1 JULY 2019 – 30 JUNE 2020
1
OUR VISION: MAKING A DIFFERENCE
CONTENTS
02 MEET THE BOARD
02
BOARD OF DIRECTORS
03
CHAIRMAN’S REPORT
04
CEO’S REPORT
05
OUR DIFFERENCE IN THE COMMUNITY 06 SPORT IN OUR COMMUNITY
06
PEOPLE & CULTURE REINVENTED
07
ASSOCIATED VENUES
08
04
MEMBERSHIP 09 SUSTAINABILITY 10 FLINDERS CENTRE
11
SUPPLY CHAIN
12
FINANCIALS 13
07 ANNUAL REPORT 2019 - 2020
1
09
MEET OUR BOARD JOHN MURRAY OAM - Chairman John is an active farmer, RFS volunteer and charity fundraiser who has been a member of Bankstown Sports since 1962, and a member of our Board since 1981. A former company director, Camden Councillor and sportsman, John was appointed Chairman in 2006, and is a Life Member of the Club.
RICHARD PHILLIPS - Director Richard is a retired businessman and has been a Club member since 1971 and a member of our Board since 1981. With a keen interest in snooker and squash, he was the Sports Committee Chairman from 1986-2013, and Vice-President of the Club from 2006 2019. He is also a Life Member.
JIM RONIS - Director Greek-born Jim is a consultant to Bankstown-based Ronis Real Estate. He was on the board of Soccer NSW (now Football NSW). He is a life member of Football NSW, Canterbury Marrickville Soccer Club and is a Life Member of Bankstown Sports. He helped establish the Hellenic Lions Club and works with Saint Lavra Association which helps resettle migrants. He was a long serving member of the APEX Club Bankstown.
CAROLYN CAMPBELL - Director Carolyn has a keen interest in all sports and has dedicated her life to the administration of sport in Australia. She is the current Secretary of the Norwest Strikers Hockey Club, the CEO of Netball NSW and the Chairperson of Sport NSW. She has been a member of Baulkham Hills Sports Club since 2004 and joined the Bankstown Sports Board in 2019.
VERNON FALCONER - Director A keen tennis and cricket enthusiast, Vern was a senior Industrial Advocate for the Australian Workers Union for almost four decades. He currently works as a consultant. He has been a member of Bankstown Sports since 1993, was appointed to the Board in 2006 and was made a Life Member of the Club in 2016.
MARTIN KLUMPP OAM - Director Bankstown born and bred, Martin is a former banking industry HR consultant who has been involved in Bankstown District Cricket Club for more than 30 years, and has a new passion is the Bankstown Sports Cycling Club. He became a Club member in 1993 and was appointed to the Board in 2013.
ANNUAL REPORT 2019 - 2020
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JIM HANNA - Director Family man Jim loves watching cricket and the Bulldogs, is a former federal public servant, solicitor and now Company Director. He is a member of the Law Society and is on the Board of Bankstown City Aged Care. He has been a Club member since 2004 and joined the Board in 2015.
BOARD OF DIRECTORS Registered clubs in NSW are required by law to have a Board of Directors, who are responsible for the overall governance and performance of the club. Among their many roles, they provide direction on strategies for growth and development, they monitor the performance of the Chief Executive Officer and approve senior management policies and practices, ensuring the club’s business is being conducted ethically and transparently. At Bankstown Sports, there are seven members of our Board, who are all unpaid volunteers. Like many Boards, ours is made up of a mix of members from a range of professions including business, management, law, accounting, public administration and marketing.
Back Row (from left): Jim Ronis (Director), Vern Falconer (Director), Richard Phillips (Director) and Jim Hanna (Director)
ANNUAL ANNUALREPORT REPORT2010 2019- -2020 2020
33
Front Row (seated from left): Carolyn Campbell (Director), John Murray OAM (Chairman), Mark Condi (Chief Executive Officer) and Martin Klumpp OAM (Director)
CHAIRMAN’S REPORT On behalf of the Board of Directors I am pleased to offer you the 62nd Annual Report for Bankstown Sports. I’d like to take this opportunity to once again recognise the passing of Douglas Shedden and Alex Fulcher – both valued Directors of Bankstown Sports. Additionally, condolences to the family, friends and colleagues of long-serving and highly valued staff member, Jaqueline Ayers. While 2020 will be recorded as one of the most challenging years for our organisation, I am so incredibly proud to report that Bankstown Sports has recovered from the 10-week shutdown, bruised but leaner. Bankstown Sports has continually sought to place our staff, members and community at the heart of every decision.
JOHN MURRAY, OAM CHAIRMAN “Bankstown Sports has continually sought to place our staff, members and community at the heart of every decision.”
And on Monday 23 March 2020, as our doors closed due to COVID-19 Government restrictions and over 500 of our highly valued and well-respected staff were stood down – we all stepped up to ensure that everyone was supported by the kindness, camaraderie and determination that makes us family. There has also been the recent announcement from the Salvation Army Corp, wherein chaplaincy services have been removed from many outlets, including Bankstown Sports with our officer, Shane Mount. We thank Shane for his commitment and service, and trust he will be served well with his future endeavours.
When drought struck our country – we continued to source local and support Australian farmers, producers and businesses. When the bushfires ravaged through much of Australia, particularly the South Coast of NSW, our team, staff and members collaborated to support those in need.
This year has been a challenge, but it has also provided an opportunity for Bankstown Sports and associated venues to refocus, reposition and ensure that we are set up for a long-standing future. I sincerely thank my fellow Directors, our CEO Mark Condi, the Executive Management team and our team of dedicated staff – without your commitment, perseverance and willingness to serve our members, 2020 could have proven even more challenging. Together we will continue to make a difference for many years to come.
ANNUAL REPORT 2019 - 2020
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CEO’S REPORT This year has been incredibly hard for our country, the awful bushfires in December/ January, floods in February and now COVID-19. This year has been about resilience from both our community and our staff - what strong people we are. In February 2020 we launched our ‘South Coast Pale Ale’ brewed in our Basement Brewhouse, with all proceeds going towards supporting south coast clubs who had suffered through the awful bushfire season. We went from supporting these amazing community focused clubs, to having to focus on saving our club during the COVID-19 shutdown.
MARK CONDI, CHIEF EXECUTIVE OFFICER “Our entire team was able to demonstrate strength, business-minded leadership and determination to place the best interests of our staff, members and our community at the heart of all we do.”
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This process resulted in expense redirections and operative changes that will make a drastic impact on our organisation’s success, setting us up to ensure we can continue to make a difference in our community. We’ve made hard decisions, lost some incredibly valued staff and had to reposition some of our offerings. We hope to see the benefit of this process deliver return for many years to come. However, communicating the implications of the Government enforced closure of our industry to the staff of Bankstown Sports and our associated venues was one of the biggest challenges I have faced as CEO. Standing down our valued team prior to the announcements of official Government support left me feeling helpless. Seeing Bankstown Sports completely vacant of members was also heart-breaking. Pouring my whole career into Bankstown Sports, I knew it was not the end, and ultimately our organisation is just a small part of the devastating economic impacts of COVID-19 that unfortunately still rein for many organisations globally. As we re-opened on 1 June 2020, I was so proud of our staff. We have an incredible team that demonstrated our new Culture Value Focus, each bringing with them a cando attitude, a willingness to be a team player, ready to surprise and delight our customers. This renewed focus represents how we bring people into our organisation, how we each work together and how we will continue to deliver a difference to the community we serve.
In December 2019 our Executive Management team sought to make some progressive and forward-thinking changes for Bankstown Sports. While this was an incredibly challenging and difficult process, it ensured our entire team was able to demonstrate strength, business-minded leadership and determination to place the best interests of our staff, members and our community at the heart of all we do.
As hard as this year has been, I am so grateful for the opportunities it has provided us all. I am part of a team who do not take working for Bankstown Sports for granted – to be part of our organisation is a privilege, and I thank each and every one of our staff and members for contributing to the Bankstown Sports momentum.
OUR DIFFERENCE
IN THE COMMUNITY 2020 has offered unprecedented times for all. Optimistically, this year has provided an opportunity to consider the value of clubs within their local communities – especially as the South Cost was ravaged by fire and drought.
Bankstown Sports was able to contribute ClubGRANTS Emergency Relief to Regional NSW - $100,000 was provided directly to South Coast clubs affected by the 2020 Bushfires. These South Coast clubs used the funds to provide emergency relief to their community, cover the cost of utilities, staff wages, cleaning and food. Below is a summary of the support provided to nine clubs across the NSW South Coast; • • • • • • • • •
Bodalla Bowling Club ($20,000) Merimbula RSL Club ($5,000) Mollymook Beach Bowling Club ($10,000) Moruya Bowling Club ($5,000) Pambula Merimbula Golf Club ($10,000) Sussex Inlet RSL Club ($10,000) Tathra Beach Country Club ($5,000) Tomakin Sports ($25,000) Tumbarumba Golf Club ($10,000)
Additionally, Team Rubicon (since renamed to Disaster Relief Australia) was granted $50,000 towards the “Litres for the Land” drought relief efforts. Team Rubicon have been working closely with ClubsNSW and regional and rural communities across NSW to deliver water to drought affected areas. Bankstown Sports and associated venues are grateful to have been able to support others in need.
SPORT IN OUR COMMUNITY
We recognise the passing of Keith Vallis, a significant contributor to the sporting clubs in Baulkham Hills and the founding chairman of the original venue at Baulkham Hills.
•
Our annual contribution to sport was over $580,000 in cash funding and over $200,000 of in-kind support.
•
Our Sports Network boasts 47 grassroots sporting clubs engaging over 1,000 volunteers and some 10,000 participants.
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• •
In 2019/20 we witnessed growth in female participation in football both on-field and in volunteer roles off-field. Our Sports Network members received enhanced child safety training, were upskilled in the areas of managing social media and
ANNUAL REPORT 2019 - 2020
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•
We continued to provide Xero software subscriptions to all eligible clubs and launched a new online platform for volunteers to access sports administration resources.
•
Our Ted Horwood Reserve Working Party was successfully granted funds to improve walking tracks, lighting and signage for the benefit of the greater community at Ted Horwood Reserve in Baulkham Hills.
fundraising, and successfully utilised the industry’s relaunched ClubGRANTS Online system.
PEOPLE & CULTURE
HR REINVENTED OUR PEOPLE
1 JUNE 2020
2019/2020 proved a difficult year for our people. In March 2020, all 563 staff members were stood down after the Australian Government shut down hospitality venues amid the growing COVID-19 outbreak in the community.
It was fantastic to see so many of our staff members back at work on 1 June ready to serve our members and community. We emerged from the 10-week shut, having lost 82 staff members in a workplace restructure. It was a very difficult time for our organisation and our people.
Staff were without their jobs for 10 weeks or more. As disheartening as this was, it was pleasing to see our staff community come together to support one another, the club, and our broader community.
LOOKING FORWARD Our team members are now being cross-trained and skilled up more than ever to ensure we are adaptable and efficient in a post-COVID world. We have re-focused our training approach and revisited our values engaging each of our 481 staff members to deliver an exceptional customer experience for our members and visitors.
OUR DIFFERENCE
ANNUAL REPORT 2019 - 2020
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Immediately after shut-down, our chefs and kitchen teams volunteered their time to pack up food and donate hampers to staff members in need. An OzHarvest truck was also loaded up with fresh produce to support some of the most vulnerable members in the community.
ASSOCIATED VENUES ANNUAL REPORT 2019 - 2020
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This year, our associated venues have experienced several managerial changes on account of workplace restructure. Associated venues provide an opportunity for upcoming talent to be nurtured and growth opportunities to be trialled, as well an opportunity for our members to be offered variety. David Hills has deservingly been placed in a newly formed role as Area Venue Manager – actively working with the Venue Managers to support their operative and business needs. 2020 has also seen: •
The appointment of Tony Choueifati as Venue Manager of Bankstown Sports Bowls Club
•
Maria Pizanias welcomed into the position of Venue Manager of Baulkham Hills Sports
•
The progression of Yvette Mosses as Venue Manager of Birrong Sports Club
•
Vince Bruning moved to Auburn Tennis Club to shape its projection as a leading associated venue
•
The Acres Club under the insightful leadership of Joanne Hall as Venue Manager
We congratulate the team on all appointments and recognise the contribution of the Associated Venues towards the wider direction and momentum of the Bankstown Sports group.
MEMBERSHIP
This fiscal year has seen many changes to the Bankstown Sports membership offering. Not only have all venues increased focus on strengthening membership value, but the collective goal of reaching 100,000 members has also been achieved.
Internally developed membership kiosks have now been placed at all Bankstown Sports entry points. Enabling seamless membership purchase via a licence scan, the system has literally converted membership registration into an intuitive, self-led process that takes only a few moments. There are seven kiosks at Bankstown Sports due to the venue’s high volume of visitation. The Acres Club also features one kiosk as the venue has been identified as a premium opportunity for membership conversion. More kiosks are to come across the group. Delivering more value to members of Bankstown Sports and associated venues has never been more relevant. This year Bankstown Sports introduced discounted member pricing at every venue-operated restaurant and bar. Membership prices have also been reduced; $5 for one year, $10 for 3 years and $15 for 5 years. Increased digital communication options for members seeks to drive efficiency and relevance, as well as delivering environmental benefit with reduced paper consumption. Remaining relevant and embracing opportunities for change have also extended to QR ordering within many of our restaurants across Bankstown Sports and The Acres Club. While customers find this service valuable, efficient and controlled, it also allows staff to focus more time on customer-centric service.
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Additionally, many restaurants are now also available for online ordering – external to the venue. Not only does this service diversify the Bankstown Sports offering by extending takeaway services, it ensures that that valued customers can experience a taste of Bankstown Sports from the comfort of their home.
In late 2019 when the NSW Government introduced digital licences as being a valid form of entry into clubs, Bankstown Sports swiftly integrated digital licence scanning and encouraged the method as a quick means of membership registration.
All the changes to membership within the past year reflect in the changing profiles of members. With 33% of new members under the age of 35, and the average age of a Bankstown Sports member being 41, it’s highly evident that these enhancements are introducing Bankstown Sports to a new generation, sustaining the ability of the club to deliver to the local community.
SUSTAINABILITY Bankstown Sports is committed to being a highly sustainable organisation and aims to lead the way in environmentally friendly initiatives. Significant time and resources are invested into sustainable options for every operative area of the club, ensuring responsible management of energy and waste now, and into the future. In 2019 Bankstown Sports introduced a food waste processing system to reduce the organisation’s environmental impact. The ORCA breaks down organic food scraps, converting them into trade wastewater which is then treated and recycled. ORCA operates at Bankstown Sports 24 hours a day and can be fed every 1-2 hours. This fiscal year the ORCA was able to divert 29.03 tonnes of waste which equates to a decrease of 55.17 tonnes of Co2 being produced.
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Bankstown Sports has also installed 1,332 Sunpower Solar Panels in a bid to reduce the organisation’s carbon footprint and environmental impact while also offering a significant cost reduction. So far results show that on weekdays 98.37% of energy generated by the solar panels is consumed on site, and weekends represent a consumption of 95.7%. Remaining energy is exported to the grid – contributing to offset the consumption of others. Investment in sustainability is adding value to the ongoing community benefit of Bankstown Sports.
FLINDERS CENTRE Being a beacon of Bankstown and one of the greatest reflections of Bankstown Sports to date, Flinders Centre Bankstown offers premium opportunities and office space to the local community.
While the tower is yet to be completely tenanted, the positive impact of the business precinct can be seen via commercial progression of the local Bankstown area, as well as patronage to Bankstown Sports in otherwise off-peak periods. St.George Bank, ANZ and Coverforce are just a few of the businesses that rent positions in the tower, benefiting from the on-site childcare, UFC Gym and direct access to Bankstown Sports. Whole floors are available for lease via JLL and Ronis Real Estate, however, Flinders Centre Bankstown is also home to shared office space, Regus.
Regus Bankstown provides affordable office rental on flexible terms. Combining coworking space, bookable meeting rooms and virtual office capabilities with 24-hour access, CCTV, parking, business-quality WiFi and admin support, Regus Bankstown focus’ on facilities while smaller businesses and start-ups concentrate on their operations. With the swift changes in the business and economic climate of 2020, Regus Bankstown offers flexibility and responsive space solutions that will aid many in navigating the unprecedented business needs of today and beyond. The wholistic offering of Flinders Centre Bankstown ensures it is an immediate asset to the local community, as well as security for many local businesses for tomorrow.
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First established in 1989, Regus is one of the original pioneers of flexible workspace, helping businesses choose a way of working that’s best for their people. Now spanning the world with over 3,000 locations, Regus’ global network of bright, inspiring workspaces allows modern businesses to work where, when and how they want, in a more agile way.
SUPPLY CHAIN Bankstown Sports takes a great deal of pride in its suppliers – not just in the produce that can be sourced and collaboratively created, but also in the ability to support a variety of businesses and form valuable lasting relationships.
In response to the 2020 South Coast Fires, a South Coast burger and beer were especially crafted by Basement Brewhouse. Not only did these items sustainably source produce from the region, but they also served as an opportunity for members of Bankstown Sports to raise funds for fire-affected areas. Featured on the limited-edition burger was beef mince sourced from the Riverina (Albury – Wodonga area) as well as cheese and Dairymont butter sourced from Bega (NSW South Coast). Inspired by the NSW South Coast, Basement Brewhouse South Coast Pale Ale was packed with juicy tropical Australian galaxy hops lending aromas of bright passionfruit and citrus, making it super refreshing and easy drinking after a long day. All proceeds from the Fire Relief Burger combo (burger and pint of South Coast Pale Ale) sold on 1 February 2020 were donated to areas affected by the bushfire crisis. Ongoing, $2 from every pint
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of the Basement Brewhouse South Coast Pale Ale sold was also donated.
FINANCIALS 2019-2020
102,845 OVERALL MEMBERSHIP
STATE AND FEDERAL TAXES
$19 MILLION SPORTING CLUBS AND COMMUNITY DONATIONS
$2.3 MILLION ANNUAL REPORT 2019 - 2020
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DEFICIT BEFORE OBJECTIVES
($534 K) EMPLOYMENT
$29 MILLION TOTAL TURNOVER
$101 MILLION PURCHASE OF FOOD AND BEVERAGE
$8.9 MILLION
DIRECTORS’ REPORT The Directors present their report together with the financial report of the Bankstown District Sports Club Limited for the financial year ended 30th June 2020 and the auditor’s report thereon. a) Directors The names, qualifications and responsibilities of the Directors in office as at the date of this report are:
ANNUAL REPORT 2019 - 2020
14
Name
Occupation
Number of years on Board
No. of Attendance at Board Meetings
FALCONER, Vernon Frederick
Consultant
14
11 of 12
FULCHER, Alexander Frederick MBE,OAM
Retired (Deceased)
14
5 of 6
HANNA, Jim
Company Director
5
11 of 12
KLUMPP, Martin OAM
Consultant
7
12 of 12
MURRAY, John OAM
Retired (Chair)
40
11 of 12
PHILLIPS, Richard
Retired
39
11 of 12
RONIS, Jim
Company Director
15
10 of 12
CAMPBELL, Carolyn
Company CEO
15 Months
11 of 12
The Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. b) Company Secretary The Company Secretary at the end of the financial year is Mark Christopher Condi MBA, BBusClubMgt, GAICD, JP. Mr. Condi was appointed company secretary on 7th July 2012. c) Principal Activities The principal activities of the Club during the course of the financial year were the promotion of sport and games and the operation of a Licensed Club. There has been no significant change in the nature of these activities since the last report. d) Operating Results The Net Deficit after Tax and Objectives for the year ended 30 June 2020 amounted to $2,824,466 ($4,182,044-2019 surplus), a decrease of $7,006,510. This deficit is after including, depreciation and impairment of non-current assets $16,239,402 ($12,142,369-2019) and income tax expense ($1,610,155) (($505,346) - 2019). The reduction in Net Surplus after Tax and Objectives, is due to reductions in poker machine income and sale of goods income in FY2020, especially during COVID-19 lockdown period in which the clubs were forced to close for 10 weeks, which lead to a deficit. During the lockdown period the club’s rental income was reduced due to some of the tenants facing financial hardship. The clubs reopened on 01 June 2020 however the operating income and trading performances were impacted under strict COVID-19 social restrictions since the reopening. e) Objectives The short and long term objectives of the Company are to continue to provide the very best facilities for its members and guests, support and foster sport in the local area and provide a high level of financial support to community organisations. The strategy for achieving these objectives is to diversify income streams and to lessen the reliance on gaming revenue.
f) Measurement of Success The Company measures financial and operation performance by: • Benchmarking to industry standards • Profitability • Cashflow • Trading versus Budget • Using gross profit and wage cost ratios • Return on capital employed • Patron visitations g) Membership Bankstown District Sports Club Limited is a company limited by guarantee without share capital. The number of members as of 30th June 2020 was 102,845 (76,881 - 2019) h) Significant changes in the state of affairs There has been no significant change in the state of affairs of the Company in the past financial year. i) Auditor independence A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on the following page. Dated at BANKSTOWN This 8th day of October 2020 ON BEHALF OF THE BOARD AND IN ACCORDANCE WITH ITS RESOLUTION
John Murray OAM Richard Phillips Director Director
ANNUAL REPORT 2019 - 2020
15
INDEPENDENT AUDITOR’S DECLARATION 2020 GREG HUGGETT & CO
Phone
(02) 9570 9951
CHARTERED ACCOUNTANT
Fax
(02) 9570 9291
ABN 33 155 958 377
Mobile
0412 239 579
7/83 Mulga Road, Oatley West NSW 2223
ghuggett@bigpond.com
All correspondence: PO Box 4125, Oatley West, 2223
Principal
G W Huggett
The Directors Bankstown District Sports Club Limited PO Box 213 BANKSTOWN NSW 1885
AUDITOR’S INDEPENDENCE DECLARATION SECTION 307C OF CORPORATIONS ACT 2001 I declare that to the best of my knowledge and belief, during the year ended 30 June 2020 there has been: 1. No contraventions of the auditor’s independence requirements as set out in the Corporations Act 2001 in relation to the audit, and 2. No contraventions of any applicable code of professional conduct in relation to the audit.
G W HUGGETT Greg Huggett & Co Registered Company Auditor Date: 7 October 2020 Oatley West Liability limited by a scheme approved under Professional Standards Legislation
ANNUAL REPORT 2019 - 2020
16
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2020 Revenue from ordinary activities
Note
2020
2019
Revenue from sale of goods
24,466,075
28,665,075
Revenue from gaming
69,704,227
87,779,187
Members' subscriptions
486,131
542,160
Bank interest received
38,315
47,038
3,362,330
2,248,692
2,836,110
3,870,982
Rental income Other revenue from ordinary activities Gain on disposal of fixed assets Total Revenue
57,419
102,556
100,950,607
123,255,690
Less expenditure from ordinary activities Cost of goods sold
8,921,634
10,246,319
Employment expenses
25
29,434,676
34,894,214
Depreciation expense
7
13,303,502
11,672,211
Impairment of non-current assets
7
2,935,900
470,158
21,054,825
23,833,764
Entertainment, marketing and promotions
5,771,234
7,852,070
Finance costs
2,307,916
2,921,826
Administration and operating expenses
State and federal taxes
12
Total expenses from ordinary activities Surplus before tax and objectives Less: Income tax expense / (benefit) Surplus after tax but before objectives
13
19,365,277
25,054,039
103,094,964
116,944,601
(2,144,357)
6,311,089
(1,610,155)
(505,346)
(534,202)
6,816,435
787,658
1,026,171
1,502,606
1,608,220
2,290,264
2,634,391
(2,824,466)
4,182,044
Less expenditure in furtherance of the Club's Objectives Sports expenses Community support and welfare
ANNUAL REPORT 2019 - 2020
17
Total comprehensive income for the year
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the notes to and forming part of the accounts.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2020 Current Assets Cash and cash equivalents
Note
2020
2019
3
9,929,733
8,432,067
Inventories
4
837,956
958,141
Trade and other receivables
5
2,220,446
1,569,425
Other current assets
6
4,455,006
2,559,581
17,443,141
13,519,214
7
298,978,232
305,132,604
Deferred tax asset
13
2,517,066
1,112,149
Financial assets
27
462,500
262,500
Intangible assets
8
4,579,070
4,579,070
Loans to Other Parties
6
229,167
399,167
306,766,035
311,485,490
324,209,176
325,004,704
Total current assets Non-current assets Property, plant and equipment
Total non-current assets Total assets Current Liabilities Trade and other payables
9
23,044,512
20,003,325
Interest bearing liabilities
10
4,820,562
4,604,000
Current tax liability
13
(220,905)
(601,966)
Employee benefits
26
3,758,518
4,236,295
11
288,908
280,309
31,691,595
28,521,963
Short term provisions Total current liabilities Non-current liabilities Interest bearing liabilities
10
68,354,872
69,240,833
Employee benefits
26
1,475,070
1,524,565
Deferred tax liability
13
3,069,549
3,274,787
72,899,491
74,040,185
Total liabilities
104,591,086
102,562,148
Net assets
219,618,090
222,442,556
7,111,305
7,111,305
Retained surplus
212,506,785
215,331,251
Total equity
219,618,090
222,442,556
Total non-current liabilities
18
Made up of:
ANNUAL REPORT 2019 - 2020
Equity Land and buildings revaluation reserve
The consolidated statement of financial position is to be read in conjunction with the notes to and forming part of the accounts.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY As at 30 June 2020
Retained earnings
Reserves
Total
211,149,207
7,111,305
218,260,512
Net surplus for the year
4,182,044
-
4,182,044
Transfers from reserves
-
-
-
As at 30 June 2019
215,331,251
7,111,305
222,442,556
Net surplus for the year
(2,824,466)
-
(2,824,466)
Transfers from reserves
-
-
-
212,506,785
7,111,305
219,618,090
As at 1 July 2018
As at 30 June 2020
CONSOLIDATED STATEMENT OF CASH FLOWS As at 30 June 2020
Cash flows from operating activities
Note
Cash receipts in the course of operations Cash payments in the course of operations Borrowing costs paid Interest received Income tax Net cash provided by operating activities
2020
2019
104,045,990
139,662,642
(83,727,193)
(111,238,837)
(2,307,916)
(2,934,220)
38,315
45,636
381,060
(615,313)
18,430,256
24,919,908
286,035
335,326
(14,851,847)
(25,086,299)
Cash flows from investing activities Proceeds from sale of property, plant and equipment Payment for property, plant and equipment Payment for financial assets Net cash used in investing activities
(200,000)
(50,000)
(14,765,812)
(24,800,973)
368,989
3,476,300
(2,705,767)
(3,402,480)
170,000
146,667
-
(20,000)
(2,166,778)
200,487
1,497,666
319,422
8,432,067
8,112,645
9,929,733
8,432,067
Cash flows from financing activities Proceeds from borrowings 19
Repayment of borrowings Funds received from other parties
ANNUAL REPORT 2019 - 2020
Funds advanced to other parties Net cash used in financing activities Net increase / (decrease) in cash held Cash at beginning of financial year Cash at end of financial year
14(i)
The consolidated statement of cash flows is to be read in conjunction with the notes to and forming part of the accounts.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
1. Corporate Information The financial statements of Bankstown District Sports Club Limited for the year ended 30 June 2020 were authorised for issue with a resolution of directors on 8th October 2020. The Club is incorporated and domiciled in Australia as a Company limited by guarantee. In accordance with the Constitution of the Club, every member of the Club undertakes to contribute an amount to $4 per member in the event of the winding up of the Club during the time that he or she is a member or within one year thereafter. The nature of the operations and principal activities of the Club are described in the directors’ report. 2. Summary of significant accounting policies a. Basis of Preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB), International Financial Reporting Standards as issued by the International Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events, and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and they have been consistently applied unless otherwise stated. Except for cash flow information, the financial statements have been prepared on an accrual basis and are based on historical costs, modified where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. This financial report has been prepared under the Going Concern concept. b. Changes in Accounting Standards There are three accounting standards that have been applied in the 2020 Financial Report. The 2019 comparatives are still using the previous Accounting Standards. AASB 9 Financial Instruments, AASB 16 Leases and the AASB 1058 Income of Not-for-Profits. The impact on AASB 9 and AASB 1058 are not material. c. Changes in Accounting Policies There were no changes in accounting policies during the year excepting for the introduction of AASB 16 Leases and refer to Note 2(g). d. Inventories Inventories are valued at the lower of cost and net realisable value. e. Income Tax In accordance with the concept of mutuality, income tax is liable on income derived from non-members and other parties. The charge for current income tax is based on the surplus for the year, adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted at the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. No deferred tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting, or taxable profit or loss.
ANNUAL REPORT 2019 - 2020
20
Deferred tax liability is calculated at the tax rates they are expected to apply in the period when an asset is realised or a liability is settled. Deferred tax is credited in the income statement, except where it relates to items that may be credited to equity, in which case the deferred tax is adjusted against equity. Deferred tax assets are recognised to the extent that it is probable that future tax profit will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account, or which may be realised in the future, is based on the assumption that no adverse change will occur in income tax legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with conditions of deductibility imposed by the law.
f.
Employee Benefits Provision is made for the company’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee provisions that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee provisions payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employees’ wage increases and the probability that the employee may not satisfy vesting requirements. Those cash outflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows attributable to employee provisions. g. Leases The company has adopted AASB 16 Leases and assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Right-of-use asset The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight line basis over the shorter of the lease term and the estimated useful lives of the assets. If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. The effect the adopting of AASB 16 Leases has seen an increase in assets of $1,605,896 (2019 $nil). Lease liability At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including insubstance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The effect the adopting of AASB 16 Leases has seen an increase in liabilities of $1,666,734 (2019 $nil). Short term leases and leases of low-value assets The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low-value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
ANNUAL REPORT 2019 - 2020
21
h. Comparative Figures Where required by Accounting Standards, comparative figures have been adjusted to conform with changes in presentation for the current financial year. i. Property, Plant and Equipment i. Property, Plant and Equipment are brought to account at cost, or at independent valuation where cost cannot be ascertained, less where applicable, any accumulated depreciation. The carrying amount of property, plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows, which will be received from the assets employment and subsequent disposal. ii. Buildings are depreciated on a straight-line basis, where as all other depreciable assets are on a diminishing value basis over their estimated lives. Buildings on leasehold land are written off on the consideration of the remaining term of the lease, likelihood of the lease being renewed, and the present cash generation ability of the building. iii. Land and buildings are revalued by a professional independent valuer every three years. That valuation is shown in the notes to and forming part of the financial statements, but not the actual statement of financial position. iv. In the earlier years of the Company, there was a regular revaluation of real estate being land and buildings and the revaluation was expressed in the statement of financial position. That policy ceased in 1986. Due to the time periods when such revaluations occurred it appears impossible to fully apply AASB116:Property, Plant and Equipment, whereby such assets are to be reduced back to their original cost. The departure from this standard is considered to have an immaterial effect. v. In this year, the Company at 30 June has no building works under construction. Advice is received annually from the Company’s quantity surveyors, Kinlay Grinham Casey Burne as to completed works and that are still under construction at 30 June. The quantity surveyor further advises as to completed works in respect of dividing costs between buildings, plant and equipment and repairs. vi. When real estate is purchased the acquisition cost is divided between land and buildings. The land value is determined by a recent Valuer Generals Valuation and the balance of the purchase price is allocated to buildings. If a property is acquired for possible redevelopment in the near to medium term then the acquisition cost is directed to Land only. vii. Depreciation rates for each class of depreciable assets are: Class of fixed assets Depreciation rate Buildings 1-10% Poker Machines 21% Motor Vehicles 18.5% Other Plant and Equipment 1.5 - 40% Gains and losses on disposal are determined by comparing proceeds with the carrying amount. These gains and losses are recognised in the profit and loss in the period in which they arise. viii. The potential capital gains tax on the disposal of applicable land and buildings and any other assets subject to capital gain tax has not been taken into account.
ANNUAL REPORT 2019 - 2020
22
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED)
2. Summary of significant accounting policies (Continued) j. Intangibles - Poker Machine Entitlements The Directors believe that the value shown in respect of poker machine entitlements is based on an active market at 30.6.20, and accordingly the values are not impaired, and as such, entitlements have an indefinite life and amortisation need not be considered. Each poker machine licence is an effective cash generating unit. k. Revenue Trading revenue is recognise d upon the delivery of goods and services to customers. Interest revenue is recognised at the earliest of receipt or being due and receivable. The profit and loss on disposal of assets is brought to account at the date an unconditional contract comes into being. Rental income is brought to account i. when it’s received or it is receivable, or ii. where a rent free period is involved, the benefit of the entire lease is taken into account and is apportioned over the lease period, or iii. upfront receipt in relation to a signed lease is brought to account as income, over the lease period. l.
Cash and Cash Equivalents For the purposes of the statement of cash flows, cash includes cash on hand and at bank.
m. Trade and Other Receivables Sales made on credit and due in 30 days are included in Trade Debtors at balance date net of a provision for amounts estimated to be uncollectible. The Company does not have any material risk in this area. There is expected to be some debtors who may not comply with their obligations and an increased Provision for Doubtful Debts has been enacted to address this contingency. n. Trade Creditors Liabilities are recognised for amounts to be paid in the future for goods and services received whether or not billed to the Company. Trade accounts are normally settled within 30 days unless there are specific arrangements to the contrary. o. Bank Bill Facility The bank bill facility in current liabilities comprises the current portion of the Company’s bank bill repayment within one year. The bank bill facility is repayable in minimum quarterly instalments of $1,000,000. The Company does have the right to make additional reductions in principal. The bill bears interest at the bank’s interest rate plus a margin. The Company is required to submit to the bank an annual capital budget for approval. The part of interest that relates post 30 June is included as a prepayment. p. Subscription Income Members’ subscriptions, which are paid in respect of the coming years, are not brought to account as revenue in this financial year but expressed as unearned income (liability) in the statement of consolidated financial position.
ANNUAL REPORT 2019 - 2020
23
q. Goods and Services Tax (GST) Receivables and Payables in the statement of financial position are shown inclusive of GST. Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these cir d as part of the cost of acquisition of the asset or an item of the expense. r.
Impairment of Assets At each reporting date the Company reviews the carrying value of its assets to determine whether there is any
indication that those assets have been impaired. If such an indication exists, the recoverable of the assets, being the higher of the assets fair value less costs to sell, and value in use, is compared to the assets carrying value. Any excess of the assets carrying value over its recoverable amount is expensed to the statement of profit or loss and other comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which that asset belongs. The following impairment write offs were recorded: Impairment of assets
Note
Buildings Plant and Equipment 7
2020
2019
588,818
-
2,347,082
470,158
2,935,900
470,158
s. Investment property Investment property consists of local real estate and it is held for the purpose of deriving rental income. All tenant leases are on an arm’s length basis. t.
Critical Accounting Estimates and Judgements Critical Accounting Estimates and Judgements incorporated in the Financial Report are based on historical and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company. For the purposes of measurement AASB119:Employee Benefits, defines obligations for short term employee entitlements obligation to be settled within 12 months of year’s end. Key estimates - Impairment The Company assesses impairment at each reporting date by evaluating conditions specific to the Company that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amounts incorporate a number of key estimates. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the organisation.
u. Financial Instruments Cash on hand and at bank are measured at face value. Receivables are measured at face value less provision for likely non recovery. Bank bills are measured at face value. Interest income and interest expense is recognised as earned or incurred. v.
ANNUAL REPORT 2019 - 2020
24
Consolidation of the financial statements It was decided by the Directors to consolidate the financial statements of Bankstown District Sports Club Limited and its wholly controlled entities being BDSC Agencies Pty Limited and BDSC Properties Pty Limited from 1 July 2017 and Flinders Centre Properties Pty Ltd from 1 July 2019. Previously consolidation was not considered warranted as the financial position of the wholly owned and controlled entities was immaterial. The company Facility Services Pty Limited was incorporated last year and is wholly owned by Bankstown District Sports Club Limited. However, as this company has not yet traded and has $nil asset and liability, it does not form part of the consolidated group.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) 2. Summary of significant accounting policies (Continued) v. Consolidation of the financial statements (continued) As Bankstown District Sports Club Limited owns 100% of issued share capital of BDSC Agencies Pty Limited, BDSC Properties Pty Limited and Flinders Centre Pty Ltd. it is considered that Bankstown District Sports Club Limited has total control over the just mentioned entities. All inter company balances and transactions within the group have been eliminated. The financial effect of consolidation on Bankstown District Sports Club Limited accounts is as follows; Statement of Profit or Loss and other Comprehensive Income
2020
2019
3,281,534
230,079
Decrease / (increase) in expenditure from ordinary activities
(5,500,518)
(677,290)
Increase / (decrease) in comprehensive income for the year
(2,218,984)
(447,211)
81,607
252,164
Other current assets
1,563,253
437,067
Total current assets
1,644,860
689,231
13,474,402
13,513,876
608,333
(7,228,855)
Total non-current assets
14,082,735
6,285,021
Total assets
15,727,595
6,974,252
Trade and other payables
417,597
129,340
Interest bearing liabilities
(5,117)
(5,117)
412,480
124,223
18,184,072
7,500,000
Total liabilities
18,596,552
7,624,223
Net assets
(2,868,957)
(649,971)
(2,868,957)
(649,971)
Increase / (decrease) in revenue from ordinary activities
Statement of Financial Position Assets Cash and cash equivalents
Property, plant & equipment Other non-current assets
Liabilities
Current liabilities Non-current liabilities
ANNUAL REPORT 2019 - 2020
25
Equity Increase / (decrease) in Equity
w. Parent entity information The financial information in relation to the parent being Bankstown District Sports Club Limited Statement of Profit or loss and other Comprehensive Income Revenue from ordinary activities Expenditure from ordinary activities Surplus before tax and objectives
2020
2019
98,280,254
123,052,611
(98,205,627)
(116,267,311)
74,627
6,758,300
Less: Income tax expense
(1,610,155)
(505,346)
Surplus after tax but before objectives
1,684,782
7,263,646
Cash and cash equivalents
9,848,126
8,179,903
Other current assets
4,344,259
4,650,080
Total current assets
14,192,385
12,829,983
287,109,726
291,618,728
17,863,541
13,851,741
304,973,267
305,200,469
319,165,652
318,030,452
Trade and other payables
22,626,915
19,873,985
Interest bearing liabilities
4,820,562
4,604,000
Statement of Financial Position Assets
Property, plant & equipment Other non-current assets Total non-current assets Total assets Liabilities
Other current liabilities
3,831,638
3,919,756
Total current liabilities
31,279,115
28,397,741
60,854,872
61,740,833
Interest bearing liabilities Other non-current liabilities
4,544,618
4,799,352
Total non-current liabilities
65,399,490
66,540,185
Total Liabilities
96,678,605
94,937,926
222,487,047
223,092,526
7,111,305
7,111,305
Net Assets Equity Land and buildings revaluation reserve
ANNUAL REPORT 2019 - 2020
26
Retained surplus
215,375,742
215,981,221
Total equity
222,487,047
223,092,526
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) 3. Cash and cash equivalents Cash at bank and on hand
2020
2019
9,929,733
8,432,067
667,057
766,208
4. Inventories Beverage Catering
170,899
191,933
837,956
958,141
2,026,741
1,368,839
193,705
200,586
2,220,446
1,569,425
1,541,378
1,616,495
79,401
501,664
5. Trade and other receivables Trade debtors (Net of doubtful debt provision of $348,185 ($3,815-2019) Other receivables and loans
6. Other assets Current Prepayments Deposits Rights to Use Asset
1,605,897
-
Other assets
1,228,330
441,422
4,455,006
2,559,581
229,167
399,167
26,797,215
26,797,215
Non-Current Non-Current other assets Loan to other parties 7. Property, plant, and equipment Land Land held for investment
Buildings Buildings-held for investment
ANNUAL REPORT 2019 - 2020
27
14,676,777
14,676,777
41,473,992
41,473,992
199,011,810
193,636,801
56,505,808
56,505,808
Buildings-leasehold land
2,731,339
2,731,339
Buildings-under construction
1,204,026
4,639,062
259,452,983
257,513,010
(42,461,876)
(37,884,143)
216,991,107
219,628,867
Plant and equipment
107,622,782
111,857,651
Less: accumulated depreciation
(67,109,649)
(67,827,906)
40,513,133
44,029,745
298,978,232
305,132,604
Less: accumulated amortisation
Total property, plant and equipment
Land and buildings were independently valued at fair value for financial reporting purposes in accordance with AASB 116 on 27 February 2019 at $379,944,000 (GST exclusive). This value has not been taken up in the accounts. This valuation was prepared on the basis of completed works (renovations) at that point in time. It does not take into account any additions and improvements to buildings since that date or the acquisition of land. Details of the Company’s property, plant and equipment and their carrying amount are as follows: Land
2020
2019
41,473,992
41,473,992
Additions
-
-
Disposals
-
-
41,473,992
41,473,992
252,873,948
194,938,492
Balance 1 July 2019
Balance 30 June 2020 Buildings Balance 1 July 2019 Additions
-
-
Transfers from capital works
6,244,339
57,935,456
Disposals
(869,330)
-
258,248,957
252,873,948
Balance 1 July 2019
4,639,062
55,928,741
Additions
4,096,220
14,901,921
(6,244,339)
(57,935,456)
Balance 30 June 2020 Capital Works in Progress
Transfers to buildings Transfers to plant and equipment
(217,676)
(8,066,087)
Transfers to expenses
(1,069,241)
(190,057)
Balance 30 June 2020
1,204,026
4,639,062
(37,884,143)
(33,819,894)
280,512
-
Amortisation
(4,858,245)
(4,064,249)
Balance 30 June 2020
(42,461,876)
(37,884,143)
216,991,107
219,628,867
111,857,651
101,003,162
8,739,746
6,997,984
217,676
8,066,087
-
-
(13,192,291)
(4,209,582)
107,622,782
111,857,651
(67,827,906)
(63,703,453)
9,163,514
3,483,509
Depreciation
(8,445,257)
(7,607,962)
Balance 30 June 2020
(67,109,649)
(67,827,906)
40,513,133
44,029,745
298,978,232
305,132,604
Amortisation Balance 1 July 2019 Amortisation written back on disposal
Carrying amount at end of year-buildings Plant and equipment Balance 1 July 2019 Additions Transfers from capital works in progress Transfers from Plant and Equipment under Lease
ANNUAL REPORT 2019 - 2020
28
Disposals Balance 30 June 2020 Depreciation Balance 1 July 2019 Depreciation written back on disposal
Carrying amount at end of year-plant and equipment Total property, plant and equipment
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) 7. Property, plant, and equipment (Continued) Asset write off / impairment
2020
2019
588,818
-
-
-
588,818
-
Buildings Cost written back Amortisation written back Impairment Plant and Equipment Cost written back
11,270,657
3,953,667
(8,923,575)
(3,483,509)
Impairment
2,347,082
470,158
Total impairment
2,935,900
470,158
4,579,070
4,579,070
14,242,982
10,862,700
8,801,530
9,140,625
23,044,512
20,003,325
4,820,562
4,604,000
-
-
4,820,562
4,604,000
68,354,872
69,240,833
68,354,872
69,240,833
Depreciation written back
8. Intangible Assets Poker machine entitlements 9. Trade and other payables Trade Creditors Other
10. Interest bearing liabilities Current Bank cash advance facility Bank loan Non-Current Bank cash advance facility
ANNUAL REPORT 2019 - 2020
29
The Westpac Bank holds a registered equitable mortgage over the assets and undertakings of the Company and also holds registered mortgages on certain real estate owned by the Company to support a maximum loan facility of 80,627,000. The club obtained $7m in temporary funding with Westpac through the COVID-19 lockdown period, but managed the cash we had on hand and did not need to use the temporary funding. The actual indebtedness at 30/6/20 was $73,175,433 ($73,844,833 - 2019). The interest rate as at 30th June was 1.54%, with the average for the year being 1.61% (In 2019 the interest rate at 30th June was 2.70% and the average for the year 2.77%).
In accordance with the finance agreement in place, the Bank has the right to give notice to the effect that all indebtedness will convert to a current liability. In the ordinary course of events this is not expected to occur. Bank indebtedness is made up of: Cash advance facility - 1
20,000,000 This facility has quarterly prinicipal reductions of $1,000,000 commencing November 2018 and matures 15.5.2021
Cash advance facility - 2
40,000,000 This facility matures 15.5.2021
Cash advance facility - 3
3,000,000 This facility matures 15.5.2021
Cash advance facility - 4
7,500,000 This facility matures 15.5.2021
Cash advance facility - 5
3,500,000 This facility matured on 30.10.18 and then $2,581,453 became an equipment loan.
Cash advance facility - 6
1,500,000
Credit card facility Overdraft facility Bank guarantee fee facility Total bank indebtedness
20,000 4,000,000 1,107,000 80,627,000
Financial Risk Exposure and Management The Company has two areas of exposure being interest and liquidity. The directors and management have addressed the area of interest rate rises by capping the maximum interest rate that may be charged on $30,000,000 of the present debt. Additionally, the company is not expecting interest rates to rise significantly in the short term and medium term. With respect to liquidity the Company has further developed its gaming capacity and broadened its income base with facilities such as the Brewhouse Bar, Peking Square, La Piazza and the construction of a multi level commercial building Flinders Centre. The Company also has real estate that may be disposed of if liquidity demands. The Company has a cash flow budget which is continually monitored and updated. Apart from bank indebtedness other areas of financial risk are minimal. Sensitivity Analysis The Company has performed a sensitivity analysis relating to its exposure to Interest Rate Risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks. At date of this report, a stable low interest environment exists and is expected to continue. Interest Rate Risk Sensitivity Analysis: At 30 June 2020, the effect on surplus and equity as a result of changes in the Interest Rate Risk, with all other variables remaining constant would be as follows:
Change in surplus
ANNUAL REPORT 2019 - 2020
30
2020
2019
Increase in interest rate risk by 1%
(438,100)
(554,270)
Decrease in interest rate risk by 1%
438,100
554,270
Increase in interest rate risk by 1%
(438,100)
(554,270)
Decrease in interest rate risk by 1%
438,100
554,270
Change in equity
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) 11. Short term provisions
2020
2019
288,908
280,309
288,908
280,309
17,531,897
22,883,289
1,497,691
1,829,004
Fringe benefits tax
55,333
84,055
Excise Duty
25,884
30,027
254,472
227,664
19,365,277
25,054,039
Poker machine link jackpot
12. State and federal taxes Poker machine tax Payroll tax
Land tax
13. Income tax The Company is liable for Income Tax only on non-member income, external investments, and monies paid by other parties. The statement showing how the tax expense for 30 June 2020 has been calculated is: Non-member income Less: Non-member expenses Add: Income / (loss) taxable in full
(30,088,238)
(40,105,350)
611,350
4,429,755
1,257,138
2,534,377
1,868,488
6,964,132
(6,931,689)
(8,167,688)
Taxable income / (loss)
(5,063,201)
(1,203,556)
-
-
Less: Instalment taxes paid
(220,905)
(601,966)
Balance due as at 30.6.20
(220,905)
(601,966)
-
-
Add: Increase/(decrease) in deferred tax liability
(205,238)
(211,065)
Less: (Increase)/decrease in deferred tax asset
(1,404,917)
(299,402)
Add: Prior Year Tax adjustment
-
5,121
Income tax expense / (benefit)
(1,610,155)
(505,346)
Income Tax Expenses - 30%
ANNUAL REPORT 2019 - 2020
2019 44,535,105
Less: Expenses allowable in full
Income Tax Expenses - 30%
31
2020 30,699,588
Deferred Tax Asset
2020
2019
-
-
553,980
642,890
30,582
31,281
The balance comprises temporary differences attributable to: Amount recognised in income Employee benefits Poker machine link accrual Superannuation accrual
52,478
76,911
Tax Loss
1,880,026
361,067
Deferred tax asset as per statement of financial position
2,517,066
1,112,149
1,112,149
812,747
Credited (debited) to statement of profit or loss
1,404,917
299,402
Closing balance 30.6.20
2,517,066
1,112,149
Opening balance 1.7.2019
The deferred tax asset will only be realised if: 1. The Company derives future assessable income of a nature and of an amount sufficient to enable the asset to be realised; 2. The Company continues to comply with the conditions for deductibility imposed by law; and 3. No changes in tax legislation adversely affect the Company in realising the asset. Deferred tax liability
2020
2019
Depreciation - timing differences
3,069,549
3,274,787
Opening balance 1.7.19
3,274,787
3,485,852
Debited (credited) to statement of profit or loss
(205,238)
(211,065)
Closing balance 30.6.20
3,069,549
3,274,787
The balance comprises temporary differences attributable to:
14. Cash flow information i.
Reconciliation of cash For the purposes of the Statement of Cash Flows, cash includes cash on hand, cash at bank and investments in money market instruments. Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position. Cash at bank and on hand
9,929,733
8,432,067
ii. Financing facilities The Company has an arrangement with the Westpac Bank to provide funds and support facilities: Cash advance facility
75,500,000
75,500,000
Overdraft facility
4,000,000
4,000,000
Amount utilised
(73,175,433)
(73,844,833)
6,324,567
5,655,167
Unused credit facility
ANNUAL REPORT 2019 - 2020
32
The club also obtained $7m in temporary funding with Westpac to help through the COVID-19 lockdown period, but with a tight management of the cash on hand, the Club did not need to use the temporary funding. Since reopening, the club is in an improved liquidity position, and this temporary funding has since been cancelled.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) 15. Superannuation commitments There is a legally enforceable obligation on the Company to contribute to a superannuation fund at a rate that is determined by industrial agreement. 16. Commitments
2020
2019
-
4,639,062
-
4,639,062
Capital expenditure commitment Not later than one year Between one year and two years
-
The Club’s capital expenditure commitments were zero this year due to COVID-19 as the club was closed. Last year it consisted of cost of constructing the level 1 gaming extension.
17. Auditor’s remuneration During the year the following fees were paid or payable to Greg Huggett & Co for: Audit
70,000
75,100
5,000
5,750
Other Services: Taxation services 18. Contingent Liabilities There were no known material contingent liabilities as at 30 June 2020. Any legal action afoot is not likely to significantly affect the Company’s future operations. 19. Mortality Benefit The Company’s current policy is to pay each full member a mortality benefit of $200 provided that he was a full member for at least five years prior to 31.12.1983. The future financial effect of this policy will be immaterial. 20. After Balance Date Events No events have occurred since 30 June 2020 to date of signing this report that would have a significant financial affect on the company. The club reopened on 1 June 2020 and Executive Management reviewed expenses and means of operation. The consequence of this has seen improved profitability and increases in liquidity.
ANNUAL REPORT 2019 - 2020
33
21. Related Party Transactions and Directors Remuneration The Company has paid Ronis Real Estate, in which Director Jim Ronis has an interest, an amount of $15,950 in property management fees for the year ended 30.6.20. Ronis Real Estate is a tenant in the Flinders Centre, and Bankstown District Sports Club Limited received a total of $87,084 in rent for year ending 30 June 2020. Ronis Real Estate received two month’s rent relief in April and June 2020 during COVID-19 period, which was less than what other tenants were given. Ronis Real Estate was not in arrears in rent as at 30.06.2020, whereas some other tenants were. Jim Ronis ceased to be the director of Ronis Real Estate as at 30.06.2020. Regards to rental negotiation, Jim Ronis excluded himself and CBRE Commercial Real Estate Agent were appointed to conduct the negotiation on behalf of Bankstown District Sports Club Limited. CBRE Real Estate Agent is the managing agent for the Flinders Centre and that includes Ronis Real Estate. CBRE’s role is to manage the property and ensure rent is collected and is of market value. No other director or a near relative of a director has benefited from a transaction involving the Company other than stated above. No director has been paid remuneration or is owed remuneration. No loan or advances have been made to directors or their relatives. Except when on official duties, directors pay usual commercial prices for goods and services. Loan to Subsidiaries
2020
2019
BDSC Agencies Pty Limited
1,384,727
1,119,277
BDSC Properties Pty Limited
6,338,455
6,537,911
Flinders Centre Properties Pty Limited
2,960,890
-
10,684,072
7,657,188
(527,272)
(92,557)
477
674
Loans made by the Company to its subsidiaries are unsecured and noninterest bearing. Balance of loans made to subsidiaries as at year end are:
22. Employee Benefits Net movement in provision for employee benefits Number of employees at year end
23. Core Property Disclosure
34
Section 41J of the Registered Clubs Amendment Act 2006 requires Bankstown District Sports Club to nominate its core and non core property assets. Core property assets are: The Club premises comprised on the whole of the land at 8 Greenfield Parade, Bankstown The Club premises comprised on the whole of the land at 11 Renown Road, Baulkham Hills The Club premises comprised on the whole of the land at 231 Roberts Road, Greenacre The Club premises comprised on the whole of the land at 181 Chisholm Road, Auburn The Club premises comprised on the whole of the land at 41 Northam Avenue, Bankstown Non core property assets are: 9 Greenfield Parade, Bankstown 9A Greenfield Parade, Bankstown 11 Greenfield Parade, Bankstown 13 Greenfield Parade, Bankstown 13A Greenfield Parade, Bankstown 23 Greenfield Parade, Bankstown 22 Bankstown City Plaza, Bankstown
ANNUAL REPORT 2019 - 2020
24. Key Management Personnel Remuneration paid or directed to key management personnel was:
1,204,924
1,318,108
Key management personnel are arm-length employees and are not directors of Bankstown District Sports Club Ltd. Remuneration consist of salary, wages, superannuation, fringe benefits, annual leave and long service leave as legally required. The Directors, CEO, CFO and General Manager review and decide wage remuneration packages.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) 25. Employee Expense
2020
2019
Total Employment Expense
34,053,676
34,894,214
Less: Government Economic Stimulus received
(4,619,000)
-
Employment Expense as per Statement of Profit and Loss
29,434,676
34,894,214
The Australian Federal Government announced Government Economic Stimulus payment in March 2020, which is a scheme to support businesses and not-for-profit organisations significantly affected by COVID-19 and to help keep more Australians in jobs. The club is entitled to receive the Government Economic Stimulus wage subsidy from Australian Taxation Office since 30 March 2020. 26. Employee provisions
2020
2019
5,760,860
5,853,417
Additional provisions raised during year
2,999,646
2,691,740
Amounts used
(3,526,918)
(2,784,297)
Closing Balance 30.6.20
5,233,588
5,760,860
Employee benefits - current liability
3,758,518
4,236,295
Employee benefits - non current liability
1,475,070
1,524,565
5,233,588
5,760,860
462,500
262,500
Total Employment Expense
Made up of:
27. Financial Assets Non-current Shares in an unrelated corporation at cost
ANNUAL REPORT 2019 - 2020
35
DIRECTORS’ DECLARATION The Directors of the Company declare that the financial report and notes a set out on pages 13 to 35 for the year ended and as at 30 June 2020 are in accordance with the Corporations Act 2001 including: 1. (a) comply with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Regulations 2001; and (b) give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended on that date of the Company. 2. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors. Dated at BANKSTOWN This 8th day of October 2020 ON BEHALF OF THE BOARD AND IN ACCORDANCE WITH ITS RESOLUTION
John Murray OAM Richard Phillips Director Director
ANNUAL REPORT 2019 - 2020
36
INDEPENDENT AUDIT REPORT Independent Audit Report to the members of Bankstown District Sports Club Limited ABN 88 000 243 916 Opinion I have audited the financial report of Bankstown District Sports Club Limited, which comprises of the consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows, notes to the financial statements (including summary of significant accounting policies) and directors’ declaration. In my opinion; a. the accompanying financial report of Bankstown District Sports Club Limited and Controlled Entities is in accordance with the Corporations Act 2001, including; i. Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial performance for the year ended; and ii. Complying with Australian Accounting Standards and the Corporations Regulations 2001. b. the financial report also complies with International Reporting Standards as disclosed in Note 1. Basis for Opinion I conducted this audit in accordance with Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of my report. I am independent of the company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110; Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial report in Australia. I have also fulfilled my other ethical responsibilities in accordance with the Code. I confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the company, would be in the same terms if given to the directors as at the same time of the auditor’s report. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Information Other than the Financial Report and Auditor’s Report Thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s annual report for the year ended 30 June 2020, but does not include the financial report and my auditor’s report thereon. My opinion on the financial report does not cover the other information and accordingly I do not express any form of assurance conclusion thereon. In connection with my audit of the financial report, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.
ANNUAL REPORT 2019 - 2020
37
Responsibilities of the Directors for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, the matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report. My objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also: •
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsible to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of the internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
•
Conclude on the appropriateness of the directors’ use of going concern basis accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the disclosures and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. I am responsible for the direction, supervision and performance of the Group audit. I remain solely responsible for the audit opinion.
I communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.
ANNUAL REPORT 2019 - 2020
38
G.W.HUGGETT Registered Company Auditor Greg Huggett & Co Chartered Accountant ABN: 33 155 958 377 7/83 Mulga Road, Oatley West This 9th day of October 2020 Liability limited by a scheme approved under Professional Standards Legislation
