ANNUAL REPORT 2007-2008 CITY OF GREATER GEELONG

CITY OF GREATER GEELONG
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2008
36 Financial Instruments
(a) Accounting Policy, terms and conditions
CITY OF GREATER GEELONG ANNUAL REPORT 2007-2008
Recognised financial instruments Note Accounting Policy Terms and Conditions
Financial Assets
Cash and cash equivalents 16 Cash on hand is valued at face value. Cash on Hand is managed according to normal expenditure approval procedures.
Interest is recognised as it accrues. Funds returned fixed interest rate of between 6.19% and 7.38% (5.70% to 6.15%
in 2006-2007)
Bank Bills
Bills are redeemed for purchase price plus interest at maturity. Bills are held for
periods between 30 to 60 days. Interest ranged between 6.40% to 8.04%.
Term Deposits Term deposits return fixed interest rates of between 6.83% and 8.14%.
Term Deposits are held for periods of 30, 60 or 90 days.
Other Financial Assets 18 Units in Trust Withdrawals are at call 24 to 48 hours notice. These investments attract floating
interest rates of between 1.95% and 8.11% net of fees payable.
Trade and other receivables 17 Receivables are carried at nominal amounts due less any General and deferred debtors are unsecured and interest free. Credit terms are
provision for doubtful debts. A provision for doubtful debts usually 30 days.
is recognised when collection in full is no longer probable.
Collectability of overdue accounts is assessed on an ongoing
basis.
Financial Liabilities
Bank overdraft 25 The Council's bank account is closely monitored to ensure that Council has a $5M overdraft facility. It is secured by a mortgage over Council's
cash invested is maximised. The overdraft reflects unpresented general rates and is repayable on demand, interest rate, when the overdraft is
cheques at balance day.
used, is < 11%pa.
Trade and other payables 22 Liabilities are recognised for expenses incurred to balance date Creditors are unsecured, not subject to interest charges and are normally settled
and payable in the next financial year, whether invoices have within 30 days of invoice receipt.
been received or not.
Interest-bearing loans and borrowings Secured loans are carried at the principle amount outstanding. Loans are secured over the general rates of the Council. The interest rate for each
- Secured Loans 25 Loans are subject to borrowing limits imposed by the State loan is fixed for the period of the loan. Council took out a loan of $7M in May
Government under the Loan Council approval arrangements. 2006, repayable over 10 years at 6.4%. Council took out a loan of $5M in June
Interest is charged as an expense as it accrues.
2007, repayable over 10 years at 6.97%. Council took out a loan of $3.125 M
in June 2008, repayable over 10 years at 8.573%.
- Unsecured Loans 25 Unsecured loans are carried at the principle amount Unsecured loans comprise of two interest free loans from the Department of
outstanding.
Planning and Development to fund the purchase of the former Geelong Post Office
and former Geelong Gaol.
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