131 q Annual Report 2013-2014 HORSHAM RURAL CITY COUNCIL


NOTES TO THE FINANCIAL STATEMENTS (Cont.) FOR THE YEAR ENDED 30th JUNE, 2014


34 OPERATING LEASE COMMITMENTS


(a) Operating lease commitments At the reporting date, Horsham Rural City Council had the following obligations under non-cancellable operating leases for the lease of equipment for use within Council's activities (these obligations are not recognised as liabilities):


2014 $'000


Not later than one year


Later than one year and not later than 2 years Later than 2 years and not later than 5 years


2013 $'000


------------------- -------------------- 74 73 12


75 74 85


------------------- -------------------- 159


234 =========== ============


(b) Operating lease receivables At the reporting date, Horsham Rural City Council had entered into commercial property leases on its investment property, consisting of surplus freehold shop complexes. These properties held under operating leases have remaining cancellable lease terms of between 1 and 5 years. All leases include a CPI based revision of the rental charge annually.


Future minimum rentals receivable under non-cancellable operating leases are as follows: Not later than one year


Later than one year and not later than 2 years Later than 2 years and not later than 5 years


------------------- -------------------- 309


127 126 56


118 83 77


=========== ============ 278 35 CONTINGENT LIABILITIES AND CONTINGENT ASSETS


At balance date, the Council's exposure as a result of bank guarantees is: $'000


Department of Natural Resources - Arnotts Quarry Department of Natural Resources - Courtneys Quarry Minister for Agriculture and Resources Minister for Energy and Resources Environment Protection Authority


------------------- 32 12 12 5


625


Finance Assurance for Dooen Landfill Council has a responsibility under the Environment and Protection Act 1970, for remedial action and site aftercare at the Dooen Landfill. Council progressively rehabilitates the John's site each year.


Council has obligations under a defined superannuation scheme that may result in the need to make additional contributions to the scheme to ensure that the liabilities of the fund are covered by the assets of the fund. As a result of the volatility in financial markets the likelihood of making such contributions in future periods exists. At this point in time it is not known if additional contributions will be required, their timing or potential amount.


A contingent asset exists in relation to class action re damages incurred to council assets, in February 2009 Horsham bushfire. A settlement agreement has been entered into with the defendant but has not yet been finalised through the courts. It is reasonable to expect that some compensatory payment would eventuate in 2014/15.


Contingent liabilities The Council is presently involved in a confidential legal matter, which are being conducted through Council's solicitors. As this matter is yet to be finalised, and the financial outcomes are unable to be reliably estimated, no allowance for this contingency has been made in the financial statements.


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