

Quarry 6,0-16,s09 6,076,509 | {76 7?S 4,499,774 72'7,t3l

_ rgn94{p9n |,849,640 3,517 .457 5.367 .097 t,t24,601 4.242.496 26,130,130

Roma Saleaards 2.833.74s 2.833.745 2,9t5.4t7 (81,672\ 9.5t4.377

Total 63,948,397 5t,698,926 I 15,643,323 r 03,698.024 | |,945,299 r .039. I 55.540

Prior Year

Functions Income Total

lncolTle

201 |

$

Total

expenses

201 |

$

Net

result

lor period

20Il

$

Assets

20t I

q

Grants

20tl

$

Other

20ll$

Corporate Govemance t4t.3t2 1.201.085 t.342.397 4.04t.627 (2.699.230 (70.227.703

Corporate Services t0.387.220 t2.273.482 22.660.702 5.450.897 I 7.209.805 7 6.533.07 5

Community Services 3,808,073 I,98,906 5,456.979 8?!!p71

2.2s3.003

alupes)(l .1 39.885)

s2,03!.01j2_

53t t49Planning and Pevelopment

Transpon_ Infrastrucru re

Waste Management

Water Infrastrucfure

Sewerage Infrastrutcure

QuqlryRorna Airpon

Roma Saleyards

Total

2.1 85 I .l 10.933 !.!!3,1 I8

48,59!]958

?r ! 13,58 !3,7q1 | 81

I 17 t?:549

4,406,506

6,838921

2.7 t3.465

40.742.476 71848.48?

2,! !l.5ql)!262Lsl?

1 ,7 t2,549

4,406,506

I,04r,196

2.'713.465

3s ]2e;t9|,s t2 ]e6Irs81,l5!1,381,1f8

| ,99t tt91

4tgl!L3.009.708

t3.46t.402 818.000.41 I

!2t,99e

5 791 727

6q l,l8l

!q !,010

129.17 l

2,'715,309

6,lq8,s l?

(296.243

275.999

14 551.242

1239s,4t I

5?!r010

t3f04-Lt7s

9,870,427

61,374,662 1q 1 lo Aa? t00,7 t4,359 66.750,201 33,964,1 5 8 1 ,02 5,25 9,2 1 8

Notes to the financial statementsFor the year ended 30 June 20 I 2

2012


3 Revenue analysis(a) Rates and levies

General rates

Separate rates

Water

Water consumption, rental and sundriesSewerage

Sewerage trade wasteWaste managementGarbage chargesRates and utility charge revenueLess: DiscountsLess: Pensioner remissions

Net rates and utility charges

Sale of goods and major servicesSale yards

Gas supply

AirportQuarryCaravan Park

Maranoa Retirement VillageChild CareAged CareNeighbourhood Centre

Stafutory fees and chargesOther statutory fees

User fees and charges

Rental and IeviesCouncil properry rentalsCornmunity housing rental incomeOther property rental income

Interest receivedInvestments

Over due rates and utility charges

Sales ofcontract and recoverable worksRevenue

The amount recognised as revenue from contract works during the period is theamount receivable in respect ofinvoices issued during the period.There are no contracts in progress at the period end.The contract work carried out is not subiect to retentions.

Other recurrent incomeOther income

Note

L8(a)

$

13,206,386

572,5632,019,3521,547,1951,877,612

234,1682,924,779

b

I I ,891 ,65 I

604,387

3,022,758

|,799,5t7

- 907.508

(268,369) ( l0l.s95)2l,081,498 16,627,120

22,382,055( 1,032,188)

2,833,058

514,9312,275,9856,076,509

34,667

18,22s,821(r,497,106)

2,712,560

1,041,1964,376,1t4

235,745

48,470

42,673

186,702

8,643,460

(b)

(c)

(d)

(e)

I 1,735,150

405,636 302,9201,494,366 2,597,3441,900,002 2,900,264

I,093,909 142,370

306,427

108,466

557,263

I,078,045

1,093,909

t,495,475

(f)

184,3 l0 116,4491,679,785 1,194,494

t1,758,629 7,117,0s411,758,629 7,1t7,0s4

700,842 426,tt4700,842 426,n4

(g)


Notes to the financial statementsFor lhe year ended 30 June 20 I 2

4 Grants, subsidies, contributions and donations(i) Recurrent - grants, subsidies, contributions

and donations are analysed as follows:General purpose grants

Other commonwealth grants


Other Non-Govemment SubsidiesDonations

ContributionsTotal recurrent revenue

The 6 months of the 20 I 2- I 3 Financial Assistance Grant for the amount of$6,837,698 was prepaid to Council in June 2012. This has been transferred to thePrepaid Grants Reserve.

(ii) Capital - grants, subsidies, and contributionsare analysed as follows:

Monetary revenue constrained for capital purposes:

Commonwealth government grants


Other Non-Government SubsidiesContribulions

Total capital revenue

(iii) Conditions over contributionsNon-reciprocal grants and contributions which were recognised as revenues duringthe reporting period and which were obtained on the condition that they be expendedin a general specified manner (eg.headworks) by the contributor but had not beenexpended at the reporting date:

Grants for infrastruc htre

Contributions for infrastructure

Non-reciprocal grants and contributions which were recognised as revenues during a

previous reporting period and were expended during the cunent reporting period.

Grants for infrastructure

Capital incomeCain on the sale of capital assets

Gain (loss) on the disposal of capital assets

(a) Non-current assets classified as held for sale

Less: Carrying value of asset sold

(b) Proceeds frorn the sale ofplant and equiprnentLess; Book value ofplant and equiprnent sold

Total gain (loss) on the disposal ofcapital assets

20t2

Note S

t.8(b)

t6,846,7321,379,093

40,844,246

1 33,1 99

100,00059,303,270

2011

13,230,371

674,417

39,2s8,224

19,000

92,t69--53,274,t81

2,082,860 1,208,029

2,795,466 4,276,3491,227,2'73

rt6,9t7 3,29s,292

__6 2n,s | 6_ __8 J 7 9,67 9_

u6,917tt6,9l7

' 3,891,670

3,89r,670

167,722

t67,722

4,s48,0642,272,'127

6,820,791

724,662

724,662

l, l r 9,530

I,I 19,530

1,500,4s5(529,7 t6)9'.10;739

301 ,93 I

(t34,209)167,722

|,258,606(l,r09,815)

148,'l9l

t67,722 l ,I 19,530

QAOCERTIFIEI}

MARANOA RXGIONAL COUNCIL

Notes to the financial statementsFor lhe year ended 30 June 2012

20t2

7 Employee benefitsOperational staff wages and salariesCouncillors' remunerationAnnual, sick and long service leave entitlementsSuperannuation

Other employee related expenses

Wages and salaries exclude capitalised wages charged to the construction of capitalassets.

councillor remuneration represents salary, and other allowances paid in respect ofcarrying out their duties.Total Council employees at June 2012:

Elected membersAdministration staffDepot and outdoors staff

Total full time equivalent employees

8 Materials and servicesAudit of annual financial statements by the Auditor-General of eueenslandAdvertising and marketingAdministration supplies and consumablesCommunications and ITConsultants

Contractors

Donations/spnsorships

Insurance (General and p/Liab)

Power and gas

Repairs and maintenance

Subscriptions and registrationsTraveling expenses

Quarry Coss ofGoods SoldPlant and vehicle running costsLegal servicesRentals - Operating leases

Other material and servrces

Precepts

Recoverable Works

Quarry Stock Write-offs

9 Finance costsFinance costs charged by the eueensland Treasury CorporationBank charges

Impainnent of receivables and bad debts written offOther finance costs

l0 DepreciationDepreciation of non-current assers

BuildingsPlant and equiprrentRoad, Drainage and Bridge NetworkWater

Sewerage

Other InfrastructureAirport

t4,723,800 16,t27,509512,756

5,275,04148'7,266

3,673,82627 2,453,711 2,434,206

22,965,308 22.722.807926,463 t26,418

23,89t,77r 22,849.225

20t29

201204

9

165

2t8392

r 82,600

395,310I ?10 K{6

I ,558,251gqR r'qt

45,039,01328,439

l,156,3 l3737,457154,146319,341I l3,l l5

562,6r0196,573

t0,662t6,687,624

398,164

353,724

453,746

t,627,1201,260,769

n,248,328l5 1,987

763,398

775,r459,477,590

193,524

97,939

1,766,248

2,39'1,813420,627

3,3t2,300282,080

____34,989,502_

788,234

4 t ,063(231,87 t)362,960

_______260'3!g_

69,379,602

730,t4079,407

78,096

887,643

I 6(e)

1,608,s06

2,564,33r3,023,7031,055,256

470,440530,739

205,733

9,4s8,708

627,857

2,365,359

2,643,407

882,639497,613825,t'79I18,034

7,960,088


Notes to the financial statemenrs

For the year ended 30 June 20 I 2

2012

S

80,300

2011

$

t2

n Capital expenses

Loss on write-offofcapital assets

Total capital expenses

Loss on write-offofcapital assets are as follows:Plant and equipmenl

l3 Cash assets and cash equivalentsCash in operating bank accountCash in other banks and on hand

Deposits and investments held with QTC at variable interesr rareBalance per statement ofcash flows

Externally imposed expenditure restrictions at the reporting daterelate to the following cash assets:

Unspent loan momes

Unspent government grants and subsidiesUnspent developer contributionsTotal unspent restricted cash for capital projects

Cash and deposits at call are held in the National Ausfalia Bank, the bank currentlyhas a short term credit rating of A I + and along term rating of AA-.Term deposits are held at Queensland Treasury Corporation which has a AA+ creditratlng.

l4 Trade and other receivablesCurrent

Rateable revenue and utility charges

Accrued government operating grants and subsidiesGST recoverable

Other debtonLess: hnpairment provision

Prepaynents

Loans and advances to comrnunify organisations

Interest is charged on outstanding rates at a rate of I I 7o per annum.No interest is charged on other debtors. There is no conaentration ofcredit risk forrates and utility charges, fees and other debtors receivable.

All loans and advances relate to loans rnade to various cornrnunity bodies. These loansarise from tinte to tirne and are subject to negotiated interest rates.The credit risk on these loans is considered low.

Movement in accumulated irnpainnent losses (trade and other receivables)is as follows:

Opening balanceLnpainnent adjustment in periodClosins balance

l5 InventoriesCurrent

Inventories for intemal use:

Quarry and road materialsStores and materials

Valued at cost, adjusted when applicable for any loss ofservice potential.

Note

11

en 1nn

80.300l l 80,300 _

Ll04,0t3,766

I l,69r23,620,203 37,630;n327,645,660 38,912,691

23 (ii) 744,681 840,221

6,820,79123 (iii) 2,929,t2123 (iii) l,165,19l t,048,274

4,838,993 8,709,289

2,666,550 2,037,816

14,503,790 3,736,57510? o? 1

I 1,208,1 14 I 1,553,950

(308,603) (234,238)28,463,774 17,094,103

23'7 ,895 505,184

1,8 l028,'703,479

|,2'74,321

7,657

l.l I

__-]J_5ee.28l_

234,2387 4,365

308,603

t,728,792(r,494,s54)

234,238

|,765,7372,150,3614,5 16,098

2,88s,4192,885,4t9

,"9#g;ATEMEN

1.r2




2012

16 Non-current assets ctassllied as held for saleOpening balance at valuationDisposal - value ofasset sold

This is land which was previously used for the old depot. Council has decided to sellthis land as it is no longer required, It has been placed with real estate agents and isexpected to be.sold within one year.The land is valued at the lower ofcost and selling price less cost to sell.

Note $

853,6 r 5

s

1,383,331

- (529,716'853,615 853,615

r6

66-r

-1

el

F

:3 -€h96daJ-''.j<c, g9 55

:e^i^i-X n.i

-i

.;

I

e

;*;

()

39Nr66€- 9" O-6--do6

N\ao.5*-R9

N€6doo,--: , .i,r-,

6*-

P rN,€6$6od'.jn€

.rr116*R.;

d

&F

'E

l

L

I0oo@-=66XNr

.il 'l

tltlI

'l

I

dqo€l

o09p''Fz6&dF

6iN$o_ir , dld .l lo"l5€Al Nl

i'L

iI

r

f6

U

dl - =:6-ort t-. ,l @- 09 d- ; r: r {g€ird

NoQdl -:adxsir

ii

..1

=

691rrath.d'-iN9

d d'Ir

=66

r6

CD*9qr

orOF€*ct o:

=6-.

rroi

a-c

.g F = 29e9d.=-az-e 7 \,*iE ",€; = ::=+E= E e8ii2 8tr-- '3 3 g g g TiZn " "d 1== | 2,,.!5si ==7 ,ie Z EiL.EZF ;Ej, "ia"i ..s Eiaaeii ==t 31rs!lf-! P:,8 EEtoaald=t27-qsva6a*=34€ tF€F*!7 E=LLIi" - s:

? E Et z A S i ; d i i d 2 6 e,3 ,f !{:u>L/ iAA OAU z:co<{sr

o

JUzIOrg

ZHx?

z3

F

-9€-v66*dtq+^s-

- -q?. 3.-.t !

r

6id

B

NAS6COhrsNdN€+5

-.-9O-

r

r

e

r9qq$so-:

r

a6-

n

r, o

d"l r

d.l

l

€"

^-go'

r

A

F-

O N t- c€. , o. r:lr3 h ,51 5_ q o lv1 c

F * r , =, o

illll

0

dl^'-t-

i

ri

to:

iri

I *l

IN-l d"l '6t ol51 6 *:;

=l d'l

>lItl

ExFE'FzAo

9l

leci

I

€rsoOr r -6t ' ci -..:c! v't' \9rN '5,r'i

I

:

il

1d66

oGer66F9r , \i q-, .lqh€ioi€=-€r 60^- e il ! Jl ril I -..1xv

;t;l

.5

@

r|ol AiNo-90td€x' 'l i |

^'' :b;r'&6-e.4.-)q=6NN6NFi c'

=

qil{'a t:odi I

I

l

Ei?+€ F "4, Ei z2 E A z ;y it

=.i i !+e i; - i

= R C : aiE €i' - Y..=2CnoxgoE.rE

E i,i ii-: 9..=sa Ei E '4

y ai+ E+Z ElitEEea : ;i n s..H ;z_g IEaeEEJT Z g: i1EEEEE, E?EE€;*E : *a E5:i3eEa ,8Aa'3C: Z 46{22r

O

I

-lUztOi:t?Ezfr

z€




Note

2012

$

201 I

l7 (b) Property, plant and equipment valuations were determined by referenceto the following:

Land and Site ImprovementsThe fair value of land is measured at current market value as at 30 June2Ol2.Therewas no measurable movement in land values during 201 l-12. Land wasindependently determined by Assetval Pty Ltd in June 201 l.Fair value was derived byreference to market based evidence including observable historical sales data forproperties of similar nature and specification within the Maranoa Regional Counciland surounding areas.

BuildingsThere is no tnarket fcr Council's b,uildings as these are hcld to providc essentialservices to the community. Accordingly, the fair value of all building assets ismeasured at written down current replacement cost.There was no measureablemovement in building costs during 2011-l2.The fair value of buildings wasindependently determined by Assetval Pty Ltd in June 201 l. This revaluation wasbased on the use ofrates and primary cost information developed by Assetval Pty Ltdthrough direct contact with suppliers , making reference to various constructionguides and their own research.

Plant and equipmentOther plant and equipment is measured at original cost less accumulated depreciation.

InfrastructureThere is no market for Council's infrastructure assets as these are held to orovideessential services to the community.Accordingly , the fair value of all infrastructure assets is measured at written downcurrent replacement cost.

Road , Drainage and Bridge Network

In March 201 0 and again in January and April 201 I Council's road assets were damaged

by flooding. The assessed damage to the road assets at that time were approximately $ 120

million. Although a revaluation of assets was completed in 2011 , that revaluation wascompleted prior to the second flood event and therefore did not reflect the condition ofthe road, drainage and bridge network as at 3Oth June 2011. in November /December2011 and Janyary /February 2012 the Council was also impacted by further flood events.

Atthe30th June2012 Cor-rncil had notasessed theqr.ranturnofroadassetsimpairedfrom flood damage that occurred to its road and drainagenetwork.

QAOCERTIF'IED


Notes to the financial statemenrsFor the year ended 30 June 2012

Not€

2012

(

qR? q45

4,r66,365

2011

Roads, Drainage and Bridge networks were previously revalued to reflect currentreplacement cost as at 30th June 201 I by Assetval Pty Ltd . This revaluation was basedon the use ofrates and primary cost information developed by Assetval pty Ltd throughdirect contact with suppliers , making reference to various construction guides, data fromthe ABS and their own research.

Water and Seweragewater Supply and Sewerage Infrastructure was revalued to reflect the currentreplacement cost and the current fair value as at 30th June 201 I by Assetval pty LtdThis revaluation was based on the use of rates and primary cost informationdeveloped by Assetval Pty Ltd through direct contact with suppliers , makingrel-erence to various constructlon guides and data from th Australian Bureau ofStatistics and their own research.

Other InfrastructureOther Infrastructure was revalued to reflect current replacement cost and current fairvalue as at 30th June 2011 as determined by Assetval pty.

AirportAirport Infrastructure was revalued to reflect current replacement cost and currentfair value as at 30th June 201 I as determined by Assetval pty Ltd .

This revaluation was based on the use of rates and primary cost informationdeveloped by Assetval Pty Ltd through direct contact with suppliers, makingreference to various construction guides, data from the Australian Bureau ofStatisticsand their own research.

l8 Trade and other payablesCurrent

AccrualsCreditors

CST payable

Employee related accrualsAnnual leave

Non CurrentAnnual leave

Employee benefit expenses are calculated at current pay levels and adjusted forinflation and likely future changes in salary level.The non-current portion ofannual leave and long service leave is then discounted tothe present value. Further details on employee entitlements are reported in Note 1.20

I9 Provisions

CurrentLong service leave

Non-CurrentLong service leaveProperty restoration:

1.19

1.20(b)

1.20(b)

I,380,203

3,491,8981,t13,779

632,9023,600,221 2,864,9988,754,531 9.483.780

796,818 503.854796,818

2.390.455

1.20(e)

1.20(e) 1,667 ,041



For the year ended 30 June2012

Note

2012

$

35,029

2,r70,895. 1,193,046

(t76,668)

______1]n,n]_

35,029

_______]se2_

35,029

------3t 92-

-0"i1--$'1S n?q

1,7U,0?0

2,447,349(69,804)

(206,6s0)

___J]19,8%_

35,02915 O?q:

Depot and Sawmill

Details of movements in provisions:Long service leave

Balance at the beginning offinancial yearAmount provided for in the period

Amount paid in the periodBalance at end ofthe financial vear

Depot and SawmillBalance at the beginning offinancial yearBalance at end ofthe financial year

Current portionNon-current Dortion

This is the present value of the estimated future cost of restoring the depot andsawmill under the State Government environmental rezulations at the end of its usefutlife.

The projected cost is $720,000 and this cost is expected to be incurred in 2048.

20 Borrowings(a) Bank overdraft

The council does not have a bank overdraft facility.

(b) UnsecuredborrowingsUnsecured borrowings are provided by the Queensland Treasury Corporation.All bonowings are in $A denominated amounts and carried at amortised cost, interestbeing expensed as it accrues. No interest has been capitalised during the current orcomparative reporting period. Expected final repayment dates vary from I st luly 2012tol5 June 2030.

There have been no defaults or breaches ofthe loan agreement during the period.Principal and interest repalrnents are made quarterly in arrears.

Details of borrowings at balance date are:Current

Queensland Treasury Corporation

Non CurrentQueensland Treasury Corporation

Details of movements in borrorvings:

Queensland Treasury CorporationBalance at the beginning of financial yearLoans raised

Principal repayments

Balance at end ofthe financial yearClassified as :

CurrentNon-current

?5 n?q

3sw

1.21

898,403 1,091 ,703

12,143,368 t0,286,r79

1r.377 .8823,000,000

(1,336.1 I 1)

13.041,771

898,403r2,t43,368

r2,949.933

11 ,377 ,882

i,091,703r0,286,179

13,041,77 r 11,377 ,882

- oAOCERTIFIT'D


Notes to the hnancial statements

ended 30 lune2012For the

20 Borrowings - continuedThe loan market value at the reporting date was 514,362,686.This represents the value of the debt if Council repaid it at that date. As it is theintention of Council to hold the debt for its term, no provision is required to be madein these accounts,

No assets have been pledged as security by the council for any liabilities.Borrowings are all in $A and are underwritten by the Queensland State Govemment.

2l (i) Asset revaluation surplusMovements in the asset revaluation surplus were as follows:Balance at the beginning of financial year

(a) Adjustments to property, plant and equipment through revaluations:Land and Site ImprovementsBuildingsRoad, Drainage and Bridge NetworkWaterSewerage


Balance at end ofthe financial year

(ii) Asset revaluation surplus analysisThe closing balance ofthe asset revaluation surplus is comprised ofthefol lowing asset categories:

Land and Site ImprovementsBuildingsRoad, Drainage and Bridge NetworkWaterSewerage


22 Retained surplusMovement in retained surplus

Balance at the beginning of financial yearNet result

Transfers (to)/ from capital reserues for future capital project funding, or Aomreserves funds that have been expended:

Constrained grants and subsidy contributions reserve

Future capital asset sustainability reserve

Unspent loan cash reserye

Future Capital works reserveWater reserve

Buildings reserve

Airports reserve

Note

r.23

649,942,716

-

2011

243,496,695

3,929, I 00(33,742,737)471,702,647(18,071,7sr)(rr,709,722)(5,607,157)

54,651649,942,716

t7

649,942,716

17,394,796(670,6s3)

590,979,291

24,929,3562,245,739

15,01 0,536

54,651

____642p!2J16_

17,394,796(670,6s3)

590,978,29124,929,356

2,245,739

I 5,01 0,536

54,651649.942.716

|.24

311,708,929I I A4s ?qO

304,283,679

33,964, 1 58

3,77 4,',l 53

(s04,940)

323,6s4,228 338,24't,837

(6.209,604)

4.478,865

3t,844(ee8,e64)

(1,476,645)

2012

55) R)47q6 tooQAO

CERTIFIED4,813,179 (4,174,504)




Transfers (to) recurrent reserves for future project funding, or from reserves fundsthat have been expended:

Constrained Operational grants & contributions reservePrepaid Grants reserve


23 Reserves(a) Restricted capital res€rves

(i) Future capital asset sustainability reserve

Balance at the beginning offinancial yearFunded depreciation on capital assets in periodLess: Funds utilised in the period


(ii) Unspent loan cash reserveThis cash forms part ofcouncil's capital value as the balance represents loan cashdrawn down but unspent at balance date. The cash is restricted to specific projectfunding.

Balance at the beginning offinancial yearLoan funds drawn down in period.Loan cash expended in period.Balance at end ofthe financial vear

(iii) Constrained grants and subsidy contributions reserveBalance at the beginning offinancial yearTransfer from retained earnings non reciprocal grants, subsidies and contributionsreceived and allocated to specific capital projectsTransfer to retained earnings funds expendedBalance at end ofthe financial year

Total restricted capital reserves

(b) Other reserves(1) Summary of capital reserves held for funding future projects:

(ii) Future Capital Works reserve(iii) Water reserve(iv) Sewerage reserve(v) Plant reserve(vi) Roads reserve(vii) Buildings reserve(viii) Airports reserve

(2) Summary of recurrent reserves hetd for funding future projects:(i) Constrained Operational Grants & Contributions reserve(ii) Prepaid Crants reserve

Note

1.25

2012

$

(6,837,698)(6,29s,15s)

322.172.252

542,543 (22,364.404)

2011

$

(22,364,404)

3r1J08,n9

- 4.478.865

3,262,698 5,249,639(2,7s7,7s8) (e,728,s04)

504,940

840,224

3,000,000(3,095,543)

744,681

7,869,065

6,222,5t6(e,ee7,26e)4,094,312

872,068

(3r,844)840,224

1,659,461

8,779,670(2,570,066)7,869,065

s 141 S?',1 8,709,289

2,2s0,000 2,2s0,0001,283,098 1,83s,922

276,799 276.799

1,040,114 1,040,114

2,268,tt4 2,268,114

900,346 1,696,645

- 98,700

8,0t8,47 | 9,466,294

21,821,861

6,83'7,698

)) 764 AOA

?R 65q 55q 22,364,404

31.830.698QAOCERTIFTED

Total general reserves 36,678,030



20t2


Note

2011

$

2,2s0,000 r,251,036_ 2,250,000- (1,25t,036)

--4fl+ 2,2so,ooo

Movements in capital reserves are analysed as follows:

(ii) Future Capital Works reserveBalance at the beginning offinancial yearTransfer from retained earnings for future expenditureTransfer to retained earnings funds expendedBalance at end ofthe financial yearTransfer to retained earnings funds expended

(iii) Water reserveBalance at the beginning of financial yearTransfer to retained eamings funds expendedBalance at end ofthe financial vear

(iv) Sewerage reserveBalance at the beginning of financial yearBalance at end ofthe financial year

(v) Plant reserveBalance at the beginning offinancial yearBalance at end ofthe financial year

(vi) Roads reserveBalance at the beginning offinancial yearBalance at end ofthe financial vear

(vii) Buildings reserveBalance at the beginning offinancial yearTransfer from retained eamings for future expenditureTransfer to retained earnings funds expendedBalance at end ofthe financial vear

(viii) Airports reserveBalance at the beginning offinancial yearTransfer to retained eamings funds expendedBalance at end ofthe financial year

Movements in recurrent reserves are analysed as follows:(i) Constrained Operational Grants & Contributions reserve

Balance at the beginning offinancial yearTransfer from retained eamings for future expenditureTransfer to retained eamings funds expendedBalance at end ofthe financial year

(ii) Prepaid Grants reserveTransfer from retained eamings for future expenditureBalance at end ofthe financial vear

Commitments for expenditureContractual Commitments

Contractual comrnitments at balance date bulstat€ments

Within one yearLater than I year but not later than 5 years

I RlS q??

(ss2,824)

I,293,099

1,835,922

1,835,922

276,799 276,799276,799 276,799

1,040,114 1,040,1141,040,t14 t,040,tt4

2,268,1t42,268,114

1,696,645

(796,299)

98,700(98,700)

2,269,1142,268,n4

220,000r,476,645

98,700

900,346 1,696,645

98,700

22,364,404

2,432,97'7

(2,975,s20)

____?1,u|,8!]-_

6,831,6986.837.698

485,063970,r24

22,593,34Q(228,e36)

_236!,404_

QAO -

CEXJIFIED

24

not recognised in the financial


Notos to tle hnancial statements

For the yeai: ended 30 June 2012

20t2

b

10.335.200 1.4s5.r87

201]1

Note

Capital CommitmentsCommitment for the construction of the following assets contracted forat the reporting date but not recognised as liabilities are as follows:

BuildingsOther Assets

Airport

These expenditures are payable :

Within one year

Later than I year but not later than 5 years

ater than 5 years

25 Events after balance date

Council has experienced a number ofsubsequent events since the preparation ofitsAmual Financial Statements that are considerednecessary to disclose;

. Continuation of Flood Damage restoration works on its road network amounting toan estimated $51 million which is being funded under NDRRA fundingarrangements .

. Involvement with gas companies in major private works contracts to upgradespecific impacted roads amounting to an estimated $15 million.. Receipt of substantial grant funding from the Federal and Queensland Stategovernmemts as well as other sources to construct a levy bank in Roma Townshipamounting to $19.4 million.

26 ContingentliabilitiesDetails and estimates of maximum amounts of contingent liabilities are as follows:

Local Government WorkcareThe Maranoa Regional Councilis a member of the Queensland localgovernment workers compensation self-insurance scheme, Local GovemmentWorkcare. Under this scheme the Council has provided a bank guaranteeto cover bad debts which may remain should the self insurance licencebe cancelled and there was insufficient funds available to cover outstandingliabilities. Only the Queensland Government's workers compensation authoritymay call on any part ofthe guarantee should the above circumstances arise.The Council's maximum exposure to the bank guarantee is:

Local Government MutualThe Council is a member of the local govemment mutual liability self-insurance pool,

z,ots,sqz

907,3305q{ os ?

5,387,6566,790,939

? o?a 541 6,790,939

2,039,543 6,790,939

568,603

oAOgER--TrFrED

568,603



For the vear ended 30 June 20 I 2

2012

-

2011

NoteLGM Queensland. In the event of the pool being wound up or it is unable to meet itsdebts as they fall due, the trust deed and rules provide that any accumulated deficitwill be met by the individual pool members in the same proportion as theircontribution is to the total pool contributions in respect to any year that a deficitarises.

As at 30 June 2011 the frnancial statements reported an accumulated surplus and itis not anticipated any liability will arise.

27 SuperannuationThe Maranoa Regional Council contributes to the Local GovernmentSuperannuation Scheme (Qld) (the scheme). The scheme is a Multi-employer plan

as defined in the Australian Accounting Standard AASB 1 l9 Employee Benefits.

The Queensland Local Government Superannuation Board, the trustee of the scheme,advised that the local government superannuation scheme was a complyingsuperaruruation scheme for the purpose of the commonwealth SuperannuationIndustry (Supervision) legislation.The scheme has two elements refened to as th€ Defined Benefits Fund (DBF) and theAccumulation Benefits Fund (ABF). The ABF is a defined contribution scheme as

defined in AASB 119. Council has no liability to or interest in the ABF other than thepayment of the statutory contributions as required by the Local Govemment Act 2009.

The DBF is a defined benefit plan as defined in AASBl l9. The council is not able toaccount for the DBF as a defined benefit plan in accordance with AASBl lg becausethe scheme is unable to account to the council for its proportionate share ofthedefined benefit obligation, plan assets and costs.

Any amount by which either fund is over or under funded would only affect futurebenefits and contributions to the DBF, and is not an asset or liability of the Council.Accordingly there is no recognition in the financial statements ofany over or underfunding of the scheme.

The audited general purpose financial report of the scheme as at 30 June 20 I I (themost recent available) which was not subject to any audit qualification, indicates thatthe assets of the scheme are sufficient to meet the vested benefits.

The most recent actuarial assessment of the scheme was undertaken as at I July 2009.The actuary indicated that "the DBF is in a very modest financial position with regardto the net asset coverage ofvested liabilities. Investment returns will be volatile underthe required investment strategy, particularly over short periods. The DBF thereforeneeds sufficient reserves to be able to withstand a reasonable range ofsuch influences.Because the DBF is now running down and cash flows are negative, the VBI (vestedbenefit index) should not be allowed whenever possible to retreat below 100%. oncebelow 100%, benefits drawn reduce the available assets for remaining members andhence the nest asset coverage ofvested benefits declines further.

27 Superannuation - continuedIn order to withstand a one in ten 'low return' outcome. the DBF would need reservesofthe order of8% to l0% having regard to the investment strategy adopted. Given thecurrent position ofthe DBF, such reserve can essentially only eventuate frorn eitherexcess investment returns over salary increases or additional employer contributions.

Council has been advised by the trustee of the scheme, following advice from thescheme's actuary. that additional contributions may be imposed in the future at a levelnecessary to protect the entitlements of DBF members. Under the Local Govemment

oAoERTIFIED


Notes to the financial statementsFor the year ended 30 June 2012

Act 2009 the trustee of the scheme has the power to lelry additional contributionson councils which have employees in the DBF when the actuary advises suchadditional contributions are payable - normally when the assets of the DBF areinsufficient to meet members' benefits.

The next actuarial investigation will be made as at I July 2012.

The amount of superannuation contributions paid by Maranoa Regional councilto the scheme in this period for the benefit of employees was:

28 Trust fundsTrust funds held for outside parties:

Monies collected or held on behalf of other entities yetto be paid out to or on behalfofthose entitiesSecurity depositsUnclaimed monies

The Maranoa Regional Council performs only a custodial role in respect of thesemonies, and because the monies cannot be used for council purposes, they are notbrought to account in these financial statements.

29 Reconciliation of net result for the year to net cashinflow (outflow) from operating activities

Net result

Non-cash operating items:Impairment of receivables and bad debts written offDepreciation and amortisation

Investing and development activities:Capital grants, subsidies and contributionsCapital incomeCapital expenses

Changes in operating assets and Iiabilities :

(lncrease) decrease in receivables(lncrease) decrease in inventories (excluding land)Increase (decrease) in payablesIncrease (decrease) in provisions

Note

t.29

2012

$

151,691

293,690243,063688,444

20tl

95,381120,271

2t8,905

2,453,7t1 2,434.206

434,557

| |,945,299

78,0969,458,7089,536,804

33,964,158

7,960,099

7,960,088

o

l0

4

1t

(6,222,s16) (8,779,670)(167,722) (1,119,530)

80,300(6,309,938)

(t2,56r,s46)(r,630,679)

651,8191,0 r6,378

(9,899,200)

(8,s r 7,846)(1,073,653)

4,093,623(276,4s4)

(t2,524,028) (5,774,330)

QAOCERTIFIED

Net cash inflou' from operating activities 2,648,137 26,250,716

MARA-}{OA REGIONAL COUNCIL

Notes to tbe frnancial statements

for the year ended 30 June 2012

30 Financiallnstruments

Maranoa Regional C'ouncil's activities expose it to a variery of hnancial nsks including interest rate risk, credit risk,

and litluidity dsk.

Exposure to linancial risks is rnanaged in accordance with C'ouncil approved policies on furancial risk management. These

policies tbcus on managurg the volatility of financial rnarkets and seek to nrininise potential adverse eftbcts on the financialperlbrmance ofthe Council. The Council rninimises iLs exposure to financial risk in the ibllowing ways:

- lnveslmeuts in tinancial assets are only rnade where those assets are with a bank or other financial instinrtion in

Ausfalia. The Council does not invest in derivatives or other hish risk invesonenrs.

- When the Council borrows. it borrows fi'orn the Queensland Treasury Corporation unless another financial institution

can oftbr a more beneficial rate, taking into account any risk. Bon owing by the Council is conshained by the

provisions ofthe Statutory Bodies Financial Arrangernents Act I982.

lvlaranoa Regional Council measures risk ex;nsure using a variety ofnet}ocls as lbllows:

Risk exposure Vleasurement method

Sredit risk Aseino annlsis

Liquidity risk Mahrrifv analvsis

I-nterest rate risk iensitivitu :nalvsis

(i) C--redit Risk

Credit risk exposure refers to dre situation where the Council may incur financial loss as a result ofanother party to a

l-mancial instnrnrent failing to discharge their obligations.

h the case ofrate receivables, the Council has the power to sell the property to recover any defaulted amounts.

In eftbct this power protects the Council against credit risk in the case ofthese debls.

ln other cases, the Couocil assesses the credit risk betbre providing goods or services and applies nortrral business

credil protection procedures to minimise the risk.

The Council is exposed to credit risk through its invesbnenls with the Queensland Treasury Corporation (QTC) and

deposits held with banks or other financial institutions (ifapplicable). l'he QTC Cash F'und is an asset marragemeut

portlbliothatinvestswitrarvidevarietyofhighcreditratingcounterparties. Depositsarecapitalguaranteed.

Other investrnents are held with highly rated./regulated banks/financial institutions and whitst not capital guaranteed,

the likelihood ofa credit tailure is remote.

By the rtaturc ofthe C'ormcils operations, there is a geographical concenfiation ofrisk in the Council's area. Because

the area is largely agricultural and mining based, there is also a concenFation in both the agriculturaland rnining sectors.

sector. The maximum expostre to credit risk at balance date in relation to each class oflecognized f-rnancial asset is the

gross oarry'ing amount ofthose assels inclusive ofany provisions for impairment.

No collateral is held as security relating to the financial assets held by the Council.

'l'he following table represents the C'ouncil's ntaxiurum exposure to credit risk:

Financial Assets

( ash and cash equivalents - Banl

Cash and oash equivalents - QTC

Receivables - rates

Receivables - other

Ofher credit exposure

Gutrrantee'l otal

Note

l)

IJ

T4

l4

26

2012

$

4,025,457

23,620,203

2,666,550

25,799,034

s68.603

201 I

r,281,978

37,630,-n3

2,03'1,816

15,056,287

s68.603

QAOCERTIFIED

56.679.847 56,57 5.397




30 Financial instruments - continued

Past due or impaired

No financial assets have had their tenns renegotiated so as to prevent thenl fiom being past due or irnpaired, and are stated

at the carr.ving amounts as indicated.'lhe tbllowing table represents an analvsis ofthe age ofthe Council's financial assets that are either fully perlbrming, past

due or irnnaired:

Fully

Performing

$

Past due Lrss

knpaired

s

Total

$

lrss than 30

days

S

3l to 60

days

6l to 90

days

s

Over 90

days

$

20, I 64,639 3,207,463 l3l ,640 288,697 4,98 I.748 (308,603) 28,465,584

Receivables

20t2

201 I 2.842.3s1 ll,07r,023 482.052 (234,238) t7 ,094,10321,327 2,911,588

(ii) Liquidity risk

Liquidity risk refers to the situation where the C'ouncil nray encounter difficulty in meeting obligations associated rvith

financial liabilities that are settled by delivering cash or another financial asset.

lhe Council is exposed to liquidity risk through its trading in the normal course ofbusiness and borrowings from the

Treasury Corporation for capital works.

The Council [ranages its exposure to liquidity risk by maintaining sufticient undrawn facilities, both short and long term. to

cater fbr unexpected volatilio/ in oash flows. These facilities are disclosed in the bonowings note 20.

The following table sets out the liquidity risk of financial liabilities held bv the Council in a fbnnat as it night be provided to

management. The amounts disclosed in the maturity analysis represent the conh actual undiscounted cash flows at balance

date(excludingemployeeentitlementsasdefinedbyA.AsBl32 Financiallnstrumenlspara4(b)):

0 to I year

s

I to 5 years

b

Over 5 years

$

Total contractual

cash flows

s

Carrying

amount

$

5, I 54,3 l0 - 5, I 54,3 l0 5, l 54,3 l01.698.869 6.79s.477 t0.184.474 18.678.820 13.041.771

6,853,179 6.795.47'7 10.184.474 23.833.130 18.196.081

2012'l rade and other pavables

Loans QTC

2011

'frade and other payables

l.oans QTC

the outtlorvs i.rr the above table arc

si grrifi cantly di lllrent amounts than

6,6t8,782

1,776,268 5,570,362 8,90r,313

6,6t8,182

t6,247,943

6,6t8,782

1t,377,882

8,395,0s0 5.5'10.362 8.901.313 22.866.725 17.996.664

not expected to occur significantly earlier and are not expected to be fbr

indicated in the table.

(iii) Interest rrte risk'fhe Council is exposed to i.nterest rate risk through its borowLngs fiom the Queensland'l reasury Corporation and

investments held with financial institutions.'l he dsk in borowing is effectively rnanaged by borrowing mainly ficnn the Queensland 1reasury Corporation and

havins access to a mix oflloating and tixed funding sources such that the desired interest rate risk expcrsure can

L)e constnlcted. Irterest rate risk ur othel areas is minirrrar.

The Council does not undertake anv hedgine ofinterest late nsk.

s'8#"?'"

Interest Rate Sensltivity Analysis

The following interest rate sensitivity anallnis is based on a report similar to that which would be provided tomanagement, depicting tbe outcome to profit and loss should there* t l%o increase in market interest rates.

The calculations assume that the rate would be beld constant overttre next ftnncial year, with the change occurdngat fte beginning of that year. It is assumed that interest rates on overdu€ rates would not chanse. If the rates

decreased by l% the impact would be equal in amount in the revene direction.

Financial assets and liabilities that

held at variable interest rates total:

Financial assets

Financial liabilities

Net total

(iv) Fair Value

Maranoa Regional Council does not recopise financial assets or liabilities at fair value in its Satement of Financial Position

M/RANOA REGIONAL COUNCIL


For the year ended 30 June 201 2

3l National Competition Policy

(a) Activities to which the code of competitive conduct is applied

A "business activify" of a local government is divided into two categories :

(a) Roads business activity:

(i) the construction or maintenance of State controlled roads for which the local government submits an offer to

carry out work in response to a tender invitation, other than through a sole supplier arrangement.

(ii) submission of a competitive tender for construction or road maintenance on the local government's roads which

the local government has put out to tender, or called for by another local govemment.

(b) Other business activity, referred to as type three activities, means the following:

(i) trading in goods and services to clients in competition with the private sector, or

(ii) the submission of a competitive tender in the local government's own tendering process in competition with others

for the provision of goods and services to its self. Excluded activities are (a) library services, and (b) an activity or

part thereof prescribed by legislation.

Local govemment may elect to apply a Code of Competitive Conduct (CCC) to their identified business activities. This requires

the application of full cost pricing, identifuing the cost of community sewice obligations (CSO) and eliminating the advantages and

disadvantages of public ownership within that activity. The application of the CCC to the roads business activity is compulsory.

The CSO value is determined by Council, and represents an activities cos(s) which would not be incurred if the activifies primary

objective was to make a profit. The Council provides funding from general revenue to the business activity to cover the cost of

providing non-commercial community services or costs deemed to be CSO's by the Council. Notwithstanding CSO's, the council

is commifted to operating these activities as business activities in accordance with the CCC.

Quarry

Saleyards

Road Works

Water & Sewerage

Waste Management

Gas

The following table summaries the financial results for these, including competitive neutrality adjustments if applicable.

Full information is available for inspection at the council offices.




3l National Competition Policy - continued

(b) Financial performance of activities subject

Revenue for services provided to the Council

Revenue for services provided to extemal clients

* Community service obligations

Less : Expendinre

Surplus (deficiency)

Revenue for services provided to the Council

Revenue for services provided to external clients* Community seruice obligations

Less : Expenditure

Surplus (deficiency)

3l National Competition Policy - continued

(c) CSO's were paid during the reporting period to the following activities.

Water & Sewerase provide free water to public areas within the region. 145,000

to reforms:

Ouarrv Saleyards Road Works

20t2

$

6,076,s09

20r l

$

4,406,506

20t2

2,833,745

201 I

$

2,713,465

2012

$

l 0,002,385

20tl$

6,062,475

6,076,509

|.576.735

4,406,s06

| .7 t7 .617

2,833,745

2,915,417

2,7 t3,465

3.035.236

10,002,385

8.248.932

6,062,47s

8.230236

4.499.774 2.688.889 (81,672" (321,77r t.753.453 (2.167.761

Water & Sewerage Waste Manasement Gas

2012

$

5,696,t57

145.000

201 I

5,475,530

too ooo

2012

$

t1 lt5

2,989,708

20t I

$

2,r13,467

2012

s

5r4.737

20r t

$

285,926

5,841,t 57

5.213,139

5,575,530

4.976.145

3,073,033

1.584.200

2,113,467

1.504.390

514,737

s26.&0

285,926

446.824

628.018 599.385 1.488.833 609,077 l 1,9031 fl 60.898)

MARANOA R.EG IONAL COUNCIL

FINANCIAL STATEMENTS

For the year ended 30 June 20 I 2

MANAGEMENT CERTIFICATEFor the vear ended 30 June 2012

These general purpose financial statements have been prepared pursuant to Section 102 ofthe Local Govemment

(Finance, Plans and Reporting) Regulation 2010 (the Regulation) and other prescribed requirements.

In accordance rvith Section l6l of the Regulation we certif that these general pwpose fmancial statements:

(D have been prepared in accordance with the relevant accountqtg documents; andl

(ii) accurately reflect the local govemment's financial performance and position for the financial year.

In addition we certi8/ that, in our opinion:

the prescribed requirements ofthe Local Government Act 2009 and associated Regulations for the

establishment and keeping of accounts have been complied with in all material respects; and

the general purpose furancial statements have been prepared in accordance with Australian accounting siandards

(including Australian Accounting lnterpretations and other authorilative pronouncements issued by the

Australian Accounting Standards Board); and

the general purpose financial statemens present a true and fair view ofthe Council's financial position as at

and cash flows for the frnancial year ended on that date.

(rl

(iD

(ii0

o't.,'jf0r\g rG, o,,",'2O,L,15

30 June 2012

INDEPENDENT AUDITOR'S REPORT

To the Mayor of Maranoa Regional Council

Report on the Financial Report

I have audited the accompanying financial report of Maranoa Regional Council, whichcomprises the statement of financial position as at 30 June 2012, the statement of

comprehensive income, statement of changes in equity and statement of cash flows for theyear then ended, notes comprising a summary of significant accounting policies and otherexplanatory information, and certificates given by the Mayor and the Chief Executive Officer.

The CounaT's Respon sibility for the Financial Report

The Council is responsible for the preparation of the financial report that gives a true and fairview in accordance with prescribed accounting requirements identified in the LocalGovernment Act 2009 and Local Government (Finance, Plans and Repofting) Regulation2010, including compliance with Australian Accounting Standards. The Council'sresponsibility also includes such internal control as the Council determines is necessary to

enable the preparation of the financial report that gives a true and fair view and is free frommaterial misstatement, whether due to fraud or error.

A u d itor's Re s pon si b il ity

My responsibility is to express an opinion on the financial report based on the audit. Theaudit was conducted in accordance with the Auditor-General of Queensland AuditingStandards, which incorporate the Australian Auditing Standards. Those standards requirecompliance with relevant ethical requirements relating to audit engagements and that the

audit is planned and performed to obtain reasonable assurance about whether the financialreoort is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial report. The procedures selected depend on the auditor'sjudgement, including the assessment of the risks of material misstatement of the financialreport, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity's preparation of the financial report that gives

a true and fair view in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity's internal control, other than in expressing an opinion on compliance with prescribedrequirements. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by the Council, as well as

evaluating the overall presentation of the financial report

I believe that the audrt evidence obtained is sufficient and appropriate to provide a basis formy qualified audit opinton

lndependence

the Auditor-General Act 2009 promotes the independence of the Auditor-General and allauthorised auditors. The Auditor-General is the auditor of all Queensland public sectorentities and can be removed only by Parliament.

-The Auditor-General may conduct an audit rn any way considered appropriate and is notsubject to direction by any person about the way in which audit powers are to be exercised.The Auditor-General has for the purposes of conducting an audit, access to all documentsand property and can report to Parliament matters which in the Auditor-General's opinion aresignificant.

Easis for Qualified Opinion

As disclosed in Note 17(b), the Council was impacted by flood events during the 2011-12financial year. While indicators of imparrmeni were present as a result of these flood events,the Council failed to complete condition assessments over those assets rn the road,drainage and bridge network asset class which had been physically damaged, in order toestimate their recoverable amounts. Consequently, the Council has been unable to providesufficient appropriate audit evidence to demonstrate that the written down value of its road,drainage and bridge network af $794,641,819 (2011: $795,649,497), reported in Note 17(a),does not differ materially from their fair value at 30 June 2012 as required by AustralianAccounting Standard AASB 116 Property, Plant and Equipment I am therefore unable toand do not express an opinion on the reported written down value of these assets, or theassociated depreciation expense of $3,023,703 (2011'. $2,643,407), disclosed in Note 10,

and the associated asset revaluation surplus balance of $590,978,291 (2011'.$590,978,291), disclosed in Note 21(ii). As the Council have not written off any road,drainage and bridge network assets destroyed by the floods, I am also unable to and do notexpress an opinion on the reported loss on write-off of capital assets of $80,300 (2011: $nil),disclosed in Note 11, and the net result attributable to Council of $'11 ,945,299 (2011'.

$33,964,158) and total comprehensive income of $11,945,299 (2011: $44O,420,189), bothreported in the statement of comprehensive income. The opinion in my audit report for 2010-1 1 was also modified on this basis and the 2011 comparative balances remain qualified in

2012.

The impact of these issues on the financial report is unable to be quantified due to theabsence of reliable data.

Qualified Opinion

ln accordance with s 40 of the Auditor-General Act 2009, except for the possible effects of thematter described in the basis for qualified opinion paragraphs above, I certify that -

(a) | have received all the information and explanations which I have required; and

(b) in my opinion -

(i) the prescribed requirements in relation to the establishment and keeping ofaccounts have been complied with in all material respects. and

(ii) the financial report presents a true and farr view, in accordance wtth theprescribed accounting standards, of the financial pedormance and cash flows of

Maranoa Regronal Council for the financial year 1 July 2011 to 30 June 2012 andof the financial position as at the end of that vear

Other Matters - Electronic Presentation of the Audited Financial Report

This auditor's report relates to the financial report of Maranoa Regional Council for the yearended 30 June 2012. Where the financial report is included on Maranoa Regional Council'swebsite the Council is responsible for the integrity of Maranoa Regional Council's websiteand I have not been engaged to report on the integrity of Maranoa Regional Council'swebsite. The auditor's report refers only to the subject matter described above. lt does notprovide an opinion on any other information which may have been hyperlinked to/from thesestatements or otherwise included with the financial report. lf users of the financial report areconcerned with the inherent risks arising from publication on a website, they are advised torefer to the hard copy of the audited financial report to confirm the information contained in

this website version of the financial report.

These matters also relate to the presentation of the audited financial report in otherelectronic mddia including CD Rom.

,/ /l/&',r'*

UK JOHNSON FCAAs Delegate of the Auditor-General of Queensland

ffi^uotron\q 26 iu:i 20i3 '(

K*'" ^rr@Queensland Audit Office

Brisbane

l5 t7 l8 )n - maranoa.qld.gov.au · Notes to the Financial Statemenrs For the year ended 30 June...

Documents

Transcript of l5 t7 l8 )n - maranoa.qld.gov.au · Notes to the Financial Statemenrs For the year ended 30 June...