City of Stirling Annual Financial Report 2008 by City of Stirling

Financial Statements 2007â&#x20AC;&#x201C;2008

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INDEX TO FINANCIAL STATEMENTS

INCOME STATEMENT BALANCE SHEET STATEMENT OF CHANGES IN EQUITY STATEMENT OF CASH FLOWS SCHEDULE 1 - GENERAL PURPOSE FUNDING SCHEDULE 2 - STATEMENT OF RATING INFORMATION

Page 1 3 4 5 6 7

NOTES TO THE FINANCIAL STATEMENTS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

SIGNIFICANT ACCOUNTING POLICIES CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS OPERATING REVENUES AND EXPENSES ABNORMAL ITEMS CASH AND OTHER FINANCIAL ASSETS RECEIVABLES AND PREPAYMENTS INVENTORIES PROPERTY, PLANT AND EQUIPMENT CARRYING COST OF ASSETS (BY PROGRAMME) BORROWINGS TRADE PAYABLES AND PROVISIONS RESERVES OPERATING LEASE COMMITMENTS SUPERANNUATION TRUST FUNDS COMMITMENTS OTHER FINANCIAL ASSETS TOWN PLANNING SCHEMES NOTES TO THE STATEMENT OF CASH FLOWS RATES AND SERVICE CHARGES LATE PAYMENT INTEREST INCOME, EXPENDITURE AND MOVEMENTS OF MONEY INFORMATION ABOUT FEES TO COUNCIL MEMBERS EMPLOYEE REMUNERATION MAJOR LAND TRANSACTION INFORMATION FINANCIAL INSTRUMENTS PERFORMANCE MEASUREMENTS SUBSEQUENT EVENTS LOSS ON RESTRUCTURE OF LOCAL GOVERNMENT

8 15 16 22 23 24 27 28 31 32 33 34 37 38 39 40 42 43 49 51 57 58 59 60 61 63 65 66 67

INCOME STATEMENT (BY PROGRAMME)

FOR THE YEAR ENDED 30 JUNE 2008

Note

2008 BUDGET $

2008 ACTUAL $

2007 ACTUAL $

REVENUE FROM OPERATIONS GENERAL PURPOSE FUNDING GOVERNANCE LAW, ORDER, PUBLIC SAFETY HEALTH EDUCATION & WELFARE COMMUNITY AMENITIES RECREATION AND CULTURE TRANSPORT ECONOMIC SERVICES OTHER PROPERTY AND SERVICES

89,959,527 1,347,511 2,083,377 255,429 5,428,544 23,061,397 7,538,510 3,253,087 3,149,738 17,092,989

92,747,350 2,741,522 2,306,253 300,536 5,987,703 32,144,483 8,356,253 5,094,826 3,839,460 2,599,299

85,710,936 2,346,679 2,062,875 292,737 5,242,195 21,918,858 6,751,647 2,989,977 13,713,845 10,172,861

153,170,109

156,117,685

151,202,610

GENERAL PURPOSE FUNDING GOVERNANCE LAW, ORDER, PUBLIC SAFETY HEALTH EDUCATION & WELFARE COMMUNITY AMENITIES RECREATION AND CULTURE TRANSPORT ECONOMIC SERVICES OTHER PROPERTY AND SERVICES

1,560,000 10,501,456 4,857,267 2,050,269 8,449,114 23,795,600 37,423,453 29,754,284 7,608,927 6,454,038

1,580,027 11,469,374 4,881,917 1,859,486 9,317,924 24,522,405 39,782,676 30,893,433 7,666,981 7,277,250

2,071,734 9,558,912 4,103,700 1,840,830 8,004,234 21,077,780 33,320,284 28,051,214 6,604,554 5,649,058

132,454,408

139,251,473

120,282,300

20,715,701

16,866,212

30,920,310

TOTAL REVENUE EXPENSES FROM OPERATIONS

TOTAL EXPENSES

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS AND BEFORE RESTRUCTURING OF LOCAL GOVERNMENT LOSS ON RESTRUCTURING

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS AND AFTER LOSS FROM RESTRUCTURING

20,715,701

(2,263,264)

14,602,948

30,920,310

The income statement should be read in conjunction with the accompanying notes to the financial statements

The income statement should be read in conjunction with the accompanying notes to the financial statements Financial Statements 1

INCOME STATEMENT (BY PROGRAMME) FOR THE YEAR ENDED 30 JUNE 2008

BALANCE SHEET AS AT 30 JUNE 2008

BALANCE SHEET AS AT 30 JUNE 2008 Note

CURRENT ASSETS Cash at Bank Other Financial Assets Receivables Prepayments Inventories

5a 5b 6a 6b 7

2008 $

2007 $

46,593 77,478,940 6,909,421 128,732 342,727

1,498,802 63,844,597 5,420,481 217,876 274,539

84,906,413

71,256,295

2,926,197 19,506,118

2,740,126 15,852,490

TOTAL CURRENT LIABILITIES

22,432,315

18,592,616

NET CURRENT ASSETS

62,474,098

52,663,679

6,037,357 3,295,763 779,643,564

5,955,721 4,344,961 773,830,256

788,976,684

784,130,938

450,596

397,379

450,596

397,379

NET NON-CURRENT ASSETS

788,526,088

783,733,559

NET ASSETS

851,000,186

836,397,238

803,753,109 47,247,077

807,104,506 29,292,732

851,000,186

836,397,238

TOTAL CURRENT ASSETS CURRENT LIABILITIES Borrowings Payables and Provisions

NON-CURRENT ASSETS Other Financial Assets Receivables Property plant and equipment

10 11

17 6a 8a,b

TOTAL NON-CURRENT ASSETS NON-CURRENT LIABILITIES Payables and Provisions

TOTAL NON-CURRENT LIABILITIES

EQUITY Accumulated Surplus Reserves TOTAL EQUITY

The balance sheet should be read in conjunction with the accompanying notes to the financial statements The balance sheet should be read in conjunction with the accompanying notes to the financial statements

Financial Statements 3

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 Note

2008 $

2007 $

ACCUMULATED SURPLUS Balance at beginning of reporting period

807,104,506

779,502,230

Changes in accounting Policy Restated Balance

807,104,506

779,502,230

14,602,948

30,920,310

(26,967,607)

(18,217,766)

9,013,262

14,899,732

803,753,109

807,104,506

Balance at beginning of reporting period

29,292,732

25,974,698

Amount transferred from accumulated surplus

26,967,607

18,217,766

Amount transferred to accumulated surplus

(9,013,262)

(14,899,732)

47,247,077

29,292,732

851,000,186

836,397,238

Change in net assets resulting from operations

Transfers to reserves Transfers from reserves Balance at end of reporting period

RESERVES - CASH BACKED

Balance at end of reporting period TOTAL EQUITY

The statement of change in equity should be read in conjunction with the accompanying notes to the financial statements The statement of change in equity should be read in conjunction with the accompanying notes to the financial statements

Financial Statements 4

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 Note

2008 $

2007 $

82,102,592 5,970,615 32,852,224 7,328,132 1,209,175 7,959,039

80,583,115 4,730,625 29,986,895 6,214,114 864,738 2,724,256

137,421,777

125,103,743

51,831,289 47,690,275 4,268,819 1,170,493 2,600,216 196,824

46,204,902 42,183,235 3,712,946 934,606 3,029,857 39,608

107,757,916

96,105,154

29,663,861

28,998,589

New & Redevelopment of Community Infrastructure Payments for purchase of property, plant & equip Payment for investment in other entity Proceeds from sale of property, plant & equip Capital Grants & Contributions (Govt & Non Govt)

(29,245,341) (15,551,676) (81,636) 10,811,982 16,398,873

(26,849,183) (15,303,081) (5,407,146) 15,932,344 13,973,333

NET CASH USED IN INVESTING ACTIVITIES

(17,667,798)

(17,653,733)

11,996,063

11,344,856

CASH FLOWS FROM OPERATING ACTIVITIES Receipts Rates Fees from Regulatory Services User Charges Interest Earned Other Grants & Contributions Activity Functional Operating Revenue

Payments Staff Expenses Materials and contracts Utilities Insurance Other Expenditure Interest

NET CASH FROM OPERATING ACTIVITIES

19d

CASH FLOWS USED IN INVESTING ACTIVITIES

NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENT CASH & CASH EQUIVALENT AT BEGINNING OF REPORTING PERIOD

19a

62,603,273

51,258,417

CASH & CASH EQUIVALENTS AT END OF REPORTING PERIOD

19a

74,599,336

62,603,273

The cash flow statement should be read in conjunction with the accompanying notes to the financial statements

The cash flow statement should be read in conjunction with the accompanying notes to the financial statements Financial Statements 5

SCHEDULE 1

SCHEDULE 1 - GENERAL PURPOSE FUNDING

GENERAL PURPOSE FUNDING

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

54,454,616

50,960,997

24,315

10,474

22,854,564

21,886,443

1,142,649

826,022

78,476,144

73,683,936

195,494 369,653 280,794

315,752 377,465 272,994

79,322,085

74,650,147

General Purpose Grant Pensioner Deferred Rates Interest Grant Other General Purpose Funding

4,996,866 109,067 8,319,332

4,808,698 92,198 6,159,893

TOTAL GENERAL PURPOSE FUNDING SHOWN ON INCOME STATEMENT

92,747,350

85,710,936

General Rate GRV Rate in $7.120 cents Specified Area Rate GRV Rate in $5.4158 cents Minimum Payments GRV Number of Assessments 39,647 at $576.00 each GRV Number of Assessments 54 at $374.00 each Interim Rates GRV Rate in $ Total General Rates Levied Plus - Late Payment Penalties Plus - Instalment charges & interest Plus - Arrears Rates Total Amount made up from Rates

General Purpose Funding 2008 General Purpose Grants 14% Other Rate Revenue 1%

$13,425,265

$870,256

Minimum Rates 25% $22,854,564

Total General Purpose Funding 2008 $92,747,350

Financial Statements 6

General rates 60% $55,597,265

SCHEDULE 2 STATEMENT OF RATING INFORMATION SCHEDULE 2 - STATEMENT OF RATING INFORMATION

FOR THE YEAR ENDED 30 JUNE 2008 FOR THE YEAR ENDED 30 JUNE 2008 Rateable Value

Property Numbers

Rate in $ (cents)

GENERAL RATE-GRV General Rates 763,077,416 Interim Rates

42,857

TOTAL GRV

42,857

763,077,416

Rate Yield

7.120

Minimums No. Yield $

TOTAL $

54,454,616 1,142,649

39,701 22,854,564

77,309,180 1,142,649

55,597,265

39,701 22,854,564

78,451,829

TOTAL SPECIFIED AREA RATE-GRV

24,315

TOTAL RATES LEVIES - as per Schedule 1

78,476,144

Number of Properties

Minimum Rated 48%

42,857

General Rated 52% Total Number of Properties 82,558

39,701

Rate Yield

Minimum Rated 29%

$55,597,265

General Rated 71% Total Rate Yield $78,451,829

Financial Statements 7

$22,854,564

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 1. SIGNIFICANT ACCOUNTING POLICIES The significant policies which have been adopted in the preparation of these financial statements are: a) Basis of Preparation The City's Financial Report for the year ended 30 June 2008 is a general purpose report that has been prepared in accordance with Australian Accounting Standards which outline a framework for the Preparation and Presentation of Financial Statements and Accounting Standards, the report incorporates other mandatory professional reporting requirements of the Local Government Act 1995 (as amended) and accompanying regulations (as amended). The report has also been prepared on the accrual basis under the convention of historical cost accounting. In preparing these Financial Reports the City has adopted, where relevant in operations, new and revised Standards and interpretations from their operating date as issued by the AASB.

b) Critical Accounting Estimates The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgements, estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The results of this experience and other factors combine to form the basis of making judgements about carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates. c) The Local Government Reporting Entity All funds through which the Council controls resources to carry on its functions have been included in the financial statements forming part of this financial report. In the process of reporting on the local government as a single unit, all transactions and balances between those funds (for example, loans and transfers between funds) have been eliminated. All monies held in Trust Funds are excluded from the financial statements but a separate statement of these monies appears in Note 15 to these financial statements.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) d) Property Plant and Equipment Property, plant and equipment is carried at cost. Property, Plant and Equipment, including buildings but excluding freehold land, reserve's reticulation and other parks infrastructure are depreciated over their estimated useful lives on a straight line basis. The carrying cost of infrastructure assets is depreciated on an annual basis to reflect its expected life. The expected useful lives are as follows: Buildings Fixed assets 50 years Plant and Equipment Fixed assets 8 years Mobile Vehicles and Plant Fixed assets 8 years Furniture and Office Equipment Fixed assets 10 years Computer Equipment & Photocopiers Fixed assets 4 years Recreation Equipment Fixed assets 10 years Roads Infrastructure asset 50 years Drains Infrastructure asset 75 years Footpaths Infrastructure asset 30 years Other Engineering Infrastructure Infrastructure asset 30 years Property Plant and Equipment are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and held ready for use. Infrastructure assets are depreciated from 1 July following the year in which they were constructed or acquired. The City has elected not to depreciate Reserves, Reticulation and Other Parks Infrastructure as the high level of ongoing maintenance of these assets does not result in any decrease in values. Property, Plant and Equipment with a value exceeding $1,000 and all infrastructure are capitalised and taken into account in the Council's Asset Registers at cost less, where applicable, any accumulated depreciation or amortisation and any accumulated impairment values. e) Investment Property The City does not hold any properties for investments, any property assets held as owners are for the purpose of delivering services to the ratepayers. f) Rates The rating and reporting periods coincide. All rates levied for the year are recognised as revenue. g) Grants, Donations and Other Contributions All grants, donations and other contributions are recognised as revenue when the Council obtains control over the monies (assets) comprising the contributions. Expenditure of those monies has been made in the manner specified under the conditions upon which the Council received those monies. Where contributions recognised as revenue during the reporting period were obtained on the condition that they be expended in a particular manner or used over a particular period, and those conditions were undischarged as at the reporting date, the nature of and amounts pertaining to those undischarged conditions are disclosed in Note 3(e). That note also discloses the amount of contributions recognised as revenue in a previous reporting period which were obtained in respect of the local government's operation for the current period. Financial Statements 9

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) h) Cash and Cash Equivalents Cash and cash equivalents includes cash on hand and municipal fund bank accounts that are highly liquid investments that are readily convertible to cash and are subject to an insignificant risk of change in values. i) Payables Trade payables and other accounts payable are recognised when the Council becomes obliged to make future payments resulting from the purchase of goods and services. j) Provisions for Employee Entitlements The provision for employee entitlements relates to amounts expected to be paid to employees for long service leave and annual leave and is based on legal and contractual entitlements. The funds in the Council's long service leave reserve bank account is considered adequate. Provisions made in respect of wages and salaries, annual leave and other long service leave expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Provisions made in respect of long service leave which are not expected to be settled within 12 months are measured at the present value of the estimated future cash outflows to be made by the Council in respect of services provided by employees up to reporting date. Provisions for sick leave are not made in the accounts as they are non vesting and are paid when incurred. k) Superannuation Fund The superannuation expense for the reporting period is the total contribution the City makes towards superannuation plans which provides benefits to its employees. Details of those arrangements are set out in Note 14. l) Land held for Resale Land purchased for development and/or resale is valued at the lower of cost and net realisable value. Cost includes the cost of acquisition and development. Interest and other holding charges incurred are recognised immediately as expenses. Revenue arising from the sale of property is recognised in the statement as at the time of signing a binding contract of sale. m) Land Under Roads The City of Stirling has elected not to recognise land under roads as an asset in the Balance Sheet for the period ending 30 June 2008. n) Leases In respect of operating leases, where the lessor effectively retains substantially all of the risks and benefits incident to ownership of the leased items, lease payments are charged to expense over the lease term. The Council has no finance leases.

Financial Statements 10

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) o) Interest in Regional Councils The Council's interest in two Regional Councils has been recognised in the financial statements at cost of contributed equity. Information about the Regional Councils are set out in Note 17. p) Goods and Services Taxation All amounts disclosed in the Financial Statements are net of any Tax which is payable or claimable under Goods and Services Taxation legislation. The Australian Taxation Office is held as both a creditor and a debtor for amounts payable or receivable. The cash flow statement is reproduced on a gross basis and includes any GST involved in the cash flows. q) Rounding Amounts shown in the Financial Statements have been rounded to the nearest dollar. This may result in minor variations between individual schedules. r) Comparative Information Where comparative information is not available it has been omitted from the financial statements. s) Impairment In accordance with Australian Accounting Standards the assets of the City of Stirling, other than inventories, are assessed at each reporting date to determine whether there is any indication they may be impaired. Where such an indication exists, an estimate of the recoverable amount of the asset is made in accordance with AASB 136 "Impairment of Assets" and appropriate adjustments made. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the Income Statement. The preparation of the annual financial report in accordance with AIFRSs has resulted in no change to numeric values of the 2008 figures compared to the most recent annual financial statements prepared under previous Generally Accepted Accounting Principles ("GAAP"). t) Inventories Inventories are valued at the lower of cost and net realisable value. u) Liquidity and Interest Rate Risk The City of Stirling's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of changes in market interest rates, is considered negligible for all financial instruments. Liquidity risk is managed through maintaining adequate cash reserves and borrowing facilities by continuously monitoring forecast and actual cash flows, and by maintaining an appropriate mix of financial institutions to invest and setting limits in terms of borrowing and investments.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) v) Receivables Receivables are recognised as the amount to be received for goods and services provided. A provision for doubtful debts is recognised to the extent that collection of a full amount receivable is no longer probable. Bad debts are identified and approved in accordance with Council's policy. w) Borrowings The balance of the bank overdraft amount reflects the book position and includes cheques that have been drawn but have not as yet been debited to the bank account. Funds are maintained in investment until required. x) Investments and Other Financial Assets Financial Assets in the scope of AASB 139 'Financial Instruments: Recognition and Measurement' are classified as either financial assets at fair value through profit or loss, loans and receivables, recognised held-to-maturity investments, or available-for-sale financial assets. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Council determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year end.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) y) New Accounting Standards and Interpretations Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Council for the annual reporting period ending 30 June 2008. Council’s assessment of these new standards and interpretations is set out below. Issued

Applicable

(i) Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting Standards arising form AASB 123 [AASB1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and interpretations 1 & 12]

June 2007

1 January 2009

Nil – The revised Standard has removed the option to expense all borrowing costs and, when adopted, will require the capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset. There will be no impact on the financial report of the Council as the Council already capitalises borrowing costs relating to qualifying assets.

(ii) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB 101 and AASB 2007-10 Further Amendments to Australian Accounting Standards arising from AASB 101

September 2007 and December 2007

1 January 2009

Nil – The revised Standard requires the presentation of a Statement of comprehensive income and makes changes to the Statement of changes in equity, but will not affect any of the amounts recognised in the financial statements. If Council has made a prior period adjustment or has reclassified items in the financial statements, it is likely it will need to disclose a third balance sheet (Statement of financial position), being as at the beginning of the comparative period.

(iii) AASB 1050 Administered Items: AASB 1051 Land Under Roads, AASB 1052 Disaggregated Disclosures revised AASB 1004 Contributions, AASB 2007-9 Amendments to Australian Accounting Standards arising from the review of AAS 27, AAS 29, and AAS 31.

December 2007

1 July 2008

• AASB 1050 is only applicable to Government departments and will have no impact on council.

Title and Topic

Impact

• AASB 1051 will allow Council to recognise or not recognise land under roads acquired before 30 June 2008. Land under roads acquired after 30 June 2008 must be recognised. • AASB 1052 requires disclosure of financial information by function or activity. Council already provides this information so there will be no additional impact on the financial statements.

Financial Statements 13

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) y) New Accounting Standards and Interpretations (Continued) Title and Topic

Issued

Applicable

December 2007

1 July 2008

Impact • AASB 2007-9 This Standard will have a impact on the Council’s financial statements when adopted. • AASB 1004 requires contributions made to Council to be recognised at fair value when they are controlled and to be appropriately disclosed. Council already accounts for contributions in this manner so there will be no additional impact on the financial statements.

Financial Statements 14

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE FOR THE YEAR ENDED 30 JUNE 2008YEAR ENDED 30 JUNE 2008

2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The carrying values of certain assets and liabilities are continually evaluated based on historical experience and other factors, including estimates and expectations of future events. There have been no critical accounting estimates or critical accounting judgements in applying the City's accounting policies made by management in preparing these financial statements that have a material impact.

Financial Statements 15

NOTES NOTES TO AND TO AND FORMING FORMING PART PART OF THE OF THE FINANCIAL FINANCIAL STATEMENTS STATEMENTS FORFOR THE THE YEAR YEAR ENDED ENDED 30 JUNE 30 JUNE 20082008 NOTES TO PART AND FORMING PARTSTATEMENTS OF STATEMENTS THE FINANCIAL STATEMENTS NOTES NOTES TO AND TO AND FORMING FORMING PART OF THE OF THE FINANCIAL FINANCIAL 2008 2008ENDED 30 2007 20072008 FOR THE YEAR JUNE $ $ $ FORFOR THE THE YEAR YEAR ENDED ENDED 30 JUNE 30 JUNE 20082008 $ 3. OPERATING 3. OPERATING REVENUES REVENUES ANDAND EXPENSES EXPENSES 20082008 20072007 a) The a) change The change in net inassets net assets resulting resulting fromfrom operations operations was was arrived arrived at at $ $ $ $ after charging charging (crediting) (crediting) the following the following items: items: 3. OPERATING 3. after OPERATING REVENUES REVENUES AND AND EXPENSES EXPENSES Depreciation Depreciation on:inon: a) The a) change The change net inassets net assets resulting resulting fromfrom operations operations was was arrived arrived at at Buildings Buildings afterafter charging charging (crediting) (crediting) the following the following items: items: PlantPlant & Equipment & Equipment Mobile Mobile Vehicles Vehicles Plant & Plant Depreciation Depreciation on:& on: Furniture Furniture & Office & Office Equipment Equipment Buildings Buildings Recreational Recreational Equipment Equipment Plant Plant & Equipment & Equipment Roads Roads Mobile Mobile Vehicles Vehicles & Plant & Plant Drainage Drainage Furniture Furniture & Office & Office Equipment Equipment Footpaths Footpaths Recreational Recreational Equipment Equipment OtherRoads Other Engineering Engineering Infrastructure Infrastructure Roads Drainage Drainage Footpaths Footpaths OtherOther Engineering Engineering Infrastructure Infrastructure

2,624,139 2,624,139 949,281 949,281 3,058,891 3,058,891 2,145,624 2,145,624 2,624,139 2,624,139 275,048 275,048 949,281 949,281 14,202,121 14,202,121 3,058,891 3,058,891 1,928,731 1,928,731 2,145,624 2,145,624 1,585,938 1,585,938 275,048 275,048 646,128 646,128 14,202,121 14,202,121 1,928,731 1,928,731 27,415,901 27,415,901 1,585,938 1,585,938 646,128 646,128

2,406,980 2,406,980 877,845 877,845 2,882,598 2,882,598 1,862,182 1,862,182 2,406,980 2,406,980 280,203 280,203 877,845 877,845 13,919,728 13,919,728 2,882,598 2,882,598 1,893,096 1,893,096 1,862,182 1,862,182 1,531,763 1,531,763 280,203 280,203 628,702 628,702 13,919,728 13,919,728 1,893,096 1,893,096 26,283,097 26,283,097 1,531,763 1,531,763 628,702 628,702

Profit/(Loss) Profit/(Loss) on sale on sale of non-current of non-current assets assets

27,415,901 27,415,901 6,626,316 6,626,316

26,283,097 26,283,097 10,637,855 10,637,855

Profit/(Loss) Profit/(Loss) on sale on sale of non-current of non-current assets assets Rental Rental Operating Operating Leases Leases

6,626,316 6,626,316 100 100

10,637,855 10,637,855 100 100

Rental Rental Operating Operating Leases Leases

100 100 100 100

Disposal Disposal of Assets of Assets by Program by Program

100 100

BUDGET BUDGET PROFIT PROFIT OR OR (LOSS) ON SALE ON SALE Disposal Disposal of Assets of Assets by Program by Program (LOSS)

NET BOOK NET BOOK

SALESALE PRICEPRICE PROFIT PROFIT OR (LOSS) OR (LOSS)

VALUE VALUE

ON SALE ON SALE

PROGRAM PROGRAM

General General Purpose Purpose Funding Funding Governance Governance Law,Law, OrderOrder &PROGRAM Public &PROGRAM Public Safety Safety Health Health General General Purpose Purpose Funding Funding Education Education and Welfare and Welfare Governance Governance OtherLaw, Other Property Property &&Services &Safety Services Law, Order Order & Public Public Safety Economic Economic Services Health HealthServices Recreation Recreation & Culture & Culture Education Education and Welfare and Welfare Community Community Amenities Amenities OtherOther Property Property & Services & Services Transport Transport Economic Economic Services Services Recreation Recreation & Culture & Culture Community Community Amenities Amenities Transport Transport

- OR - OR BUDGET BUDGET PROFIT PROFIT

- SALESALE PRICEPRICE PROFIT PROFIT OR (LOSS) OR -(LOSS) (22,698) (22,698) 659,705 659,705 350,062 350,062 ON(309,643) (LOSS) (LOSS) ON SALE ON SALE VALUE VALUE SALE ON(309,643) SALE 11,169 11,169 434,601 434,601 346,773 346,773 (87,828) (87,828) 3,052 169,934 169,934 155,175 155,175 (14,759) (14,759) - 3,052 2,176 2,176 280,223 280,223 254,636 254,636 (25,587) (25,587) (22,698) (22,698) 659,705 659,705 350,062 350,062 (309,643) (309,643) 15,596,901 15,596,901 715,975 715,975 7,335,294 7,335,294 6,619,319 6,619,319 11,169 11,169 434,601 434,601 346,773 346,773 (87,828) (87,828) (2,016) (2,016) 136,819 136,819 127,227 127,227 (9,592) (9,592) 3,052 3,052 169,934 169,934 155,175 155,175 (14,759) (14,759) (14,985) (14,985) 638,978 638,978 637,968 637,968 (1,010) (1,010) 2,176 2,176 280,223 280,223 254,636 254,636 (25,587) (25,587) (65,911) (65,911) 481,029 481,029 687,259 687,259 206,230 206,230 15,596,901 15,596,901 715,975 715,975 7,335,294 7,335,294 6,619,319 6,619,319 161,690 161,690 456,472 456,472 705,658 705,658 249,186 249,186 (2,016) (2,016) 136,819 136,819 127,227 127,227 (9,592) (9,592) (14,985) (14,985) 638,978 638,978 637,968 637,968 (1,010) (1,010) 15,669,378 15,669,378 3,973,736 3,973,736 10,600,052 10,600,052 6,626,316 6,626,316 (65,911) (65,911) 481,029 481,029 687,259 687,259 206,230 206,230 161,690 161,690 456,472 456,472 705,658 705,658 249,186 249,186 Financial Financial Statements Statements 16 16 15,669,378 15,669,378

NET BOOK NET BOOK

3,973,736 3,973,736

Financial Financial Statements Statements 16 16

10,600,052 10,600,052

6,626,316 6,626,316

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

79,322,085 107,799 1,641,847 14,563,660 5,135,166 7,571,232 18,020,625 11,712,436 7,723,055 5,498,711 4,821,069

74,650,147 10,695,881 1,625,241 12,434,910 1,399,226 11,031,273 16,701,239 9,203,065 6,271,463 4,373,172 2,816,993

TOTAL REVENUE AGREES WITH INCOME STATEMENT

156,117,685

151,202,610

EXPENSES Employee costs Materials and contracts Direct Mtce of Non Current Assets Materials & Contracts Other Works Utilities (gas, electricity, water etc) Depreciation on non-current assets Interest expenses Insurance expenses Loss on asset disposals Underground power Other expenditure TOTAL EXPENSES Less: Allocated to Works & Services

53,801,822 27,630,293 49,958,446 4,268,819 27,415,901 196,824 1,170,493 944,915 2,600,216 167,987,729 28,736,256

46,141,232 27,436,815 42,253,593 3,712,946 26,283,097 39,608 1,268,111 393,418 3,029,857 150,558,677 30,276,377

AGREES WITH INCOME STATEMENT

139,251,473

120,282,300

25,976 41,260 1,550,039 5,061,667 253,852 111,740 350 4,667,552

29,060 39,020 1,549,900 2,929,927 245,758 64,487 3,750 4,341,163

11,712,436

9,203,065

2007/08 $ 1,494,509 6,228,546

2006/07 $ 1,164,740 5,106,723

3. OPERATING REVENUES AND EXPENSES (Continued) b) Revenue and Expenses Classified according to Nature and Type REVENUE General Rates Underground Power Rates Security Charge Grants and Subsidies Contributions, reimbursements and donations Profit on asset disposals Rubbish service charges Fees and charges Interest earnings Registrations/licences & permits Other revenue/income

Revenue from the fees or charges from each program: General Purpose Funding Governance Law Order & Public Safety Health Education & Welfare Community Amenities Other Property & Services Economic Services Transport Recreation & Culture Total Fees & Charges

Interest on Investments Amount earned on investment of reserves Amount earned on investment of other money Total earnings from investments

Original Budget $ 1,605,000 4,265,400 5,870,400

Financial Statements 17

7,723,055

6,271,463

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 3. OPERATING REVENUES AND EXPENSES (Continued)

Revenue by Nature 90,000,000 80,000,000 70,000,000

Amount

60,000,000

2007 2008

50,000,000 40,000,000 30,000,000 20,000,000 10,000,000

O th er

rm its &

In te

re s

ge s

s C

lic

R eg

bi sh

of it

ha r

rv ic e Se

se tD is p

As on

& m R ei

Total Revenue 2007 $151,202,610 2008 $156,117,685

C on

tri b

R ub

D on a

& nt s G ra

tio

s rg e C ha

Po Se

rit y

nd er gr ou

U nd

G en

er al

R at es

w er

Nature

Expenses by Nature 60,000,000

50,000,000

2007 2008

30,000,000

20,000,000

10,000,000

O th er

w er nd

er gr ou U nd

on ss Lo

Nature

D is p

se t As

ra n

re s

t C ur

re n In te

In su

N on

U til iti es D ep

C on &

M at

er ia

l& er ia

ot he s tra ct

ct s tra

C on

Em pl oy

M ai nt

M at

Amount

40,000,000

Total Expenses 2007 $150,585,677 2008 $167,987,729

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR 2008 THE PERIOD ENDED 30 JUNE 2008 FOR THE PERIOD ENDED 30 JUNE 3. OPERATING REVENUES AND EXPENSES (Continued) Original Cost $

Current Year Depreciation $

c) Assets Classified by Programme Year Ended 30 June 2008 GOVERNANCE - MEMBERS LAW, ORDER, PUBLIC SAFETY HEALTH EDUCATION AND WELFARE COMMUNITY AMENITIES RECREATION AND CULTURE TRANSPORT ECONOMIC SERVICES OTHER PROPERTY AND SERVICES

9,801,634 2,341,541 1,115,312 9,625,659 30,961,539 175,135,784 931,145,760 552,081 46,070,746

1,696,104 90,007 27,553 227,333 315,134 2,648,844 18,328,379 57,274 4,025,273

1,206,750,056

27,415,901

Financial Statements 19

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 3. OPERATING REVENUES AND EXPENSES (Continued) d) Statement of Objective

The City of Stirling is dedicated to providing high quality services to the community through the various service oriented programmes which it has established. GOVERNANCE To manage the administrative functions of the council. LAW ORDER AND PUBLIC SAFETY To increase the support to protection of life and property within the City and reduce inconvenience through the enforcement of statutory powers and the provision of public order, safety and security services. HEALTH To maintain and improve the health and well-being of the community. EDUCATION AND WELFARE To facilitate the provision of a range of services and encourage their utilisation for the social wellbeing of the community. COMMUNITY AMENITIES To develop waste and environment management programmes which recognise community needs. RECREATION AND CULTURE To plan, construct, maintain and initiate a range of facilities and programmes which enables the community to satisfy its need for information, personal development, recreation and leisure. TRANSPORT To provide facilities and services within the road reserve which promote safety, ease of access and improve the amenity of the locality. GENERAL PURPOSE FUNDING To minimise the costs of financing City operations through effective financial planning and management. ECONOMIC SERVICES To plan facilities and regulate land use consistent with community expectations and environmental considerations. OTHER PROPERTY AND SERVICES 1. To provide a community information network that complements and supports the corporate and programme objectives of the City. 2. To facilitate, develop and maintain City buildings and property. Financial Statements 20

NOTES TO AND FORMING PART OF THEPART FINANCIAL NOTES TO AND FORMING OF THESTATEMENTS FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008 FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

3. OPERATING REVENUES AND EXPENSES (Continued) e) Conditions over Contributions Grants which were recognised as revenue during the year and which were obtained on the condition that they be expended on the acquisition of non-current assets but have yet to be applied in that manner at the reporting date were: Jon Sanders Drive Spinozo Street Munja Way Narla Street

71,656 1,461 33,520 48,492

Harborne Street Mirrabooka Avenue Fourth Avenue Beauford Street

56,759 62,100 15,092 19,092

155,129

153,043

Grants which were recognised as revenue in a previous year and were expended in the current year in the manner specified by the grantor were: Harborne Street Mirrabooka Avenue Fourth Avenue Beauford Street Carrington Street Grenville Street

Net increase (decrease) in restricted assets resulting from grant revenue for the reporting period.

Financial Statements 21

56,759 62,100 15,092 19,092

73,502 10,743

153,043

84,245

2,086

68,798

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 4. ABNORMAL ITEMS There were no Abnormal items to report for the 2007/2008 financial year.

Financial Statements 22

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

5. CASH AT BANK a) Cash at bank RESTRICTED UNRESTRICTED

880 45,713

1,460,972 37,830

46,593

1,498,802

47 531 258 44 -

125 709 336 123 197,354 222 572,797 221 571,458 117,627

880

1,460,972

49,841,418 27,637,522

36,974,916 26,869,681

77,478,940

63,844,597

47,247,077 205,063 367,928 1,503,647 517,703 -

29,292,732 190,452 341,713 1,396,512 480,817 89,334 1,096,352 146,859 2,319,229 1,025,880 595,036

49,841,418

36,974,916

The following restrictions have been imposed by regulations or other externally imposed requirements: TOWN PLANNING SCHEME NO 18 TOWN PLANNING SCHEME NO 25 TOWN PLANNING SCHEME NO 27 TOWN PLANNING SCHEME NO 28 TOWN PLANNING SCHEME NO 31 A TOWN PLANNING SCHEME NO 31 B TOWN PLANNING SCHEME NO 31 C TOWN PLANNING SCHEME NO 31 D TOWN PLANNING SCHEME NO 31 E TOWN PLANNING SCHEME NO 38

b) Short maturity investments RESTRICTED UNRESTRICTED

The following restrictions have been imposed by regulations or other externally imposed requirements: CONSOLIDATED RESERVE TOWN PLANNING SCHEME NO 18 TOWN PLANNING SCHEME NO 25 TOWN PLANNING SCHEME NO 27 TOWN PLANNING SCHEME NO 28 TOWN PLANNING SCHEME NO 31 A TOWN PLANNING SCHEME NO 31 B TOWN PLANNING SCHEME NO 31 C TOWN PLANNING SCHEME NO 31 D TOWN PLANNING SCHEME NO 31 E TOWN PLANNING SCHEME NO 38

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

6. RECEIVABLES AND PREPAYMENTS a) Receivables Current Rates outstanding Debtors: Libraries Health Fines & Penalties Reinstatements Revenue from Property Town Planning Schemes Urban Design Projects (see page 20) Sundry Insurance Recoverable Recreation Reserves Underground Power Australian Taxation Office - GST Less: Allowance for doubtful debts

1,102,016 72,267 659,674 292,394 105,985 258,682 624,898 225,866 1,237,195 25,322 160,078 669,838 1,545,206 (70,000)

2,285,142 44,740 369,864 416,392 48,138 89,665 1,717,329 210,559 507,761 34,251 67,268 1,011,455 436,634 (1,818,717)

6,909,421

5,420,481

Current Receivables 2,500,000

1,500,000

2007 2008 1,000,000

500,000

Current

ST -G

w er Po

un d rg ro

Un de

rv e Re se

AT O

ki n Bo o

ai m

or s In

su r

an c

De bt

oj e

pr Su nd

n si g

ba n

ng To w

an ni

Re in

ct s

m es

Sc he

as e Le

s tie

st at

na l

em en ts

al &P e

ne s

is h Ru bb

rie br a Li

R em ov

Ra te

Amount

2,000,000

Total Curremt Receivables 2007 $7,239,198 2008 $6,979,421

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 6. RECEIVABLES AND PREPAYMENTS (Cont'd)

Movement in Allowance for doubtful debts Balance at beginning of year Reduction/(Addition) to provision Balance at end of year Non-current Rates outstanding - pensioners Overdraft Debtors Deferred Debtors

2008 $

2007 $

(1,818,717) 1,748,717 (70,000)

(1,570,688) (248,029) (1,818,717)

1,344,219 12,124 1,939,420 3,295,763

1,573,636 30,886 2,740,439 4,344,961

128,732

217,876

128,732

217,876

b) Prepayments Current Prepayments

Allowance for Doubtful Debts (2,000,000) (1,750,000)

Amount

(1,500,000) (1,250,000) 2007

(1,000,000)

2008

(750,000) (500,000) (250,000) (0) Balance at Year End

Total Allowance 2007 $(1,818,717) 2008 $(70,000)

Non Current Recievables & Prepayments 3,000,000 2,500,000

Amount

2,000,000 1,500,000

2007 2008

1,000,000 500,000 Deferred Pensioner Rates

TP Schemes Non Current

Deferred Debtors Total Non Current Rec & Prepayments 2007 $4,562,837 2008 $3,424,495

NOTES FORMING PART OF NOTES TO AND FORMING PART OFTO THEAND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

6. RECEIVABLES AND PREPAYMENTS (Cont'd) Urban Design Projects - The line item titled Urban Design Projects refers to amounts owed by land owners for work completed on private property as part of commercial precinct upgrades. In order to harmonise and co-ordinate the streetscape upgrades in a number of local commercial centres, Council has approved the pre-funding of works on some private properties contingent upon the owner complying with repayment terms. Details of these Urban Design projects are provided below.

Main Street - Urban Design Stage 2 Between Royal Street and Eldorado Street There are three owners with original debts totalling Interest charged to date Amounts paid to 30 June 2008 Total amount outstanding at 30 June 2008

$ $ $

66,168 27,854 (13,978) 80,044

Interest is at the lesser of the Westpac Bank Base Corporate lending rate or the overdraft rate charged for overdraft funds for the City of Stirling Municipal Fund from time to time. At 30 June 2008 the rate was 10.00%. Quarterly payments are required with full settlement by 31 July 2008. One participant has until 30 July 2012 to finalise payment. Main Street Plaza Precinct - Between Federal and Lawley Street There are 3 owners with original debts totalling Interest charged to date Amounts paid to 30 June 2008 Total amount outstanding at 30 June 2008

$ $ $ $

90,935 54,887 145,822

Interest is at the rate applied to Council's Town Planning Scheme Overdraft from time to time. At 30 June 2008 the rate was 8.70%. No interest is applicable to the three properties owned by by pensioners.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

7. INVENTORIES

Inventories Construction Materials and Fuel

342,727

Financial Statements 27

274,539

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 8. PROPERTY, PLANT AND EQUIPMENT a) Fixed Assets Land

Gross carrying amount

Cost $ 8,870,133 (795,042) 8,075,091 897,673 (648,682) 8,324,082

Balance as at 1July 2006 Additions (Disposals) Balance as at 30 June 2007 Additions (Disposals) Balance as at 30 June 2008 Accumulated depreciation amortisation and impairment Balance as at 1July 2006 Depreciation expense (Disposals) Balance as at 30 June 2007 Depreciation expense (Disposals) Balance as at 30 June 2008 Net Book Value Balance as at 30 June 2007 Balance as at 30 June 2008

Buildings

8,075,091 8,324,082

Plant and Equipment

Mobile Vehicles and Plant

Furniture & Recreation Office Equipment Equipment Cost Cost $ $ 14,006,130 3,950,139 1,574,923 180,749 (503,598) (50,954) 15,077,455 4,079,934 2,036,779 369,485 (3,804,018) (259,954) 13,310,216 4,189,465

Total

Cost $ 116,010,106 4,007,270 (3,694,170) 116,323,206 11,544,209 (135,768) 127,731,647

Cost $ 11,924,371 1,895,923 (158,344) 13,661,950 1,272,366 (675,685) 14,258,631

Cost $ 23,860,341 5,751,953 (4,646,982) 24,965,312 6,847,475 (6,117,872) 25,694,915

19,957,538 2,406,980 (1,383,524) 20,980,994 2,624,139 (29,568) 23,575,565

8,604,052 877,845 (15,072) 9,466,825 949,281 (594,614) 9,821,492

8,208,511 2,882,598 (2,447,959) 8,643,150 3,058,891 (2,874,226) 8,827,815

8,391,866 1,862,182 (482,545) 9,771,503 2,145,624 (3,505,281) 8,411,846

2,662,012 280,203 (39,360) 2,902,855 275,048 (201,457) 2,976,446

47,823,979 8,309,808 (4,368,460) 51,765,327 9,052,983 (7,205,146) 53,613,164

95,342,212 104,156,082

4,195,125 4,437,139

16,322,162 16,867,100

5,305,952 4,898,370

1,177,079 1,213,019

130,417,621 139,895,792

Fixed Assets at Written Down Historic Cost Furniture & Office Equipment 4% $4,898,370

Recreation Equipment 1%

$1,213,019

Land 6%

$8,324,082

Mobile Vehicles and Plant 12% $16,867,100

Plant and Equipment 3% $4,437,139

Buildings 74%

Total Written Down Value 2008 $139,895,792

$104,156,082

Financial Statements 28

Cost $ 178,621,220 13,410,818 (9,849,090) 182,182,948 22,967,987 (11,641,979) 193,508,956

NOTES TO ANDPART FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008 FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

8. PROPERTY, PLANT AND EQUIPMENT (Continued) b) Infrastructure Assets Roads - at cost Balance at beginning of reporting period Transferred to Town Vincent Additions Balance at end of reporting period Depreciation Balance at beginning of reporting period Transferred to Town Vincent Expensed Balance at end of reporting period Net book value at end of reporting period Drainage - at cost Balance at beginning of reporting period Transferred to Town Vincent Additions Balance at end of reporting period Depreciation Balance at beginning of reporting period Transferred to Town Vincent Expensed Balance at end of reporting period Net book value at end of reporting period

710,425,219 (2,462,870) 18,880,192 726,842,541

696,117,770 14,307,449 710,425,219

279,482,296 (492,581) 14,202,121 293,191,836 433,650,705

265,562,568 13,919,728 279,482,296 430,942,923

145,055,329 (193,096) 1,596,755 146,458,988

142,356,545 2,698,784 145,055,329

41,873,263 (41,297) 1,928,731 43,760,697 102,698,291

39,980,167 1,893,096 41,873,263 103,182,066

47,656,139 (206,280) 1,312,026 48,761,885

46,009,805 1,646,334 47,656,139

25,559,646 (65,106) 1,585,937 27,080,477 21,681,408

24,027,883 1,531,763 25,559,646 22,096,493

19,407,783 210,815 19,618,598

18,880,676 527,107 19,407,783

8,814,390 646,128 9,460,518 10,158,080

8,185,688 628,702 8,814,390 10,593,393

Footpaths - at cost Balance at beginning of reporting period Transferred to Town Vincent Additions Balance at end of reporting period Depreciation Balance at beginning of reporting period Transferred to Town Vincent Expensed Balance at end of reporting period Net book value at end of reporting period Other Engineering Infrastructure - at cost Balance at beginning of reporting period Additions Balance at end of reporting period Depreciation Balance at beginning of reporting period Expensed Balance at end of reporting period Net book value at end of reporting period

Financial Statements 29

NOTESPART TO AND FORMING PART OF THE NOTES TO AND FORMING OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

2008 $

2007 $

8. PROPERTY, PLANT AND EQUIPMENT (Continued) Reserves - at cost Balance at beginning of reporting period Additions Net book value at end of reporting period

24,355,569 855,486 25,211,055

21,228,467 3,127,102 24,355,569

Reticulation - at cost Balance at beginning of reporting period Additions Net book value at end of reporting period

21,820,937 935,276 22,756,213

20,679,868 1,141,069 21,820,937

Other Parks Infrastructure - at cost Balance at beginning of reporting period Additions Net book value at end of reporting period

22,362,909 1,187,520 23,550,429

20,992,484 1,370,425 22,362,909

Assets under Construction - at cost Balance at beginning of reporting period Additions Transferred to infrastructure assets Net book value at end of reporting period

8,058,345 24,979,465 (32,996,219) 41,591

448,926 32,427,489 (24,818,070) 8,058,345

Total Infrastructure Assets Net Book Value at end of reporting period

639,747,772

643,412,635

Total Property Plant and Equipment

779,643,564

773,830,256

Infrastructure Assets at Written Down Historic Cost Reserves - at cost 4% $25,211,055

Other Parks Reticulation - at cost Infrastructure - at cost 4% 4% $22,756,213 $23,550,429

Other Engineering Infrastructure 2%

Asset Under Construction - at cost 0% $41,591

$10,158,080

Footpaths 3% $21,681,408

Roads 67%

Drainage 16% $102,698,291

Total Written Down Value 2008 $639,747,772

Financial Statements 30

$433,650,705

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2008 $

Current Assets

Non-Current Assets

Non-Current Assets Capital

Non-Current Assets Infrast.

84,906,413 -

9,333,120 -

4,369,863 1,639,890 838,643 6,317,256 8,039,871 72,078,101 4,127,696 364,380 42,120,092

84,906,413

9,333,120

139,895,792

9. CARRYING COST OF ASSETS (BY PROGRAMME) GOVERNANCE LAW, ORDER & PUB SAFETY HEALTH EDUCATION & WELFARE COMMUNITY AMENITIES RECREATION & CULTURE TRANSPORT ECONOMIC SERVICES OTHER PROP & SERVICES

Total Carrying Cost of Assets

873,883,095

9,572,838 71,517,697 558,657,235 639,747,770

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

10. BORROWINGS Current Bank Overdrafts (Unsecured)

2,926,197

2,740,126

2,926,197

2,740,126

The balance of the bank overdraft amount reflects the book position and includes cheques that have been drawn but have not as yet been debited to the bank account. Funds are maintained in investment until required. Loans Raised During the Year There were no loans raised during the period.

Financial Statements 32

NOTES TO AND FORMING PART THE FINANCIAL NOTES TO ANDOF FORMING PART OFSTATEMENTS THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

11. TRADE PAYABLES AND PROVISIONS Current Trade Payables Accrued creditors Accrued wages and salaries Income received in advance Provision for annual leave Provision for long service leave

4,355,658 5,914,518 1,481,230 763,516 3,834,409 3,156,787

2,007,092 4,938,949 979,661 2,345,805 3,056,432 2,524,551

19,506,118

15,852,490

450,596

397,379

450,596

397,379

Non-current Provision for long service leave

Number of Employees (Full Time Equivalent)

Financial Statements 33

792

759

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 12. RESERVES

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Purpose of Reserve

Expected Utilisation

Workers Comp Provision MGB Replacement Sanitation Heavy Fleet Replacement LSL Provision Staff Leave Liability Ocean F'Shore & Trigg Civ Fac Town Planning Sch. 38 Town Planning Sch. 12A Security Services Surplus Waste Charge Payment in lieu of parking Payment in lieu of open space Development Reserve Assets Acquisition Reserve Trigg Beach Master Plan Underground Power Schemes Mirrabooka Regional Centre Strategy Future Fund

Within five years Over the 15 year replacement cycle for Mobile Garbage Bins Over the next three year period As and when staff take their accumulated Long Service Leave As and when staff take their accumulated Annual Leave Within the next two years When suitable developments in accordance with the Scheme are identified Within the next year Within the next two years As and when suitable properties are identified. As and when suitable properties are identified. Within five years Within five years Within three years Within the next two years Within five years Within five years

Reserves as at 30 June 2008 14,000,000

12,000,000

Amount

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

G B

H ea vy

Sa ni ta tio n

or ke rs

C om p

Pr ov is io R n ep l a Fl c e ee m tR en t ep la ce m LS en t L Pr O St ce ov af an is fL io F' ea n Sh ve or Li e ab & ilit Tr To y ig g w n C iv Pl an Fa To ni c w ng n Sc Pl an h. ni 38 ng Sc Se h. 12 cu rit A Su y rp Se lu r vi s Pa ce W as s ym te e Pa nt C ha ym in rg lie en e u ti of n pa lie u rk of in g op D ev e n el s o As pa pm se ce en ts tR Ac es qu er is Tr ve iti on ig g R U B e nd ea se er M ch rv irr gr e M ab ou a st oo nd er ka Po Pl R w an eg er io Sc na h lC em en es tre St ra te gy Fu tu re Fu nd

Purpose of Reserve

Total Reserves 2008 $47,247,077

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

12. RESERVES (Cont'd)

Transaction Summary

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Opening Balance 01.07.07 $

Amount set aside during year $

2,173,222 663,604 1,826,876 318,305 6,476,970 172,071 203,699 83,600 4,368,735 532,805 3,627,228 403,375 1,728,242 6,714,000 -

1,454,017 38,317 999,010 66,460 373,990 9,936 2,282,673 11,762 94,015 1,655,955 49,165 873,430 11,753,634 99,791 2,120,515 1,203,285 3,881,652

29,292,732

26,967,607

Financial Statements 35

Amount used during the year $ 999,037 1,144,788 53,076 83,600 18,761 6,714,000 -

9,013,262

Closing Balance 30.06.08 $ 2,628,202 701,921 1,681,098 331,689 6,850,960 182,007 2,282,673 215,461 94,015 6,024,690 581,970 4,500,658 12,138,248 1,828,033 2,120,515 1,203,285 3,881,652

47,247,077

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 12. RESERVES (Cont'd)

Budget Information

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Opening Balance 01.07.07 $

Amount set aside during year $

Amount used during the year $

Closing Balance 30.06.08 $

2,173,084 663,604 1,826,875 273,943 6,476,970 172,071 203,699 2,998,735 532,805 3,759,748 403,375 1,728,242 6,714,000 -

1,427,454 50,209 1,031,747 20,000 490,051 13,019 1,500,000 15,412 226,886 40,312 284,465 4,957,555 130,760 3,000,000 2,000,000 11,211,954 3,881,652

897,257 1,090,500 20,000 6,714,000 4,927,035 -

2,703,281 713,813 1,768,122 273,943 6,967,021 185,090 1,500,000 219,111 3,225,621 573,117 4,044,213 5,360,930 1,859,002 3,000,000 2,000,000 6,284,919 3,881,652 -

27,927,151

30,281,476

13,648,792

44,559,835

Financial Statements 36

NOTES TO ANDNOTES FORMING PART OF THE FINANCIAL STATEMENTS TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

13. OPERATING LEASE COMMITMENTS At the reporting date, the City had the following obligations under non-cancellable operating leases (these obligations are not recognised as liabilities): not later than one year later than one year but not later than five years later than five years

100 400 3,000

100 400 3,100

3,500

3,600

Operating lease relates to a parcel of land for use by the City for 50 years. The City does not have the option to purchase the leased land at the expiry of the lease period.

NOTES TO AND FORMING PART OF THE FINANCIAL NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 14. SUPERANNUATION

The City contributes to an industry based defined contribution superannution plan on behalf of its employees. Contributions are determined by Superannuation Guarantee Legislation as well as obligations under its own policy that requires member contribution rates to be matched by the City in agreed proportions. Payments to both statutory and contributory schemes are managed by the Local Government Superannuation Plan. The superannuation contributions made by the City during the reporting period was $7,352,965 (2007: $6,210,145)

Financial Statements 38

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE FOR 2008THE YEAR ENDED 30 JUNE 2008 15. TRUST FUNDS Funds over which the City has no control and which are not included in the financial statements are as follows:

PURPOSE OF TRUST FUND

Verge Bonds Book Bonds Client Bonds Hall Hire Bonds Other Bonds Key Bonds Performance Bonds Payments in Advance Suspense Refunds Unclaimed Monies Land - Section 20A Laneways Other Trusts

Opening Balance 01.07.07 $

Receipts $

Paid Out $

Closing Balance 30.06.08 $

600,172 1,806 200 15,990 630,033 17,929 2,722,944 20 300 239,931 1,581,506 991,379 1,402,781

717,313 1,560 1,300 61,567 59,834 4,622 1,344,137 20,339 122,980 247,111

581,958 2,838 1,250 65,417 157,984 9,686 591,121 8 13,233 1,212 41,695 961,920

735,527 528 250 12,140 531,883 12,865 3,475,960 12 300 247,037 1,580,294 1,072,664 687,972

8,204,991

2,580,763

2,428,322

8,357,432

Financial Statements 39

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 16. COMMITMENTS AND CONTINGENT LIABILITIES a) Expenditure Commitments At the reporting date, capital expenditure commitments (which have not been provided for elsewhere in the financial statements) have been contracted for as follows:

City Wide - Sports Floodlighting Program Yokine Regional Open Space Master Plan Breckler Parks - Playground Shade Sail Careniup Reserve - Playground Shade Sail Coastal Strip-Beach Information Signage Scarborough Beach Reserve Terry Tyzack Aquatic Centre - Replacement of Plant Balga Aquatic Centre Road Construction Grenville Reserve - New Sports Facility City Wide - Playground Shade Structure City Wide - Median Renewal Program City Wide - Regional Playground Universal Access Program City Wide - Street Tree Program City Wide - Irrigation Monitoring Equipment Carine Regional Open Space Master Plan Mirrabooka Regional Strategy - Herb Graham Subdivision Karrinyup Community Centre - Roof Replacement Trigg Sewerage Conversion - Stage 2

Financial Statements 40

2008 $ 50,635 77,337 31,961 31,962 17,227 33,961 49,706 528,111 2,272,505 28,750 120,560 41,816 27,372 67,064 24,486 15,961 48,684 -

2007 $

3,468,098

6,995,282

5,287,582 1,120,665 28,750 125,980 19,012 15,432 47,328 102,119 31,959 137,027 48,684 30,744

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 16. COMMITMENTS AND CONTINGENT LIABILITIES (Continued) b) Commitments to Compensation for Compulsory Land Acquisitions From time to time, the City of Stirling has reason to invoke powers of compulsory purchase of land to facilitate the advancement of specific projects such as road widening. The City intends to acquire land in the following streets in order to carry out road widening operations. Anticipated costs are based on the City's valuations plus solatium, if an agreed amount is not available. Any amounts paid prior to 30 June 2008 have been included in the City's financial statements in the year the amounts were paid and are not included in the amounts provided in this note.

Grindleford Road, Balcatta Harbourne Street, Glendalough Scarborough Beach Road, Innaloo Beauford Steet, Inglewood First Avenue, Mt Lawley Oswald Street, Innaloo Ravenswood Drive, Westminister Railway Parade, Mt Lawley

2008 $ 21,850 447,741 767,412 813,594 7,768 223,000 -

2007 $ 21,850 447,741 767,412 813,594 7,768 223,000 143,585 215,000

2,281,365

2,639,950

c) Contingent Liability â&#x20AC;&#x201C; Guarantee for Mindarie Regional Council The City of Stirling, along with other member councils of the Mindarie Regional Council, has agreed to provide a financial guarantee to the operators of the resource recovery facility to be built at the Mindarie Regional Council site at Neerabup. The guarantee will cover Mindarie Regional Council obligations to make a termination payment to the facility operators if there is a Force Majeure event, a default event under the Resource Recovery Facility Agreement by the Mindarie Regional Council or where member councils of Mindarie Regional Council fail to pay the applicable gate fees. The financial Guarantee is to provide comfort to the operator (and its financiers) by providing a direct contractual relationship between each member council and the operator.

NOTES TO AND PART OF THE FINANCIAL NOTES TO AND FORMING PART OFFORMING THE FINANCIAL STATEMENTS

STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 2008 $

2007 $

17. OTHER FINANCIAL ASSETS

Equity Contributions in Other Unlisted Entities Tamala Park Regional Council Mindarie Regional Council

5,381,432 655,925 6,037,357

5,407,146 548,575 5,955,721

Mindarie Regional Council The City of Stirling, along with the City of Perth, City of Joondalup, City of Wanneroo, Town of Vincent, Town of Cambridge and Town of Victoria Park is a member of the Mindarie Regional Council. The Mindarie Regional Council's objective is to establish and operate a long term refuse disposal site on Mindarie Super lot 118. The City of Stirling has contributed one third of the land and establishment costs of the refuse disposal facility. The City uses the refuse disposal facility at Mindarie to deposit all non recyclable waste collected by the City's domestic and commercial waste services. The City has received its share of lease fees, since the facility became operational. Capital contributions paid during establishment are represented in the accounts of the City of Stirling as a Non Current Asset.

Tamala Park Regional Council The City of Stirling, along with the City of Perth, City of Joondalup, City of Wanneroo, Town of Vincent, Town of Cambridge and Town of Victoria Park is a member of the Tamala Park Regional Council. On the 21 February 2006 the Council received a report advising the formal establishment of the Tamala Park Regional Council under Section 3.61 of the Local Government Act. The Tamala Park Regional Council formally come into existence on the 3 February 2006. The Tamala Park Regional Council's activities will centre around the development of part Lot 118 Mindarie. Lot 118 was initially purchased in 1981 to provide a refuse landfill site for member councils of the Mindarie Regional Council, this lot is now being developed with a purpose of creating a new urban land development and a new urban community. The City of Stirling will contribute one third of any funding required for capital or operating costs.

Financial Statements 42

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 18. TOWN PLANNING SCHEMES The following Overdraft Town Planning Schemes reported transactions during the year ended 30 June 2008: Town Planning Scheme No. 18 Town Planning Scheme No. 25 Town Planning Scheme No. 27 Town Planning Scheme No. 28 Town Planning Scheme No. 31 Town Planning Scheme No. 38

Dianella Balcatta Morley Drive Extension Alexander Drive North Balcatta Innaloo

Upon completion of each scheme, any surplus will be dispersed in accordance with the provisions of the particular scheme text. a) TOWN PLANNING SCHEME NO 18 Revenue and Expenses for the year ended 30 June 2008: REVENUE $ Interest received Bank Charges

EXPENSES $

14,448 -

14,448

Scheme position as at 30 June 2008: ASSETS Cash and Cash Equivalents Accrued Interest Receivable Other Financial Assets

47 46 205,062 205,155

LIABILITIES Nil NET ASSETS

205,155

- Any surplus may be used by Council for the acquisition and development of amenities within the district of the Council which will be of a benefit to residents of the scheme area.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 18. TOWN PLANNING SCHEMES (Continued) b) TOWN PLANNING SCHEME NO 25 Revenue and Expenses for the year ended 30 June 2008: REVENUE $ Interest received Bank Charges

EXPENSES $

25,923 -

25,923

Scheme position as at 30 June 2008: ASSETS Cash and Cash Equivalents Receivables Accrued Interest Receivable Other Financial Assets

531 23,982 367,927 392,440

LIABILITIES Nil NET ASSETS

392,440

- Any surplus may be used by the Council to enhance the amenities of the scheme area.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 18. TOWN PLANNING SCHEMES (Continued) c) TOWN PLANNING SCHEME NO 27 Revenue and Expenses for the year ended 30 June 2008: REVENUE $ Interest received Bank Charges

EXPENSES $

105,941 -

105,941

Scheme position as at 30 June 2008: ASSETS Cash and Cash Equivalents Accrued Interest Receivable Other Financial Assets

258 335 1,503,647 1,504,240

LIABILITIES Nil NET ASSETS

1,504,240

- Any surplus may be used by the Council to develop any portion of the scheme area or to acquire and develop amenities within the district of the Council which will be of benefit to residents within the scheme area.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 18. TOWN PLANNING SCHEMES (Continued) d) TOWN PLANNING SCHEME 28 Revenue and Expenses for the year ended 30 June 2008: REVENUE $ Interest received Bank Charges

EXPENSES $

36,475 -

36,475

Scheme position as at 30 June 2008: ASSETS Cash and Cash Equivalents Accrued Interest Receivable Other Financial Assets

45 115 517,703 517,863

LIABILITIES Nil NET ASSETS

517,863

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 18. TOWN PLANNING SCHEMES (Continued) e) TOWN PLANNING SCHEME NO 31 Revenue and Expenses for the year ended 30 June 2008 REVENUE $

Interest received Bank Charges Contributions to Owners

EXPENSES $

300,325 -

150 5,020,297

300,325

5,020,447

Finalisation of the scheme was adopted by Council on 22 April 2007. Scheme position as at 30 June 2008: ASSETS Other Financial Assets

LIABILITIES Payables and Provisions NET ASSETS

- Any surplus in respect of a sub-area is to be paid to the owners of the old lots in that sub-area in proportion to the value of the old lots in the sub-area.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 18. TOWN PLANNING SCHEMES (Continued) f) TOWN PLANNING SCHEME NO 38 Revenue and Expenses for the year ended 30 June 2008 REVENUE $ Transferred to Reserve Funds

EXPENSES $ -

1,389,067

Finalisation of the scheme was adopted by Council on 15 May 2007. Scheme position as at 30 June 2008: ASSETS Other Financial Assets

LIABILITIES Payables and Provisions NET ASSETS

Note - Following the wind up of the scheme remaining funds are being held in a Reserve pending finalisation of associated works.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 19. NOTES TO THE STATEMENT OF CASH FLOWS a) Reconciliation of Cash For the purpose of the Statement of Cash Flows, cash and cash equivalents includes cash on hand, cash at bank and investments in short term money market activity, net of any outstanding bank overdraft. All trust monies are excluded. Cash at the end of the reporting period as shown in the Statement of Cash Flows is reconciled to the related items in the balance sheet as follows: 2008 $ Cash At bank Short maturity investment Bank Overdraft

46,593 77,478,940 (2,926,197)

2007 $ 1,498,802 63,844,597 (2,740,126)

74,599,336

62,603,273

b) Non-Cash Investing Activities During the reporting period the City acquired assets with an aggregate fair value of $992,747 (2007 - $84,048) by means of donations. These acquisitions are not reflected in the Statement of Cash Flows. c) Taxation Except for the Goods and Service and Fringe Benefits Tax, the activities of the City are exempt from taxation. d) Reconciliation of net cash used in operating activities to change in net assets.

Change in Net Assets resulting from operations Depreciation Increase/(decrease) in allowance for doubtful debts Increase/(decrease) in employee entitlements Increase/(decrease) in payables and provisions increase/(decrease) in Income in advance (Increase)/Decrease in receivables (Increase)/Decrease in prepayments (Increase)/decrease in inventories (Increase)/decrease in assets under construction (Gain)/loss on sale of non current assets Acquired assets Town Planning Scheme adjustments Assets Transferred during restructuring Government grants plus subsidies Net cash from operating activities

Financial Statements 49

2008 $ 16,866,212 27,415,901 (1,748,717) 1,964,999 3,324,135 (1,582,289) (1,308,975) (89,144) 68,188 8,016,754 (6,626,316) (992,747) (1,508,531) 2,263,264 (16,398,873)

2007 $ 30,920,310 26,283,097 248,029 (157,209) 618,351 641,307 1,447,107 (5,307) 2,206 (7,609,419) (10,637,855) (84,048) 1,305,356 (13,973,333)

29,663,861

28,998,592

NOTES TO AND FORMING OF THE FINANCIAL STATEMENTS NOTESPART TO AND FORMING PART OF THE FINANCIAL FOR THE YEAR ENDED 30 JUNE 2008FOR

STATEMENTS

THE YEAR ENDED 30 JUNE 2008

19. NOTES TO THE STATEMENT OF CASH FLOWS (continued) 2008 $

2007 $

e) Credit Standby Arrangements Bank Overdraft limit Bank Overdraft at reporting date

500,000 -

Total amount of credit unused

500,000

Short-term loans Long-term loans

Total facilities in use at reporting date

Nil

f) Loan Facilities

Unused loan facilities as at reporting date

The movement in used loan facilities during reporting period was Nil (2007 - Nil)

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 20. RATES AND SERVICE CHARGES a)

Rates Original Budget $

The total revenue from general rates:

The amount of revenue from: The rate: Interim rates: Back rates:

The amount of revenue from: The minimum payment

Actual $

54,331,112

54,454,616

54,331,112

54,454,616

54,331,112 834,180 -

54,454,616 1,142,649 -

55,165,292

55,597,265

23,003,712

22,854,564

25,177

24,315

Specified area rate The purpose of the rate being to fund the maintenance and infrastructure around the business units subject to the rate; The area to which the specified area rate applies being that bounded by Cobbler Place, Farrier Road, Northwood Drive and the right of way between Brewer Place and Mason Place; The amount of revenue from the rate; b) Security Service Charges The City of Stirling provided a Security Patrol service with a mission "To reduce the incidence of preventable crime, anti-social behaviour and residents fear of crime within the boundaries of the City of Stirling through patrols and proactive security measures". The charge per property was fixed at $19 and the revenue raised was $1,641,847. The original budget was $1,635,000.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 20. RATES AND SERVICE CHARGES (Continued) c) Underground Power - Woodlands/Doubleview The raising of rates and service charges occurred in the 1999/2000 financial year with the work being undertaken between July 1999 and September 2000. Expenditures were finalised in December 2000 and surplus revenue was refunded to owners in January 2001. As the City of Stirling offered to accept payment over a period of up to 7 years, discount, instalment interest and penalty interest will continue to feature in these financial statements for some years. Instalment interest applies at 7.5% with a discount of 10% credited to accounts paid by the instalment date. The instalment date was 7 October 2006 with penalty interest being levied on overdue amounts at 7.5%. $ Discount allowed was Instalment interest charged was Penalty interest levied was 564 d) Underground Power - Mt Lawley The raising of rates and service charges occurred in the 2002 financial year with the work being undertaken between September 2001 - June 2003. Expenditures have been finalised and the surplus of $389,184 has been refunded to property owners. As the City of Stirling offered to accept payment over a period of 7 years, discount, instalment interest and penalty interest will continue to feature in these financial statements for some years. Instalment interest applies at 7% with a discount of 10% credited to accounts paid by the instalment date. The instalment date was 6 January 2008 with penalty interest being levied on overdue amounts at 7%. $ Discount allowed was 6,701 Instalment Interest charged was 1,374 Penalty interest levied was 22

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 20. RATES AND SERVICE CHARGES (Continued) e) Underground Power - Scarborough The raising of rates and service charges occurred in the 2006 financial year with the work being undertaken between July 2004 and December 2004. The cost to the City was funded on a 50/50 basis with owners, any difference between the equity raised and the rates levied being waived by Council. As the City of Stirling offered to accept payment over a period of up to 7 years, discount, instalment interest and penalty interest will continue to feature in these financial statements for some years. Instalment interest applies at 5.5% with a discount of 10% credited to accounts paid by the instalment date. The instalment date was 29 July 2006 with penalty interest being levied on overdue amounts at 7.0%. $ Discount allowed was 1,967 Instalment Interest charged was 1,815 Penalty interest levied was 528 f) Underground Power - Inglewood The City of Stirling facilitated a major upgrade of Beaufort Street Inglewood, which included the undergrounding of power to a number of properties. For logistical reasons, the project was split into two sections namely Inglewood 1 and Inglewood 2. Inglewood Stage 1 This stage included properties on both sides of Beaufort Street from just north of Tenth Avenue to just south of Seventh Avenue. The Scheme involved 61 properties, with rates and service charges occurred in the 2006 financial year. Costs were funded 50/50 between owners and Council, with owners being responsible for any connections costs. Any differences between equity raised and rates levied being waived by council. As the City of Stirling offered to accept payment over a period of up to 7 years, discount, instalment interest and penalty interest will continue to feature in these financial statements for some years. Instalment interest applies at 5.5% with a discount of 10% credited to accounts paid by the instalment date. The instalment date was 2 August 2006 with penalty interest being levied on overdue amounts at 7.0%. $ Discount allowed was 688 Instalment Interest charged was 832 Penalty interest levied was -

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 20. RATES AND SERVICE CHARGES (Continued) f) Underground Power - Inglewood (Cont'd) Inglewood Stage 2 This stage included property on both sides of Beaufort Street from just north of Crawford Road to south of Eleventh Avneue and Dundas Road and an area to the north and south of Sixth Avenue. These areas are adjacent to and at either end of Inglewood Stage 1. This Scheme involved 53 properties, with rates and services charges being incurred in the 2006 financial year. Costs were funded 50/50 between owners and the council, with owners being responsible for any connection costs. Any difference between equity raised and rates levied being waived by council. As the City of Stirling offered to accept payment over a period of up to 7 years, discount, instalment interest and penalty interest will continue to feature in these financial statements for some years. Instalment interest applies at 5.5% with a discount of 10% credited to accounts paid by the instalment date. The instalment date was 2 August 2006 with penalty interest being levied on overdue amounts at 7.0%. $ Discount allowed was 688 Instalment Interest charged was 832 Penalty interest levied was g) Underground Power - Churchlands/ Wembley Downs The City raised of rates and service charges to upgrade the propertes in the Churchlands/Wembley Downs area in the 2007 financial year, with work expected to be finalised in the 2009 financial year. The Scheme involved 2,438 properties and is funded 50/50 by Western Power and Owners, with owners being responsible for network and service connection charges. The Scheme has not been finalised and no surplus or deficit has been calculated. As the City of Stirling offered to accept payment over a period of 7 years, discount, instalment interest and penalty interest will continue to feature in these financial statements for some years. Instalment interest applies at 5.5% with a discount of 10% credited to accounts paid by the instalment date. The instalment date was 18 December 2007 with penalty interest being levied on overdue amounts at 11%. $ Amount Paid in 2008 Discount allowed was Instalment Interest charged was Penalty interest levied was

18,899 96,158 81,257 2,693

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 20. RATES AND SERVICE CHARGES (Continued)

h) Underground Power - Highgate East The City facilitated an upgrade of properties in the Highgate East area. This project is part of the State Underground Power Program. The Scheme involved 6 properties and is funded 50/50 by Western Power and Owners, with owners being responsible for network and service connection charges. A Specific Area Rate was used to levy amount to be paid by owners with the rate being set at 25.71 cents in the dollar of Gross Rental Valuation. The City of Stirling agreed to accept payment over a period of up to 7 years with interest to apply at 5.5%. In addition, a discount of 10% was offered if prompt payment was received within 35 days of issue. Penalty interest is levied on overdue amounts at the rate of 8.0%. Charges were levied on 13 April 2008 with a due date for payment of 18 May 2008.. $ Amount Paid was Discount allowed was Instalment Interest charged was Penalty interest levied was

57 189 143

i) Instalment Option for Rates The City of Stirling operated an instalment option plan consisting of four instalments. The first instalment was due within 35 days of date of issue and comprised of any arrears, current rubbish charge, current security charge, current pool fence inspection charge (if any) and one quarter of current rates, plus instalment charge and instalment interest. The second, third and fourth instalment comprised of one quarter of current rates plus instalment charge and instalment interest. The rate of interest for the instalment option was 5.5%. The amount of interest received was $280,794. The original budget was $280,000. The instalment charge was $21 per assessment. This charge is in addition to the instalment interest. The amount of revenue raised from the imposition of the instalment charge was $357,872. The original budget was $350,000.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 20. RATES AND SERVICE CHARGES (Continued) j) Rates Early Payment Discount The City of Stirling offered a discount of 3% if rates were paid on or before the 28th day following the date of issue of assessment. The total amount of discounts granted to 21 August 2007 plus discount granted throughout the rest of the year for interim rates paid within the 28 day discount period was $1,499,348. The original budget was $1,458,000. k) Rates Early Payment Incentive Scheme The City of Stirling operated an incentive scheme in which eighteen prizes were donated by sponsors. To be eligible, full payment of all rates and charges must have been received by 21 August 2007. This excluded pensioner rates deferred under the provisions of the Rates and Charges (Rebates and Deferments) Act 1992. The selection method involved a computer programme that selected all assessments eligible to be in the draw. The draw was conducted in the presence of a JP and several senior officers. The total cost to the City of Stirling for the incentive scheme was $37,217. The original budget was $60,000. l) Concession and Write Offs The total cost or reduction of revenue from the waiver or grant of concession was nil. The total amount of rates written off was nil The original budget was nil.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR2008 THE YEAR ENDED 30 JUNE 2008 FOR THE YEAR ENDED 30 JUNE 21. LATE PAYMENT INTEREST

The rate of interest charged for the late payment of rates and service charges was 11%. The amount of revenue raised from the imposition of the interest for the late payment of rates and service charges was $195,494. The original budget was $340,000. The rate of interest charged for the late payment of any other money was 11%. The amount of revenue raised from the imposition of the interest for the late payment of any other money was nil. The original budget was nil.

Financial Statements 57

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008 FOR

THE YEAR ENDED 30 JUNE 2008

22. Income, Expenditure and movements of money to and from reserve accounts which have not been included in the Operating Statement, but which have been included in the rate setting statement. BUDGET TSF Ex Particular Reserve Fund TSF Ex Municipal Fund Transfer to Particular Res Fund Transfer to Municipal Fund Cap Tfr Offset - Roads Cap Tfr Offset - Drainage Cap Tfr Offset - Footpaths Cap Tfr Offset - Oth Eng Infrast Cap Tfr Offset - Reserves Cap Tfr Offset - Reticulation Cap Tfr Offset - Oth Pks Infrast Cap Tfr Offset - Land Cap Tfr Offset - Buildings Cap Tfr Offset - Plant & Equip Cap Tfr Offset - Mob Veh & Plant Cap Tfr Offset - Furn & Office Equip Cap Tfr Offset - Recreation Equip Land Freehold Buildings Plant & Equipment Mobile Vehicle & equipment Furniture / Office Equipment Recreational Equipment Community works various Parks & Reserves Works

Financial Statements 58

ACTUAL

(13,648,792) (30,281,476) 13,648,792 30,281,476 10,424,811 256,995 6,990,093 2,078,980 489,033 27,479,433 6,432,673

17,954,345 (26,967,607) 26,967,607 (17,954,345) (18,880,192) (1,596,755) (1,312,026) (210,815) (855,486) (935,276) (1,187,520) (897,673) (11,544,209) (1,272,366) (6,847,475) (2,036,779) (369,485) 897,673 10,716,609 1,272,366 6,847,475 2,036,779 369,485 22,827,388 2,978,282

54,152,018

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNEFOR 2008THE YEAR ENDED 30 JUNE 2008 23. INFORMATION ABOUT FEES TO COUNCIL MEMBERS Original Budget $

2008 $

2007 $

Communications Allowance

47,600

46,230

47,952

Travel Expenses

18,000

12,781

19,206

105,000

103,761

102,910

60,000

58,167

51,290

6,000

6,802

3,000

236,600

227,741

224,358

Meeting fee allowance Mayoral Allowance Deputy Mayoral Allowance

Financial Statements 59

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008 FOR

THE YEAR ENDED 30 JUNE 2008

24. EMPLOYEE REMUNERATION Set out below, in bands of $10,000, is the number of employees of the City entitled to an annual salary of $100,000 or more. Salary Range $ 100,000 - 109,999 110,000 - 119,999 120,000 - 129,999 130,000 - 139,999 140,000 - 149,999 150,000 - 159,999 160,000 - 169,999 170,000 - 179,999 180,000 - 189,999 190,000 - 199,999 200,000 - 209,999 210,000 - 219,999 220,000 - 229,999 230,000 - 239,999 240,000 - 249,999 250,000 - 259,999 260,000 - 269,999

2008

2007

4 12 4 1 -

4 1 -

Financial Statements 60

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008

25. MAJOR LAND TRANSACTION INFORMATION 1.

The development and subdivision of part lots 11, 63 & 64 Civic Place Stirling. Original Project Budget (at Valuation) $ Income from Sales Development Expenses Sales Expenses

Actual 2008

Prior to 30 June 2007

17,125,568

27,217,573

5,915,000

4,466,798

673,309

438,728

The City has undertaken the redevelopment of the Civic centre and as part of this, the old depot was relocated to Delawney Street, Balcatta. The land on which the old depot was situated was subdivided in 2003/2004 comprising a mixture of residential and commercial lots. The associated cost related to the redevelopment has been expensed in this financial year. The City has not sold any lots during the year.

To 30 June 2007 $

2008

Total

Income from Sales

27,217,573

Development Expenses

(4,466,798)

(438,728)

Sales Expenses Surplus

22,312,047

Financial Statements 61

22,312,047

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 25. MAJOR LAND TRANSACTION INFORMATION (Cont'd) 2.

The development and subdivision of part lot 27, Diagram 51563, 29 Chesterfield Road Mirrabooka. Original Project Budget (at Valuation) $ Income from Sales Development Expenses

Actual 2008

Prior to 30 June 2007

12,613,636

7,375,591

4,591,200

618,004

3,847,033

111,274

Sales Expenses

The City has undertaken the development of land adjacent to Herb Graham Recreation Centre as part of its Mirrabooka Regional Strategy. The City has set aside any surplus funds from the sale of Land in the Herb Graham Sub-division in a reserve until it is required to fund the Mirrabooka Regional Strategy Centre.

The City has sold thirty lots during the financial year. The historical cost of the lots sold and removed from the City's land register was $589,917.

To 30 June 2007 $ Income from Sales Development Expenses

(3,847,033)

2008

Total

7,375,590

(618,004)

(4,465,037)

Infrastructure Capitalised Land Capitalised

3,875,120 589,917

Sales Expenses

(701,191)

Surplus/(Deficit)

(3,847,033)

10,521,432

Financial Statements 62

6,674,399

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008 FOR THE YEAR ENDED 30 JUNE 2008 26. FINANCIAL INSTRUMENTS a) Significant Accounting Policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset and financial liability are disclosed in Note 1 to the accounts. b) Interest Rate Risk The following table details the Council's exposure to interest rate risk as at the reporting date Fixed Interest Rate Maturity

2008

Av Int

Var Int

Less than

1 to 5

More than

Non Int

Rate

1 Year

Years

5 Years

Bearing

Total

Financial Assets Cash and Cash Equivalents TP Sch Cash and Cash Equivalents TOTAL

6.81 6.81

880 880

77,478,940 77,478,940

45,713 45,713

46,593 77,478,940 77,525,533

Financial Liabilities Payables Bank overdraft TP Sch. Overdraft Unpresented cheq Employee Entlmts TOTAL

0 11.87 8.70 0 0

2,926,197 2,926,197

10,270,176 212,056 8,923,022 19,405,254

10,270,176 2,926,197 212,056 8,923,022 22,331,451

Fixed Interest Rate Maturity

2007

Av Int

Var Int

Less than

1 to 5

More than

Non Int

Rate

1 Year

Years

5 Years

Bearing

Financial Assets Cash and Cash Equivalents TP Sch Cash and Cash Equivalents TOTAL

6.25 6.45

1,460,972

Financial Liabilities Payables Bank overdraft TP Sch. Overdraft Unpresented cheq Employee Entlmts TOTAL

0 10.00 8.70 0 0

Total

1,460,972

63,844,597 63,844,597

37,830 37,830

1,498,802 63,844,597 65,343,399

2,740,126 2,740,126

6,946,041 221,764 6,958,023 14,125,828

6,946,041 2,740,126 221,764 6,958,023 16,865,954

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 26. FINANCIAL INSTRUMENTS (Cont'd) c) Sensitivity to Interest Rate Risk The City has significant funds invested and returns from those investments are dependent upon current interest rates. If interest rates were to increase or decrease by 1%, the annual return would increase or decrease by $775,255. There is no real interest rate risk in relation to financial liabilities because the overdraft disclosure is purely a book figure representing unpresented cheques. d) Credit Risk Credit risk refers to the risk that a counterparty will default on its contractural obligations resulting in financial loss to the Council. The Council has adopted the policy of only dealing with creditworthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Council measures credit risk on a fair value basis. The Council does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. e) Fair Value of Financial Instruments The City considers that the carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective fair values.

Financial Statements 64

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

27. PERFORMANCE MEASUREMENTS 2008

2007

2006

2005

2004

Financial information by ratio: (a) the current ratio - to assess ability to meet current commitments current assets minus restricted assets 2.2708 2.5224 ---------------------------------------------------current liabilities minus liabilities associated with restricted assets

1.4232

2.2044

1.8904

(b) the debt ratio - to identify the exposure of the City to debt as an indicator of the solvency of the City total liabilities -------------------------total assets

0.2428

0.0222

0.0307

0.033

0.0269

0.0014

0.0003

0.0024

0.0029

0.0034

0.5259

0.5329

0.5440

0.5038

0.5288

0.0644

0.1033

0.0723

0.0661

0.0484

2.6955

3.8738

8.2553

3.4601

2.9693

0.0308

0.0385

0.0463

0.0385

0.0438

0.0499

(c) the debt service ratio - to assess the capacity of the City to meet debt commitments debt service cost -------------------------available operating revenue

(d) the rate coverage ratio - to assess the dependance on non rate revenue sources net rate revenue -------------------------operating revenue (e) outstanding rates ratio - to assess the rate collection performance rates outstanding -------------------------rates collectable (f) untied cash to trade creditors ratio untied cash ------------------------------------unpaid trade creditors (g) gross debt to revenue ratio gross debt ------------------------------------total revenue

(h) gross debt to economically realisable asset ratio gross debt ------------------------------------economically realisable assets

Financial Statements 65

TOPART AND OF FORMING PART OF THE FINANCIAL NOTES TO ANDNOTES FORMING THE FINANCIAL STATEMENTS

STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008 28. SUBSEQUENT EVENT

There has been no subsequent events of a material nature to report since the end of the financial year.

Financial Statements 66

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

FOR THE YEAR ENDED 30 JUNE 2008

29. LOSS ON RESTRUCTURE OF LOCAL GOVERNMENT A review of the City of Stirling boundaries by the Minister for Local Government resulted in part of the suburb of Glendalough in the City of Stirling, east of the Mitchell Freeway bounded by the Mitchell Freeway, Powis Street, Brady Street and Scarborough Beach Road and Freeway being transferred to the Town of Vincent, effective 1 July 2007. As a consequence of the restructure, the following roads, paths and drainage were transferred from the City of Stirling to the Town of Vincent as at the 1st of July 2007.

Original Cost Roads

Accumulated Depreciation

Net Book Value

2,462,870

(492,580)

1,970,290

Paths

206,280

(65,105)

141,175

Drainage

193,096

(41,297)

151,799

2,862,246

(598,982)

2,263,264

Total Roads, Paths and Drainage transferred to the Town of Vincent on 1 July 2007

Financial Statements 67