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Annual Financial Statements for year ended 30 June 2012
33. Contingencies & Assets & Liabilities Not Recognised in The Balance Sheet
The following assets and liabilities do not qualify for recognition in the Balance Sheet but knowledge of those items
is considered relevant to users of the financial report in making and evaluating decisions about the allocation of
scarce resources.
(a) Land Under Roads
As reported elsewhere in these statements, Council is of the opinion that it is not possible to attribute a value
sufficiently reliable for these assets to qualify for recognition, and accordingly land under roads has not been
recognised in these reports. Land acquired for road purposes during the year is initially recognised at cost, but
transferred to fair value at reporting date.
(b) Potential Insurance Losses
Council is a multi-purpose organisation providing a large range of building, parks infrastructure, playgrounds
and other facilities accessible to the public. At any time, it is likely that claims will have been made against
the Council that remain unsettled.
Council insures against all known insurable risks using a range of insurance policies, each of which is subject
to a deductible “insurance excess”, the amount of which varies according to the class of insurance.
Council has recognised the potential losses arising from claims known at reporting date, however other
potential claims not reported to Council may have existed at reporting date.
(c) Legal Expenses
Council is the planning consent authority for its area under the Development Act 1993 (as amended).
Pursuant to that Act, certain persons aggrieved by a planning decision of the Council may appeal. It is normal
practice that parties bear their own costs. At the date of these reports, Council had notice of one appeal
against planning decisions made prior to reporting date. All known costs have been recognised, but the
amount of further costs cannot be known until the appeals are determined.
d) Carbon Tax
From 1 July 2012 a new tax on emissions of certain “greenhouse” gases commences operation. Council is a
constituent member of the Western Region Waste Management Authority which is managing the closure and
remediation of the Garden Island landfill operation. How long this site will emit such gases is unknown.
Information currently available provides assurances that “legacy emissions” from garbage placed in such a
landfill prior to 30 June 2012 will not subsequently become liable for such a tax. However, details of the
mechanisms for measuring such emissions or of providing the exemption are not currently available.
34. Remuneration of Auditors
Council’s independent auditors are Deloitte Touche Tohmatsu.
Audit Activity
2011-2012
$
2010-2011
$
Auditing the financial report
56,337
43,414
Other activities
14,550
13,930
Total
70,887
57,344
35. Financial Indicators
These Financial Indicators have been calculated in accordance with Information Paper 9 – Local Government
Financial Indicators, prepared as part of the LGA Financial Sustainability Program for the Local Government
Association of South Australia.
Indicator Description
2011/12
Target
(Unaudited)
2011/12
Actual
2010/11
Target
(Unaudited)
2010/11
Actual
Operating Surplus Ratio
This ratio expresses the operating surplus/(deficit) as a
percentage of general and other rates, net of NRM Levy.
1%
5%
0%
6%
Net Financial Liabilities Ratio
This ratio expresses net financial liabilities as a percentage
of operating revenue, net of NRM Levy.
Net Financial Liabilities are defined as total liabilities less
financial assets excluding equity accounted investment.
23.8%
(4%)
26.9%
2.5%
Asset Sustainability Ratio
This ratio expresses net asset renewals as a percentage of
depreciation expense.
Net asset renewal expenditure is defined as net capital
expenditure on the renewal and replacement of existing
assets, and excludes new capital expenditure on the
acquisition of additional assets.
69%
58%
68%
76%
Notes to the Financial Statements
59