General Purpose Financial statements

Provides an overview of Hills Shire Council's highlights and achievements, a message from the Chairman and General Manager and a financial overview. A description of the nature of the Council's operations and its main activities is provided in Note 2(b). iii).

Financial statementsContents of the Notes accompanying the Financial Statements

Financial statements

Summary of Significant Accounting Policies

Financial statementsThe Hills Shire Council

Summary of Significant Accounting Policies (continued)

The council is a member of the following county councils (which are corporate bodies under the Local Government Act); Realized and unrealized gains and losses arising from changes in the fair value of financial assets classified as "fair value through profit or loss". Any gain or loss arising from derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Council's Income Statement in the year the asset is derecognised.

A provision is made for the estimated present value of the costs of environmental cleanup obligations outstanding at the balance sheet date.

Income from Continuing Operations

Income from Continuing Operations (continued)

TOTAL OTHER REVENUE

Expenses from Continuing Operations

TOTAL EMPLOYEE COSTS EXPENSED

Operating lease Payments are attributable to

Expenses from Continuing Operations (continued)

IMPAIRMENT COSTS EXPENSED

TOTAL OTHER EXPENSES

Gains or Losses from the Disposal of Assets Plant & Equipment

NET GAIN/(LOSS) ON DISPOSAL OF ASSETS

TOTAL CASH ASSETS, CASH EQUIVALENTS & INVESTMENTS

Receivables

TOTAL NET RECEIVABLES

Inventories & Other Assets

TOTAL INVENTORIES / OTHER ASSETS

Statement of Cash Flows - Additional Information

Statement of Cash Flows - Additional Information (continued)

Commitments for Expenditure

Commitments for Expenditure (continued)

Unrestricted Current Ratio
Debt Service Ratio Debt Service Cost
Rates & Annual Charges Coverage Ratio
Rates, Annual Charges, Interest &
Building & Infrastructure Renewals Ratio

Additional Fees Outstanding Percentages, Annual and Additional Fees Outstanding Rates, Annual and Additional Fees Collectable. 3) See note 10(c) - excludes all liabilities and provisions not expected to be paid in the next 12 months (incl. 4) Asset renewals represent the replacement and/or refurbishment of existing assets to a similar capacity or performance.

To assess the Board's degree of reliance on revenue from tariffs and annual charges and to further the purpose of Tariffs &.

Investment Properties

Financial Risk Management

Financial Risk Management (continued)

The main risk associated with these receivables is credit risk - the risk that debts owed to the municipality will not be repaid in full. Credit risk on rates and annual charges is minimized by the municipality's ability to secure a charge over the land related to the debt - that is, the land can be sold to collect the debt. The council can also charge interest on arrears and annual fees at higher than market rates, further encouraging debt payment.

The level of outstanding debtors is reported monthly and benchmarks are set and monitored for acceptable collection performance. Creditors and Loans are both subject to liquidity risk - the risk that insufficient funds may be on hand to meet Creditors and Loans are both subject to liquidity risk - the risk that insufficient funds may be on hand to meet payment obligations as and when due. The Board manages this risk by monitoring its cash flow requirements and liquidity levels and maintaining an adequate cash buffer.

Payment terms may also be extended (in extenuating circumstances) and overdraft facilities used as required. Loans are also subject to interest rate risk - the risk that fluctuations in interest rates could adversely affect borrowing costs and debt service requirements. Council manages this risk by diversifying loan types, maturities and interest rate structures.

Material Budget Variations

Material Budget Variations (continued)

Hills Shire Council's Notes to the Financial Statements for the financial year ended 30 June 2011 for the financial year ended 30 June 2011 Note 17. Progress Statement for Contributions The table below reflects the position of each Contribution Plan including Internal Borrowings from the General Fund and from contributions that are not under a plan. NSW Government establishes $50 million Priority Infrastructure Fund (PIF) to service transition for reforms00This fund aims to transition The NSW Government has established a $50 million Priority Infrastructure Fund (PIF) to served as a transition fund10 for this 11 and the 2011-12 financial year and will enable Councils to recover the difference between the rate of contributions included in the contribution plan (which is assessed as reasonable by IPART) and the $30k limit.

Based on the current assumptions and indices used, the effect of the rate cap of USD 30,000 on the adopted contribution plans is shortfalls of USD 104 million, respectively. USD and 79 million USD in CP13 North Kellyville Contribution Plan and CP12 Balmoral Road Contribution Plan. While grant opportunities to fund beautification may arise over time, the realistic options to fund this deficit include: * Priority Infrastructure Fund (PIF) funding for lots approved and created since the introduction of the cap for the 2010-11 financial years and 2011-12 *FditD2010PRlOiittfdtilifttiGfildit* Funding schemes 2010 Dec. Press release - Ongoing assistance to fund essential infrastructure at Greenfield sites * Funding the shortfall through increased rates or a special levy. Calculation of developer per contributions (continued The following tables describe the receipt, interest and use of the above contributions and charges and the value of all remaining funds which are "restricted" in their future use. Statement of developer per contribution (continued S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 1 - Bella Vista Village Internal ContributionExt.Internal Projections Interest Cumulative Over orExpenses Held as Future (1,343) Financing OutstandingLoan Internal (to)/from.

Overview of Development by Contributions (Continued S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 4 - Glenhaven InternalCumulativeProjects Held as ContributionsAbout orExpensesInternalExpensesInterest Financing 1. Statement of Development by Contributions (Continued S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 7 - Southern Precincts InternalCumulative InternalHeld as InterestExpOver ofProjections ContributionsExpensesLoansInternal.Development Overview by Contributions (continued S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 9 - Castle Hill Town CentreCumulative InternalExpensesProjects Held As InterestInternalContributionsAbout OfExpenses Internal Loan Income Due/(Payable).

Statement of Contributions Develo to Contributions (continued CONTRIBUTIONS S94 - UNDER PLAN CONTRIBUTIONS PLAN NUMBER 12 - Balmoral Road InternalCumulative Over or ExpInternal ExpenditureHed as Projections ContributionsInterest BorrowingsInternal - 26 377 due/(payable). Statement of Contributions Develo to Contributions (continued CONTRIBUTIONS S94 - UND ER A PLAN PLAN CONTRIBUTION NUMBER 14 - Carlingford Withheld as ExpProjectionsCumulative InternalOver or ContributionsExpenditureInterestInternal 57 Withheld.

Contingencies & Other Assets/Liabilities Not Recognised

Contingencies & Other Assets/Liabilities Not Recognised (continued)

Controlled Entities Associated Entities & Interests in Joint Ventures

Controlled Entities, Associated Entities & Interests in Joint Ventures

Equity - Retained Earnings and Revaluation Reserves (continued)

In previous years the Council had not consolidated the operations and balance of the KKK in its Financial Reports. In accordance with AASB 108 - Accounting Policies, Changes in Accounting Estimates and Errors, the above changes have resulted in the following equity corrections:. regarding the adjustments for the end of the reporting year 30/6/09 and previous periods).

Financial Result & Financial Position by Fund Income Statement by Fund

34;Held for Sale" Non Current Assets & Disposal Groups

Financial Result & Financial Position per Fund Profit and Loss Account per Fund Profit and Loss Account per Fund.

Events occurring after Balance Sheet Date. Events occurring after Balance Sheet Date

Discontinued Operations. Discontinued Operations

Intangible Assets

Reinstatement, Rehabilitation & Restoration Liabilities

Events occurring after Balance Sheet Date

S94 Developer Contributions with Internal Borrowing Consent issued by Council.. to be attributed to remaining funds. solicit developer contributions for access contributions up to a limit of $30,000 per nd Pricing and Regulatory Tribunal. This fund is intended to be a transition ions rate contained in the contribution plan g reasonable by IPART) and the $30K limit. It is not entirely certain that this fund covers the difference between the "essential works" list in the ash used, the effect of the $30k rates and CP12 Balmoral Road Contribution Plan.

S94 Development Contributions by Internal Borrowings (Continued) $ '000 The following tables show in detail the receipt, interest and application of the above contributions and charges, and the value of any remaining funds "restricted" in their future use. S94 Develo per Internal Borrowing Contributions (Continued) $ '000 CONTRIBUTIONS S94 - BOXED PLAN NUMBER PLAN CONTRIBUTION 1 - Bella Vista Village PLAN NUMBER CONTRIBUTION 2 - West Pennant Hills. S94 Develo per Internal Borrowing Contributions (Continued) $ '000 CONTRIBUTIONS S94 - BOXED PLAN NUMBER PLAN CONTRIBUTION 3 - Crestwood PLAN CONTRIBUTION NUMBER 4 - Glenhaven.

S94 Development By Contributions With Internal Loans(continued) $'000 S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 5 - Castle Hill CONTRIBUTION PLAN NUMBER 6 - Extractive Industries. S94 Development by contributions with internal loans (continued) $'000 S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 7 - Southern Precincts CONTRIBUTION PLAN NUMBER 8 - Rouse Hill. S94 Development by contributions with internal loans (continued) $'000 S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 9 - Castle Hill Town Center CONTRIBUTION PLAN NUMBER 10 - Bannerman Road CONTRIBUTION PLAN NUMBER 11 - Annangrove Industrial.

S94 Developer by Contributions with Internal Borrowing (continued) $ '000 S94 CONTRIBUTIONS - UNDER A PLAN CONTRIBUTION PLAN NUMBER 12 - Balmoral Road CONTRIBUTION PLAN NUMBER 13 - North Kellyville. S94 Development by Contributions with Internal Loans (continued) ExpOver or Internal Opening received during the YearEarnings during BorrowingLimited Future Projections Cumulative GOAL Contributions Interest Expenses InternalHeld as income outstanding Funding due/(payable.

Council Information & Contact Details

Financial st

BacKgROunD

Special Purpose Financial Report

Index

NET ASSETS

TOTAL EQUITY

Significant Accounting Policies

These annual accounts are special purpose accounts (SPFS) prepared for use by the Council and the department for local administration. For the purposes of these statements, the Council's business activities (reported herein) are not reporting entities. Certain taxes and other costs (duly described) have been imputed for the purposes of national competition policy.

The Council has adopted the principle of 'competitive neutrality' for its business activities as part of the national competition policy applied throughout Australia at all levels of government. The “Prices & Costs for Council Businesses A Guide to Competitive Neutrality” issued by the Local Government Division in July 1997 was also accepted. The pricing and costing guidelines outline the process for identifying and allocating costs to activities and provide a standard of disclosure requirements.

Costing for Council Businesses – A Guide to Competitive Neutrality, the Council stated that the following should be considered business activities:. where the gross business turnover is more than USD 2 million). Provision of childcare services b. Provision of elderly care services, category 2. where the gross business turnover is less than USD 2 million). Amounts shown in the financial statements are in Australian currency and rounded to the nearest thousand dollars.

In carrying out its business activities, the Council is obliged to pay various taxes and financial charges. However, where the Council is exempt from taxes normally paid by private sector businesses (such as income tax), equivalent tax payments have been applied to all business activities designated by the Council and are reflected in these financial statements.

Significant Accounting Policies (continued) For the purposes of disclosing comparative

Significant Accounting Policies (continued)

Special Schedules 2010 - 2011

Community centers and halls Performing arts venues Other performing arts Other cultural services Sports grounds and venues Swimming pools. Parks & Gardens (Lakes) Other Sports and Recreation total Recreation and culture Fuel & energy. Sealed Rural Roads (SRR) - Local Sealed Rural Roads - Regional Unpaved Rural Roads (URR) - Local Unpaved Rural Roads (URR) - Regional Bridges on UR - Local.

7 - State of public works (continued) as of June 30, notes: (1). Satisfactory refers to the estimated cost of bringing the asset to a satisfactory condition as judged by the Council. 3). Current annual maintenance is what was spent in the current year to maintain the assets. asset condition 'Key' - according to the NSW Local Government Asset Accounting Manual: near perfect - Range from new or good asset not serviceable - critical, superficial deterioration beyond repair - range from generally good to considerable deterioration evident - range from fair to marginal Requires major restoration- Range from poor to critical3.