Administration Office The Gatehouse, Eastern Cemetery 141 Ormond Road, Geelong East 3219 Telephone (03) 5249 3939 Fax (03) 5221 7031 Email [email protected]Web site www.gct.net.au REPORT FOR THE FINANCIAL YEAR TO 30 JUNE 2014 Page No. REPORT OF OPERATIONS 1 Chairman’s Report 10 Further Information APPENDIX - FINANCIAL STATEMENTS 1 Certification of Financial Statements 2 Comprehensive Operating Statement 3 Balance Sheet 4 Statement of Changes in Equity 5 Cash Flow Statement 6 Notes to the Financial Statements 49 Auditor-General’s Report Cemeteries of the Trust • Geelong Eastern • Barrabool Hills, Highton • Leopold • Lorne • Flinders Memorial Park, Lara • Geelong Western • Grovedale • Drysdale • Mount Moriac • Geelong Memorial Park • Mount Duneed • Portarlington • Winchelsea and Crematorium, Mount Duneed
Transcript
Administration OfficeThe Gatehouse, Eastern Cemetery141 Ormond Road, Geelong East 3219
Cemeteries of the Trust· Geelong Eastern · Barrabool Hills, Highton · Leopold · Lorne · Flinders Memorial Park, Lara· Geelong Western · Grovedale · Drysdale · Mount Moriac · Geelong Memorial Park
· Mount Duneed · Portarlington · Winchelsea and Crematorium, Mount Duneed
Disclosure IndexThe Annual Report of the Geelong Cemeteries Trust is prepared in accordance with all relevant Victorianlegislation. This index has been prepared to facilitate identification of the Trust’s compliance withstatutory disclosure requirements.The following codes are applicable for the page references in the table below:CR – Chairman’s Report FS – Financial Statements
Legislation Requirement Page Reference
Ministerial DirectionsReport of Operations – FRD Guidance
Charter and PurposeFRD 22D Manner of establishment and the relevant Ministers CR – Page 10FRD 22D Objectives, functions, powers and duties CR – Page 1FRD 22D Nature and range of services provided CR – Pages 1 & 10Management and StructureFRD 22D Organisational structure CR – Page 11Financial and Other InformationFRD 10 Disclosure index Page (i)FRD 11A Disclosure of ex-gratia expenses FS – Page 48FRD 21B Responsible person and executive officer disclosures FS – Pages 46 & 47FRD 22D Employment and conduct principles CR – Pages 11 & 12FRD 22D Occupational health and safety policy CR – Page 12FRD 22D Organisational Chart CR – Page 11FRD 22D Summary of the financial result for the year CR – Page 2FRD 22D Subsequent events FS – Page 48FRD 22D Application and operation of Freedom of Information Act 1982 CR – Page 12FRD 22D Compliance with building & maintenance provisions of Building Act 1993 CR – Page 13FRD 22D Application and operation of the Protected Disclosures Act 2012 CR – Page 13FRD 22D Statement on National Competition Policy CR – Page 13FRD 22D Details of consultancies over $10,000 CR – Page 13FRD 22D Details of consultancies under $10,000 CR – Page 13FRD 22D Statement of availability of other information CR – Page 12FRD 22D Details of marketing activities undertaken by the Trust CR – Page 12FRD 22D Details of fees and charges levied by the Trust CR – Page 10FRD 22D Details of overseas visits CR – Page 13FRD 22D Declarations of pecuniary interests CR – Page 13FRD 24C Reporting of office-based environmental impacts CR – Page 13FRD 25A Victorian Industry Participation Policy disclosures CR – Page 13FRD 29 Workforce Data disclosures CR – Pages 11 & 12SD 4.2 (g) Specific information requirements CR – Page 1SD 4.2 (j) Signed report of operations CR – Pages 1 to 9SD 4.3.13 Data Integrity – Attestation Statement CR – Page 14SD 4.5.5 Risk Management Compliance – Attestation Statement CR – Page 14SD 4.5.5.1 Insurance Compliance – Attestation Statement CR – Page 14
I have pleasure in presenting my third Annual Report as Chairman, on the operations of the GeelongCemeteries Trust for the twelve month period from 1 July 2013 to 30 June 2014.
OBJECTIVES
The principal objectives of the Geelong Cemeteries Trust are to:
· Plan for and deliver, at reasonable cost, a high standard of ongoing service in the provision andmaintenance of burial, cremation and memorialisation facilities to the Geelong community.
· Consult with the community and the funeral industry in the Geelong region to help improve thelevel of service and facilities provided by the Trust.
· Continue the program to develop and upgrade the facilities provided at the Trust’s cemeteries,crematorium and mausoleum.
· Manage the finances of the Trust in a prudent and responsible manner.
· Train and encourage the Trust's staff to perform their duties in a caring, efficient and safemanner.
· Operate as a good corporate member of the Geelong regional community.
I am pleased to report that, in the opinion of the Trust, these objectives were fully achieved during theperiod of this report.
BURIALS, ENTOMBMENTS AND CREMATIONS
Over comparative periods, the number of cremations performed by the Trust has increased while thenumber of burials has fluctuated up and down over the past five years, with an increase in the currentreporting period. Included within the current year is a total of 30 burials provided at the three cemeterieson the Surf Coast (Mt. Moriac, Winchelsea, Lorne), which were taken over by the Trust in August 2010.
The total services provided by the Trust have increased, on average, by approximately 3.8% annuallyover this period and details of burials, entombments and cremations are outlined below:
As the Trust provides its services to a regional population of approximately 255,000 the regional deathrate in 2013/14 is slightly over eight deaths per thousand of population, with the cremation rate being62.8% of funerals serviced by the Trust. The Trust acknowledges that some Geelong deaths result inburial or cremation elsewhere and that some Geelong funerals and cremations result from the death ofpersons who lived outside the region.
The regional cremation rate had been gradually increasing since the Trust commenced operation of theonly crematorium in Geelong in 1988. Prior to 1988, the cremation rate for Geelong was approximatelytwenty-five per cent with these cremations usually being performed at Ballarat or Altona crematoria.
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GEELONG CEMETERIES TRUST
CHAIRMAN’S REPORT 2014 (Continued)
FINANCIAL MANAGEMENT
The Trust is an incorporated entity of the Victorian Public Sector. It generally operates on a self-fundingand not-for-profit basis, without subsidy from the Victorian Government, the City of Greater Geelong, SurfCoast Shire or any other source.
Revenue is raised by means of the Government-approved fees and charges earned by the Trust for theservices it directly provides.
The Operating Deficit for the Trust in the twelve month period to 30 June 2014, together with the NetAssets, is outlined in the table below, with prior years’ figures included for comparison purposes.The Deficit is attributable to the “Loss on Revaluation” of the land purchased at Marcus Hill. TheCommunity Service Obligation (CSO) with cemetery land is a discount of 95%, which equated to a loss of$1,187,500 being recognised in Expenditure in the table below.
Net Assets 11,974,790 12,451,905 12,789,796 12,304,430 10,487,697 9,188,390
In addition, an amount of $1,637,066 was expended during the reporting period to 30 June 2014 on theprovision of Fixed Assets, including the purchase of the land at Marcus Hill ($988,962 in 2013). The Trusthad also allocated significant funds in the Budget for Development Works in Lawn E at Eastern Cemeterywhich has been recognised as Operating Expenditure, impacting adversely on the Budget figures.
This is consistent with the Trust’s policy of investing available funds in the development of the cemeteriesit administers, for the long term benefit of the Geelong community.
Control of New Cemeteries
As stated earlier, the Trust assumed responsibility for the administration and operations of threecemeteries from the Surf Coast Cemeteries Trust as from 12 August 2010.
Considerable staff time was expended during the negotiations with the Surf Coast Cemeteries Trust priorto assuming control and since then has continued with the cross checking of records with current plansand receipts held to prove or correct grave allocations, etc. A significant number of improvements havealso been carried out at all three sites and this is expected to continue in 2014/15.
Major Projects
The major projects for the year were purchase of land at Marcus Hill, construction of beams in Lawn E(Eastern Cemetery), Development Works in NE Corner (Eastern Cemetery), new Catafalque at theCrematorium, Upgrading décor at the Crematorium and levelling of the Nature Strip at the LorneCemetery.
More detail is provided on these projects later in the report.
Income generated at the Trust’s crematorium is a principal source of revenue used to cross-subsidise theTrust’s current and perpetual maintenance obligations at its various other cemetery sites with aproportion of each cremation being allocated to a Plant & Equipment Replacement Reserve which willprovide for the renovation or replacement of the cremators when required. Details of the amountsallocated are shown in Note 13 of the Financial Statements. An annual allocation is also made to thePerpetual Maintenance Reserve and this is also detailed in Note 13.
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GEELONG CEMETERIES TRUST
CHAIRMAN’S REPORT 2014 (Continued)
DEVELOPMENT WORKS
The Trust’s development works program during the reporting period to 30 June 2014 included:
Administration· Purchase of land at Marcus Hill for a future cemetery site for the Bellarine Peninsula.
Eastern Cemetery, Geelong· Completion of earthworks and compaction of fill in the North-East Corner of the Cemetery.· Completion of replacement of Beams in Lawn E. (Two year project)· Road repairs and crack-sealing of internal roads.· Construction of Premium Graves at the southern side of the Mausoleum.· Construction of additional Lawn Beams.
Western Cemetery, Herne Hill· Construction of new kerb around Lawn 1.· Construction of new concrete beams in the old Latvian area now designated as a general area.
Barrabool Hills Cemetery, Highton· Construction of new dirt heap corrals.
Geelong Memorial Park & Crematorium, Armstrong Creek· Construction of a Burial Rotunda.· Landscaping around the dam to create potential memorial positions.· Purchase and installation of a new catafalque.· Upgrading décor at the Crematorium (carpet, furniture, pews, cushions, etc.)· Road repairs and crack-sealing of internal roads.
Lorne Cemetery, Lorne· Levelling of the nature strip and replacement of kerb and channel.
Drysdale Cemetery, Drysdale· Construction of Road Extension to open up a new lawn area in the cemetery.
FORWARD PLANNING
Cremation Facilities
At Geelong Memorial Park crematorium, the Trust operates two high-volume computerised cremationfurnaces, manufactured by Austeng Pty Ltd of Geelong. As each furnace alone is capable of meeting thecurrent cremation requirements of the Geelong region, the Trust has considerable reserve capacity for afuture increase in the number of cremations being carried out.
Marcus Hill Land Purchase for Development of a Cemetery for the Bellarine Peninsula
The Trust finalised purchase of approximately 40 hectares of land at Marcus Hill for the development of a cemetery site for the Bellarine Peninsula. Initial design/concept plans have been prepared and once theTrust is comfortable with the design and layout, a public consultation meeting will be held to allow thepublic the opportunity to provide comments. Copies of the development/concept plans will also be placedon site to allow any visitors to the site to get an understanding on the layout and design of the site.
Third Mausoleum for the Geelong Region
The Trust has completed construction of both Stage 1 and Stage 2 of the Mausoleum project. The Trust’sinitial mausoleum development program envisaged three stages and as Stage 1 is now sold to 81% andStage 2 to 61% planning for Stage 3 has commenced with contact being made to prepare architecturaldesigns for consideration by the Trust and the community. Approval for Stage 3 has already beenreceived from the Department of Health and it is expected that design will be completed during 2014/15with construction to commence in 2015/16.
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GEELONG CEMETERIES TRUST
CHAIRMAN’S REPORT 2014 (Continued)
FORWARD PLANNING (Continued)
Cemetery Land for the Future
The fourteen areas of Crown Land presently administered by the Trust are as detailed:
Area (ha.)
Approx. area (ha.)remaining for future
developmentThe Eastern Cemetery Geelong 28.6 5.7
Geelong Western Public Cemetery 8.4 Nil
Barrabool Hills Cemetery 4.2 0.2
Grovedale Cemetery 0.4 Nil
Geelong Memorial Park& Crematorium, Armstrong Creek 42.8 37.1
Mount Duneed Cemetery 0.8 0.3
Mount Moriac Cemetery 8.7 5.5
Winchelsea Cemetery 7.5 3.8
Lorne Cemetery 2.0 0.7
Leopold Cemetery 2.4 1.6
Drysdale Cemetery 5.7 3.7
Portarlington Cemetery 2.0 0.9
Flinders Memorial Park, Lara 25.8 24.6
Marcus Hill Greenfields Site 39.6 39.6
Total 178.9 ha.(442.0 acres)
123.7 ha.(305.6 acres)
Under the current legislative provisions, the Trust is responsible for the perpetual maintenance of thecemetery properties it administers, but not of individual monuments, even after all the graves areoccupied and a cemetery has little or no ability to generate further income.
While the Trust has sufficient cemetery land to meet the burial requirements of the Geelong urban areafor many decades, it has also purchased an additional site at Marcus Hill on the Bellarine Peninsula tocater for growth trends in that area as well as the development of the Armstrong Creek Growth Area,south of Grovedale, towards Mount Duneed, which will be serviced by the Geelong Memorial Park.
TRUST POLICIES & PROCEDURES AND REPORTING
During the reporting period the Trust further updated a significant number of its adopted policies andprocedures and also developed and reported on a number of Key Performance Indicators during thecurrent reporting period to work towards full compliance with the “Financial Management ComplianceFramework”. The reporting and monitoring of KPI’s will further assist the Trust in understanding the keydrivers for the operations of the Trust and also ensure compliance with the relevant directions in the“Financial Management Compliance Framework”.
The Trust expects to review and update all policies over each two year period. During the reporting periodthe Trust developed new policies in relation to Contract Management and Occupational Health & Safetywith the assistance of consultants specializing in each of those fields.
The Trust’s Policy Manual is reviewed regularly for relevance and accuracy.
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GEELONG CEMETERIES TRUST
CHAIRMAN’S REPORT 2014 (Continued)
ATTENDANCE AT TRUST MEETINGS
The Trust held eleven monthly meetings during the year, excluding January 2014. All meetings areusually held on the fourth Tuesday of the month at the Administration Office at Eastern Cemetery. Duringthe reporting period there were no changes to the membership of the Trust with the existing Chairman,Lynden Smith, continuing to the end of his three year term to 28 February 2016, along with MauriceBarwick and Sue Chisholm. Trust Members with their three year term expiring on 14 August 2015 areHelene Bender, Lloyd Gosling, Michelle Heagney and Peter Mansfield. The newest member, BrendaRichardson, has a three year term expiring on 28 February 2016.
Finance Committee
In September 2010, the Trust’s Committee structure was reviewed and amended which resulted in theformation of a separate Finance Committee independent of the previous Audit, Finance & RiskCommittee. This Committee consists of all members of the Trust and the Chairman of this Committee isthe Chairman of the Trust. This Committee also met eleven times during the reporting period.
Audit & Risk Committee
The Audit & Risk Committee was initially comprised of four of the existing Trust members, appointed bythe Trust on a bi-annual basis. This number was increased to five, by the full Trust at their Decembermeeting, with Helene Bender then being appointed to the Committee as from February 2014. Themembers and their attendance details are listed in the table below. The Committee oversees the InternalAudit Program, working closely with Crowe Horwath, reviewing areas of possible concern, often based on experiences of Crowe Horwath in other audits they have carried out. The Committee usually meetsmonthly but did not meet in September 2013, due to insufficient numbers as a result of approvedabsences, and did not meet in January 2014, as detailed above, and therefore met ten times during thereporting period. Mr. Maurice Barwick was the Chairman of this Committee for the entire reporting period.
The Committee acknowledged the approval of the 2012/13 Financial Statements for signing andpresentation to the Victorian Auditor-General’s Office for sign off at its meeting in August 2013. The Trustthen prepared and delivered the relevant number of copies to the Department of Health within therequired timelines.
Remuneration Committee
The Trust’s Remuneration Committee met as required and as indicated in the Trust’s minutes.
Meeting Attendances
Details of attendance by Trust Members at the various meetings are outlined in the following table.
Trust Member TrustMeetingsattended
FinanceCommitteeMeetingsattended
Audit & RiskCommitteeMeetingsattended
L. J. Smith (Chairman) 11 of 11 11 of 11 10 of 10
M. G. Barwick (Audit & Risk Chairman) 10 of 11 10 of 11 9 of 10
S. M. Chisholm 8 of 11 8 of 11 7 of 10
H. F. Bender 11 of 11 11 of 11 4 of 5
S. L. Gosling 10 of 11 11 of 11 8 of 10
M. Heagney 9 of 11 9 of 11 N/A
P. Mansfield 10 of 11 10 of 11 N/A
B. I. Richardson 9 of 11 9 of 11 N/A
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GEELONG CEMETERIES TRUST
CHAIRMAN’S REPORT 2014 (Continued)
ATTENDANCE AT TRUST MEETINGS (Continued)
In addition to attending the monthly Trust meetings, all Trust Members carry out bi-monthly inspections ofcemetery sites administered by the Trust. This is done on a rotational basis with all Trust Memberspotentially visiting all of the Trust’s sites over the course of the financial year. The Trust, as a whole, alsousually carries out an inspection of all Trust’s properties and sites on an annual basis.
The Trust also sends its representatives to peak industry conferences, including those of the Cemeteriesand Crematoria Association of Victoria and the Australasian Cemeteries and Crematoria Association toensure that Trust Members and staff are fully aware of changes being introduced and implemented withinthe industry.
Through regular attendance at these, the Trust’s representatives have the opportunity to provide input toany proposed changes to be implemented, either via the industry itself or the Department of Health.
Annual Meeting
The Trust held its fourth Annual Meeting in December 2013 after being publicly advertised, with sixmembers of the public in attendance together with six Trust Members, four Senior Management andthree Community Advisory Committee Members.
Full details of the Annual Meeting have previously been provided to the Department of Health, asrequired under the Cemeteries and Crematoria Act 2003 (as amended).
Community Advisory Committee
The Trust formed its Community Advisory Committee, as required, in its new role as a Class A Trust.It did this by public advertising and directly seeking expressions of interest from community members. Allapplicants were interviewed and the following six applicants were initially appointed by the Trust.
Mrs. Sue Plunkett, Messrs. Geoff Anderson, John Caldow, Jim Fidge, Mick Harris and Bill Lowrey.
The Trust appointed Trust members, Mrs. S. Chisholm and Mr. L. Smith, to the Committee, with theformer as Committee Chairperson.
During the previous reporting period, Mrs. Sue Plunkett resigned from her position and the Committeeappointed ex-Trust Member, Mr. Fred Freijah to the Committee.
The Committee formally met on four occasions during the reporting period – all being held at the Trust’sAdministration Office. The Committee has also been very active with public and community meetingattendances at Diversitat Geelong for the Karen/Karenni Group, Lara Lions Rotary and RSL Club,Bellarine Land Care Group (twice) and the Launch of the 175 Year Anniversary of the first burial atEastern Cemetery. There have also been presentations made to the Geelong RSL, a radio interview onVision Australia detailing services of the Trust and also Public Consultation Meetings held at Colac andQueenscliff prior to seeking transfer of those two cemeteries to this Trust. The Committee also carries outtours of the Crematorium for the Gordon TAFE and specific cemeteries for scouts and community groupswhen requested. Further community meetings are scheduled in late 2014 for a number of communitygroups and faiths through the Diversitat Network.
MAJOR DEVELOPMENTS DURING 2013/14
There were a number of significant development projects undertaken during the reporting period, allcompleted with a long-term perspective in mind. These projects were all funded from prior year surplusfunds and continue the Trust policy of re-investing for the future, as outlined previously.
Installation of Concrete Beams at Various Sites
The number of pre-purchased graves continues to grow requiring the Trust to construct additional newbeams at a number of sites. During the reporting period, Trust staff have constructed new beams atEastern Cemetery, Western Cemetery, Drysdale Cemetery, Portarlington Cemetery and FlindersMemorial Park.
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GEELONG CEMETERIES TRUST
CHAIRMAN’S REPORT 2014 (Continued)
MAJOR DEVELOPMENTS DURING 2013/14 (Continued)
Replacement of Concrete Blocks with Beams in Lawn E – Eastern Cemetery
This project involves the removal of existing concrete blocks and replacing them with a continuousconcrete beam for each row and then removing the plaques from the blocks and placing them back onthe new concrete beam. This is a very labour intensive project being completed by Trust staff but willdramatically improve the amenity of that area and also reduce the maintenance costs significantly.
This project covered in excess of 1,500 graves and was staged over the 2012-13 and 2013-14 financialyears, with the Trust receiving a grant allocation from the Department of Health to assist in the funding ofthese works. The project has now been completed with all plaques being placed back on the new beamsand new turf placed along the edge of all beams.
Second Stage Development Works in North-East Corner – Eastern Cemetery
The Trust has completed the second stage of development of the North-East Corner of EasternCemetery by importing approximately 60,000 cubic metres of clean fill to build up the levels within thatarea, creating a land bridge, improving storm water drainage, leveling and landscaping the area for futureburials. A spoil heap retention corral has also been contracted to work in with this development andprovide storage facilities for excess soil at the Eastern Cemetery.
Development of Burial Gardens – Eastern Cemetery and Geelong Memorial Park
During the current year, the Trust constructed a Burial Garden area behind the mausolea providing forboth burials and memorials. The burial areas provide a unique setting, overlooking the mausolea toprovide for large headstone memorials with cremation memorial positions within the gardens. Thesegardens have been developed at the Eastern Cemetery and similar options have been provided atGeelong Memorial Park.
New Catafalque – Crematorium Chapel
The Trust and management consulted with local funeral directors in 2013 regarding their requirements forthe presentation of a coffin in the chapel and requested feedback on a proposed design of a newcatafalque to display the coffin during a service. The new catafalque provides the ability to turn thecoffin’s orientation at the front of the chapel, lower the coffin and close the top to represent a committal.The new catafalque design has received positive feedback from local and metropolitan funeral directors.
Landscaping and Top Dressing – Lorne Cemetery
Landscaping works were carried out to level dips and difficult to maintain areas at the Lorne Cemeteryand nature strip, as well as grass monumental areas to reduce the risk of erosion caused by storm-water.
Road Extension – Drysdale Cemetery
A ring road has been constructed to gain access to the rear of the cemetery to enable the creation of thenext lawn section. This will enable full utilisation of the existing cemetery prior to commencingdevelopment of the adjacent undeveloped cemetery extension land.
Fill and Landscaping – Geelong Memorial Park
The importation of clean fill has commenced that will fill in the disused dam, allowing for extra futureburial space, as well as level off the undulating ground to enable better utilisation of the property forburials. Once the majority of the fill is imported and compacted, landscape mounding and top dressing forseeding will take place.
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GEELONG CEMETERIES TRUST
CHAIRMAN’S REPORT 2014 (Continued)
TRUST PERSONNEL
Representation on Committees and Industry Associations
Trust members and Executive staff are represented on a number of Committees and IndustryAssociations to use their knowledge and experience to assist in the guidance and development of thesector and to also show this Trust’s ongoing commitment and support to the sector.
The Chief Executive Officer is a past-President and current Board member of the AustralasianCemeteries and Crematoria Association (ACCA) and a past-President of the Cemeteries and CrematoriaAssociation of Victoria (CCAV). He is also the Australasian member on the board of the InternationalCremation Federation (ICF) as from July 2011.
The Deputy CEO/Operations Manager is the President of CCAV and the current Chairperson of theCCAV’s Environmental Sustainability Focus Group. He was appointed in August 2012 and will completehis two-year term in August 2014.
The Manager - Finance & Administration has been a representative member of CCAV on the CemeteriesFinancial Policy Committee (CFPC) since September 2006 and this group has considered a number ofaccounting and finance issues specific to the Industry and provided guidance where required. This groupmeets irregularly continuing to provide support to the sector covering issues such as PerpetualMaintenance, Governance Training, Chart of Accounts Review and updates on the progress of anyLegislative Bills.
Other matters currently before this group include – Cemetery Land Sustainability Report, Fee Increases(both CPI and also via a Regulatory Impact Statement), FBT Updates and Charity Status Applications,Review of the EBA process, Asset Improvements/Maintenance, Defined Benefits Unfunded Liability anddevelopment of a Fee Justification Model focused on Class B Trusts.
The Trust also provides Administrative support and/or Management support for the following IndustryCommittees on a regular basis – Funeral Industry Consultative Committee (FICC) and the CommunityAdvisory Committee (CAC). This involves preparation and distribution of Agendas and Minutes as well aspresentations made at community meetings.
Integrated Cemetery Management System - Hosting Class B Trust’s Data
The Trust is currently considering the possibility of hosting a number of Class B Trusts on its existingCemetery Management System. In conjunction with the supplier of the system, Enabling, a proposal hasbeen developed outlining the requirements from all concerned parties and also the proposed feestructure associated with the hosting.
This project will be fully explored in the coming year and is seen as a very positive move forward forClass A assistance to Class B Trusts but will also provide a secure site for data to be stored, minimisingthe risk of lost or destroyed records. It will also allow a smooth transition of data to a Class A Trust shouldthe Class B Trust seek to be wound up and merged with the Class A Trust.
REQUIREMENTS OF VICTORIAN GOVERNMENT
The workload for the Trust to comply with the requirements of many Departments and Agencies of theVictorian Government together with a number of special reviews and audits continues to increase. Inaddition, as a Class A Trust, the Trust is now required, and appreciates the opportunity, to provideguidance and advice to the smaller regional cemeteries in Victoria on an ongoing basis. This has resultedin many hours of support and assistance being provided to a large number of Class B Trusts on anongoing basis.
These additional governance and audit requirements increase the workload on the Trust’s administration,resulting in considerable additional time and cost.
All of this has necessitated increases in fees and charges levied by the Trust.
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GEELONG CEMETERIES TRUST
FURTHER INFORMATION 2014
AUTHORITY OF THE TRUST
Geelong Cemeteries Trust was established on 1 January 1985 by the Governor-in-Council, and becameincorporated on 1 January 1996 under the Cemeteries (Incorporation of Trusts) Regulations 1995. Theauthority of the Trust is provided by the Cemeteries and Crematoria Act 2003, which was enacted in 2005and applied as from 1 July 2005. The Trust was designated as a Class A Trust as from 1 March 2010following amendments to the Cemeteries and Crematoria Act 2003.
The Trust is responsible to the Minister for Health (Victoria), and the Trust Members are appointed totheir positions by the Governor-in-Council.
The Trust manages fourteen areas of Crown Land within the Geelong region, at:
The Eastern Cemetery, Geelong Geelong Memorial Park & CrematoriumGeelong Western Public Cemetery Leopold CemeteryBarrabool Hills (Highton) Cemetery Drysdale CemeteryGrovedale (Germantown) Cemetery Portarlington CemeteryMount Duneed Cemetery Flinders Memorial ParkMount Moriac Cemetery Winchelsea CemeteryLorne Cemetery Marcus Hill Greenfields Site
FINANCIAL
Geelong Cemeteries Trust is an incorporated entity of the Victorian Public Sector. It operates on a self-funding and not-for-profit basis without external subsidy, and its:
· fees and charges are subject to approval by the Governor-in-Council (published in theGovernment Gazette), and are detailed in full on the Department of Health website,
· Financial Statements are audited by the Victorian Auditor-General, and· the Annual Report is tabled in the Victorian Parliament.
The principal fees adopted by the Trust, are as follows: 2013/14 Year 2012/13 Year
$ $GST EXEMPT
Grant of Right of Interment - lawn section 1,600 1,565- lawn monument section 2,370 2,320- monument section 1,600 1,565- freestyle memorial lawn areas 3,555 3,480- Concrete-Lined Grave 7,670 7,510
- delivered for cremation before 10.00 a.m. 955 935- delivered for cremation from 10.00 a.m. 1,030 1,010
Use of chapel (60 minutes) 145 140
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GEELONG CEMETERIES TRUST
FURTHER INFORMATION 2014 (Continued)
STAFF
There are twenty-eight full-time staff employed by the Trust, being:
As at30 June 2014
As at30 June 2013
Chief Executive Officer (Mr. D. L. Thomas) 1 1Deputy CEO/Operations Manager (Mr. F. de Groot) 1 1Finance & Administration Manager (Mr. T. J. Colbert) 1 1Executive Assistant (Mrs. S. McKean) 1 1Cemeteries & Crematorium Staff 18 18Administration Staff 6 6
TOTALS 28 28
Staff members are appointed and assessed having regard to criteria of ability, equity and workperformance. In addition, some grounds maintenance duties are performed by contractors.
ORGANISATIONAL STRUCTURE
GEELONGCEMETERIES
TRUST(8 MEMBERS)
FINANCE COMMITTEE
AUDIT & RISK COMMITTEECOMMUNITYADVISORY
COMMITTEE
CHIEF EXECUTIVEOFFICER
MANAGER, FINANCE & ADMINISTRATION
DEPUTY CEO/OPERATIONS MANAGER
EXECUTIVEASSISTANT
FUNERALSSUPERVISOR
TEAM LEADERCONSTRUCTION
WORKS
ADMINISTRATIONSTAFF (4)
SALES(2)
CEMETERIES & CREMATORIUM STAFF(16)
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GEELONG CEMETERIES TRUST
FURTHER INFORMATION 2014 (Continued)
STAFF (Continued)
The following table categorises staff by gender and age for the current and previous reporting periodswith all staff ongoing and employed full time in each year.
Staff as at 30 June 2014 Staff as at 30 June 2013
Gender No. Gender No.
Female 7 Female 7
Male 21 Male 21
Age No. Age No.
Under 25 3 Under 25 3
25 – 34 2 25 – 34 3
35 – 44 9 35 – 44 9
45 – 54 10 45 – 54 10
55 – 64 4 55 – 64 3
Over 64 - Over 64 -
Employees are selected on the basis of ability, knowledge and skills in fair and open competition thatensures equal opportunity. Promotion and advancement of qualified individuals is based on these sameprinciples, relevant to the position involved.
Employees receive fair and equitable treatment without regard to race, colour, sex, sexual preference,age, physical or mental disability, pregnancy, religion, political opinion, national extraction or social origin.
Audit & Risk Committee Membership
Members of the Audit & Risk Committee are existing Trust Members with the current committee being:
M. G. Barwick (Chairman), L. J. Smith, S. M. Chisholm, S. L. Gosling and H. F. Bender.
Finance Committee Membership
All Trust Members are members of the Finance Committee and the Finance Committee meets prior to thefull Trust Meeting.
OTHER REPORTABLE MATTERS/DISCLOSURES
Promotional material concerning the role of the Trust, and the goods and services it will provide for a fee,is available from the Administration Office of the Trust, 141 Ormond Road, Geelong East 3219.
During the reporting period the Trust again revised a number of promotional brochures and price listsdetailing goods and services available for all sites administered by the Trust.
Freedom of Information Act 1982.
No applications were received during the reporting period for information to be made available under theFreedom of Information Act 1982. Mr. D. L. Thomas, CEO of the Trust, is the FOI officer.
Occupational Health & Safety Act 2004.
The Trust has an active Occupational Health & Safety Committee that meets on a regular basis andconsiders potential risks to staff and customers as well as reviews any claims incurred. During thereporting period the Trust did not have any claims and hence had no working days lost. The Trust hasappointed a Return to Work Co-Ordinator, Mrs. L. M. Wallace, to assist staff returning to work if, andwhen, required. Annual Risk Assessments are carried out via the Committee for plant & equipment,manual handling and general work practices of the Trust.
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GEELONG CEMETERIES TRUST
FURTHER INFORMATION 2014 (Continued)
OTHER REPORTABLE MATTERS/DISCLOSURES (Continued)
National Competition Policy.
The Trust adheres to the principles of the National Competition Policy (NCP) to ensure that any businessrelated competition with private firms and entities takes place in an environment free from competitiveadvantages.
Protected Disclosures Act 2012.
No disclosures were made during the reporting period to the responsible officer of the Trust under theProtected Disclosures Act 2012. Mr. D. L. Thomas, CEO of the Trust, is the responsible officer.
Building Act 1993.
The Trust performs regular inspections of the condition of the buildings and properties for which it isresponsible, and carries out maintenance work as necessary.
Victorian Industry Participation Policy Act 2003.
The Trust did not commence or complete any projects during the current financial period to which thispolicy applied.
Environmental Performance
During the reporting period the Trust continued to take part in a “Recycling of Metals FollowingCremation” program through a company called OrthoMetals (via a local company – Austeng EngineeredSolutions). All funds raised from the program are returned to charities nominated by the Trust withapproximately $750 being distributed by this Trust in this reporting period.The Trust also recycles printer cartridges via Cart Collect with $2 donated to Landcare Australia for everyfull collection box. In addition, the Trust purchases a number of EarthSaver Products from CorporateExpress with a total value in excess of $3,000. The Trust also recycles plastic name plates from coffinsand de-commissioned ashes containers, has a rainwater catchment program in place at 4 sites, a dam atGeelong Memorial Park and has planted 600 trees at various sites.
FRD 22C – Standard Disclosures in the Report of OperationsDeclarations of pecuniary interest have been duly completed by all relevant officers.
No shares are held by Trust members or senior officers as nominees or held beneficially in a statutoryauthority or subsidiary.
There was no major research or development activity carried out by the Trust during the current period.
During the reporting period the CEO travelled overseas:Ø November 2013, Paris, Funeraire Conference as the ICF representative; andØ May 2014, Macau, Asia Funeral and Cemetery Expo as an ACCA representative
There was no time lost through Trust staff being involved in industrial disputes and no working days lostthrough industrial accidents, as detailed above.
There were no consultancies during the reporting period that cost in excess of $10,000.
The Trust engaged consultants for the following projects:
· Internal Audit – Policies and Procedures $ 9,500· IT, Website and Phones - Services and Support $ 3,669· Marcus Hill zoning and initial design concepts $ 8,282· Internal Audit Reviews $ 4,170· Tax Compliance Framework Review $ 1,670· Two minor projects with a total value of $ 7,670
TOTAL $ 34,961
Page 13
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2014
Note 2014 2013$ $
RevenueCemetery Operations Income 2(a) 4,889,562 4,833,390Cost of Sales 2(d) ( 197,100) ( 368,300)
Items that may be reclassified subsequently to net resultNet fair value gains/(losses) on Available for Sale FinancialInvestments 13(c) ( 53,874) 6,173
Items that will not be reclassified to net resultNet fair value revaluation on Non Financial Assets 13(c) ( 164,621) -
( 218,495) 6,173
Comprehensive Result for the Year ( 815,006) 485,366
The Comprehensive Operating Statement should be read in conjunction with the accompanying notes.
GEELONG CEMETERIES TRUST
COMPREHENSIVE OPERATING STATEMENT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Page 2
Note 2014 2013$ $
Current AssetsCash and cash equivalents 4 4,001,497 4,107,379Receivables 5 161,033 161,762Inventories 6 190,421 164,076
Total Equity at the end of the Period 13 12,304,430 485,366 12,789,796
The Statement of Changes in Equity should be read in conjunction with the accompanying notes.
GEELONG CEMETERIES TRUST
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Page 4
Note 2014 2013Inflows/ Inflows/
(Outflows) (Outflows)$ $
Cash Flows from Operating Activities
Receipts from burials and cremations (inclusive of GST) 4,181,167 4,093,817Other income (inclusive of GST) 1,188,237 1,295,467Payments to suppliers & employees (inclusive of GST) ( 4,585,492) ( 5,082,637)Interest received 261,173 319,686GST recovered from the Australian Taxation Office 325,399 236,970GST paid to the Australian Taxation Office ( 280,469) ( 282,189)
Net Cash Inflows/(Outflows) from Operating Activities 14(b) 1,090,015 581,114
Cash Flows from Investing ActivitiesRedeemed investments (excluding earnings) 315,000 400,000Payments for property, plant & equipment ( 1,637,066) ( 988,962)Proceeds from sale of property, plant & equipment 126,169 180,385
Net Increase/(Decrease) in Cash and Cash Equivalents ( 105,882) 172,537
Cash and Cash Equivalents at Beginning of the Period 4,107,379 3,934,842
Cash and Cash Equivalents at the End of the Period 14(a) 4,001,497 4,107,379
The Cash Flow Statement should be read in conjunction with the accompanying notes.
GEELONG CEMETERIES TRUST
CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2014
Page 5
Contents Note Number
Statement of Significant Accounting Policies 1Net Results from Operations - Income and Expenses 2Net Gain/(Loss) on Disposal of Non-Current Assets 3Current Assets
Cash and Cash Equivalents 4Receivables 5Inventories 6Other Current Assets 7
Non-Current AssetsInventories 7Other Financial Assets 8Property, Plant and Equipment 9
Gross Carrying Amount and Accumulated Depreciation 9(a)Reconciliation of Property, Plant and Equipment 9(b)Aggregate Depreciation Recognised as an Expense During the Year 9(c)Fair Value Measurement Hierarchy for Assets as at 30 June 2014 9(d)Reconciliation of Level 3 Fair Value 9(e)Description of Significant Unobservable Inputs to Level 3 Valuations 9(f)
LiabilitiesPayables 10Provisions - Employee Benefits 11(a)Provisions - Other 11(b)Unearned Income 12
Equity 13Notes to the Cash Flow Statement 14
Reconciliation of Cash 14(a)Reconciliation of net result for the period to net cash inflows from operating activities 14(b)
Commitments for Expenditure 15Contingent Assets 16Contingent Liabilities 17Financial Instruments 18
Financial Risk Management Objectives and Policies 18(a)Credit Risk 18(b)Liquidity Risk 18(c)Market Risk Exposure 18(d)Fair Value 18(e)
Superannuation 19Remuneration of Auditors 20Responsible Persons Disclosure 21(a)Executive Officer Disclosures 21(b)Events Occurring after Balance Sheet Date 22Ex-Gratia Expenses 23
Notes to the Financial Statementsfor the year ended 30 June 2014
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies
These financial statements of Geelong Cemeteries Trust are a general purpose financial report which has beenprepared in accordance with the Financial Management Act 1994 , applicable Australian Accounting Standards(AAS) which includes interpretations issued by the Australian Accounting Standards Board.
The financial statements also comply with relevant Financial Reporting Directions (FRD) issued by the Departmentof Treasury and Finance, and relevant Standing Directions (SD) authorised by the Minister for Finance. In complyingwith AAS, the Geelong Cemeteries Trust has, where relevant, applied those paragraphs applicable for not-for-profitentities.
The financial statements were authorised for issue by D.L. Thomas (Chief Executive Officer) on 21 August 2014.
Basis of Accounting Preparation and Measurement
Accounting policies are selected and applied in a manner which ensures that the resulting financial informationsatisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactionsor other events is reported.
The accounting policies set out below have been applied in preparing the financial statements for the year ended30 June 2014, and the comparative information for the year ended 30 June 2013.
The going concern basis was used to prepare the financial statements.
These financial statements are presented in Australian dollars, the functional and presentation currency of the Trust.
The financial statements, except for cash flow information, have been prepared using the accrual basis of accounting.Under the accrual basis, items are recognised as assets, liabilities, equity, income or expenses when they satisfythe definitions and recognition criteria for those items, that is they are recognised in the reporting period to whichthey relate, regardless of when cash is received or paid.
The financial statements are prepared in accordance with the historical cost convention, except for:
- non-current physical assets, which subsequent to acquisition, are measured at a revalued amount being their fairvalue at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairmentlosses. Revaluations are made and are re-assessed with sufficient regularity to ensure that the carrying amountsdo not materially differ from their fair values; and
- available-for-sale investments which are measured at fair value with movements reflected in equity until the assetis derecognised (i.e. other comprehensive income - items that may be reclassified subsequent to net result).
Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilitiesthat are not readily apparent from other sources. The estimates and associated assumptions are based onprofessional judgements derived from historical experience and various other factors that are believed to bereasonable under the circumstances. Actual results may differ from these estimates.
Consistent with AASB 13 Fair Value Measurement, the Trust determines the policies and procedures for bothrecurring fair value measurements such as property, plant & equipment and financial instruments, and fornon-recurring fair value measurements such as non-financial physical assets held for sale, in accordance with therequirements of AASB 13 and the relevant FRD's.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorisedwithin the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fairvalue measurement as a whole;
(a) Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities that acemetery can access at measurement date.
(b) Level 2 - Are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
(c) Level 3 - Unobservable inputs for the asset or liability.
For the purpose of fair value disclosures, the Trust has determined classes of assets and liabilities on the basis ofthe nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
In addition, the Trust determines whether transfers have occurred between levels in the hierarchy by re-assessingcategorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at theend of each reporting period.
The Valuer-General Victoria (VGV) is the Trust's independent valuation agency.
The Trust, in conjunction with VGV, monitors the changes in the fair value of each asset and liability through relevantdata sources to determine whether revaluation is required.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimate is revised if the revision affects only that period or in the period of therevision, and future periods if the revision affects both current and future periods. Judgements and assumptions madeby management in the application of AAS that have significant effects on the financial statements and estimates,with a risk of material adjustments in the subsequent reporting period, relate to:
(i) the fair value of land, buildings, infrastructure, plant and equipment (refer to Note 1(f))(ii) superannuation expense (refer to Note 1(m))(iii) actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates (refer to Note 1(m))(iv) cost assumptions for the calculation of the provision for loss on pre-paid fees (refer to Note 1(j))
Change in Accounting Policies
AASB 13 Fair Value Measurement
AASB 13 establishes a single source of guidance for all fair value measurements. AASB 13 does not change whena Trust is required to use fair value, but rather provides guidance on how to measure fair value under AustralianAccounting Standards when fair value is required or permitted. The Trust has considered the specific requirementsrelating to highest and best use, valuation premise, and principal (or most advantageous) market. The methods,assumptions, processes and procedures for determining fair value were revised and adjusted where applicable. Inlight of AASB 13, the Trust has reviewed the fair value principles as well as its current valuation methodologies inassessing the fair value, and the assessment has not materially changed the fair values recognised.
AASB 13 has predominantly impacted the disclosures of the Trust. It requires specific disclosures about fair valuemeasurements and disclosures of fair values, some of which replace existing disclosure requirements in otherstandards, including AASB 7 Financial Instruments: Disclosures.
The disclosure requirements of AASB 13 apply prospectively and need not to be provided for comparative periods,before initial application. Consequently, comparatives of these disclosures have not been provided for 2012-13,except for financial instruments, of which the fair value disclosures are required under AASB 7 Financial Instruments:Disclosures.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
Change in Accounting Policies (continued)
AASB 119 Employee Benefits
In 2013-14, the Trust has applied AASB 119 Employee Benefits (Sep 2011, as amended), and related consequentialamendments for the first time.
The revised standard changes the definition of short-term employee benefits. These were previously benefits thatwere expected to be settled within 12 months after the end of the reporting period in which the employees renderthe related service, however, short-term employee benefits are now defined as benefits expected to be settled whollywithin 12 months after the end of the reporting period in which the employees render the related service. As a result,accrued annual leave balances which were previously classified by the Trust as short-term employee benefits nolonger meet this definition and are now classified as long-term employee benefits. This has resulted in a change ofmeasurement for the annual leave provision from an undiscounted to discounted basis.
The Trust considered that the change in classification has not materially altered its measurement of the annual leaveprovision.
(a) Reporting Entity
The financial report includes all the controlled activities of the Geelong Cemeteries Trust. The GeelongCemeteries Trust was established under the Cemeteries Act 1890 and the operations are governed by theCemeteries and Crematoria Act 2003 . The financial statements of the Geelong Cemeteries Trust includesGeelong Eastern Cemetery, Geelong Western Public Cemetery, Grovedale (Germantown) Cemetery,Mount Duneed Cemetery, Geelong Memorial Park and Crematorium, Leopold (Kensington) Cemetery,Drysdale (Bellarine) Cemetery, Portarlington Cemetery, Highton (Barrabool Hills) Cemetery, FlindersMemorial Park, Lorne Cemetery, Mount Moriac Cemetery and Winchelsea Cemetery.
The objective of the Trust is to provide cemeteries, crematorium and memorialisation services to the public.
It's Principal address is: "The Gatehouse", Eastern Cemetery, 141 Ormond Road, East Geelong 3219.
(b) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash at bank, deposits at call and highly liquidinvestments with an original maturity of 3 months or less, which are held for the purpose of meetingshort-term cash commitments rather than for investment purposes, and which are readily convertible toknown amounts of cash and are subject to insignificant risk of changes in value.
(c) Other Financial AssetsOther financial assets are recognised and derecognised on trade date where purchase or sale of aninvestment is under a contract whose terms require delivery of the investment within the timeframeestablished by the market concerned, and are initially measured at fair value, net of transaction costs.
Geelong Cemeteries Trust classifies its other financial assets between current and non-current assetsbased on the purpose for which the assets were acquired. Management determines the classification ofits other financial assets at initial recognition.
Geelong Cemeteries Trust assesses at each balance sheet date whether a financial asset or group offinancial assets is impaired. All financial assets except those measured at fair value through profit andloss are subject to annual review for impairment.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(d) ReceivablesReceivables consist of:
- contractual receivables, which includes mainly debtors in relation to goods and services, accruedinvestment income; and
- statutory receivables, which includes predominantly amounts owing from the Victorian Government andGST input tax credits recoverable.
Receivables that are contractual are classified as financial instruments and categorised as loans andreceivables. Statutory receivables are recognised and measured similarly to contractual receivables (exceptfor impairment), but are not classified as financial instruments because they do not arise from a contract.
Receivables are recognised initially at fair value and subsequently measured at amortised cost, using theeffective interest rate method, less any accumulated impairment.
Trade debtors are carried at nominal amounts due, and are due for settlement within 30 days from the dateof recognition. Collectability of debts is reviewed on an ongoing basis and debts which are known to beuncollectable are written off. A provision for doubtful debts is recognised when there is objective evidencethat the debts may not be collected and bad debts are written off when identified.
(e) Inventories
Right of IntermentInventories - Right of Interment are measured at the lower of cost and net realisable value. Costs areassigned to graves and memorial positions (under development and developed) on a specific identificationof cost basis, with the costs of development and constructions averaged over the number of graves ormemorial positions in the construction.
Land Allocated for Interment PurposesInventories include land allocated for interment purposes held for sale. Inventory of land allocated forinterment purposes is measured at the lower of cost and net realisable value on the basis of weightedaverage cost and includes adjacent land and landscaping that add to the amenity of the land for interment.
(f) Recognition and Valuation of Non-Current Physical AssetsThe capitalisation threshold for the recognition of all non-current physical assets is $3,000. (2013: $3,000).
Non-current physical assets measured at fair value are revalued in accordance with FRD103D. Thisrevaluation process normally occurs every 5 years, based on the asset's Government Purpose Classification,but may occur more frequently if fair value assessments indicate material changes in value. Revaluationincrements and decrements arise from differences between an asset's carrying value and fair value.
Revaluation increments are recognised in other comprehensive income and accumulated in the property,plant & equipment revaluation surplus, except that, to the extent that an increment reverses a revaluationdecrement in respect of that class of asset previously recognised as an expense in the net result, theincrement is recognised as income in determining the net result.
Revaluation decrements are recognised immediately as expenses in the net results, except that, to theextent that a credit balance exists in the asset revaluation reserve in respect of the same class of assets,they are debited directly to the asset revaluation reserve.
Revaluation increases and revaluation decreases relating to individual assets within an asset class areoffset against one another within that class, but are not offset in respect of assets in different classes.Revaluation reserves are not transferred to accumulated funds on derecognition of the relevant asset.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(f) Recognition and Valuation of Non-Current Physical Assets (continued)
Land - Cemetery UseCrown land controlled by the Geelong Cemeteries Trust, which has been reserved for cemetery andcrematoria purposes, is measured at fair value with regard to the land's highest and best use (HBU) afterdue consideration is made for legal and/or constructive restrictions imposed on the land. These restrictions,whereby the land has been reserved for a cemetery, have been assessed by the Valuer-General of Victoriaas reducing the land's highest and best use value by a discount factor of 95%. The discount of 95%represents the community service obligation (CSO) of providing the cemetery to the Victorian public.
Cemetery use land was valued as at 30 June 2012 by the Valuer-General of Victoria's registered valuer inaccordance with the requirements of Financial Reporting Direction FRD 103D Non-current Physical Assets,issued pursuant to the Financial Management Act (the next scheduled revaluation under FRD 103D is set for30 June 2017, or earlier if there is an indication that fair values have moved materially since the last valuation).
A managerial revaluation was completed as at 30 June 2014 for the category "Land - Infrastructure" as theindices provided by the Valuer-General Victoria for the englobo classification have increased by in excess of10% over the previous two reporting periods. The increased valuation has been recognised in the Assets andAsset Revaluation Surplus in this reporting period.
Property, Plant and EquipmentAll non-current physical assets are measured initially at cost and subsequently revalued at fair value lessaccumulated depreciation and impairment. Where an asset is acquired for no or nominal cost, the cost is itsfair value at the date of acquisition. Assets transferred as part of a merger/machinery of Government aretransferred at their carrying amount.
Plant, equipment and vehicles are recognised initially at cost and subsequently measured at fair valueless accumulated depreciation and impairment. Depreciated historical cost is generally a reasonable proxyfor depreciated replacement cost because of the short lives of the assets concerned. Unless there is marketevidence that current replacement costs are significantly different from the original acquisition cost, it isconsidered unlikely that depreciated replacement cost will be materially different from the existing carryingvalues.
Buildings and improvements are recognised initially at cost and subsequently measured at fair value lessaccumulated depreciation and impairment.
(g) Net Gain/(Loss) on Financial InstrumentsNet gain/(loss) on financial instruments includes realised and unrealised gains and losses from revaluationsof financial instruments that are designated at fair value through profit or loss or held-for-trading, impairmentand reversal of impairment for financial instruments at amortised cost, and disposals of financial assets.
Revaluations of Financial Instruments at Fair ValueThe revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned onfinancial assets.
Impairment of Financial AssetsBad and doubtful debts are assessed on a regular basis. Those bad debts considered as written off areclassified as an expense.
Financial Assets have been assessed for impairment in accordance with Australian Accounting Standards.Where the fair value of an investment in an equity instrument at balance date has reduced by 20% or morethan its cost price; or where its fair value has been less than its cost price for a period of 12 or more months,the financial instrument is treated as impaired.
In order to determine an appropriate fair value as at 30 June 2014 for its portfolio of financial assets, GeelongCemeteries Trust prepared a valuation based on the market value of the investments as at 30 June 2014.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(g) Net Gain/(Loss) on Financial Instruments (continued)
Impairment of Non-Financial AssetsApart from intangible assets with indefinite useful lives (and intangible assets not yet available for use), allother assets are assessed annually for indications of impairment, except for;
- inventories;- financial assets;- non-current physical assets held for sale; and- assets arising from construction contracts.
If there is an indication of impairment, the assets concerned are tested as to whether their carrying valueexceeds their possible recoverable amount. Where an asset's carrying value exceeds its recoverable amount,the difference is written-off as an expense except to the extent that the write-down can be debited to an assetrevaluation surplus amount applicable to that same class of asset.
If there is an indication that there has been a change in the estimate of an asset's recoverable amount sincethe last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount.This reversal of the impairment loss occurs only to the extent that the asset's carrying amount does notexceed the carrying amount that would have been determined, net of depreciation or amortisation, if noimpairment loss had been recognised in prior years.
It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of theasset will be replaced unless a specific decision to the contrary has been made. The recoverable amount formost assets is measured at the higher of depreciated replacement cost and fair value less costs to sell.Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of thepresent value of future cash flows expected to be obtained from the asset and fair value less costs to sell.
(h) PayablesPayables consist of:
- contractual payables which consist predominantly of accounts payable representing liabilities for goods and services provided to the cemetery trust prior to the end of the financial year that are unpaid, and arise
when the cemetery trust becomes obliged to make future payments in respect of the purchase of those goods and services; and
- statutory payables, such as goods and services tax and fringe benefits tax payables.
The normal credit terms for accounts payable are usually Net 30 days.
Contractual payables are classified as financial instruments and are initially recognised at fair value, and thensubsequently carried at amortised cost. Statutory payables are recognised and measured similarly tocontractual payables, but are not classified as financial instruments and not included in the category offinancial liabilities at amortised cost, because they do not arise from a contract.
(i) Goods and Services TaxIncome, expenses and assets are recognised net of the amount of goods and services tax (GST), except:(a) where the amount of GST incurred is not recoverable from the Australian Taxation Office, it is
recognised as part of the cost of acquisition of an asset or as part of an item of expense; or(b) for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included as partof receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flowsarising from investing and financing activities which is recoverable from, or payable to, the AustralianTaxation Office is classified as cash flows from operating activities.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(j) ProvisionsProvisions are recognised when either a legal or constructive obligation, as a result of a past event, existsat the balance sheet date and where the amount of the obligation can be reliably estimated. A provision willalso be recognised for onerous contracts where the unavoidable costs of meeting the obligations under thecontract exceed the economic benefits that expect to be received under it.
Provision for loss on pre-paid feesA provision is recognised in relation to pre-paid fees where the cost of providing the purchased goods andservices is expected to be greater than the amount received/revenue to be recognised. The provisionrepresents the present value of the expenditure required to provide the goods and services, less the amountof revenue to be recognised.
(k) Contingent Assets and Contingent LiabilitiesContingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed byway of a note and, if quantifiable, are measured at nominal value.
(l) Revenue RecognitionRevenue is recognised in accordance with AASB118 Revenue and is recognised to the extent that it isprobable that the economic benefits will flow to the Trust and the revenue can be reliably measured at fairvalue. Unearned income at reporting date is reported as unearned income, in accordance with the guidancebelow.
Sale of InvestmentsThe gain/loss on the sale of investments is recognised when the investment is realised.
Donations and Other BequestsDonations and bequests are recognised as revenue when received.
FeesFees received for the rights of interment for graves, cremation memorials and mausoleum crypts arerecognised as revenue at the time of purchase except for the memorialisation portion which is recognisedat the time of interment.
Fees received for interment, cremation and certain memorialisation products such as granite and plaquesare recognised as revenue in the period that the goods or services are provided. Fees received in advanceof service provision are recorded as unearned income as detailed below.
Unearned IncomeCremation and interment fees received in advance of the relevant service being provided are carried forwardas a liability and not brought into account as revenue until the year in which each individual service isprovided by the Trust. All prepaid fees are shown as a current liability as the Trust does not have anunconditional right to defer settlement of the liability for at least twelve months after the reporting date.Information is included within note 12 identifying the amount of the liability that is expected to be convertedto revenue in the next year, based on past experience.
Interest RevenueInterest revenue is recognised on a time proportionate basis that takes into account the effective yield of thefinancial asset and allocates the interest over the relevant period.
Resources Provided and Received Free of Charge or for Nominal ConsiderationContributions of resources and resources provided free of charge or for nominal consideration are recognisedat their fair value. Contributions in the form of services are only recognised when a fair value can be reliablydetermined and the services would have been purchased if not donated.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(m) Expense RecognitionExpenses are recognised as they are incurred and reported in the financial year to which they relate.
(i) Cost of SalesCosts of sales are recognised when the sale of an item or right of interment occurs by transferring the costor value of the item/s or value of land related to the right of interment from inventories.
(ii) Administrative CostsAdministrative costs are recognised in the period to which they relate and includes the operation of the mainAdministration Office in Geelong East.
(iii) Employee Benefits
Wages and Salaries, Annual Leave, Sick Leave and Accrued Days OffLiabilities for wages and salaries, including non-monetary benefits, annual leave, accumulating sick leaveand accrued days off are all recognised in the provision for employee benefits as "Current Liabilities",because the Trust does not have an unconditional right to defer settlements of these liabilities.
Depending on the expectation of the timing of settlement, liabilities for wages and salaries, annual leave,sick leave and accrued days off are measured at:
(i) Undiscounted value - if the Trust expects to wholly settle within 12 months; or(ii) Present value - if the Trust does not expect to wholly settle within 12 months.
Long Service Leave (LSL)
Liability for LSL is recognised in the provision for employee benefits.
Unconditional LSL is disclosed in the notes to the financial statements as a current liability, even where theTrust does not expect to settle the liability within 12 months because it will not have the unconditional rightto defer the settlement of the entitlement should an employee take leave within 12 months.
The components of this current LSL liability are measured at:(i) Undiscounted value - if the Trust expects to wholly settle within 12 months; and(ii) Present value - if the Trust does not expect to wholly settle within 12 months (undiscounted).
Conditional LSL is disclosed as a non-current liability. There is an unconditional right to defer the settlementof the entitlement until the employee has completed the requisite years of service. This non-current liabilityis measured at Present Value.
Any gain or loss following revaluation of the present value of non-current LSL liability is recognised as atransaction, except to the extent that a gain or loss arises due to changes in bond interest rates for which itis then recognised as an other economic flow.
On-CostsEmployee benefits on-costs (payroll tax, workers compensation, superannuation, annual leave and LSLaccrued while on LSL taken in service) are included within the provision for employee benefits.
SuperannuationThe amount charged to the Comprehensive Operating Statement in respect of superannuation representscontributions made or due by Geelong Cemeteries Trust to the relevant superannuation plans in respect tothe services of Geelong Cemeteries Trust's staff (both past and present). Superannuation contributions aremade to the plans based on the relevant rules of each plan and any relevant compulsory superannuationrequirements that Geelong Cemeteries Trust is required to comply with.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(m) Expense Recognition (continued)
(iv) DepreciationDepreciation is calculated on a reducing balance basis to write off the cost or valuation of each item ofproperty (excluding land) over its expected useful life to the Trust.
The following table indicates the expected useful lives of non-current assets on which the depreciationcharges are based.
2013Property infrastructure Up to 40 yearsBuildings
The Gatehouse, Eastern Cemetery Up to 100 yearsAll Other Buildings Up to 50 years
Plant & Equipment Up to 5 yearsFurniture & Fittings Up to 5 years
The useful life of assets are assessed annually.
(v) Cemetery LevyA proclamation on 1 March 2010 saw the Cemeteries and Crematoria Act 2003 (the Act) amendmentsintroduced. As outlined in Section 18Q (1) of the Act, an annual levy is payable to the Department of Healthby each Class A Cemetery Trust based on their gross income for the financial year. The levy was introducedto assist in defraying the costs of administering the Act, making improvements in cemetery trust governanceand administration and the provision of services to the community. The levy is currently set at 3% of grossincome and Geelong Cemeteries Trust has recognised the levy as an accrued expense in Note 10 - OtherCreditors for the amount of $152,596. (2013 - $152,712).
(vi) Maintenance and Operating CostsMaintenance and Operating costs generally represent the day-to-day operating costs of each of the cemeterysites and crematorium administered by the Trust. All costs are expensed in the period they are incurred andthe majority of the expenses relate to maintenance of lawn and monument areas within the thirteen sites.
(n) Contributed CapitalConsistent with Interpretation 1038 "Contributions by Owners Made to Wholly-Owned Public Sector Entities"and FRD 119 "Contributions by Owners" transfers that are in the nature of contributions or distributions,have been designated as contributed capital.
(o) Trust Reserves
Available for Sale Investment Revaluation SurplusThe available for sale investment revaluation surplus arises on the revaluation of available-for-sale financialassets. Where a revalued financial asset is sold, that portion of the reserve which relates to that financialasset, and is effectively realised, is recognised in the comprehensive operating statement. Where a revaluedfinancial asset is impaired, that portion of the reserve which relates to that financial asset is recognised inthe comprehensive operating statement.
Plant & Equipment Replacement ReserveThis reserve has been created to provide funds for replacement of the cremators at the Crematorium. Anallocation is made from each cremation carried out during the reporting period and this is reviewed by theTrust each year at the time of the Budget preparation. The allocation has been determined using currentnumbers of cremations, existing costs of replacement of each cremator and current charges for cremations.
2014Up to 40 years
Up to 100 yearsUp to 50 yearsUp to 5 yearsUp to 5 years
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(o) Trust Reserves (continued)
Future Maintenance of Cemeteries ReserveThe future maintenance of cemeteries reserve is used to provide funds for the perpetual maintenancerequirements of the Trust for each of the sites administered by the Trust. An annual allocation is providedin the approved budget and is determined using estimated numbers of sales of rights of interments andinterments for the current financial year.
(p) Amalgamations and MergersOn the 12th August 2010, the Surf Coast Shire gifted the following assets to the Geelong Cemeteries Trust.- Lorne Cemetery - Winchelsea Cemetery - Mt. Moriac Cemetery
Cemetery assets acquired from the Surf Coast Shire were taken up at book value at the date of transfer.Crown assets acquired remain the property of the Crown; however they are reported as assets of thecemetery because effective control passes to the cemetery along with a substantial benefit. The value ofthe assets transferred were:
$- Land, Buildings and Infrastructure 146,006- Cash 88,705- Inventory 14,786
249,497
The Council also made a commitment to fund the perpetual maintenance reserve in the future in the amountof $77,316, to be paid to the Trust over a ten year period. The balance owing, excluding interest, is $54,888(2013 - $60,927) and this is recognised in Receivables.
Current Receivables of $6,433 (2013 - $6,039)Non-Current Receivables of $48,455 (2013 - $54,888)
(q) Rounding of AmountsAll amounts shown in the financial report have been rounded to the nearest dollar.
(r) Scope and Presentation of Financial Statements
Comprehensive Operating StatementThe Comprehensive Operating Statement presents the operating result of Geelong Cemeteries Trust. Itpresents significant categories of income and expenses included in the operating result to enhance theunderstanding of the financial performance of Geelong Cemeteries Trust. It also shows other comprehensiveincome included in the comprehensive result for the year.
Balance SheetAssets and liabilities are categorised either as current or non-current (non-current being those assets orliabilities expected to be recovered more than 12 months after reporting period), and are disclosed in thenotes where relevant.
Statement of Changes in EquityThe Statement of Changes in Equity presents reconciliations of each non-owner and owner equity openingbalance at the beginning of the reporting period to the closing balance at the end of the reporting period. Italso shows separately changes due to amounts recognised in the comprehensive result and amountsrecognised in other comprehensive income related to other non-owner changes in equity.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(r) Scope and Presentation of Financial Statements (continued)
Cash Flow StatementCash flows are classified according to whether or not they arise from operating activities, investing activities,or financing activities. This classification is consistent with requirements under AASB107 Statement ofCash Flows.
For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts,which are included as current borrowings in the Balance Sheet.
Comparative InformationWhere necessary the previous year's figures have been reclassified to facilitate comparisons. There are nochanges to this year's comparatives.
(s) Financial InstrumentsFinancial instruments arise out of contractual agreements that give rise to a financial asset of one entity anda financial liability or equity instrument of another entity. Due to the nature of the Geelong Cemeteries Trust'sactivities, certain financial assets and financial liabilities arise under statute rather than a contract. Suchfinancial assets and financial liabilities do not meet the definition of financial instruments in AASB 132Financial Instruments: Presentation. For example, statutory receivables arising from taxes, fines andpenalties do not meet the definition of financial instruments as they do not arise under contract.
Where relevant, for note disclosure purposes, a distinction is made between those financial assets andfinancial liabilities that meet the definition of financial instruments in accordance with AASB 132 and thosethat do not.
The following refers to financial instruments unless otherwise stated.
Categories of Non-Derivative Financial Instruments
Financial Assets and Liabilities at Fair Value Through Profit or LossFinancial assets are categorised as fair value through profit or loss at trade date if they are classified as heldfor trading or designated as such upon initial recognition. Financial instrument assets are designated at fairvalue through profit or loss on the basis that the financial assets form part of a group of financial assets thatare managed by the Trust based on their fair values, and have their performance evaluated in accordance withdocumented risk management and investment strategies.
Financial instruments at fair value through profit or loss are initially measured at fair value and attributabletransaction costs are expensed as incurred. Subsequently, any changes in fair value are recognised in"other comprehensive income".
Financial assets held for trading purposes are classified as current assets and are stated at fair value, withany resultant gain or loss recognised in profit or loss. The net gain or loss recognised in net result incorporatesany dividend or interest earned on the financial asset. Fair value is determined in the manner described inNote 18.
Available-for-Sale Financial AssetsAvailable-for-sale financial instrument assets are those designated as available-for-sale or not classified in anyother category of financial instrument asset. Such assets are initially recognised at fair value. Subsequent toinitial recognition, gains and losses arising from changes in fair value are recognised directly in equity until theinvestment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previouslyrecognised in equity is included in net result for the period. Fair value is determined in the manner describedin Note 18.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(t) Financial Instruments (continued)
Loans and ReceivablesLoans and receivables are financial instrument assets with fixed and determinable payments that are notquoted on an active market. These assets are initially recognised at fair value plus any directly attributabletransaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised costusing the effective interest method, less any impairment.
Loans and receivables category includes cash and deposits, term deposits with maturity greater than threemonths, trade receivables, loans and other receivables, but not statutory receivables.
The effective interest method is a method of calculating the amortised cost of a financial asset and ofallocating interest income over the relevant period. The effective interest rate is the rate that exactly discountsestimated future cash receipts through the expected life of the financial asset, or, where appropriate, ashorter period.
Held-to-Maturity InvestmentsIf the Trust has the positive intent and ability to hold nominated investments to maturity, then such financialassets may be classified as held-to-maturity. Held-to-maturity financial assets are recognised initially at fairvalue plus any directly attributable transaction costs. Subsequent to initial recognition, held-to-maturityfinancial assets are measured at amortised cost using the effective interest method, less any impairmentlosses.
The Trust makes limited use of this classification because any sale or reclassification of more than aninsignificant amount of held-to-maturity investments not close to their maturity would result in the wholecategory being reclassified as available-for-sale. The Trust would also be prevented from classifying investmentsecurities as held-to-maturity for the current and the following two financial years.
The held-to-maturity category includes certain term deposits and debt securities for which the Trust intends tohold to maturity.
Financial Liabilities at Amortised CostFinancial instrument liabilities are initially recognised on the date they are originated. They are initiallymeasured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, thesefinancial instruments are measured at amortised cost with any difference between the initial recognisedamount and the redemption value being recognised in profit and loss over the period of the borrowing, usingthe effective interest rate method.
Financial instrument liabilities measured at amortised cost include all of the Trust's contractual payables,deposits held and advances received.
(u) Events After the Reporting PeriodAssets, liabilities, income or expenses arise from past transactions or other past events. Adjustments aremade to amounts recognised in the financial statements for events which occur after the reporting period andbefore the date the financial statements are authorised for issue, where those events provide informationabout conditions which existed in the reporting period. Note 22 discloses events between the end of thereporting period and the date the financial statements are authorised for issue where the events relate toconditions which arose after the end of the reporting period and which may have a material impact on theresults of subsequent reporting periods.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 1 Statement of Significant Accounting Policies (continued)
(v) New Accounting Standards and InterpretationsCertain new accounting standards and interpretations have been published that are not mandatory for the30 June 2014 reporting period. As at 30 June 2014, the following standards and interpretations had beenissued by AASB but were not yet effective. They become effective for the first financial statements for reportingperiods commencing after the stated operative dates as detailed in the table below. Geelong Cemeteries Trusthas not and does not intend to adopt these standards early.
Standard / Interpretation
Applicablefor reportingperiodsbeginning on
AASB 9 FinancialInstruments
1 Jan 2017
In addition to the new standard above, the AASB has issued a list of amending standards that are noteffective for the 2013-14 reporting period (as listed below). In general, these amending standards includeeditorial and references changes that are expected to have insignificant impacts on public sector reporting.
- AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010).
- 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial Assets.
- 2013-6 Amendments to AASB 136 arising from Reduced Disclosure Requirements.
- 2013-9 Amendments to Australian Accounting Standards - Conceptual Framework, Materiality andFinancial Instruments.
Impact on Trust's FinancialStatements
This standard simplifies requirementsfor the classification and measurementof financial assets resulting fromPhase 1 of the IASB's project to replace IAS 39 Financial Instruments:Recognition and Measurement (AASB139 Financial Instruments:Recognition and Measurement).
Summary
The preliminary assessment hasidentified that the financial impactof available for sale (AFS) assetswill now be reported through othercomprehensive income (OCI) and no longer recycled to the profit and loss.While the preliminary assessmenthas not identified any materialimpact arising from AAS 9, it willcontinue to be monitored and assessed.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 2 Net Results from Operations Note 2014 2013$ $
(g) Maintenance and Operating CostsCemeteries and crematorium 886,053 605,498Plant and equipment maintenance 200,687 198,536Plaques and mounts 125,489 139,462Total Maintenance and Operating Costs 1,212,229 943,496
(h) Cemetery Levy 152,596 152,712
(i) Loss on Revaluation of Assets - Land 9(b) 967,311 -
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 3 Net Gain/(Loss) on Disposal of Non-Current Assets 2014 2013$ $
Proceeds from sale of assets 126,169 180,385Written down value of assets sold ( 91,621) ( 161,979)
34,548 18,406
Note 4 Cash and Cash Equivalents
Cash on hand 300 300Cash at bank 362,821 125,732Bank 24-hour Call Account 2,473,813 2,857,578Term deposits 1,164,563 1,123,769
Inventories expected to be sold/utilised within 12 months are recorded as current, with the balanceas non-current assets.
Note 8 Other Financial Assets
Fixed Term Deposits at cost 2,000,000 2,000,000Managed Funds at fair value 526,000 894,874
Total Other Financial Assets 2,526,000 2,894,874
Balance at beginning of reporting period 2,894,874 3,288,701
Disposals ( 315,000) ( 400,000)Net gain/(loss) from fair value adjustments ( 53,874) 6,173
Balance at end of reporting period 2,526,000 2,894,874
Managed funds are valued monthly by MAN Investments based on market earnings of the investmentand reported on their website with their current value.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 9 Property, Plant and Equipment 2014 2013$ $
(a) Gross Carrying Amount and Accumulated Depreciation
Land - InfrastructureVested land at valuation 462,060 343,992Total Land - Infrastructure * 462,060 343,992
Infrastructure WorksInfrastructure works at valuation* 3,674,800 3,674,800
less Accumulated depreciation ( 1,268,768) ( 1,207,075)2,406,032 2,467,725
Infrastructure works at fair value 241,772 235,772less Accumulated depreciation ( 12,338) ( 6,531)
229,434 229,241
Total Infrastructure Works 2,635,466 2,696,966
Buildings and ImprovementsBuildings and improvements at valuation* 4,256,000 4,256,000
less Accumulated depreciation ( 993,858) ( 941,886)3,262,142 3,314,114
Buildings and improvements at fair value 955,302 955,302less Accumulated depreciation ( 28,576) ( 9,663)
926,726 945,639
Total Buildings and Improvements 4,188,868 4,259,753
Plant and EquipmentPlant and equipment at fair value 2,802,368 2,643,614
less Accumulated depreciation ( 1,705,914) ( 1,579,308)1,096,454 1,064,306
Office Equipment, Furniture and FittingsOffice equipment, furniture and fittings at fair value 402,013 402,013
less Accumulated depreciation ( 179,403) ( 123,591)222,610 278,422
Total Plant and Equipment 1,319,064 1,342,728
Total Property, Plant and Equipment 8,605,458 8,643,439
Valuation methodology
* - The latest cemetery land values have been provided by Mr. P. O'Kelly FAPI, Certified Practicing Valuer, asat 30 June 2012. The valuation has been prepared in accordance with accounting policy note 1(f) using theHighest and Best Use (HBU) value discounted by 95%, representing the Community Service Obligation (CSO)associated with cemeteries. A managerial revaluation has been completed for the 2013-14 year.
The calculation of the value of land for cemetery use is:Land at HBU (unrestricted) value 9,241,200 6,879,840less CSO (discount of 95%) 8,779,140 6,535,848Total Land at Valuation - Cemetery Use 462,060 343,992
Valuation of buildings and improvements and infrastructure works was also undertaken, effective 30 June 2012,based on the opinion of Mr. P. O'Kelly FAPI, Certified Practising Valuer, as agent of the Valuer-General ofVictoria to represent the "fair value" of the replacement cost of the remaining economic value of those assets.
Page 23
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 9 Property, Plant and Equipment (continued)
Note 9 (c) Aggregate Depreciation Recognised as an Expense During the Year *
2014 2013$ $
Buildings and Improvements 70,885 61,234Infrastructure Works 67,500 69,153Plant and Equipment 257,297 218,375Office Equipment, Furniture and Fittings 55,812 6,660
Total Depreciation 451,494 355,422
* The useful lives of Assets as stated in Policy Note 1 (m) are used in the calculation of depreciation.
Note 9 (d) Fair Value Measurement Hierarchy for Assets as at 30 June 2014
CarryingAmount
as at30 June 2014 Level 1 * Level 2 * Level 3 *
$ $ $ $
Land - Infrastructure at fair value 462,060 - - 462,060
Infrastructure Works at fair value 2,635,466 - - 2,635,466
Buildings and Improvements at fair value 4,188,868 - - 4,188,868
Plant and Equipment at fair value- Vehicles (i) 841,059 - - 841,059- Other Plant and Equipment 255,395 - - 255,395
Office Equipment, Furniture and Fittings atfair value 222,610 - - 222,610
8,605,458 - - 8,605,458
* Classified in accordance with the fair value hierarchy as detailed in Note 1.
(i) Vehicles are categorised as Level 3 assets as the depreciated replacement cost is used in estimating the fair value.
There have been no transfers between levels during the period.
The Trust acquires new vehicles and at times disposes of them before completion of their economiclife. The process of acquisition, use and disposal in the market is managed by the Trust who setrelevant depreciation rates during use to reflect the consumption of the vehicles. As a result, the fairvalue of vehicles does not differ materially from the carrying value (depreciated cost).
Plant and Equipment is held at carrying value (depreciated cost). When plant and equipment isspecialised in use, such that it is rarely sold other than as part of a going concern, the depreciatedreplacement cost is used to estimate the fair value. Unless there is market evidence that currentreplacement costs are significantly different from the original acquisition cost, it is considered unlikelythat depreciated replacement cost will be materially different from the existing carrying value.
There were no changes in valuation techniques throughout the period to 30 June 2014.
For all assets measured at fair value, the current use is considered the highest and best use.
Fair value measurement at end ofreporting period using:
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
(a) Employee Benefits and Related On-Costs Provisions
Current ProvisionsEmployee Benefits (including On-Costs)- Annual Leave (unconditional and expected to be settledwithin 12 months) 136,712 139,541- Annual Leave (unconditional and expected to be settledafter 12 months) 64,037 52,649- Long Service Leave - Unconditional and expected to be settledwithin 12 months 8,465 10,002- Long Service Leave - Unconditional and expected to be settledafter 12 months 312,213 233,731
Total Current Provisions 521,427 435,923
Non-Current Provisions- Long Service Leave - (Conditional and expected to be settledafter 12 months) 111,323 121,540
Total Non-Current Provisions 111,323 121,540
Total Employee Benefits and Related On-Costs 632,750 557,463
Movement in Long Service Leave:Balance at start of year 365,273 310,861Provision made during the year- Revaluations 8,969 3,440- Expense recognising employee service 65,898 59,227Settlement made during the year ( 8,139) ( 8,255)
Balance at the end of the year 432,001 365,273
Movement in Annual Leave:Balance at start of year 192,190 158,950Provision made during the year- Expense recognising employee service 159,956 148,411Annual leave taken ( 151,397) ( 115,171)
Balance at the end of the year 200,749 192,190
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
2014 2013$ $
(b) Other Provisions
Current Provisions
Loss on pre-paid fees 215,810 339,846
Total Other Provisions 215,810 339,846
Total Provisions 848,560 897,309
Note 12 Unearned Income 3,461,310 3,238,217
Amounts expected to be settled within 12 monthsof the reporting date 238,487 199,682Amounts expected to be settled after 12 monthsfrom the reporting date 3,222,823 3,038,535
3,461,310 3,238,217
Note 13 Equity
(a) Contributed Capital
Balance at beginning of the reporting period 7,092,840 7,092,840Increase / (Reduction) during period - -Balance at end of the reporting period 7,092,840 7,092,840
Contributed Capital account was established as at January 2002 by Government direction, beingtransfer of the balance from Accumulated Surplus account at 31 December 2001. This resultedfrom adoption of UIG 38/AFR 39.
(b) Accumulated Surplus
Balance at beginning of the reporting period 321,016 316,823Net result for the reporting period ( 596,511) 479,193Transfer from / (to) Other Reserves ( 495,000) ( 475,000)Balance at end of the reporting period ( 770,495) 321,016
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 13 Equity (continued) 2014 2013$ $
(c) Reserves (continued)
Property, Plant & Equipment Revaluation SurplusThe property, plant & equipment revaluation surplus is used to record increments and decrements onthe revaluation of non-current assets, as described in the accounting policy note 1(f).
Buildings and ImprovementsBalance at beginning of the reporting period 1,398,514 1,398,514Net revaluation increment/(decrement) during the reporting period - -Balance at end of the reporting period 1,398,514 1,398,514
LandBalance at beginning of the reporting period 164,621 164,621Net revaluation increment/(decrement) during the reporting period ( 164,621) -Balance at end of the reporting period - 164,621
Infrastructure - RoadsBalance at beginning of the reporting period 119,396 119,396Net revaluation increment/(decrement) during the reporting period - -Balance at end of the reporting period 119,396 119,396
Infrastructure - Other than RoadsBalance at beginning of the reporting period 302,514 302,514Net revaluation increment/(decrement) during the reporting period - -Balance at end of the reporting period 302,514 302,514
Available for Sale Investments Revaluation SurplusThe available for sale investments revaluation surplus is used to record increments and decrementsassociated with the valuation of long term investments, carried out at the end of each reporting period.Further detail is provided in the accounting policy notes 1(c) and 1(t).
Available for Sale Investments Revaluation SurplusBalance at beginning of the reporting period 79,874 73,701Net revaluation gain/(loss) during the reporting period ( 53,874) 6,173Balance at end of the reporting period 26,000 79,874
Other Reserves
Future Maintenance of Cemeteries ReserveThe future maintenance of cemeteries reserve is used to provide funds for the perpetual maintenancerequirements of the Trust for each of the sites administered by the Trust. Details of the obligations ofthe Trust are provided in Note 17 Contingent Liabilities.
Future Maintenance of Cemeteries ReserveBalance at beginning of the reporting period 2,721,021 2,346,021Transfer from Accumulated Surplus 395,000 375,000Transfer (to) Accumulated Surplus - -Balance at end of the reporting period 3,116,021 2,721,021
The amount of the allocation is determined having regard to the requirement to finance the futuremaintenance of Trust cemeteries in perpetuity.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 13 Equity (continued) 2014 2013$ $
(c) Reserves (continued)
Plant & Equipment Replacement ReserveThe plant & equipment replacement reserve is used to provide funds for future replacement of theTrust's cremators located at the Mt. Duneed Crematorium. An allocation from each cremationcarried out is transferred to the reserve at the end of each reporting period.
Plant & Equipment Replacement ReserveBalance at beginning of the reporting period 590,000 490,000Transfer from Accumulated Surplus 100,000 100,000Transfer (to) Accumulated Surplus - -Balance at end of the reporting period 690,000 590,000
Note 14 Notes to the Cash Flow StatementNote
(a) Reconciliation of Cash
For the purposes of the Cash Flow Statement, cash includescash on hand and in banks and investments in money marketinstruments, net of outstanding bank overdrafts. Cash at theend of the financial year as shown in the Cash Flow Statementis reconciled to the related items in the balance sheet as follows:
Cash on hand 4 300 300Cash at bank 4 362,821 125,732Bank 24-hour Call Account 4 2,473,813 2,857,578Term deposits 4 1,164,563 1,123,769
Total Cash as per Cash Flow Statement 4,001,497 4,107,379
(b) Reconciliation of net result for the period to net cash inflows/(outflows) from operating activities
Net result for the period ( 596,511) 479,193
Non-Cash MovementsDepreciation 451,494 355,422(Net Gain) on disposal of property, plant and equipment ( 34,548) ( 18,406)Revaluation decrement for Marcus Hill Land purchase 967,311 -
Changes in net assets and liabilities:(Increase)/Decrease in Receivables 7,162 54,380(Increase)/Decrease in Inventory 108,342 210,740Increase/(Decrease) in Payables 12,421 ( 1,050,043)Increase/(Decrease) in Provisions ( 48,749) 228,669Increase/(Decrease) in Prepaid Burial and Cremation Fees 223,093 321,159
Net cash inflows/(outflows) from operating activities 1,090,015 581,114
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 15 Commitments for Expenditure 2014 2013$ $
Capital CommitmentsNil Projects - -
- -These Commitments are due:Not Longer than 1 Year - -1 - 5 Years - -Longer than 5 Years - -
- -
Note 16 Contingent Assets
There are no known contingent assets at 30 June 2014. (2013: $nil)
Note 17 Contingent Liabilities
Perpetual Maintenance
The Trust has an obligation under the Cemeteries and Crematoria Act 2003 to manage and maintaineach public cemetery for which it is responsible. As stated in Section 12 of the Act, in exercising itsfunctions the Trust must have regard to its obligation in relation to the funding of the perpetualmaintenance of the public cemetery. At this time the Trust is aware that there will be ongoingsignificant cash outflow for future expenditure on perpetual maintenance of the public cemetery but isunable to calculate a sufficiently reliable estimate of any related present obligation which may ariseunder the accounting standards and accordingly has not recognised a value for this obligation inthese financial statements.
The Trust has nevertheless created a related reserve, which is now fully cash backed and is disclosedas a Future Maintenance of Cemeteries Reserve in Note 13.
Letter of Demand
A claim has been made against the Trust in regard to works at the Eastern Cemetery. A Letter ofDemand has been received but the Trust denies the claim. At this time the Trust has not been servedwith any proceedings but the Trust intends to defend any proceedings should the matter progressany further. There will also be some legal costs incurred in defending the case should it proceed thatfar but these are currently not expected to be significant.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 18 Financial Instruments
(a) Financial Risk Management Objectives and Policies
The cemetery trust's principal financial instruments comprise of:- Cash Assets- Receivables (excluding statutory receivables)- Available for Sale Investments- Payables (excluding statutory payables)
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, with respectto each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to thefinancial statements.
The cemetery trust's main financial risks include credit risk, liquidity risk, interest rate risk and equityprice risk. The Trust manages these financial risks in accordance with its financial risk managementpolicy.
The Trust uses different methods to measure and manage the different risks to which it is exposed.Primary responsibility for the identification and management of financial risks rests with the Audit &Risk Committee of the Trust and is mitigated by compliance with the Trust's Investment Policy.
The main purpose in holding financial instruments is to prudentially manage cemetery trust financialrisk within the government policy parameters.
Categorisation of Financial Instruments
2014 2013Note Category $ $
Financial AssetsCash and Cash Equivalents 4 Cash 4,001,497 4,107,379Receivables 5 Loans and Receivables (at
Amortised Cost) 209,488 216,650Available for Sale Investments 8 Available for Sale Investments (at
Fair Value Through Equity) 2,526,000 2,894,874Total Financial Assets 6,736,985 7,218,903
Net holding gain/(loss) on financial instruments by category
2014 2013$ $
Financial AssetsAvailable for Sale at Fair Value through Equity ( 53,874) 6,173Total Financial Assets ( 53,874) 6,173
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 18 Financial Instruments (continued)
Net holding gain/(loss) on financial instruments by category (continued)
For Available for Sale financial assets, the net gain or loss is calculated by taking the interest revenue,plus or minus market gains or losses from revaluation of the financial assets, and minus anyimpairment recognised in the net result.
(b) Credit Risk
Credit risk arises from the financial assets of the Geelong Cemeteries Trust, which comprise cash andcash equivalents, trade and other receivables and available for sale investments. The exposure to creditrisk arises from the potential default of a counter party on their contractual obligations resulting infinancial loss to the Geelong Cemeteries Trust. Credit risk is measured at fair value and is monitoredon a regular basis.
Provision of impairment for financial assets is calculated based on past experience, and current andexpected changes in client credit ratings.
(i) Policy in Managing Credit Risk
Geelong Cemeteries Trust does not have any material credit risk exposure to a single debtor or groupof debtors. In respect to trade and sundry receivables, Geelong Cemeteries Trust minimisesconcentrations of credit risk by undertaking transactions with a limited numbers of clients, all with agood credit rating based on past transactions with the Trust. Trade debtors are normally paid within 30days of end of month. Sundry debtor terms are also 30 days from end of month.
In addition, management reviews on an ongoing basis the age analysis of receivables to assess thequality of them and apply any action required to ensure the collectability of the debt. According tosuccessful past experience in managing the credit risk on receivables, Geelong Cemeteries Trust hasassessed this risk as low.
Management have assessed the credit risk associated with the cash and cash equivalents as minimal.The amounts are allocated to reputable financial institutions which have a high credit rating.
Investments are managed in accordance with our investment policy, which stipulates, where applicable,minimum credit ratings. The Trust also ensures investments are placed with a number of financialinstitutions to mitigate any credit risk. The investment policy is reviewed regularly by the Trust.
Geelong Cemeteries Trust manages all investments allocated as available for sale financial assets.The total funds invested are diversified across a range of reputable and experienced financialinstitutions and only in capital guaranteed or capital protected investment products. This mitigates thecredit risk on this class of financial assets.
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GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 18 Financial Instruments (continued)
(b) Credit Risk (continued)
(ii) Maximum Exposure to Credit Risk
The Trust's maximum exposure to credit risk at balance date in relation to each class of financial assetis represented below:
2014 2013Financial Assets $ $Cash and Cash Equivalents 4,001,497 4,107,379Receivables 209,488 216,650Available for Sale Investments 2,526,000 2,894,874Total 6,736,985 7,218,903
Currently Geelong Cemeteries Trust does not hold any collateral as security nor credit enhancementsrelating to any of its financial assets.
(iii) Credit Quality of Contractual Financial Assets that are neither past due nor impaired.
Financial Government Government OtherInstitutions Agencies Agencies (min. BBB(AAA Credit (AAA Credit (BBB Credit Credit Total
Total Financial Assets 7,218,903 7,218,903 - - - -
Contractual financial assets that are either past due or impairedThere are no material financial assets which are individually determined to be impaired. Currently theTrust does not hold any collateral as security nor credit enhancements relating to its financial assets.
There are no financial assets that have had their terms renegotiated so as to prevent them from being pastdue or impaired, and they are stated at their carrying amounts as indicated. The ageing analysis tableabove discloses the ageing only of contractual financial assets that are past due but not impaired.
(c) Liquidity Risk
Liquidity risk arises when Geelong Cemeteries Trust is unable to meet obligations associated withfinancial liabilities when they fall due.
(i) Policy in Managing Liquidity Risk
Geelong Cemeteries Trust objectives in managing liquidity risk is to ensure that all obligations will bemet as they fall due, while ensuring maximum funds are available for investment to meet longer termperpetual maintenance requirements.
Geelong Cemeteries Trust manages liquidity risk by monitoring cash flows to ensure sufficient funds aremaintained in the transactional bank accounts to meet liabilities as they fall due. This is done whileensuring that surplus funds are transferred for investment. Daily monitoring occurs, with monthly reportspresented to the Trust regarding the cash flow position and cash flow forecasts. Geelong CemeteriesTrust believes that this policy ensures sufficient funds are held to allow for the proper administration ofthe cemetery.
Geelong Cemeteries Trust has assessed this risk as minimal considering the positive current positionof current assets compared against current liabilities.
ImpairedFinancial
Assets$
Past due but not impaired
Page 36
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 18 Financial Instruments (continued)
(c) Liquidity Risk (continued)
(ii) Maximum Exposure to Liquidity Risk
The maximum exposure to liquidity risk is the carrying amounts of financial liabilities as follows:
2014 2013Financial Liabilities $ $
Payables 365,524 367,786Pre-paid Burial and Cremation Fees 3,461,310 3,238,217
Total 3,826,834 3,606,003
(iii) Maturity Analysis of Financial Liabilities as at 30 June
The following table discloses the contractual maturity analysis for financial liabilities at the respectivereporting dates:
Nominal Less than 1 - 3 3 months OverAmount 1 month months - 1 Year 1 Year
Total Financial Liabilities 3,606,003 3,606,003 384,426 33,280 149,762 3,038,535
The amounts above disclosed are the contractual undiscounted cash flows of each class of financialliabilities.
CarryingAmount
$
Maturity Dates
Page 37
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 18 Financial Instruments (continued)
(d) Market Risk Exposure
Geelong Cemeteries Trust has diversified investments across a range of investments, includinginvestments in the Australian and International share market, in order to fund pre-paid fees andlong-term perpetual maintenance obligations. These markets are subject to volatility. It is acceptedthat the share market is cyclical and that there is inherent volatility.
Investments are managed in accordance with our investment policy, which stipulates, asset allocationranges to diversify and mitigate risk. The investment policy is reviewed regularly by the Trust. The Trustmanages its own investment portfolio. The performance of investments is regularly monitored andreported to the Trust monthly.
Geelong Cemeteries Trust's exposure to market risk is through currency risk, interest rate risk, andother price related risks. Objectives, policies and processes used to manage each of these risks aredisclosed as follows:
(i) Currency Risk and Policy in Managing Currency Risk
The Geelong Cemeteries Trust is exposed to insignificant foreign currency risk through its payablesrelating to purchases of supplies and consumables from overseas. This is because of a limitedamount of purchases denominated in foreign currencies.
(ii) Interest Rate Risk and Policy in Managing Interest Risk
Financial LiabilitiesExposure to interest rate risk is minimal as Geelong Cemeteries Trust does not hold interest bearingliabilities.
Available for Sale InvestmentsThe objective of managing interest rate risk is to minimise and control the risks of losses due tointerest rate changes and to take advantage of potential profits.
Interest risk is managed by diversifying investment in a range of securities including investments withfixed interest rates, floating interest rates and market based placements.
(iii) Other Market Risk and Policy in Managing Other Market Risk
Exposure to other price risk arises due to inherent risk associated with the possibility of a fall in themarket value of Available for Sale Financial Assets.
Geelong Cemeteries Trust's objective of managing other price (primarily equity market) risk is tominimise negative impacts on investment value due to the volatility of the stock markets.
Geelong Cemeteries Trust manages all investments and through the current diversification, togetherwith the required capital guarantee and/or capital protection, minimises the risk associated with theseinvestments. All investments are placed as per the investment policy of the Trust, which is reviewed ona regular basis.
Page 38
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 18 Financial Instruments (continued)
(d) Market Risk Exposure (continued)
Interest Rate Exposure of Financial Assets and Liabilities as at 30 June
Total Financial Liabilities 3,606,003 - - 3,606,003
Weightedaverageeffective
interest rate%
CarryingAmount
$
Interest Rate Exposure
CarryingAmount
$
Weightedaverageeffective
interest rate%
Interest Rate Exposure
Page 39
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 18 Financial Instruments (continued)
(d) Market Risk Exposure (continued)
(iv) Sensitivity Analysis on Other Price RiskTaking into account past performance, future expectations, economic forecasts, and management'sknowledge and experience of the financial markets, the Trust believes the following movements arereasonably possible in the forthcoming 12 months. This sensitivity analysis has been prepared for thenext 12 months. The Trust does not believe that it is possible to reasonably estimate the variablesused further than for 12 months.
- A shift of -0.5% and +0.5% in market interest rates from year-end rates of 4.0%.
Geelong Cemeteries Trust manages all investments as per the current policies, requiring investmentsto be either capital guaranteed or capital protected and diversified across a number of investmentoptions ranging from three months through to seven years.
The following tables disclose the impact on net operating result and equity for each category offinancial instrument held by Geelong Cemeteries Trust at year end as presented to the Trust, ifchanges in the relevant risk occur.
Carrying2014 Amount Net Result Equity Net Result Equity
Total Increase/(Decrease) ( 51,202) ( 51,202) 51,202 51,202
Interest Rate Risk-0.5% 0.5%
Interest Rate Risk-0.5% 0.5%
Page 40
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 18 Financial Instruments (continued)
(e) Fair Value
The fair values and net fair values of financial instrument assets and liabilities are determined as follows:- the fair value of financial instrument assets and liabilities with standard terms and conditions andtraded in active liquid markets are determined with reference to quoted market prices; and- the fair value of other financial instrument assets and liabilities are determined in accordance withgenerally accepted pricing models based on discounted cash flow analysis.
The Trust considers that the carrying amount of financial instrument assets and liabilities recorded inthe financial statements to be a fair approximation of their fair values, because of the short-term natureof the financial instruments and the expectation that they will be paid in full. All longer-term investmentsare either capital guaranteed or capital protected with any movements in market prices recognised inthe Available-for-sale Investment Reserve.
The following table shows both the Consolidated Carrying Amount and Fair Value of the financial assetsand financial liabilities of the Trust.
Comparison between carrying amount and fair value
Consol'd Consol'dCarrying Fair Carrying FairAmount Value Amount Value
2013Available for sale financial assets- Managed Funds 894,874 894,874Total Financial Assets 894,874 894,874 - -
There have been no transfers between levels during the period.
Fair value measurement at end ofreporting period using:
Page 41
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 19 Superannuation
(a) Local Authorities Superannuation Fund (LAS), managed by Vision Super
Geelong Cemeteries Trust ("the Trust") makes the majority of its employer superannuation contributions inrespect of its employees to the Local Authorities Superannuation Fund ("the Fund"). This Fund has twocategories of membership, accumulation and defined benefit, each of which is funded differently. Thedefined benefit section provides lump sum benefits based on years of service and final average salary. Thedefined contribution section receives fixed contributions from the Trust and the Trust's legal or constructiveobligation is limited to these contributions.
Obligations for contributions to the Fund are recognised as an expense in the Comprehensive OperatingStatement when they are made or due.
Accumulation
The Fund's accumulation category, Vision MySuper/Vision Super Saver, receives both employer andemployee contributions on a progressive basis. Employer contributions are normally based on a fixedpercentage of employee earnings (for the year ended 30 June 2014, this was 9.25% as required underSuperannuation Guarantee Legislation). Our commitment to defined contribution plans is limited to makingcontributions in accordance with our minimum statutory requirements. No further liability accrues to theemployer as the superannuation benefits accruing to employees are represented by their share of the netassets of the Fund.
Effective from 1 July 2014, the Superannuation Guarantee contribution rate is legislated to increase to9.5%, and will progressively increase to 12% by 2019. Based on announcements included in the May 2014Federal Budget, this progressive increase to 12% will be delayed until 2022.
Defined Benefit
As provided under Paragraph 34 of AASB 119, Geelong Cemeteries Trust does not use defined benefitaccounting for its defined benefit obligations under the Fund's Defined Benefit category. This is becausethe Fund's Defined Benefit category is a multi-employer sponsored plan.
As a multi-employer sponsored plan, the Fund was established as a mutual scheme to allow for themobility of the workforce between the participating employers without attaching a specific liability toparticular employees and their current employer. Therefore, there is no proportional split of the definedbenefit liabilities, assets or costs between the participating employers as the defined benefit obligation is afloating obligation between the participating employers and the only time that the aggregate obligation isallocated to specific employers is when a call is made. As a result, the level of participation of GeelongCemeteries Trust in the Fund cannot be measured as a percentage compared with other participatingemployers. While there is an agreed methodology to allocate any shortfalls identified by the Fund Actuaryfor funding purposes, there is no agreed methodology to allocate benefit liabilities, assets and costsbetween the participating employers for accounting purposes. Therefore, the Actuary is unable to allocatebenefit liabilities, assets and costs between employers for the purposes of AASB 119.
Funding arrangements
The Trust makes employer contributions to the defined benefit category of the Fund at rates determined bythe Trustee on the advice of the Fund's Actuary. The Fund's employer funding arrangements comprise ofthree components (which are detailed below) are:
1. Regular contributions - which are ongoing contributions needed to fund the balance of benefits for currentmembers and pensioners;
2. Funding calls - which are contributions in respect of each participating employer's share of any fundingshortfalls that arise; and
3. Retrenchment increments - which are additional contributions to cover the increase in liability arisingfrom retrenchments.
Page 42
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 19 Superannuation (continued)
The Trust is also required to make additional contributions to cover the contribution tax payable on thecontributions referred to above.
Employees are also required to make member contributions to the Fund. As such, assets accumulate inthe Fund to meet member benefits, as defined in the Trust Deed, as they accrue.
Employer contributions
Regular contributions
On the basis of the results of the most recent full investigation conducted by the Fund's actuary as at31 December 2011, the Trust makes employer contributions to the Fund's Defined Benefit category atrates determined by the Fund's Trustee. For the year ended 30 June 2014, this rate was 9.25% ofmembers' salaries. This rate increased to 9.5% on 1 July 2014 and is expected to increase in line withthe required Superannuation Guarantee contribution rate.
In addition, the Trust reimburses the Fund to cover the excess of the benefits paid as a consequenceof retrenchment above the funded resignation or retirement benefit (the funded resignation or retirementbenefit is calculated as the VBI multiplied by the benefit).
Funding calls
The Fund is required to comply with the superannuation prudential standards. Under the superannuationprudential standards SPS 160, the Fund is required to target full funding of its vested benefits. Theremay be circumstances where:
- a fund is in an unsatisfactory financial position at an actuarial investigation (i.e. its vested benefitindex (VBI) is less than 100% at the date of the actuarial investigation; or
- a fund's VBI is below its shortfall limit at any time other than at the date of the actuarial investigations.
If either of the above occur, the fund has a shortfall for the purposes of SPS 160 and the fund is requiredto put a plan in place so that the shortfall is fully funded within three years of the shortfall occurring.There may be circumstances where the Australian Prudential Regulation Authority (APRA) may approvea period longer than three years.
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 Geelong Cemeteries Trust) are required to make anemployer contribution to cover the shortfall. The methodology used to allocate the shortfall was agreedin 1997 to fairly and reasonably apportion the shortfall between the participating employers.
Using the agreed methodology, the shortfall amount is apportioned between the participating employersbased on the pre-1 July 1993 and post-30 June 1993 service liabilities of the Fund's defined benefitcategory, together with the employer's payroll at 30 June 1993 and at the date the shortfall has beencalculated.
The pre-1 July 1993 and post-30 June 1993 service liabilities of the Fund are based on:
- The service periods of all active members split between the active members pre-1 July 1993 and post-30 June 1993 service period;- The service periods of all deferred members split between the deferred members pre-1 July 1993 and post-30 June 1993 service period; and- The pensioner (including fixed term pension) liabilities which are allocated to the pre-1993 period.
Page 43
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 19 Superannuation (continued)
The pre-1 July 1993 component of the shortfall is apportioned between the participating employersbased on the employer's share of the total participating employer payroll at 30 June 1993.
The post-30 June 1993 component of the shortfall is apportioned between the participating employersbased on the employer's share of the total participating employer payroll at the date the shortfall hasbeen calculated.
Due to the nature of the contractual obligations between the participating employers and the Fund, andthat the Fund includes lifetime pensioners and their reversionary beneficiaries, it is unlikely that theFund will be wound up. In the unlikely event that the Fund is wound up and there is a surplus in theFund, the surplus cannot be applied for the benefit of the defined benefit employers where there areon-going defined benefit obligations. The surplus would be transferred to the fund accepting thosedefined benefit obligations (including the lifetime pension obligations) of the Fund.
In the event that a participating employer is wound up, the defined benefit obligations of that employerwill be transferred to that employer's successor.
Differences between calculations
The Fund surplus or deficit (i.e. the difference between fund assets and liabilities) is calculateddifferently for funding purposes (i.e. calculating required contributions), for the calculation of accruedbenefits as required in AAS 25 and for the values needed for the AASB 119 disclosure in the GeelongCemeteries Trust's financial statements. AAS 25 requires that the present value of the defined benefitliability be calculated based on benefits that have accrued in respect of membership of the plan up tothe measurement date, with no allowance for future benefits that may accrue.
Retrenchment Increments
During 2013/14, the Trust was not required to make payments to the Fund in respect of retrenchmentincrements (2013 - Nil). The Trust's liability to the Fund as at 30 June 2014, for retrenchmentincrements, accrued interest and tax is Nil (2013 - Nil).
Shortfall Amounts
The Local Authorities Superannuation Fund's latest actuarial investigation as at 31 December 2011identified an unfunded liability of $406 million (excluding contributions tax) in the defined benefit categoryof which the Trust is a contributing employer. The Trust was made aware of the expected shortfall duringthe 2011/12 year and was informed of its share of the shortfall on 2 August 2012.
The Trust has not been advised of any further adjustments.
The Trust's share of the shortfall amounted to $409,289 (excluding contributions tax) which was accountedfor in the 2011/12 Comprehensive Operating Statement within Employee Benefits and in the Balance Sheetin Current Liabilities Provisions.
No further amount has been accounted for in the 2013/14 Comprehensive Operating Statement withinEmployee Benefits (see Note 2) and in the Balance Sheet in Current Liabilities Provisions (see Note 10)(Nil in the 2012/13 Comprehensive Operating Statement with Employee Benefits and Nil in the 2012/13Balance Sheet in Current Liabilities Provisions).
For the 2012/13 year, the Trust received an early payment discount of $25,258 which was accounted for inthe 2011/12 Comprehensive Operating Statement within Employee Benefits (see Note 2) and in theBalance Sheet in Current Liabilities Provisions (see Note 10).
The amount of the unpaid shortfall at 30 June 2014 is Nil (2013 - Nil).
Page 44
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 19 Superannuation (continued)
Accrued Benefits
The Fund's liability for accrued benefits was determined in the 31 December 2011 actuarial investigationpursuant to the requirements of Australian Accounting Standards Board AAS 25 as follows:
The next full actuarial investigation of the Fund's liability for accrued benefits will be based on the Fund'sposition as at 30 June 2014. The anticipated completion date of this actuarial investigation is 19 December2014
(b) Superannuation contributions
Contributions by the Trust (excluding any unfunded liability payments) to the above superannuation plansand other funds for the financial year ended 30 June 2014 are detailed below:
2014 2013$ $
Vision Super Defined Benefits - 9.25% 42,734 39,489Vision Super Accumulation Plan - 9.25% (2013 - 9.0%) 87,345 77,465Other Funds Super Guarantee Contributions - 9.25% (2013 - 9.0%) 55,174 43,567
185,253 160,521
(c) Contributions Outstanding as at Year EndSuper Guarantee Contributions 35,136 30,198
35,136 30,198
The expected contributions to be paid to the defined benefit category of Vision Super for the year ending30 June 2015 is $47,950.
Note 20 Remuneration of Auditors
Audit fees paid or payable to the Victorian Auditor-General'sOffice for the audit of the Trust's financial report:
Audit of financial statements 13,100 12,800
13,100 12,800
Page 45
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 21 (a) Responsible Persons Disclosure
In accordance with the Ministerial Direction issued by the Minister for Finance under the Financial ManagementAct 1994, the following disclosures are made regarding responsible persons for the reporting period.
Responsible Minister:The Honourable David Davis, MLC, Minister for Health 01/07/2013 - 30/06/2014
The following were Trustees of the Geelong Cemeteries Trust during the reporting period:
Mr. L. J. SMITH Chairman 01/07/2013 - 30/06/2014Mr. M. G. BARWICK 01/07/2013 - 30/06/2014Mrs. S. M. CHISHOLM 01/07/2013 - 30/06/2014Mrs. H. F. BENDER 01/07/2013 - 30/06/2014Mr. S. L. GOSLING 01/07/2013 - 30/06/2014Mrs. M. S. HEAGNEY 01/07/2013 - 30/06/2014Mr. P. G. MANSFIELD 01/07/2013 - 30/06/2014Ms. B. I. RICHARDSON 01/07/2013 - 30/06/2014
Chief Executive Officer: Mr. D. L. THOMAS
RemunerationAmounts relating to Ministers are reported in the financial statements of the Department of Premier andCabinet.
The number of responsible persons and their total remuneration during the reporting period are shown in the firsttwo columns in the table below in their relevant income bands. The base remuneration of responsible persons isshown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long service leavepayments, redundancy payments and retirement benefits.
Other Transactions of Responsible Persons and their Related Parties
Retirement BenefitsThere were no amounts paid by the Trust to Trust Members in connection with the retirement of responsiblepersons of the Trust during the reporting period.
LoansThere were no loans in existence at reporting date that have been guaranteed or secured by the Trust toresponsible persons of the Trust, nor any person related to the responsible persons of the Trust.
Period
TOTAL REMUNERATION BASE REMUNERATION
Page 46
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Other Transactions of Responsible Persons and their Related Parties (continued)
TransactionsThere were no other transactions between the Trust and Trust Members and their related parties during thereporting period.
SuperannuationThere was no amount paid to a superannuation fund, or other entity, by the Trust in connection with theretirement of any responsible person during the reporting period.
Note 21 (b) Executive Officer Disclosures
The number of executive officers, other than Ministers and Accountable Officers, and their total remunerationduring the reporting period are shown in the first two columns in the table below in their relevant income bands.
The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration isexclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits.
The difference between Base Remuneration and Total Remuneration for both the 2013 and 2014 year is bonuspayments approved by the Trust at the respective December Trust meetings following a comprehensiveperformance review of the relevant executive officers.
AAE - Annualised employee equivalent is based on paid working hours of 38 ordinary hours per week over the52 weeks for a reporting period.
Note 21 (c) Remuneration of other personnel
In accordance with FRD 21B the following disclosures are made in relation to other personnel of GeelongCemeteries Trust i.e. contractors charged with significant management responsibilities.
There were no payments made to contractors with significant management responsibilities in this reporting periodor the previous reporting period.
TOTAL REMUNERATION BASE REMUNERATION
Page 47
GEELONG CEMETERIES TRUST
Notes to the Financial Statementsfor the Year Ended 30 June 2014
Note 22 Events Occurring after Balance Sheet Date
Trust Investments - Volatility of World Financial Markets
Since the reporting date, world financial markets have shown volatility that has affected the carrying value of theTrust’s investment portfolio. The Trust continues to maintain a conservative investment strategy to manage ourexposure to this volatility.
Management and Control of Additional Cemeteries
The Trust recently received advice that it has been appointed to manage the Colac Public Cemetery and theQueenscliff Public Cemetery as from 8 July 2014. All assets and liabilities will be transferred to GeelongCemeteries Trust, as will all staff, contracts, records and registers. Both Colac and Queenscliff have significantfunds set aside for Perpetual Maintenance and are in a healthy financial position. Records will be transferredacross as soon as they are checked and verified and transfer of all assets and liabilities will be completed in the2014/15 reporting period.
Note 23 Ex-Gratia Expenses
The Geelong Cemeteries Trust has not made any ex-gratia payments during the current reporting period orprevious reporting period. The Trust also has not written off any amounts during the current reporting period orprevious reporting period.
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