Annual Report 07/08 - Lithgow City Council

Summary Financial PositionInvestmentsLoansCouncil's cash and investment portfolio decreased in 2007/08 by $785,000 to $14,929,000and generated interest of $1,137,000. In comparison the 2006/07 investment portfoliowas $15,714,000 with interest of $778,000.Investment comparatives:FINANCIAL YEARVALUE2007/08 $14,929,0002006/07 $15,714,0002005/06 $10,091,0002004/05 $11,154,0002003/04 $10,222,0002002/03 $8,714,0002001/02 $7,813,0002000/01 $6,957,000For 2007/08 end of year financial reporting purposes the Commonwealth Bank of Australia(CBA), has advised that the structure of a $500,000 Ethical Note purchased by Council on06 November 2006, and which will mature on 06 November 2011, is exposed to thecurrent Collateralised Debt Obligations (CDO) market. The effect of this is that theprincipal value of the note is .44c in the dollar of its original value and Council has acurrent book value of $220,000. This entry has been adjusted and reported in the2007/08 General Purpose Financial Reports and as per Department of Local GovernmentInvestment Order of 31 July 2008 it will be held until maturity and adjusted annually asthe future economic climate dictates.The nature of this product requires Council to report and adjust the written down value asat 30 June 2008.Principal amounts outstanding on loans at the end of the year were $6,386,000 withrepayments during the year of $412,000. As per Council resolution no loans were drawndown in the 2007/08 financial year.Cash and ReservesNote 6 of the General Purpose Financial Reports, discloses cash and investments of$14,929,000 (2006/07 $15,714,000).Externally restricted assets $9,915,000Internally restricted assets $3,361,000Unrestricted cash $1,653,000________________________________________________________________________________________________Annual Report – 2007/ 2008 Page 10