Corangamite Shire Council

ANNUAL FINANCIAL REPORT

For the Year Ended 30 June 2021

 Corangamite Shire Council
Financial Report
Table of Contents
FINANCIAL REPORT Page

Certification of the Financial Statements 3

Financial Statements
Comprehensive Income Statement 6
Balance Sheet 7
Statement of Changes in Equity 8
Statement of Cash Flows 9
Statement of Capital Works 10

Overview 11

Notes to Financial Statements

Note 1 Performance against budget 12
1.1.   Income and expenditure 12
1.2.   Capital works 14
Note 2 Analysis of Council results by program 16
Note 3 Funding for the delivery of our services 17
3.1.   Rates and charges 17
3.2.   Statutory fees and fines 17
3.3.   User fees 17
3.4.   Funding from other levels of government 18
3.5.   Contributions 20
3.6. Net gain/(loss) on disposal of property, infrastructure, plant and equipment 20
3.7.   Other income 20
Note 4 The cost of delivering services 21
4.1.   Employee costs 21
4.2.   Materials and services 21
4.3.   Depreciation 21
4.4. Amortisation - Intangible assets 21
4.5. Amortisation - Right of use assets 22
4.6. Bad and doubtful debts 22
4.7. Finance Costs - Leases 22
4.8.   Other expenses 22
Note 5 Our financial position 23
5.1.   Financial assets 23
5.2.   Non-financial assets 25
5.3.   Payables 26
5.4.   Provisions 26
5.5. Financing arrangements 28
5.6. Commitments 28
5.7. Leases 30
Note 6 Assets we manage 32
6.1.   Property, infrastructure plant and equipment 32
6.2.   Investments in associates, joint arrangements and subsidiaries 39
Note 7 People and relationships 40
7.1.   Council and key management remuneration 40
7.2.   Related party disclosure 41
Note 8 Managing uncertainties 42
8.1.   Contingent assets and liabilities 42
8.2.   Change in accounting standards 43
8.3.   Financial instruments 43
8.4.   Fair value measurement 45
8.5.   Events occurring after balance date 45
Note 9 Other matters 46
9.1. Reserves 46
9.2. Reconciliation of cash flows from operating activities to surplus/(deficit) 48
9.3. Superannuation 49
Note 10 Change in accounting policy 51
Corangamite Shire Council
2020-2021 Financial Report

Certification of the Financial Statements

In my opinion, the accompanying financial statements have been prepared in accordance with the Local Government Act 1989 , the Local Government
(Planning and Reporting) Regulations 2014 , the Australian Accounting Standards and other mandatory professional reporting requirements.

David Rae
Principal Accounting Officer

Date : 28-Sep-21
Camperdown, Victoria
In our opinion the accompanying financial statements present fairly the financial transactions of the <Council name> for the year ended 30 June 2021 and
the financial position of the Council as at that date.

At the date of signing, we are not aware of any circumstances that would render any particulars in the financial statements to be misleading or inaccurate.

We have been authorised by the Council and by the Local Government (Planning and Reporting) Regulations 2014 to certify the financial statements in
their final form.

Geraldine Conheady
Councillor
Date : 28-Sep-21
Camperdown, Victoria

Laurie Hickey
Councillor
Date : 28-Sep-21
Camperdown, Victoria

Andrew Mason
Chief Executive Officer
Date : 28-Sep-21
Camperdown, Victoria

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Corangamite Shire Council
2020-2021 Financial Report

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Corangamite Shire Council
2020-2021 Financial Report

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Corangamite Shire Council
2020-2021 Financial Report

Comprehensive Income Statement

For the Year Ended 30 June 2021

Note 2021 2020

$'000 $'000
Income
Rates and charges 3.1 22,618 22,095
Statutory fees and fines 3.2 630 474
User fees 3.3 6,630 5,786
Grants - operating 3.4 15,652 12,911
Grants - capital 3.4 5,011 4,200
Contributions - monetary 3.5 845 704
Share of net profits (or loss) of associates and joint ventures 6.2 - 35
Fair value adjustments 5.4 633 (201)
Other income 3.7 1,676 1,563
Total income 53,695 47,568

Expenses
Employee costs 4.1 (17,799) (14,817)
Materials and services 4.2 (12,649) (12,629)
Depreciation 4.3 (12,611) (13,088)
Amortisation - intangible assets 4.4 (702) (229)
Amortisation - right of use assets 4.5 (284) (250)
Net gain (or loss) on disposal of property, infrastructure, plant and equipment 3.6 (3,871) (3,028)
Bad and doubtful debts 4.6 (3) (13)
Finance costs - leases 4.7 (99) (99)
Other expenses 4.8 (2,976) (3,037)
Total expenses (50,994) (47,191)

Surplus/(deficit) for the year 2,701 377

Other comprehensive income

Items that will not be reclassified to surplus or deficit in future periods
Net asset revaluation increment/(decrement) 6.1 18,772 26,970
Total comprehensive result 21,473 27,347

The above comprehensive income statement should be read in conjunction with the accompanying notes.
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Corangamite Shire Council
2020-2021 Financial Report

Balance Sheet
As at 30 June 2021

Note 2021 2020

$'000 $'000
Assets
Current assets
Cash and cash equivalents 5.1 9,397 5,586
Trade and other receivables 5.1 1,609 2,527
Other financial assets 5.1 45,504 33,649
Inventories 5.2 79 47
Other assets 5.2 953 647
Total current assets 57,542 42,456

Non-current assets
Trade and other receivables 5.1 6 14
Investments in associates, joint arrangements and subsidiaries 6.2 328 328
Property, infrastructure, plant and equipment 6.1 498,375 480,491
Right-of-use assets 5.7 5,948 6,232
Intangible assets 5.2 632 1,335
Total non-current assets 505,289 488,400
Total assets 562,832 530,856

Liabilities
Current liabilities
Trade and other payables 5.3 2,798 3,155
Trust funds and deposits 5.3 216 245
Provisions 5.4 4,217 3,916
Unearned Revenue 5.3 15,909 4,634
Lease liabilities 5.7 186 180
Total current liabilities 23,326 12,130

Non-current liabilities
Provisions 5.4 5,544 6,051
Lease liabilities 5.7 5,975 6,161
Total non-current liabilities 11,519 12,212
Total liabilities 34,845 24,341

Net assets 527,986 506,515

Equity
Accumulated surplus 178,916 176,273
Reserves 9.1 349,070 330,242
Total Equity 527,986 506,515

The above balance sheet should be read in conjunction with the accompanying notes.
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Corangamite Shire Council
2020-2021 Financial Report

Statement of Changes in Equity

For the Year Ended 30 June 2021

Accumulated Revaluation Other

Note Total Surplus Reserve Reserves
2021 $'000 $'000 $'000 $'000

Balance at beginning of the financial year 506,514 176,273 317,234 13,008

Surplus/(deficit) for the year 2,701 2,701 - -
Net asset revaluation increment/(decrement) 6.1 18,772 - 18,772 -
Transfers to other reserves 9.1 - (2,204) - 2,204
Transfers from other reserves 9.1 - 2,147 - (2,147)
527,988 178,916 336,006 13,066
Balance at end of the financial year 527,988 178,916 336,006 13,066

Accumulated Revaluation Other

Total Surplus Reserve Reserves
2020 $'000 $'000 $'000 $'000

Balance at beginning of the financial year 483,667 185,223 290,264 8,180

Impact of change in accounting policy - AASB
(4,500) (4,500) - -
15 Revenue from Contracts with Customers
Adjusted Opening balance 479,167 180,723 290,264 8,180
Surplus/(deficit) for the year 378 378 - -
Net asset revaluation increment/(decrement) 6.1 26,970 - 26,970 -
Transfers to other reserves 9.1 - (5,070) - 5,070
Transfers from other reserves 9.1 - 241 - (241)
506,514 176,273 317,234 13,008
Balance at end of the financial year 506,514 176,273 317,234 13,008

The above statement of changes in equity should be read in conjunction with the accompanying notes.
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Corangamite Shire Council
2020-2021 Financial Report

Statement of Cash Flows

For the Year Ended 30 June 2021
2021 2020
Inflows/ Inflows/
(Outflows) (Outflows)
Note $'000 $'000
Cash flows from operating activities

Rates and charges 22,760 22,122

Statutory fees and fines 630 474
User fees 6,876 7,428
Grants - operating 27,795 12,904
Grants - capital 5,011 4,200
Contributions - monetary 845 704
Interest received 128 803
Trust funds and deposits taken 2,950 2,773
Other receipts 773 470
Net GST refund/(payment) 1,041 (50)
Employee costs (17,251) (14,780)
Materials and services (15,104) (11,015)
Short-term, low value and variable lease payments (6) -
Trust funds and deposits repaid (2,979) (2,754)
Other payments (2,826) (3,038)
Net cash provided by/(used in) operating activities 9.2 30,643 20,241

Cash flows from investing activities

Payments for property, infrastructure, plant and equipment 6.1 (15,047) (14,303)
Proceeds from sale of property, infrastructure, plant and equipment 349 239
Payments for investments (37,855) (24,650)
Proceeds from sale of investments 26,000 21,999
Loans and advances made - 9
Net cash provided by/(used in) investing activities (26,553) (16,706)

Cash flows from financing activities

Interest paid - lease liability (99) (98)

Repayment of lease liabilities (180) (142)
Net cash provided by/(used in) financing activities (279) (240)

Net increase (decrease) in cash and cash equivalents 3,811 3,295

Cash and cash equivalents at the beginning of the financial year 5,586 2,291
Cash and cash equivalents at the end of the financial year 9,397 5,586

Financing arrangements 5.5

Restrictions on cash assets 5.1

The above statement of cash flows should be read in conjunction with the accompanying notes.
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Corangamite Shire Council
2020-2021 Financial Report

Statement of Capital Works

For the Year Ended 30 June 2021

2021 2020
$'000 $'000
Property
Land - 335
Total land - 335
Buildings 2,538 1,261
Heritage buildings 189 254
Total buildings 2,727 1,515
Total property 2,727 1,850
Plant and equipment
Plant, machinery and equipment 797 1,858
Computers and telecommunications 157 131
Total plant and equipment 954 1,989

Infrastructure
Roads 7,477 8,426
Bridges 447 458
Footpaths and cycleways 231 410
Drainage 186 12
Recreational, leisure and community facilities 1,400 261
Parks, open space and streetscapes 954 451
Kerb and channel 162 207
Retaining walls and small culverts 73 80
Waste management 801 159
Total infrastructure 11,729 10,464

Total capital works expenditure 15,410 14,303

Represented by:
New asset expenditure 2,748 2,105
Asset renewal expenditure 8,524 10,078
Asset upgrade expenditure 4,138 2,120
Total capital works expenditure 15,410 14,303

The above statement of capital works should be read in conjunction with the accompanying notes.
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Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

OVERVIEW

Introduction
The Corangamite Shire Council was established by an Order of the Governor in Council on 23 September 1994 and is a body corporate.
The Council's main office is located at 181 Manifold Street, Camperdown, Victoria 3260.

Statement of compliance
These financial statements are a general purpose financial report that consists of a Comprehensive Income Statement, Balance Sheet,
Statement of Changes in Equity, Statement of Cash Flows, Statement of Capital Works and Notes accompanying these financial
statements. The general purpose financial report complies with the Australian Accounting Standards (AAS), other authoritative
pronouncements of the Australian Accounting Standards Board, the Local Government Act 1989 , and the Local Government (Planning
and Reporting) Regulations 2014 .

Significant accounting policies

(a) Basis of accounting

The accrual basis of accounting has been used in the preparation of these financial statements, whereby assets, liabilities, equity, income
and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily
apparent from other sources. The estimates and associated judgements are based on professional judgement derived from historical
experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these
estimates.

Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected
by the revision. Judgements and assumptions made by management in the application of AAS's that have significant effects on the
financial statements and estimates relate to:
- the fair value of land, buildings, infrastructure, plant and equipment (refer to Note 6.1)
- the determination of depreciation for buildings, infrastructure, plant and equipment (refer to Note 6.1)
- the determination of employee provisions (refer to Note 5.4)
- the determination of landfill provisions (refer to Note 5.4)
- the determination of whether performance obligations are sufficiently specific so as to determine whether an arrangement is within the
scope of AASB 15 Revenue from Contracts with Customers or AASB 1058 Income of Not-for-Profit Entities (refer to Note 3)
- the determination, in accordance with AASB 16 Leases , of the lease term, the estimation of the discount rate when not implicit in the
lease and whether an arrangement is in substance short-term or low value (refer to Note 5.7)
- other areas requiring judgements

Unless otherwise stated, all accounting policies are consistent with those applied in the prior year. Where appropriate, comparative
figures have been amended to accord with current presentation, and disclosure has been made of any material changes to comparatives.

(b) Impact of Covid-19

On 16 March 2020 a state of emergency was declared in Victoria due to the global pandemic COVID-19 virus, known as coronavirus. A
state of disaster was subsequently declared on 2 August 2020. While the impacts of the pandemic have abated somewhat through the
2020-21 year, Council has noted the following significant impacts on its financial operations:
• Council had a COVID-19 Financial Hardship Policy which provided clear and transparent options and assistance for those experiencing
hardship due to the pandemic
• Council had a 0% increase in rates for the 2020-2021 year
• Council had a $2.5M COVID-19 Economic Stimulus and Support Package which was divided into categories including fee waivers,
employments stimulus and welfare support.
• Council has worked with all levels of Government to assist the community and has secured the following funding:
- Working for Victoria $2.3 million
- Local roads and community infrastructure phase 1 - $2.2 million
- Local roads and community infrastructure phase 2 - $1.9 million
- Outdoor dining $0.2 million
- Numerous service based grants to assist in aged services and early years

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Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

Note 1 Performance against budget

The performance against budget notes compare Council’s financial plan, expressed through its annual budget, with actual performance. The
Local Government (Planning and Reporting) Regulations 2014 requires explanation of any material variances. Council has adopted a
materiality threshold of the lower of 10 percent and at least $100,000 where further explanation is warranted. Explanations have not been
provided for variations below the materiality threshold unless the variance is considered to be material because of its nature.

These notes are prepared to meet the requirements of the Local Government Act 1989 and the Local Government (Planning and Reporting)
Regulations 2014 .

1.1 Income and expenditure

Budget Actual Variance Variance
2021 2021 2021 2021
$'000 $'000 $'000 % Ref

Income
Rates and charges 22,200 22,618 418 2%
Statutory fees and fines 523 630 107 20% 1
User fees 6,095 6,630 535 9%
Grants - operating 11,322 15,652 4,330 38% 2
Grants - capital 9,419 5,011 (4,408) -47% 3
Contributions - monetary 633 845 212 34% 4
Fair value adjustments - 633 633 100% 5
Share of net profits/(losses) of associates and joint ventures - - -
Other income 595 1,676 1,081 182% 6
Total income 50,787 53,695 2,908 6%

Expenses
Employee costs (15,744) (17,799) 2,055 -13% 7
Materials and services (14,543) (12,649) (1,894) 13% 8
Depreciation (12,131) (12,611) 480 -4% 9
Amortisation - Intangible assets - (702) 702 100% 10
Amortisation - Right of use assets - (284) 284 100% 11
Net gain/(loss) on disposal of property, infrastructure, plant
(95) (3,871) 3,776 -3975% 12
and equipment
Bad and doubtful debts (2) (3) 1 -44%
Finance costs - Leases - (99) 99 100%
Other expenses (2,991) (2,976) (15) 0%
Total expenses (45,506) (50,994) 5,488 -12%

Surplus/(deficit) for the year 5,281 2,701 (2,580) -49%

(i) Explanation of material variations

1 Statutory fees and fines Increases in planning fees due to increased demand ($74,000)

Large amounts of grants received from State and Federal Governments in relation
to COVID-19 recovery which were not part of the budget. The largest of these
2 Grants - operating
include Working for Victoria ($1,497,000), free kindergarten program ($414,000),
social isolation ($135,000) and outdoor dining ($128,000)

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Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

(i) Explanation of material variations (continued)

Grants in relation to capital projects which were budgeted to be completed in 2020-

2021. Some of these projects have been delayed have been carried forward for
3 Grants - capital
completion in 2021-2022. The largest grants for these projects include the 12
Apostles Trail ($3,290,000) and Timboon town centre activation ($250,000)

Contributions from Berrybank Windfarm ($249,000) which were received for

4 Contributions - monetary
projects which were carried forward from the previous year.

Updated CPI and discount rates have decreased the Net Present Value for future
5 Fair value adjustments
rehabilitation and monitoring of the Naroghid landfill site.

Inspection of assets identified some incorrect information for bridges and culverts
6 Other income needed updating, an adjustment for the value of these assets has been included as
other income ($688,000), Investment returns better than expected ($350,000)

Additional expenditure for salaries in relation to Working for Victoria program and
7 Employee costs COVID-19 recovery funding ($1,932,000). The balance of the savings were from
multiple vacant positions throughout the year.

Operating projects incomplete at year end being carried forward for completion in
8 Materials and services 2021-2022 ($2,776,000) offset by operating projects carried forward from previous
year which were not part of the adopted budget ($903,000)

Higher depreciation on landfill cells ($917,000) offset by lower depreciation on

9 Depreciation
roads ($628,000).

10 Amortisation - Intangible assets Landfill airspace amortisation not budgeted ($702,000).

Adoption of AASB16 Leases resulted in lease expenditure which was not budgeted
11 Amortisation - Right of use assets
($284,000).

Proceeds from the disposal of Light Fleet, Heavy Plant and Buildings ($348,000)
Net loss on disposal of property, infrastructure,
12 offset by the written-down value of plant and infrastructure assets disposed
plant and equipment
($3,115,000).

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Corangamite Shire Council
2020-2021 Financial Report

Notes to the Financial Report

For the Year Ended 30 June 2021

1.2 Capital works

Budget Actual Variance Variance
2021 2021
$'000 $'000 $'000 % Ref

Property
Land 450 - (450) -100% 1
Total land 450 - (450) -100%
Buildings 658 2,538 1,880 286% 2
Heritage buildings - 189 189 0% 3
Total buildings 658 2,727 2,069 314%
Total property 1,108 2,727 1,619 146%

Plant and equipment

Plant, machinery and equipment 1,541 797 (744) -48% 4
Computers and telecommunications 155 157 2 1%
Total plant and equipment 1,696 954 (742) -44%

Infrastructure
Roads 8,681 7,477 (1,204) -14% 5
Bridges 420 447 27 6%
Footpaths and cycleways 35 231 196 559% 6
Drainage 100 186 86 86%
Recreational, leisure and community 6,270 1,400 (4,870) -78% 7
Parks open spaces and streetscapes 750 954 204 27% 8
Kerb and Channel 136 162 26 19%
Culverts and Retaining Walls - 73 73 0%
Waste Management 1,051 801 (250) -24% 9
Other Infrastructure 50 - (50) -100%
Total infrastructure 17,493 11,729 (5,764) -33%

Total capital works expenditure 20,297 15,410 (4,887) -24%

Represented by:
New asset expenditure 6,291 2,748 (3,543) -56%
Asset renewal expenditure 12,048 8,524 (3,524) -29%
Asset upgrade expenditure 1,958 4,138 2,180 111%
Total capital works expenditure 20,297 15,410 (4,887) -24%

(i) Explanation of material variations

Varianc Item Explanation

e Ref

Expected purchase of land has been delayed and will be carried forward for
1 Land
completion in 2021-2022 ($450,000)

The expansion of the Cobden and Skipton Kindergartens which were not part of
the budget ($1,202,000), additional projects funded after budget as part of Federal
2 Buildings
Government stimulus ($397,000) and projects which were incomplete at year end
and will be carried forward for completion in 2021-2022 ($170,000)

3 Heritage buildings These projects were budgeted with buildings projects

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Corangamite Shire Council
2020-2021 Financial Report

Notes to the Financial Report

For the Year Ended 30 June 2021

(i) Explanation of material variations (continued)

Delays in the delivery of Heavy Plant replacement which will be carried forward for
4 Plant, machinery and equipment completion in 2021-2022 ($495,000). The balance of the variance relates to
savings for replacement fleet in comparison to budget.

Wiridgil road was delayed due to workload pressure ($445,000) and budgeted
5 Roads
expenditure was not capitalised due to being classified as maintenance ($380,000)

Additional projects ($200,000) funded after budget as part of Federal Government

6 Footpaths and cycleways
stimulus.

Delays in delivery of 12 Apostles Trail ($5,000,000) which will be carried forward

7 Recreational, leisure and community
for completion in 2021-2022.

Additional projects funded after budget as part of Federal Government stimulus

8 Parks open spaces and streetscapes ($562,000) offset by delays in delivery of Timboon town centre activation project
($405,000) which will be carried forward for completion in 2021-2022

Delays in cell construction, budget which will be carried forward for completion in
9 Waste Management
2021-2022 ($342,000).

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Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

Note 2 Analysis of Council results by program

Council delivers its functions and activities through the following programs.

2 (a) Executive
The Chief Executive's Office works closely with Council, advocating on behalf of the Shire on issues of community importance and ensuring the
Shire's business affairs are open and accessible.

Coroprate and Community Services

The Corporate and Community Services directorate is responsible for disabled, aged and children's services, finance, human resources, risk
management, information services, rating and contract coordination.

Sustainable Development
The Sustainable Development directorate is responsible for public safety and amenity, building and planning, strategic planning and
environment and economic development and tourism.

Works and Services

The Works and Services directorate is responsible for recreation, infrastructure works and services and asset planning.

2 (b) Summary of revenues, expenses, assets and capital expenses by program

Grants included
Income Expenses Surplus/(Deficit) Total assets
in income
2021 $'000 $'000 $'000 $'000 $'000
Executive 5 (942) (937) - -
Corporate and Community Services 41,128 (26,300) 14,828 13,899 57,064
Sustainable Development 5,279 (9,375) (4,096) 536 7,393
Works and Services 7,283 (14,377) (7,094) 6,229 498,375
Total 53,695 (50,994) 2,701 20,664 562,832

Grants included
Income Expenses Surplus/(Deficit) Total assets
in income

2020 $'000 $'000 $'000 $'000 $'000

Executive 1 (873) (872) - -
Corporate and Community Services 33,947 (22,319) 11,628 11,691 43,200
Sustainable Development 4,008 (9,864) (5,856) 376 9,640
Works and Services 9,728 (14,331) (4,603) 4,954 478,015
Total 47,684 (47,387) 297 17,021 530,856

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Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
Note 3 Funding for the delivery of our services
3.1 Rates and charges

Council uses capital improved value as the basis of valuation of all properties within the municipal district. The capital improved value of a
property is its market value.
The valuation base used to calculate general rates for 2020-2021 was $5.500 billion (2019-2020 $5.243 billion).

General rates 8,263 8,174

Municipal charge 1,732 1,718
Waste management charge 1,969 1,856
Farm/Rural 10,569 10,239
Vacant Industrial Land rates 16 15
Supplementary rates and rate adjustments 29 59
Cultural and recreational land rates 6 6
Revenue in lieu of rates 34 28
Total rates and charges 22,618 22,095

The date of the latest general revaluation of land for rating purposes within the municipal district was 1 January 2020, and the valuation will
be first applied in the rating year commencing 1 July 2020.
Annual rates and charges are recognised as revenues when Council issues annual rates notices. Supplementary rates are recognised when
a valuation and reassessment is completed and a supplementary rates notice issued.

3.2 Statutory fees and fines

Landfill Levy 160 126

Town planning fees 294 219
Health Registrations 132 91
Permits 29 25
Infringements and costs 15 13
Total statutory fees and fines 630 474

Statutory fees and fines (including parking fees and fines) are recognised as revenue when the service has been provided, the payment is
received, or when the penalty has been applied, whichever first occurs.

3.3 User fees

Landfill 2,915 2,236

Private Works 458 540
Transfer stations 93 95
Family Day Care 719 671
Mobile Child Care 498 370
Saleyards 7 10
Local Laws 117 117
Aged & Disability Services 925 726
Kindergartens 78 203
Building Services 420 332
Planning Services 14 11
Environment 57 76
Other fees and charges 330 399
Total user fees 6,630 5,786
User fees by timing of revenue recognition
User fees recognised over time - -
User fees recognised at a point in time 6,630 5,786
Total user fees 6,630 5,786

User fees are recognised as revenue at a point in time, or over time, when (or as) the performance obligation is satisfied. Recognition is
based on the underlying contractual terms.

Page 17
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
3.4 Funding from other levels of government

Grants were received in respect of the following :

Summary of grants
Commonwealth funded grants 15,085 11,812
State funded grants 5,579 5,300
Total grants received 20,664 17,112

(a) Operating Grants

Recurrent - Commonwealth Government
Financial Assistance Grants 8,263 8,341
Family and children 345 353
Aged Services 801 832
Recurrent - State Government
Aged & Disability Services 169 136
Community health 24 2
Environment 70 62
Families and children 1,746 1,158
Maternal and child health 334 289
Youth Services 55 55
Total recurrent operating grants 11,807 11,228

Non-recurrent - Commonwealth Government

Local Roads and Community Infrastructure Grant 1,141 -
Australia Day Function 21
COVID Relief 15 -
Aged Care 15 -
Non-recurrent - State Government
Building 16
Community Planning 2 13
Community Services 96 59
COVID Relief 175
Environment 72 32
Emergency 113 34
Facilities Management 20 20
Natural Disaster 29 966
Recreation Projects 27 3
Regional Arts Funding 53 -
Rural Councils Transformation Program 100 -
Works & Services Management - 90
Working For Victoria 1,947 458
Youth 4 8
Total non-recurrent operating grants 3,845 1,683
Total operating grants 15,652 12,911

Page 18
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
(b) Capital Grants
Recurrent - Commonwealth Government
Roads to recovery 2,286 1,707
Total recurrent capital grants 2,286 1,707
Non-recurrent - Commonwealth Government
Roads to recovery - 579
Local Roads and Community Infrastructure Grant 2,198 -
Non-recurrent - State Government
Bridges - 500
Buildings 200 -
Roads 230 1,054
Environment - 35
Streetscapes 40 -
Recreation 58 -
Public Conveniences - 125
Camperdown Theatre - 64
Waste Management - 137
Total non-recurrent capital grants 2,726 2,494
Total capital grants 5,011 4,201

(c) Unspent grants received on condition that they be spent in a specific manner
Operating
Balance at start of year 870 4,560
Adjustment to opening balance due to change in AASB 15 - (4,357)
Received during the financial year and remained unspent at balance date 129 816
Received in prior years and spent during the financial year (850) (149)
Balance at year end 149 870
Capital
Balance at start of year 842 -
Received during the financial year and remained unspent at balance date - 842
Received in prior years and spent during the financial year (842) -
Balance at year end - 842

Grant income is recognised at the point in time when the council satisfies its performance obligations as specified in the underlying
agreement.

Page 19
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
3.5 Contributions

Monetary
Community Services - 63
Community Planning 98 38
Contributions - Special Charge Scheme - -
Cultural Development - 50
Economic Development 115 14
Environment 40 30
Emergency Services 98 62
Environmental Health 15 6
Halls 75 180
Killara / Theatre Complex 53 -
Recreation Reserves - 80
Skate Parks 47 -
Stadiums 41 42
Streetscapes - 50
Swimming Pools 249 1
Youth - 20
Other monetary contributions 15 68
Total monetary contributions 845 704

Monetary and non monetary contributions are recognised as revenue when Council obtains control over the contributed asset.

3.6 Net gain/(loss) on disposal of property, infrastructure, plant and equipment

Proceeds of sale 349 239

Written down value of assets disposed (4,220) (3,267)
Total net gain/(loss) on disposal of property, infrastructure, plant and equipment (3,871) (3,028)

The profit or loss on sale of an asset is determined when control of the asset has passed to the buyer.

3.7 Other income

Interest 441 711

Unrealised gain (loss) on invesments 150 (40)
Reassessment of useful life of waste assets - 422
Fuel Tax Credits 199 181
Assets recognised for the first time - found assets 688 -
Insurance reimbursement 123 90
Interest on rates - 69
Fees - Funding FSPL Collection 47 46
Legal costs recovered 6 33
Sundry Income 22 51
Total other income 1,676 1,563

Other income is measured at the fair value of the consideration received or receivable and is recognised when Council gains control over the
right to receive the income.

Page 20
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
Note 4 The cost of delivering services
4.1 (a) Employee costs

Wages and Salaries 13,655 11,127

Annual leave and long service leave 1,697 1,545
Superannuation 1,712 1,550
Workcover 428 285
Employee Benefits 165 140
Fringe Benefits Tax 142 170
Total employee costs 17,799 14,817

(b) Superannuation
Council made contributions to the following funds:

Defined benefit fund

Employer contributions to Local Authorities Superannuation Fund (Vision Super) 142 148
142 148
Employer contributions payable at reporting date. - -

Accumulation funds
Employer contributions to Local Authorities Superannuation Fund (Vision Super) 925 968
Employer contributions - other funds 786 582
1,712 1,550
Employer contributions payable at reporting date. - -

Refer to note 9.3 for further information relating to Council's superannuation obligations.

4.2 Materials and services

Contracts 7,023 7,522

Internal Recoveries 3,377 2,790
Fleet Costs 1,160 1,223
Utilities 466 519
Telephone and Internet 314 296
Subscriptions, Publications, Memberships 134 115
Printing and Stationery 79 67
Postage 42 46
Bank Charges 53 51
Total materials and services 12,649 12,629

4.3 Depreciation

Property 1,479 1,505

Plant and equipment 1,536 1,449
Infrastructure 9,596 10,134
Total depreciation 12,611 13,088
Refer to note 5.2( c ), 5.7 and 6.1 for a more detailed breakdown of depreciation and amortisation charges and accounting policy.

4.4 Amortisation - Intangible assets

Landfill Airspace 702 229

Total Amortisation - Intangible assets 702 229

Page 21
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
4.5 Amortisation - Right of use assets

Property 148 148

Plant and equipment 136 102
Total Amortisation - Right of use assets 284 250

4.6 Bad and doubtful debts

Other debtors 3 13
Total bad and doubtful debts 3 13

Movement in provisions for doubtful debts

Balance at the beginning of the year 131 118
New provisions recognised during the year 3 13
Amounts already provided for and written off as uncollectible - -
Amounts provided for but recovered during the year - -
Balance at end of year 134 131

Provision for doubtful debt is recognised based on an expected credit loss model. This model considers both historic and forward looking
information in determining the level of impairment.

4.7 Finance Costs - Leases

Interest - Lease Liabilities 99 99

Total finance costs 99 99

4.8 Other expenses

Auditors' remuneration - VAGO - audit of the financial statements, performance statement and
52 50
grant acquittals
Auditors' remuneration - Internal 36 45
Councillors' allowances 208 218
Council Contributions 1,394 1,438
Insurance 660 617
Advertising 184 188
Rent, Rates and Charges 25 31
Legal Costs 60 255
Meals and Accommodation 44 48
Levies 37 21
Other expenses 277 126
Total other expenses 2,976 3,037

Page 22
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
Note 5 Our financial position
5.1 Financial assets

(a) Cash and cash equivalents

Cash on hand 2 2
Cash at bank 9,396 5,584
Total cash and cash equivalents 9,397 5,586

(b) Other financial assets

Term deposits - current 40,068 28,540
Economic Development Loans - 15
1
Managed Funds - Victorian Funds Management Corporation 5,436 5,094
Total other financial assets 45,504 33,649
Total financial assets 54,901 39,235
1
Managed funds are measured at fair value. Unrealised and realised gains and losses from revaluations of financial assets at fair value are recognised in the
Statement of Comprehensive Income, under fair value adjustments

Councils cash and cash equivalents are subject to external restrictions that limit amounts available for discretionary use. These include:
- Trust funds and deposits (Note 5.3) 216 245
Total restricted funds 216 245
Total unrestricted cash and cash equivalents 9,182 5,341

Intended allocations
Although not externally restricted the following amounts have been allocated for specific future purposes by Council:
- Open space developer contributions 26 26
- Trust funds and deposits 216 245
- Grants received but not acquitted 149 1,712
Total funds subject to intended allocations 390 1,983

Cash and cash equivalents include cash on hand, deposits at call, and other highly liquid investments with original maturities of three months
or less, net of outstanding bank overdrafts.
Other financial assets are valued at fair value, at balance date. Term deposits are measured at original cost . Any unrealised gains and losses
on holdings at balance date are recognised as either a revenue or expense.

Page 23
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
(c) Trade and other receivables

Current
Statutory receivables
Rates debtors 781 916
Net GST Receivable - 237
Non statutory receivables
Loans and advances to community organisations - 2
Other debtors 962 1,504
Provision for doubtful debts - other debtors (134) (132)
Total current trade and other receivables 1,609 2,527
Non-current
Statutory receivables
Special rate scheme 6 14
Total non-current trade and other receivables 6 14
Total trade and other receivables 1,615 2,541

Short term receivables are carried at invoice amount. A provision for doubtful debts is recognised when there is objective evidence that an
impairment has occurred. Long term receivables are carried at amortised cost using the effective interest rate method.

(d) Ageing of Receivables

The ageing of the Council's trade and other receivables (excluding statutory receivables) that are not impaired was:
Current (not yet due) 763 1,229
Past due by up to 30 days - 16
Past due between 31 and 180 days 45 70
Past due between 181 and 365 days 5 3
Past due by more than 1 year 15 188
Total trade and other receivables 828 1,506

(e) Ageing of individually impaired Receivables

At balance date, other debtors representing financial assets with a nominal value of $134,437 (2020: $131,559) were impaired. The amount
of the provision raised against these debtors was $134,437 (2020: $131,559). They individually have been impaired as a result of their
doubtful collection. Many of the long outstanding past due amounts have been lodged with Council's debt collectors or are on payment
arrangements.
The ageing of receivables that have been individually determined as impaired at reporting date was:
Current (not yet due) - -
Past due by up to 30 days - -
Past due between 31 and 180 days - -
Past due between 181 and 365 days - -
Past due by more than 1 year 134 132
Total trade & other receivables 134 132

Page 24
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
5.2 Non-financial assets
(a) Inventories

Inventories held for distribution 72 36

Inventories held for sale 8 11
Total inventories 79 47

Inventories held for distribution are measured at cost, adjusted when applicable for any loss of service potential. All other inventories, including
land held for sale, are measured at the lower of cost and net realisable value. Where inventories are acquired for no cost or nominal
consideration, they are measured at current replacement cost at the date of acquisition.

(b) Other assets

Prepayments 514 378

Accrued income 439 269
Total other assets 953 647

(c) Intangible assets

Landfill air space 632 1,335

Total intangible assets 632 1,335

Landfill Landfill
2021 2020
$'000 $'000
Gross carrying amount
Balance at 1 July 1,563 67
Additions - 2,050
Reassessment of useful life - (554)
Balance at 30 June 1,563 1,563
Accumulated amortisation
Balance at 1 July 229 -
Amortisation expense 702 229
Balance at 30 June 931 229

Landfill airspace intangible assets are amortised as the remaining cell capacity is consumed. Estimates of the remaining useful lives and
amortisation method are reviewed at least annually, and adjustments made where appropriate.

Page 25
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
5.3 Payables $'000 $'000
(a) Trade and other payables
Trade payables 270 2,520
Accrued expenses 1,725 635
Net GST payable 804 -
Total trade and other payables 2,798 3,155

(b) Trust funds and deposits

Refundable deposits 112 42
Fire services levy 74 96
Amounts held in trust 30 107
Total trust funds and deposits 216 245

(c) Unearned income

Grants received in advance - operating 5,943 3,410
Grants received in advance - capital 9,355 -
Contributions received in advance 612 1,224
Total unearned income 15,909 4,634

Amounts received as deposits and retention amounts controlled by Council are recognised as trust funds until they are returned, transferred in
accordance with the purpose of the receipt, or forfeited. Trust funds that are forfeited, resulting in council gaining control of the funds, are to be
recognised as revenue at the time of forfeit.
Purpose and nature of items
Refundable deposits - Deposits are taken by council as a form of surety in a number of circumstances, including in relation to building works,
tender deposits, contract deposits and the use of civic facilities.
Fire Service Levy - Council is the collection agent for fire services levy on behalf of the State Government. Council remits amounts received on
a quarterly basis. Amounts disclosed here will be remitted to the state government in line with that process.

5.4 Provisions
Employee Landfill Total
restoration
2021 $ '000 $ '000 $ '000
Balance at beginning of the financial year 4,194 5,773 9,966
Additional provisions 1,969 1,969
Amounts used (1,591) - (1,591)
Change in the discounted amount arising because of time and
50 (633) (583)
the effect of any change in the discount rate
Balance at the end of the financial year 4,621 5,140 9,761

Employee Landfill Total

2020 $ '000 restoration
$ '000 $ '000
Balance at beginning of the financial year 4,236 3,522 7,759
Additional provisions 1,956 2,050 4,006
Amounts used (1,701) - (1,701)
Change in the discounted amount arising because of time and
(297) 201 (96)
the effect of any change in the discount rate
Balance at the end of the financial year 4,194 5,773 9,966

Page 26
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
(a) Employee provisions $'000 $'000
Current provisions expected to be
wholly
Annual settled
leave within 12 months 1,018 903
Rostered Days Off 125 123
Long service leave 386 363
1,529 1,389
Current provisions expected to be
wholly
Annual settled
leave after 12 months 314 214
Long service leave 2,375 2,313
2,688 2,527
Total current employee provisions 4,217 3,916

Non-current
Long service leave 405 278
Total non-current employee provisions 405 278
Aggregate carrying amount of employee
provisions:
Current 4,217 3,916
Non-current 405 278
Total aggregate carrying amount of 4,621 4,194

The calculation of employee costs and benefits includes all relevant on-costs and are calculated as follows at reporting date.

Wages and salaries and annual leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulated sick leave expected to be wholly settled
within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee services up to the reporting
date, classified as current liabilities and measured at their nominal values.
Liabilities that are not expected to be wholly settled within 12 months of the reporting date are recognised in the provision for employee benefits
as current liabilities, measured at the present value of the amounts expected to be paid when the liabilities are settled using the remuneration
rate expected to apply at the time of settlement.

Long service leave

Liability for long service leave (LSL) is recognised in the provision for employee benefits. LSL is measured at present value. Unconditional LSL
is disclosed as a current liability. Conditional LSL that has been accrued, where an employee is yet to reach a qualifying term of employment, is
disclosed as a non - current liability.

Key assumptions: 2021 2020

- discount rate 1.49% 0.87%
- oncost rate 12.00% 11.50%
- inflation rate 2.95% 2.50%

2021 2020
(b) Landfill restoration $'000 $'000
Current - -
Non-current 5,140 5,773
5,140 5,773

Council is obligated under EPA requirements to restore the Naroghid landfill to a particular standard. The forecast life of the site is based on
current estimates of remaining capacity and the forecast rate of infill. The provision for landfill restoration has been calculated based on the
present value of the expected cost of works to be undertaken. The expected cost of works has been estimated based on current
understanding of work required to reinstate the site to a suitable standard. Accordingly, the estimation of the provision required is dependent on
the accuracy of the forecast timing of the work, work required and related costs.

Key assumptions: 2021 2020

- discount rate 3.50% 3.01%
- inflation rate 2.50% 2.25%
- estimated cost to rehabilitate 6,866 6,866

Page 27
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
5.5 Financing arrangements

The Council has the following funding arrangements in place as at 30 June 2021
Bank overdraft 960 960
Credit card facilities 1,000 1,000
Total facilities 1,960 1,960

Used facilities 203 161

Unused facilities 1,757 1,799

5.6 Commitments
The Council has entered into the following commitments. Commitments are not recognised in the Balance Sheet. Commitments are disclosed
at their nominal value and presented inclusive of the GST payable.

Later than 1 year Later than 2

Not later than 1 and not later than years and not Later than 5
2021 year 2 years later than 5 years years Total
$'000 $'000 $'000 $'000 $'000
Operating
Recycling 406 412 - - 819
Garbage collection 612 621 - - 1,233
Green waste collection 413 419 - - 833
Street litter bins 86 88 - - 174
Skip bin transfer 115 116 - - 231
Recreation facility management 209 - - - 209
Banking 54 - - - 54
Home care services 309 - - - 309
Water quality monitoring 43 44 44 - 131
Landfill Geosynthetics 146 62 126 - 334
Plant and Equipment 158 161 163 - 482
Photocopiers 28 28 - - 56
Total 2,580 1,951 333 - 4,865

Capital
Buildings 83 - - - 83
Recreational, leisure and community 103 - - - 103
Total 186 - - - 186

Page 28
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

5.6 Commitments (continued)

Later than 1 year Later than 2

Not later than 1 and not later than years and not Later than 5
2020 year 2 years later than 5 years years Total
$'000 $'000 $'000 $'000 $'000
Operating
Recycling 374 379 385 - 1,138
Garbage collection 566 574 583 - 1,723
Green waste collection 445 451 458 - 1,354
Street litter bins 95 96 97 - 288
Skip bin transfer 109 111 113 - 333
Cleaning of Council buildings 37 - - - 37
Recreation facility management 107 - - - 107
Banking 51 52 - - 103
Home care services 265 223 - - 489
Water quality monitoring 43 44 89 - 175
Landfill Geosynthetics 566 86 - - 652
Plant and Equipment 158 161 329 - 648
Photocopiers 28 28 29 - 85
Total 2,844 2,206 2,082 - 7,132

Capital
Recreational, leisure and community 314 - - - 314
Streetscapes 76 - - - 76
Total 390 - - - 390

Page 29
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
5.7 Leases

At inception of a contract, all entities would assess whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To identify whether a contract
conveys the right to control the use of an identified asset, it is necessary to assess whether:
- The contract involves the use of an identified asset;
- The customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
- The customer has the right to direct the use of the asset.
This policy is applied to contracts entered into, or changed, on or after 1 July 2019.
As a lessee, Council recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost which comprises the initial amount of the lease liability adjusted for:
· any lease payments made at or before the commencement date less any lease incentives received; plus
· any initial direct costs incurred; and
· an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same
basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and
adjusted for certain measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, an appropriate incremental borrowing rate. Generally,
Council uses an appropriate incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:
· Fixed payments
· Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
· Amounts expected to be payable under a residual value guarantee; and
· The exercise price under a purchase option that Council is reasonably certain to exercise, lease payments in an optional renewal
period if Council is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless Council is
reasonably certain not to terminate early.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Council has elected to apply the temporary option available under AASB 16 Leases which allows not-for-profit entities to not measure right-of-
use assets at initial recognition at fair value in respect of leases that have significantly below-market terms.
Council has a small number of peppercorn leases which are used for a variety of purposes.

Right-of-Use Assets Property Plant & Total

Equipment
$'000 $'000 $'000
Balance at 1 July 2019 5,800 - 5,800
Additions - 682 682
Amortisation charge (148) (102) (250)
Balance at 30 June 2020 5,652 580 6,232

Balance at 1 July 2020 5,652 580 6,232

Additions - - -
Amortisation charge (148) (136) (284)
Balance at 30 June 2021 5,504 444 5,948

Lease Liabilities 2021 2020

Maturity analysis - contractual $'000 $'000
undiscounted
Less than onecash
year flows 281 279
One to five years 881 1,037
More than five years 7,591 7,717
Total undiscounted lease liabilities as at 8,753 9,033
30 June:
Lease liabilities included in the Balance Sheet at 30 June:
Current 186 180
Non-current 5,975 6,161
Total lease liabilities 6,161 6,341
Page 30
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

Short-term and low value leases

Council has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less
and leases of low-value of less than $10,000. Council recognises the lease payments associated with these leases as an expense on a straight-
line basis over the lease term.

2021 2020
Expenses relating to: $'000 $'000
Short-term leases - -
Leases of low value assets 6 6
Total 6 6
Variable lease payments (not included in - -
measurement of lease liabilities)

Non-cancellable lease commitments - Short-term and low-value leases

Commitments for minimum lease payments for short-term and low-value leases are payable as follows:
Payable:
Within one year 1 1
Later than one year but not later than five 5 5
Total lease commitments 6 6

Page 31
Corangamite Shire Council
2020-2021 Financial Report

Notes to the Financial Report

For the Year Ended 30 June 2021

6.1 Property, infrastructure, plant and equipment

Summary of property, infrastructure, plant and equipment

At Fair Value At Fair Value

30 June 2020 Additions Adjustments Revaluation Depreciation Disposal Write-off Transfers 30 June 2021
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Property 55,231 2,039 - 7,341 (1,479) (210) - 723 63,645

Plant and equipment 10,158 954 - - (1,536) (289) - - 9,287
Infrastructure 413,265 7,029 688 11,431 (9,596) (3,721) - 2,119 421,216
Work in progress 1,837 5,390 - - - - (158) (2,842) 4,226
480,491 15,412 688 18,772 (12,611) (4,220) (158) - 498,375

Summary of Work in Progress Opening WIP Additions Write-off Transfers Closing WIP
$'000 $'000 $'000 $'000 $'000

Property 247 688 (41) (752) 143

Plant and equipment - 2 - - 2
Infrastructure 1,589 4,701 (117) (2,091) 4,082
Total 1,837 5,390 (158) (2,842) 4,226

Page 32
Corangamite Shire Council
2020-2021 Financial Report

Notes to the Financial Report

For the Year Ended 30 June 2021
(a) Property
Total Land & Leasehold Leasehold
Land - Land - non Heritage Buildings - Buildings - non Total Work In
Land improvements - improvements - Total Property
specialised specialised buildings specialised specialised Buildings Progress
Improvements Buildings Waste
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
At fair value 1 July 2020 2,313 8,955 11,268 17,566 38,336 4,212 537 1,657 62,309 247 73,824
Accumulated depreciation at 1 July 2020 - - - (4,883) (11,719) (123) (53) (1,568) (18,345) - (18,345)
2,313 8,955 11,268 12,683 26,618 4,090 485 89 43,964 247 55,479
Movements in fair value
Additions - - - 189 1,775 - - 75 2,039 688 2,727
Revaluation 227 1,141 1,368 (221) 2,149 128 - - 2,056 - 3,424
Disposal - - - (189) (88) - - - (278) - (278)
Write-off - - - - - - - - - (41) (41)
Transfers - - - - (55) 720 - 58 723 (752) (28)
227 1,141 1,368 (221) 3,781 848 - 133 4,541 (105) 5,805
Movements in accumulated depreciation
Depreciation and amortisation - - - (403) (918) (124) (15) (20) (1,479) - (1,479)
Accumulated depreciation of disposals - - - 34 34 - - - 68 - 68
Revaluation - - - 1,625 2,315 (24) - - 3,917 - 3,917
Transfers - - - - 720 (720) - - - - -
- - - 1,256 2,151 (868) (15) (20) 2,505 - 2,505

At fair value 30 June 2021 2,540 10,096 12,636 17,345 42,117 5,061 537 1,790 66,850 143 79,628
Accumulated depreciation at 30 June 2021 - - - (3,627) (9,568) (990) (67) (1,588) (15,840) - (15,840)
2,540 10,096 12,636 13,718 32,549 4,070 470 202 51,010 143 63,788

Page 33
Corangamite Shire Council
2020-2021 Financial Report

Notes to the Financial Report

For the Year Ended 30 June 2021

(b) Plant and Equipment

Plant machinery Fixtures fittings Computers and Work in Total plant and
Other
and equipment and furniture telecomms Progress equipment

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

At fair value 1 July 2020 17,144 738 2,102 111 - 20,094
Accumulated depreciation at 1 July 2020 (7,763) (569) (1,604) - - (9,936)
9,381 169 498 111 - 10,158
Movements in fair value
Additions 797 - 157 - 2 956
Revaluation - - - - - -
Disposal (940) - - - - (940)
Write-off - - - - - -
Transfers - - - - - -
(143) - 157 - 2 16
Movements in accumulated depreciation
Depreciation and amortisation (1,296) (55) (185) - - (1,536)
Accumulated depreciation of disposals 651 - - - - 651
Revaluation - - - - - -
Transfers - - - - - -
(645) (55) (185) - - (885)

At fair value 30 June 2021 17,001 738 2,259 111 2 20,110

Accumulated depreciation at 30 June 2021 (8,408) (624) (1,789) - - (10,821)
8,593 114 469 111 2 9,289

Page 34
Corangamite Shire Council
2020-2021 Financial Report

Notes to the Financial Report

For the Year Ended 30 June 2021

(c) Infrastructure
Recreational, Parks open
Footpaths and Kerb and Culverts and Waste Other Work In Total
Roads Bridges Drainage leisure and spaces and
cycleways Channel Retaining Walls Management Infrastructure Progress Infrastructure
community streetscapes
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
At fair value 1 July 2020 377,763 58,500 17,062 36,915 2,601 2,852 38,909 21,769 3,324 71 1,589 561,356
Accumulated depreciation at 1 July 2020 (89,957) (5,265) (2,712) (17,312) (1,103) (1,858) (12,763) (14,262) (1,251) (18) - (146,501)
287,807 53,235 14,350 19,603 1,498 994 26,145 7,507 2,074 53 1,589 414,854
Movements in fair value
Additions 5,961 204 226 87 190 47 162 73 80 - 4,701 11,729
Revaluation - 5,877 1,777 7,058 99 142 - 2,217 - 14 - 17,183
Disposal (4,300) (1,658) (14) (12) - - (42) (23) - - - (6,048)
Write-off - - - - - - - - - - (117) (117)
Transfers 1,700 - 214 - 28 - - - 177 - (2,091) 28
Adjustments - 808 - (191) - - - - - - - 617
3,361 5,231 2,204 6,941 317 189 120 2,266 256 14 2,492 23,392
Movements in accumulated depreciation
Depreciation and amortisation (5,871) (560) (359) (328) (92) (124) (458) (283) (1,517) (3) - (9,596)
Accumulated depreciation of disposals 1,885 399 2 7 - - 23 11 - - - 2,327
Revaluation - (552) (312) (3,367) (3) (37) - (1,477) - (4) - (5,751)
Adjustments - (5) - 76 - - - - - - - 71
(3,986) (718) (669) (3,612) (95) (161) (434) (1,749) (1,517) (7) - (12,949)

At fair value 30 June 2021 381,124 63,731 19,266 43,856 2,918 3,041 39,029 24,035 3,581 85 4,082 584,747
Accumulated depreciation at 30 June 2021 (93,943) (5,983) (3,381) (20,924) (1,198) (2,020) (13,198) (16,011) (2,768) (25) - (159,450)
287,181 57,749 15,885 22,932 1,720 1,021 25,831 8,024 813 60 4,082 425,297

Page 35
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

Acquisition
The purchase method of accounting is used for all acquisitions of assets, being the fair value of assets provided as consideration at the date of
acquisition plus any incidental costs attributable to the acquisition. Fair value is the price that would be received to sell an asset (or paid to transfer a
liability) in an orderly transaction between market participants at the measurement date.
Where assets are constructed by Council, cost includes all materials used in construction, direct labour, borrowing costs incurred during construction,
and an appropriate share of directly attributable variable and fixed overheads.
In accordance with Council's policy, the threshold limits have applied when recognising assets within an applicable asset class and unless otherwise
stated are consistent with the prior year.

Depreciation Period Threshold Limit

Asset recognition thresholds and depreciation periods $'000

Land & land improvements
land - 10
land improvements 25 years 10
Buildings
buildings 100 years 10
building improvements 10 years 10
leasehold improvements 5-40 years 10
Plant and Equipment
plant, machinery and equipment 10 years 10
fixtures, fittings and furniture 10 years 10
computers and telecommunications 3-5 years 10
motor vehicles 2-5 years 10
Infrastructure
road pavements and seals 12-100 years 10
road formation and earthworks 100 years 10
road kerb, channel and minor culverts 80 years 10
bridges 80-100 years 10
footpaths and cycleways 8-50 years 10
drainage 100 years 10
recreational, leisure and community facilities 25 years 10
waste management 3-6 years 10
parks, open space and streetscapes 25 years 10

Land under roads

Council recognises land under roads it controls at fair value.

Depreciation and amortisation

Buildings, land improvements, plant and equipment, infrastructure, and other assets having limited useful lives are systematically depreciated over
their useful lives to the Council in a manner which reflects consumption of the service potential embodied in those assets. Estimates of remaining
useful lives and residual values are made on a regular basis with major asset classes reassessed annually. Depreciation rates and methods are
reviewed annually.
Where assets have separate identifiable components that are subject to regular replacement, these components are assigned distinct useful lives and
residual values and a separate depreciation rate is determined for each component.
Road earthworks are not depreciated on the basis that they are assessed as not having a limited useful life.
Straight line depreciation is charged based on the residual useful life as determined each year.
Depreciation periods used are listed above and are consistent with the prior year unless otherwise stated.

Repairs and maintenance

Where the repair relates to the replacement of a component of an asset and the cost exceeds the capitalisation threshold the cost is capitalised and
depreciated. The carrying value of the replaced asset is expensed.
Leasehold improvements
Leasehold improvements are recognised at cost and are amortised over the unexpired period of the lease or the estimated useful life of the
improvement, whichever is the shorter.

Page 36
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

Valuation of land and buildings

Valuation of land and buildings were undertaken by a qualified independent valuer Ming Zhi Lei (Assetic Pty Ltd). The valuation of land and buildings is
at fair value, being market value based on highest and best use permitted by relevant land planning provisions. Where land use is restricted through
existing planning provisions the valuation is reduced to reflect this limitation. This adjustment is an unobservable input in the valuation. The
adjustment has no impact on the comprehensive income statement.

Specialised land is valued at fair value using a discounted average of land values across the shire. Specialised land was revalued this year using a
discounted average of data from the Valuer General.

Any significant movements in the unobservable inputs for land and land under roads will have a significant impact on the fair value of these assets.
The date of the current valuation is detailed in the following table.
Details of the Council’s land and buildings and information about the fair value hierarchy as at 30 June 2021 are as follows:

Level 1 Level2 Level 3 Date of Valuation

$'000 $'000 $'000
Land - specialised - - 2,540 Jan-21
Land - non specialised - 10,096 - Jan-21
Heritage buildings - - 13,718 Jun-21
Buildings - specialised - - 32,549 Jun-21
Buildings - non specialised - 4,070 - Jun-21
Total - 14,166 48,807

Valuation of infrastructure
Valuations of sealed road has been determined in accordance with a independent valuation from Infrastructure Management Group. Valuation of
unsealed roads were completed internally with reference to the gravel road condition assessment manual.
A deskop review was completed by Assetic Pty Ltd on all asset classes as at 30 June 2021. Where a material variation in the value of the asset class
was determined the class was revalued.
The date of the current valuation is detailed in the following table.
The valuation is at fair value based on replacement cost less accumulated depreciation as at the date of valuation.
Details of the Council’s infrastructure and information about the fair value hierarchy as at 30 June 2021 are as follows:

Level 1 Level2 Level 3 Date of Valuation

$'000 $'000 $'000
Roads - - 287,181 Jun-20
Bridges - - 57,749 Jun-21
Footpaths and cycleways - - 15,885 Jun-21
Drainage - - 22,932 Jun-21
Recreational, leisure and community facilities - - 1,720 Jun-21
Parks, open space and streetscapes - - 1,021 Jun-21
Kerb and Channel - - 25,831 Jun-20
Culverts and Retaining Walls - - 8,024 Jun-21
Waste management - - 813 N/A
Other infrastructure - - 60 Jun-21
Total - - 421,216

Page 37
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

Description of significant unobservable inputs into level 3 valuations

Specialised land and land under roads is valued using a market based direct comparison technique. Significant unobservable inputs include the
extent and impact of restriction of use and the market cost of land per square metre. The extent and impact of restrictions on use varies and results in
a reduction to surrounding land values of 95%. The market value of land varies significantly depending on the location of the land and the current
market conditions. Currently land values range between $7 and $80 per square metre.

Specialised buildings are valued using a depreciated replacement cost technique. Significant unobservable inputs include the current replacement
cost and remaining useful lives of buildings. Current replacement costs is calculated on a square metre basis and ranges from $2,250 to $2,600 per
square metre. The remaining useful lives of buildings are determined on the basis of the current condition of buildings and vary from 10 years to 50
years. Replacement cost is sensitive to changes in market conditions, with any increase or decrease in cost flowing through to the valuation. Useful
lives of buildings are sensitive to changes in expectations or requirements that could either shorten or extend the useful lives of buildings.

Infrastructure assets are valued based on the depreciated replacement cost. Significant unobservable inputs include the current replacement cost
and remaining useful lives of infrastructure. The remaining useful lives of infrastructure assets are determined on the basis of the current condition of
the asset and vary from 10 years to 100 years. Replacement cost is sensitive to changes in market conditions, with any increase or decrease in cost
flowing through to the valuation. Useful lives of infrastructure are sensitive to changes in use, expectations or requirements that could either shorten or
extend the useful lives of infrastructure assets.

2021 2020
Reconciliation of specialised land $'000 $'000
Land under roads 2,540 2,313
Total specialised land 2,540 2,313

Page 38
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

2021 2020
6.2 Investments in associates, joint arrangements and subsidiaries $'000 $'000

(a) Investments in associates

Investments in associates accounted for by the equity method are:
Corangamite Library Corporation - 328

Corangamite Regional Library Corporation

Background
Council shares an interest in the Corangamite regional library corporation with the Colac
Otway Shire, Moyne Shire and Warrnambool City Council. Council's share of the
investment in the library is based on the census estimates of the Corangamite Shire's
population as percentage of the total populations of the four Councils. The equity share is
based on the audited accounts for the year ended 30 June 2021. Corangamite's share as
at 30 June 2021 is 17.86% (2019-2020 17.86%)

Fair value of Council's investment in Corangamite Regional Library Corporation - -

Council's share of accumulated surplus/(deficit)

Council's share of accumulated surplus(deficit) at start of year 317 282
Reported surplus(deficit) for year - 35
Transfers (to) from reserves - -
Council's share of accumulated surplus(deficit) at end of year 317 317
Council's share of reserves
Council's share of reserves at start of year 11 11
Transfers (to) from reserves - -
Council's share of reserves at end of year 11 11
Movement in carrying value of specific investment
Carrying value of investment at start of year 328 293
Share of surplus(deficit) for year - 35
Share of asset revaluation - -
Carrying value of investment at end of year 328 328

Associates are all entities over which Council has significant influence but not control or joint control. Investments in associates are accounted
for using the equity method of accounting, after initially being recognised at cost.

Committees of management
All entities controlled by Council that have material revenues, expenses, assets or liabilities, such as committees of management, have been
included in this financial report. Any transactions between these entities and Council have been eliminated in full.

Page 39
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
No. No.
Note 7 People and relationships
7.1 Council and key management remuneration
(a) Related Parties
Parent entity
Corangamite Shire Council is the parent entity.
Subsidiaries and Associates
Interests in subsidiaries and associates are detailed in Note 6.2.

(b) Key Management Personnel

Details of persons holding the position of Councillor or other members of key management personnel at any time during the year are:
Councillors Councillor Ruth Gstrein - Mayor
Councillor Jo Beard - Deputy Mayor
Councillor Geraldine Conheady
Councillor Helen Durant (ceased October 2020)
Councillor Lesley Brown (ceased October 2020)
Councillor Neil Trotter (ceased October 2020)
Councillor Simon Illingworth (ceased October 2020)
Councillor Kate Makin (commenced 17 November 2020)
Councillor Nick Cole (commenced 17 November 2020)
Councillor Laurie Hickey (commenced 17 November 2020)
Councillor Jamie Vogels (commenced 17 November 2020)

Total Number of Councillors 11 7

Andrew Mason, Chief Executive Officer

David Rae, Director Corporate and Community Services
Brooke Love, Director Works and Services
Justine Linley, Director Sustainable Development (appointed in November 2020)

Total of Chief Executive Officer and other Key Management Personnel 4 4

Total Number of Key Management Personnel 15 11

(c) Remuneration of Key Management Personnel 2021 2020

$ $
Total remuneration of key management personnel was as follows:
Short-term benefits 887 843
Long-term benefits 16 15
Post employment benefits 65 67
Total 968 925

The numbers of key management personnel whose total remuneration from Council and any related
entities, fall within the following bands: 2021 2020
No. No.

$0 - $10,000 3 -
$10,000 - $19,999 4 1
$20,000 - $29,999 3 5
$50,000 - $59,999 1 -
$60,000 - $69,999 - 1
$90,000 - $99,999 - 1
$120,000 - $129,999 1 -
$160,000 - $169,999 - 1
$170,000 - $179,999 1 -
$180,000 - $189,999 - 1
$190,000 - $199,999 1 -
$250,000 - $259,999 - 1
$260,000 - $269,999 1 -
15 11

Page 40
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
(d) Senior Officer Remuneration

A Senior Officer is an officer of Council, other than Key Management Personnel, who:
a) has management responsibilities and reports directly to the Chief Executive; or
b) whose total annual remuneration exceeds $151,000

Corangamite Shire Council has no Senior Officers meeting this definition (2020 - Nil)

7.2 Related party disclosure

(a) Transactions with related parties

During the period Council entered into the following transactions with related parties.

Councillor Related Party Nature of relationship Terms Aggregated Total

Cr Gstrein Rustic Tarts Food Business partner Commercial $1,302

(b) Outstanding balances with related parties

The following balances are outstanding at the end of the reporting period in relation to transactions
with related parties

Nil

(c) Loans to/from related parties

The aggregate amount of loans in existence at balance date that have been made, guaranteed or
secured by the council to a related party as follows:

Nil

(d) Commitments to/from related parties

The aggregate amount of commitments in existence at balance date that have been made,
guaranteed or secured by the council to a related party are as follows:

Nil

Page 41
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

Note 8 Managing uncertainties

8.1 Contingent assets and liabilities

(a) Contingent assets

Nil

Operating lease receivables

The Council has entered into commercial property leases on its investment property, consisting of surplus freehold office complexes. These
properties held under operating leases have remaining non-cancellable lease terms of between 1 and 10 years. All leases include a CPI
based revision of the rental charge annually.

Future undiscounted minimum rentals receivable under non-cancellable operating leases are as follows:

2021 2020
$'000 $'000
Not later than one year 42 53
Later than one year and not later than five years 172 170
Later than five years 360 404
574 627

(b) Contingent liabilities

Contingent assets and contingent liabilities are not recognised in the Balance Sheet, but are disclosed and if quantifiable, are measured at
nominal value. Contingent assets and liabilities are presented inclusive of GST receivable or payable, respectively.

Superannuation
Council has obligations under a defined benefit superannuation scheme that may result in the need to make additional contributions to the
scheme, matters relating to this potential obligation are outlined below. As a result of the volatility in financial markets the likelihood of
making such contributions in future periods exists.

Future superannuation contributions

In addition to the disclosed contributions, Corangamite Shire Council has no unfunded liability payments to Vision Super (2019-2020 $Nil)
There were no contributions outstanding and no loans issued from or to the above schemes as at 30 June 2021. The expected contributions
to be paid to the Defined Benefit category of Vision Super for the year ending 30 June 2021 are $142,000

Landfill
Council operates a landfill. Council will have to carry out site rehabilitation works in the future. At balance date Council is unable to accurately
assess the financial implications of such works.

Insurance claims
Council does not have any major insurance claims that could have a material impact on future operations as at the 30 June 2021.

Legal matters
Council does not have any major legal matters that could have a material impact on future operations as at the 30 June 2021.

Liability Mutual Insurance

Council is a participant of the MAV Liability Mutual Insurance (LMI) Scheme. The LMI scheme provides public liability and professional
indemnity insurance cover. The LMI scheme states that each participant will remain liable to make further contributions to the scheme in
respect of any insurance year in which it was a participant to the extent of its participant’s share of any shortfall in the provision set aside in
respect of that insurance year, and such liability will continue whether or not the participant remains a participant in future insurance years.

Page 42
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

(c) Guarantees for loans to other entities

Guarantee - Cobden Football Netball Club - Original Loan $200,000
The amount outstanding as at 30 June 2021 is $Nil (2020 $Nil)
Guarantee is in respect of a loan from the Bendigo Bank
Guarantee - Camperdown Football Netball Club - Original Loan $100,000
The amount outstanding as at 30 June 2021 is $95,716 (2020 $100,000)
Guarantee is in respect of a loan from the Bendigo Bank
Security Deposit Guarantee - National Australia Bank
This guarantee has been in place since 9 February 1996 for $45,000
Contract Performance Guarantee - Department of Natural Resources and Environment
This guarantee has been in place since 24 March 1999 for $42,500
Security Deposit Guarantee - Westpac Bank
This guarantee has been in place since 15 August 2007 for $100,000
Contract Performance Guarantee - State of Victoria - Environment Protection Authority
This guarantee has been in place since 30 April 2008 for $728,000. The guarantee is in respect of remedial action for the
Corangamite Regional Landfill at Naroghid
Contract Performance Guarantee - Warrnambool City Council
This guarantee has been in place since 2 April 2019 for $25,000

The amount disclosed for financial guarantee in this note is the nominal amount of the underlying loan that is guaranteed by the Council, not
the fair value of the financial guarantee.
Financial guarantee contracts are not recognised as a liability in the balance sheet unless the lender has exercised their right to call on the
guarantee or Council has other reasons to believe that it is probable that the right will be exercised.

8.2 Change in accounting standards

Certain new Australian Accounting Standards and interpretations have been published that are not mandatory for the 30 June 2021 reporting
period. Council assesses the impact of these new standards. As at 30 June 2021 there were no new accounting standards or interpretations
issued by the AASB which are applicable for the year ending 30 June 2022 that are expected to impact Council.

8.3 Financial instruments

(a) Objectives and policies
The Council's principal financial instruments comprise cash assets, term deposits, receivables (excluding statutory receivables), payables
(excluding statutory payables) and bank borrowings. Details of the significant accounting policies and methods adopted, including the criteria
for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument is disclosed in the notes of the financial statements. Risk management is carried out by senior
management under policies approved by the Council. These policies include identification and analysis of the risk exposure to Council and
appropriate procedures, controls and risk minimisation.

(b) Market risk

Market risk is the risk that the fair value or future cash flows of council financial instruments will fluctuate because of changes in market
prices. The Council's exposure to market risk is primarily through interest rate risk with only insignificant exposure to other price risks and no
exposure to foreign currency risk.

Interest rate risk

Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to
changes in market interest rates. Council's interest rate liability risk arises primarily from long term loans and borrowings at fixed rates which
exposes council to fair value interest rate risk / Council does not hold any interest bearing financial instruments that are measured at fair
value, and therefore has no exposure to fair value interest rate risk. Cash flow interest rate risk is the risk that the future cash flows of a
financial instrument will fluctuate because of changes in market interest rates. Council has minimal exposure to cash flow interest rate risk
through its cash and deposits that are at floating rates.

Investment of surplus funds is made with approved financial institutions under the Local Government Act 1989 . Council manages interest
rate risk by adopting an investment policy that ensures:

- diversification of investment product;

- monitoring of return on investment; and
- benchmarking of returns and comparison with budget.

There has been no significant change in the Council's exposure, or its objectives, policies and processes for managing interest rate risk or the
methods used to measure this risk from the previous reporting period.

Interest rate movements have not been sufficiently significant during the year to have an impact on the Council's year end result.
Page 43
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

(c) Credit risk

Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and cause Council to make a
financial loss. Council have exposure to credit risk on some financial assets included in the balance sheet. Particularly significant areas of
credit risk exist in relation to outstanding fees and fines as well as loans and receivables from sporting clubs and associations. To help
manage
- councilthis
haverisk:
a policy for establishing credit limits for the entities council deal with;
- council may require collateral where appropriate; and
- council only invest surplus funds with financial institutions which have a recognised credit rating specified in council's investment policy.
Receivables consist of a large number of customers, spread across the ratepayer, business and government sectors. Credit risk associated
with the council's financial assets is minimal because the main debtor is secured by a charge over the rateable property.
There are no material financial assets which are individually determined to be impaired.
Council may also be subject to credit risk for transactions which are not included in the balance sheet, such as when council provide a
guarantee for another party. Details of our contingent liabilities are disclosed in Note 8.1(b).
The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the balance sheet and notes to the financial statements. Council does not hold any collateral.

(d) Liquidity risk

Liquidity risk includes the risk that, as a result of council's operational liquidity requirements it will not have sufficient funds to settle a
transaction when required or will be forced to sell a financial asset at below value or may be unable to settle or recover a financial asset.
To help reduce these risks Council:
- have a liquidity policy which targets a minimum and average level of cash and cash equivalents to be maintained;
- have readily accessible standby facilities and other funding arrangements in place;
- have a liquidity portfolio structure that requires surplus funds to be invested within various bands of liquid instruments;
- monitor budget to actual performance on a regular basis; and
- set limits on borrowings relating to the percentage of loans to rate revenue and percentage of loan principal repayments to rate revenue.

The Council's maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed on the face of the balance sheet
and the amounts related to financial guarantees disclosed in Note 8.1(c), and is deemed insignificant based on prior periods' data and current
assessment of risk.
There has been no significant change in Council's exposure, or its objectives, policies and processes for managing liquidity risk or the
methods used to measure this risk from the previous reporting period.
With the exception of borrowings, all financial liabilities are expected to be settled within normal terms of trade.
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

(e) Sensitivity disclosure analysis

Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the
financial markets, Council believes the following movements are 'reasonably possible' over the next 12 months:
- A parallel shift of + 0.5% and -0.2% in market interest rates (AUD) from year-end rates of 0.3%.
These movements will not have a material impact on the valuation of Council's financial assets and liabilities, nor will they have a material
impact on the results of Council's operations.

Page 44
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

8.4 Fair value measurement

Fair value hierarchy
Council's financial assets and liabilities are not valued in accordance with the fair value hierarchy , Council's financial assets and liabilities are
measured at amortised cost.
Council measures certain assets and liabilities at fair value where required or permitted by Australian Accounting Standards. AASB 13 Fair
value measurement, aims to improve consistency and reduce complexity by providing a definition of fair value and a single source of fair value
measurement and disclosure requirements for use across Australian Accounting Standards.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within a fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable;
Level and
3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For the purpose of fair value disclosures, Council has determined classes of assets and liabilities on the basis of the nature, characteristics and
risks of the asset or liability and the level of the fair value hierarchy as explained above.
In addition, Council determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Revaluation
Subsequent to the initial recognition of assets, non-current physical assets, other than plant and equipment, are measured at their fair value,
being the price that would be received to sell an asset (or paid to transfer a liability) in an orderly transaction between market participants at the
measurement date. At balance date, the Council reviewed the carrying value of the individual classes of assets measured at fair value to
ensure that each asset materially approximated its fair value. Where the carrying value materially differed from the fair value at balance date,
the class of asset was revalued.

Fair value valuations are determined in accordance with a valuation hierarchy. Changes to the valuation hierarchy will only occur if an external
change in the restrictions or limitations of use of an asset result in changes to the permissible or practical highest and best use of the asset. In
addition, Council undertakes a formal revaluation of land, buildings, and infrastructure assets on a regular basis ranging from 2 to 5 years. The
valuation is performed either by experienced council officers or independent experts.
Where the assets are revalued, the revaluation increments are credited directly to the asset revaluation reserve except to the extent that an
increment reverses a prior year decrement for that class of asset that had been recognised as an expense in which case the increment is
recognised as revenue up to the amount of the expense. Revaluation decrements are recognised as an expense except where prior
increments are included in the asset revaluation reserve for that class of asset in which case the decrement is taken to the reserve to the extent
of the remaining increments. Within the same class of assets, revaluation increments and decrements within the year are offset.

Impairment of assets
At each reporting date, the Council reviews the carrying value of its assets to determine whether there is any indication that these assets have
been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs of disposal
and value in use, is compared to the assets carrying value. Any excess of the assets carrying value over its recoverable amount is expensed to
the comprehensive income statement, unless the asset is carried at the revalued amount in which case, the impairment loss is recognised
directly against the revaluation surplus in respect of the same class of asset to the extent that the impairment loss does not exceed the amount
in the revaluation surplus for that same class of asset.

8.5 Events occurring after balance date

No matters have occurred after balance date that require disclosure in the financial report.

Page 45
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
Note 9 Other matters
9.1 Reserves
(a) Asset revaluation reserves
Balance at
beginning of Increment Balance at end of
reporting period (decrement) reporting period
$'000 $'000 $'000

2021
Property
Land and land improvements 6,129 1,368 7,497
Buildings 32,024 5,973 37,997
38,153 7,341 45,494
Infrastructure
Roads 173,255 - 173,255
Bridges 46,303 5,326 51,629
Footpaths and cycleways 14,788 1,465 16,253
Drainage 16,323 3,691 20,014
Kerb and channel 22,897 - 22,897
Recreational, leisure and community facilities 58 96 154
Parks, open space and streetscapes 26 105 131
Culverts and retaining walls 5,288 740 6,028
Furniture and equipment 141 - 141
Other infrastructure 1 10 11
279,080 11,431 290,511
Total asset revaluation reserves 317,233 18,772 336,006

2020
Property
Land and land improvements 5,561 568 6,129
Buildings 32,024 - 32,024
37,586 568 38,153
Infrastructure
Roads 146,853 26,402 173,255
Bridges 46,303 - 46,303
Footpaths and cycleways 14,788 - 14,788
Drainage 16,323 - 16,323
Kerb and channel 22,897 - 22,897
Recreational, leisure and community facilities 58 - 58
Parks, open space and streetscapes 26 - 26
Culverts and retaining walls 5,288 - 5,288
Furniture and equipment 141 - 141
Other infrastructure 1 - 1
252,678 26,402 279,080
Total asset revaluation reserves 290,264 26,970 317,233

The asset revaluation reserve is used to record the increased (net) value of Council's assets over time.

Page 46
Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
(b) Other reserves
Balance at Transfer from Transfer to
beginning of accumulated accumulated Balance at end of
reporting period surplus surplus reporting period
$'000 $'000 $'000 $'000

2021
Open space developer contributions 26 - - 26
Landfill rehabilitation reserve 572 80 - 652
Superannuation reserve 1,298 10 - 1,308
Infrastructure reserve 6,324 2,000 (2,018) 6,306
Rural Councils Transformation Project reserve 4,432 11 (2) 4,440
Other reserves 356 104 (126) 334
Total Other reserves 13,008 2,204 (2,147) 13,066

2020
Open space developer contributions 43 - (18) 26
Landfill rehabilitation reserve 481 92 - 572
Superannuation reserve 1,278 20 - 1,298
Infrastructure reserve 6,065 400 (141) 6,324
Rural Councils Transformation Project reserve - 4,432 - 4,432
Other reserves 313 126 (83) 356
Total Other reserves 8,180 5,070 (241) 13,008

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Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
2021 2020
$'000 $'000
9.2 Reconciliation of cash flows from operating activities to surplus/(deficit)

Surplus/(deficit) for the year 2,701 378

Add/(deduct) Non Cash items

Depreciation 12,611 13,088
Amortisation 986 479
Bad and doubtful debts 3 13
Finance costs - leases 99 99
(Profit)/loss on disposal of property, infrastructure, plant and equipment 3,871 3,028
Reassessment of useful life of waste assets - (422)
Unrealised (gain)/loss on investments - 41
Fair value adjustments (633) 201
Prior year WIP written off 158 652
Found Assets (688) -

Change in assets and liabilities:

(Increase)/decrease in trade and other receivables 1,490 1,227
(Increase)/decrease in other assets (306) 322
Increase/(decrease) in trade and other payables (1,290) 1,044
Increase/(decrease) in trust fund and deposits (29) 19
(Increase)/decrease in inventories (32) 18
Increase/(decrease) in unearned income 11,275 224
Increase/(decrease) in provisions 427 (44)
(Increase)/decrease in Library Corporation - (35)
Net cash provided by/(used in) operating activities 30,643 20,331

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Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
9.3 Superannuation
Council makes the majority of its employer superannuation contributions in respect of its employees to the Local Authorities Superannuation
Fund (the Fund). This Fund has two categories of membership, accumulation and defined benefit, each of which is funded differently.
Obligations for contributions to the Fund are recognised as an expense in Comprehensive Operating Statement when they are made or due.

Accumulation
Council makes both employer and employee contributions to The Fund's accumulation category, Vision MySuper/Vision Super Saver, on a
progressive basis. Employer contributions are normally based on a fixed percentage of employee earnings (for the year ended 30 June 2021,
this was 9.5% as required under Superannuation Guarantee (SG) legislation).
Defined Benefit
Council does not use defined benefit accounting for its defined benefit obligations under the Fund's Defined Benefit category. This is because
the Fund's Defined Benefit category is a pooled multi-employer sponsored plan.
There is no proportional split of the defined benefit liabilities, assets or costs between the participating employers as the defined benefit
obligation is a floating obligation between the participating employers and the only time that the aggregate obligation is allocated to specific
employers is when a call is made. As a result, the level of participation of Council in the Fund cannot be measured as a percentage compared
with other participating employers. Therefore, the Fund Actuary is unable to allocate benefit liabilities, assets and costs between employers for
the purposes of AASB 119 Employee Benefits.
Funding arrangements
Council makes employer contributions to the Defined Benefit category of the Fund at rates determined by the Trustee on the advice of the
Fund Actuary.
A triennial actuarial review for the Defined Benefit category as at 30 June 2020 was conducted and completed by the due date of 31
December 2020. The vested benefit index (VBI) of the Defined Benefit category of which Council is a contributing employer was 104.6%. The
financial assumptions used to calculate the VBI were:
Net investment returns 5.6% pa
Salary information 2.5% pa for two years and 2.75% pa thereafter
Price inflation (CPI) 2.0% pa.
As at 30 June 2021, an interim actuarial investigation is underway as the Fund provides lifetime pensions in the Defined Benefit category.
Vision Super has advised that the VBI at June 2021 was 109.7%
The VBI is used as the primary funding indicator. Because the VBI was above 100%, the 30 June 2020 actuarial investigation determined the
Defined Benefit category was in a satisfactory financial position and that no change was necessary to the Defined Benefit category’s funding
arrangements from prior years.
Employer contributions
Regular contributions
On the basis of the results of the 2020 triennial actuarial investigation conducted by the Fund Actuary, Council makes employer contributions
to the Fund’s Defined Benefit category at rates determined by the Fund’s Trustee. For the year ended 30 June 2021, this rate was 9.5% of
members' salaries (9.5% in 2019/2020). This rate is expected to increase in line with any increases in the SG contribution rate and was
reviewed as part of the 30 June 2020 triennial valuation.
In addition, Council reimburses the Fund to cover the excess of the benefits paid as a consequence of retrenchment above the funded
resignation or retirement benefit.

Funding calls
If the Defined Benefit category is in an unsatisfactory financial position at an actuarial investigation or the Defined Benefit category’s VBI is
below its shortfall limit at any time other than the date of the actuarial investigation, the Defined Benefit category has a shortfall for the
purposes of SPS 160 and the Fund is required to put a plan in place so that the shortfall is fully funded within three years of the shortfall
occurring. The Fund monitors its VBI on a quarterly basis and the Fund has set its shortfall limit at 97%.
In the event that the Fund Actuary determines that there is a shortfall based on the above requirement, the Fund’s participating employers
(including Council) are required to make an employer contribution to cover the shortfall.
Using the agreed methodology, the shortfall amount is apportioned between the participating employers based on the pre-1 July 1993 and
post-30 June 1993 service liabilities of the Fund’s Defined Benefit category, together with the employer’s payroll at 30 June 1993 and at the
date the shortfall has been calculated.
Due to the nature of the contractual obligations between the participating employers and the Fund, and that the Fund includes lifetime
pensioners and their reversionary beneficiaries, it is unlikely that the Fund will be wound up.
If there is a surplus in the Fund, the surplus cannot be returned to the participating employers.
In the event that a participating employer is wound-up, the defined benefit obligations of that employer will be transferred to that employer’s
successor.

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Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021
The 2020 triennial actuarial investigation surplus amounts
An actuarial investigation is conducted annually for the Defined Benefit category of which Council is a contributing employer. Generally, a full
actuarial investigation is conducted every three years and interim actuarial investigations are conducted for each intervening year. A full
investigation was conducted as at 30 June 2020.
The Fund’s actuarial investigation identified the following for the Defined Benefit category of which Council is a contributing employer:

2020 2019
(Triennial) (Interim)
$m $m
- A VBI Surplus 100.0 151.3
- A total service liability surplus 200.0 233.4
- A discounted accrued benefits surplus 217.8 256.7

The VBI surplus means that the market value of the fund’s assets supporting the defined benefit obligations exceed the vested benefits that
the defined benefit members would have been entitled to if they had all exited on 30 June 2020.

The total service liability surplus means that the current value of the assets in the Fund’s Defined Benefit category plus expected future
contributions exceeds the value of expected future benefits and expenses as at 30 June 2020.
The discounted accrued benefit surplus means that the current value of the assets in the Fund’s Defined Benefit category exceeds the value
of benefits payable in the future but accrued in respect of service to 30 June 2020.
Council was notified of the 30 June 2020 VBI during August 2020 (2019: August 2019).

The 2021 interim actuarial investigation

An interim actuarial investigation is being conducted for the Fund’s position as at 30 June 2021 as the Fund provides lifetime pensions in the
Defined Benefit category. It is anticipated that this actuarial investigation will be completed by October 2021.
Superannuation contributions
Contributions by Council (excluding any unfunded liability payments) to the above superannuation plans for the financial year ended 30 June
2021 are detailed below:
2021 2020
Scheme Type of Scheme Rate $'000 $'000
Vision super Defined benefit 9.50% 142 148
Vision super Accumulation fund 9.50% 926 968
Other Funds Accumulation fund 9.50% 786 582

In addition to the above contributions, Council has no unfunded liability payments to Vision Super (2019-2020 $Nil).
There were no contributions outstanding and no loans issued from or to the above schemes as at 30 June 2021.
The expected contributions to be paid to the Defined Benefit category of Vision Super for the year ending 30 June 2022 is $142,000.

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Corangamite Shire Council
2020-2021 Financial Report
Notes to the Financial Report
For the Year Ended 30 June 2021

10 Change in accounting policy

AASB 1059 Service Concession Arrangements: Grantors (AASB 1059) (applies 2020/21 for LG Sector)
Council has adopted AASB 1059 Service Concession Arrangements: Grantors , from 1 July 2020.

AASB 2018-7 Amendments to Australian Accounting Standards - Definition of Material (applies 2020/21 for LG Sector)

Council has adopted AASB 2018-7 Amendments to Australian Accounting Standards - Definition of Material, from 1 July 2020.

AASB 2019-1 Amendments to Australian Accounting Standards - References to the Conceptual Framework (applies 2020/21 for
LG Sector)
Council has adopted AASB 2019-1 Amendments to Australian Accounting Standards - References to the Conceptual Framework from 1
July 2020 (To be described and completed)

It is not expected that these standards will have any significant impact on council.

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