Annual Report 2021

BUILDING A BRIGHTER FUTURE ANNUAL REPORT 2021 FOR THE YEAR ENDED 31 OCTOBER 2021

Parramatta Leagues Club Limited ABN 52 000 218 655

OUR PURPOSE We bring together our community and support local causes, sport and the Parramatta Eels to promote wellbeing, happiness and pride.

OUR MISSION We offer welcoming hospitality and positive community initiatives to maximise the experiences of our Members and our community.

OUR VISION To provide a network of premium hospitality, entertainment, sporting, complementary businesses and services for the benefit of our community by 2025.

OUR VALUES S.P.O.R.T. Service – We are here for the benefit of our Members and the community Passion – We are ambitious, strive for excellence and love what we do Openness – We demonstrate integrity and commitment through transparency and accountability Respect – We are welcoming, inclusive and respectful Teamwork – We are united, collaborative and succeed together

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PARRAMATTA LEAGUES CLUB LIMITED

Contents President’s Report................................................................................... 4 CEO Report.................................................................................................5 Eels CEO Report....................................................................................... 6 Community Update................................................................................. 9 Development Update............................................................................ 12 Parramatta Eels Update.......................................................................14 Meet the Board........................................................................................ 16 Notice of AGM.......................................................................................... 17 Directors’ Report..................................................................................... 18 Auditor’s Independence Declaration............................................... 21 Annual Financial Report...................................................................... 22 Notes to the Consolidated Financial Statements...................... 26 Directors’ Declaration...........................................................................50 Independent Auditor’s Report........................................................... 51 Honour Roll...............................................................................................54

*Front cover: Proposed Clubhouse development.

ANNUAL REPORT 2021

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President’s Report It is an exciting time for the Club as we play our role in the revitalisation of the Parramatta precinct.

Dear Members, It is my privilege to report to you on an extraordinary year for Parra Leagues & Vikings Sports. Our Club has improved profit, advanced our strategic plan, attracted record memberships, and strengthened our commitment and ties to the local community.

Net profit after tax of the Group was $3,025,066, up from $2,122,865 in 2020, a great result due to the strong trading performance of our licensed Clubs – despite being closed for 106 days – and the strong financial results of the Eels.

Parra Leagues (55,088 members) and the Eels (32,376) both achieved record memberships, a great indicator of our strength in the Community.

Our role in the community remains a key priority, and this year we were able to support our community partners with ClubGRANTS of $946k. This vital funding goes towards worthy local causes including grass roots sports, education and assisting families in need.

It is an exciting time for the Club as we play our role in the revitalisation of the Parramatta precinct. New developments for the Club are already in the pipeline including construction of a permanent new alfresco dining area on the ground floor. This $5m development will be the first major expansion of the Club’s social infrastructure in many years. Subsequent to year end, Pablo’s restaurant in Parra Leagues was re-purposed to Jacks Bar & Grill, enhancing our dining experience on the third floor.

The Club’s Development Application for a Hotel was progressed, now awaiting final approval. A formal Expression of Interest was lodged for a multi-million dollar Club expansion, on the site located between the Club and Commbank Stadium and the outcome is expected to be announced by the NSW government in 2022.

During the year, we sold non-core properties at Ferris Street and Ross Street in Parramatta for a total of $2.5m. These properties were no longer needed and the sale took advantage of record property prices. Funds received will assist the Club to re-invest into new facilities for members.

It was another successful year for the Parramatta Eels, making the semi-finals before ultimately bowing out to eventual premiers Penrith in a thriller. The Eels faced many challenges relocating to Queensland but rose to the occasion and showed themselves to be genuine premiership contenders. Good progress is being made on the Centre of Excellence at Kellyville. The Eels achieved record memberships, strong sponsorship and was once again financially self-sufficient. Commitment to the Eel’s first NRL Women’s team was a major milestone. Plainly the Eels are running extremely well on and off the field, with a strong Board and Management led by Chair Sean McElduff and CEO Jim Sarantinos.

In closing, we acknowledge the passing of life members Christopher Jurd (#85959), Peter Rogers (#70010) and Ron Collyer (#59). We pay our respects and offer our sincerest condolences to families and friends. They will be missed by many.

On behalf of all members, may I thank our current Directors, a highly skilled and diverse Board which has successfully navigated our Club through these uncertain times.

The Directors in turn would like to thank our new CEO Chris Dimou and his Management team for their tremendous work in maintaining a sound financial position and strong trading performance, whilst providing a safe and clean environment for members.

On the eve of our 75th year, we look forward with great excitement to celebrating our Anniversary with many improvements for members and a strong year for the Eels.

Greg Monaghan On behalf of Directors Mark Jenkins, Phil Sim, Joy Cusack, Richard Foda, Sue Coleman and Darren Adam 4

PARRAMATTA LEAGUES CLUB LIMITED

CEO Report The resilience shown in these uncertain times is a testament to the Board of Directors, Management and staff who are focused on the future and on delivering our strategic plan.

Dear Members, In my first report to the members as CEO I look back and reflect on a rollercoaster of a year with many challenges faced and successfully navigated by our club. Despite these challenges we remain in a strong financial position and are treating this time as an opportunity to build our brand and our business for the benefit of our members and community.

A strong financial result was delivered by the Group. Consolidated Group Net Profit increased by 42% to $3.0m. The licensed Clubs profit increased from $0.8m in 2020 to $2.0m in 2021, despite the 106-day closure of both licensed Clubs during 2021. Total Members Funds increased from $71.8m to $74.8m. Pleasingly, during the financial year we were able to repay in full the $4.5m in taxes deferred from the previous year COVID shut-down period. Additionally, our debt levels were reduced by $4.3m down to $21.8m. The Group remains in a strong cash position to support our future plans.

The resilience shown in these uncertain times is a testament to the Board of Directors, Management and staff who are focused on the future and on delivering our strategic plan.

The Clubhouse refresh has begun in earnest, with repairs to the façade completed in January 2021, which was one of our main priorities in terms of the reinvestment in the Club’s facilities.

As our President has mentioned there are more developments on the way in 2022 at Parra Leagues including a new alfresco area for members to enjoy and a covered walkway to the carpark due to be completed in 2022.

There are also plans to renovate the Clubhouse at Vikings Sports, which will help improve the overall member experience. We have also appointed a dedicated venue manager who will oversee the daily operations of the Club and help listen to what our Vikings members have to say and cater to the local community needs.

Community is at the heart of everything we do, and our Clubs were able to maintain our commitment to maximising our involvement in the local area through our support of 73 community partners via the ClubGRANTS program. We also achieved another milestone by hitting our largest ever member base, 55,088 members, by the end of October.

During lockdown our welfare campaign reached out to thousands of vulnerable members and subsequently provided 251 COVID care packages to members in need.

Over the past year we have worked extremely hard to protect our members safety and wellbeing. Our Clubs COVID-safety plan goes above and beyond the government requirements and includes regular deep cleaning at both venues, dedicated COVID-marshals and complimentary hygiene products to keep members and guests safe. Furthermore, the Management team, with full support of the Board, closely monitor any anti-money laundering and counter terrorism financing risks that may occur at our Club, whilst working alongside the respective authorities to ensure everyone’s safety. We take great pride in our harm minimisation policy which is designed to reduce the risks of problem gambling at on our venues.

Finally, I’d like to give a heartfelt thank you to all our staff and especially our Leadership team, who supported the Club throughout the year despite being stood down for a long period of time. Our people remained enthusiastic about the Club’s future and were excited to come back as soon as we were able to reopen. It is a privilege to be appointed Chief Executive Officer of this great Club and lead a team of passionate, hard-working individuals. I’m excited about our Club’s future as we continue to strive every day to make our Club and our community a better place.

Chris Dimou Chief Executive Officer Parramatta Leagues Club Limited

ANNUAL REPORT 2021

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Eels CEO Report I am immensely proud of how our staff, coaches and players continued to meet the challenges the COVID pandemic threw at us.

Dear Members, Supporters and Friends, I am pleased to present my CEO report for the 2021 financial year for the Parramatta Eels.

2021 again saw disruption for our Football Club but I am immensely proud of how our staff, coaches and players continued to meet the challenges the COVID pandemic threw at us.

The Club recorded a profit of $1.047m for the year ended 31 October 2021 (inclusive of $0.9m in grant funding from the Federal Government for the Community Facility), a continuation of the positive financial performance of recent years.

Despite a second consecutive disrupted season, the Club continues to be financially independent while also ensuring investments were maintained in member, partner and fan experience as well as our football and community programs. Some of the key highlights for the Club off the field included: •

Breaking our membership record for the 9th consecutive season, finishing the year first in the NRL with 32,376 members;

•

Securing a number of long-term partnerships with global and multinational brands including McDonalds, Subaru, Taubmans and Macron;

•

Three-year extension of Aland as the Eels major partner;

•

Working with Parra Leagues to provide much needed support to our community partners and others affected in Western Sydney during lockdown periods; and

•

Ranked 3rd overall for attendance in the NRL – before the COVID lockdown the Club had an average home crowd of 22,415.

On the field, the Club responded well to a challenging period late in the season, narrowly losing to the eventual premiers Penrith in week 2 of the finals. While falling short of our goal, it was the third straight finals appearance for the team which is the longest streak for the Club since 2007.

A significant and historical milestone for the Club was the securing of our NRLW licence.

It’s a major step forward in the growth of the women’s game and the Club is honoured to be able to provide young girls and women in Western Sydney with a pathway to represent the Parramatta Eels at the elite level. A key focus area in 2022 will be participation and the growth of Rugby League in Western Sydney.

Before the lockdown, our junior league numbers were returning to pre-COVID rates however we see Junior league and participation in all forms of the game (touch, tag, and tackle) as a major opportunity for the Club in 2022 and beyond.

The strong working relationship we have with PLC President Greg Monaghan, CEO Chris Dimou and his Management team is greatly appreciated by the Football Club. The stability at Board and Management level is allowing both organisations to grow sustainably and with a strong eye on the future.

Lastly, I would like to thank our members, corporate partners, and key stakeholders for another strong year for the Eels. The stability both financially and at a Board and management level provides the Football Club and its members a foundation to grow even stronger and we all look forward to a successful 2022.

Jim Sarantinos Chief Executive Officer Parramatta National Rugby League Club Pty Limited

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PARRAMATTA LEAGUES CLUB LIMITED

$63.8m

$67.4m

$69.6m

$71.8m

$74.8m

The Clubs Total Members Funds is in a strong position at the end of 2021.

2017

2018

2019

2020

2021

17%

5-year growth in Members Funds, despite being closed for 171 total days from 2020

We support our local community by contributing to

73+

ClubGRANTS donations

$946,229

Community Partners

 Support Local Causes

31%

Promotes Happiness & Pride

11%

ClubGRANTS donations helps support

Bring Community Together

15%

Health, Sport and Wellbeing

43%

ANNUAL REPORT 2021

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OUR TEAM We are committed to being an employer of choice in Western Sydney, and employing a highly skilled and diverse workforce. We are united, collaborative and succeed together.

204

52

Over 27

Employees

Employees

Nationalities

OUR MEMBERS We are here for the benefit of our Members, and we are dedicated to providing services that our Members can enjoy.

51,286

Parra Leagues members

Member visits

Functions booked

184,403

421

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PARRAMATTA LEAGUES CLUB LIMITED

3,802

Vikings members

Meals served

208,839

32,376

Parra Eels members

COVID Care packages delivered

251

Spotlights Heroes with Ability Heroes with Ability and the Parramatta Eels will partner for 3 years under the inclusion pillar of the Club’s community strategy.

The partnership allows for Rugby League programs to be delivered in schools within the local Parramatta area, for children with a disability.

Ryan Matterson has been named as the ambassador for the program and spoke highly of the work that Heroes with Ability is doing within the local community and is looking forward to contributing to this great program.

Miracle Babies Miracle Babies Foundation is Australia’s leading organisation supporting premature and sick newborns, their families and the hospitals that care for them.

On Saturday, 27th March 2021, Parra Leagues members and staff participated in the Miracle Babies Foundation Moon Walk.

Miracle Babies supporters walked together along the 10km course, which started and finished at the event hub in the heart of the city. As a team we raised a total of $7,056, making Parra Leagues the 3rd highest fundraising team for the event, something we are immensely proud of.

ANNUAL REPORT 2021

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Header 1

Spotlights

Ronald McDonald House Greater Western Sydney The Ronald McDonald House GWS provides a safe place to stay for around 2,000 families per year.

Parra Leagues is a proud sponsor of a room at Ronald McDonald House GWS which has provided 144 nights of accommodation to families with seriously ill or injured children.

The Parramatta Eels are also personally involved with players frequently stopping by and making visits to share some joy and put smiles on the children’s faces during very trying and difficult times.

Parra Leagues Kitchen Initiative The Parra Leagues Kitchen Initiative was a 7-week program undertaken during the lockdown period where the Club’s chefs continued to work and provide meals for Ronald McDonald House GWS, Parramatta Mission and PCYC three days a week. Charitable organisations were heavily impacted during these times with volunteers unable to carry out the duties including meal preparations.

Parra Leagues Executive Chef Paul Jury said that “the team come into work with a smile on their face and a spring in their step knowing they are making a difference.”

OVER 3,600 MEALS DONATED 10

PARRAMATTA LEAGUES CLUB LIMITED

Story Factory Parramatta Mission Parra Leagues has a proud tradition of sponsoring Parramatta Mission’s Festival of Christmas, a two-week event held in December each year that provides services, advice and special surprises to those in our community who are in need of support.

The sponsorship allows Parramatta Mission to provide these services free of charge so everyone can enjoy the festive season, no matter what their situation is.

Through our contribution, Parramatta Mission can host services, give gifts and provide pampering for people through the Meals Plus program with the idea that everyone deserves to enjoy the Christmas period.

Story Factory is a not-for-profit creative writing organisation based in Parramatta & Redfern. With Parra Leagues support, Story Factory has worked with young writers in a series of fun and engaging 8-week workshops designed to build student’s literacy and creativity and empower them with the skills and confidence to find their voice and share their future.

Supported by trained volunteer tutors, young people engaged in the program are provided with the intensive oneon-one and small group support often not available to them at school.

“In the future there will be enough worthiness, safe, warm places to stay and respect for everyone” Tabassum, Story Factory student

ANNUAL REPORT 2021

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Header 1

In 2021, The Board of Directors committed to accelerate the redevelopment of the Club’s facilities. The first priority was repairing the exterior façade of the Parra Leagues Clubhouse, which was damaged by thunderstorms in 2019. Repairs were completed in time for the 2021 NRL season and has laid the foundation for the next stage of the redevelopment works.

Your feedback is important, and we have listened. Our member survey told us that we need more spaces where members can gather with their friends and family and socialise in a more casual atmosphere.

As a result, there are now plans in place to build a new alfresco dining area on the ground floor of Parra Leagues. With DA approval confirmed, construction is slated to begin shortly with the project due for completion in 2022.

In addition, the construction of a much needed covered walkway to the carpark will be completed in the upcoming year, along with the unveiling of our long-awaited ‘Walk of Fame’ to honour our Club’s legends.

Covered walkway to the carpark to be completed in 2022

The Vikings Sports Club remains a vital part of our plans as we build a broader footprint in Western Sydney.

Going from strength to strength since the amalgamation with Parra Leagues in 2004, we are committed to providing a hospitality offering that is tailored to the local community of Dundas and surrounding suburbs.

In order to continue the strong growth seen in the past few years, we have appointed a new Management team at Vikings Sports, who are dedicated to providing friendly customer service and ensuring that Vikings stays true to its local identity. Further capital investment has been earmarked to upgrade the building and its facilities in 2022 which will further improve our standing as a family-friendly, local Club with the type of professional first-class service you’d expect from a much bigger venue.

“Customer service is my passion, and I’m looking forward to getting to know all of our Vikings members by first name. It’s great to be part of a Club that is committed to supporting and representing the local community” Andrew Lark, Venue Manager

ANNUAL REPORT 2021

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Proposed Centre of Excellence development

Parramatta Eels – Centre of Excellence Ensuring the future strength of the Parramatta Eels on and off the field continues to be a key focus for the organisation. In partnership with the Hills Shire Council and the Federal Government, the Eels are currently building Australia’s largest community Rugby League facility at Kellyville Park in North Western Sydney.

This facility will provide state of the art facilities for all forms of the game for men and women at the community and elite level and enhances the Eel’s commitment to grow participation in Rugby League.

The Eels have continued to make progress throughout 2021, with two new dedicated playing fields being completed to ensure that the Club and community has 5 high quality Rugby League fields ready for 2022.

Extensive design and planning has taken place with the aim to start construction of the Community Centre which will also include the match venue for our NSW Cup and Elite Pathways by mid-2022.

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PARRAMATTA LEAGUES CLUB LIMITED

Season Recap The 2021 season saw a second consecutive year of disruption and significant challenges for the NRL competition and its Clubs.

While the Rugby League season started positively the COVID outbreak throughout NSW and Victoria in June 2021 saw the competition relocated to South East Queensland. With limited notice, a group of 41 of our players and staff together with their families were relocated north to ensure the competition could continue while the rest of the Club remained in Sydney and continued to provide support remotely.

Our team started the regular season strongly, winning 13 of our first 17 games. A difficult period followed at the back end of the season, however the team responded well, including a memorable win to end the Melbourne Storm’s record equalling unbeaten streak. Our final regular season record of 15 wins and 9 losses resulted in a 6th placed finish.

Following a strong win against Newcastle in the first week of the finals, the team delivered one of its most spirited finals performances in recent years, unfortunately going down in a courageous loss in the second week of the finals to eventual premiers Penrith. Despite the disappointment of falling short of our goal of winning a premiership, the Club has qualified for the finals in three successive years which is an achievement worth recognising and reflects the quality and consistency that has been embedded within our football program.

We thank our Head Coach Brad Arthur, GM of Football Mark O’Neill, our captain Clint Gutherson, and our team of staff and players, as well as their families for their dedication to the Club during what has been another challenging year.

From an individual achievement perspective, both Junior Paulo and Mitchell Moses were selected for State of Origin honours with Clint Gutherson joining the NSW squad for Game 3, while Reed Mahoney was also selected in the Queensland Origin squad.

Isaiah Papali’i had a career best year taking out the Ken Thornett Medal, Nathan Hindmarsh players’ player award and making the Dally M team of the year. Eels Head Coach Brad Arthur also coached his 200th game making him the Club’s second longest serving Coach behind Brian Smith.

From a whole of Club perspective one of the highlights of this season was the emergence of new talent across the Club.

Seven players made their NRL debut including 4 local juniors in Will Penisini, Jake Arthur, Sean Russell and Samuel Loizou.

This was the first time since 2013 that 4 local Juniors made their debut in the one season.

The strong connection between our elite pathways and our NRL squad shows that the development Club philosophy is being put in place which is critical for the long-term success of the Club.

Our Harold Matthews Cup team reached the grand final this season and our Knock on Effect Cup (2nd grade) team was in 3rd place when the competition ceased in July.

The selection of 5 Eels players in the 2021 Emerging Blues squad and the addition of Simon Woolford, Michael Ennis and Paul McGregor to our coaching and development staff demonstrates the importance the Club is placing on player development and the commitment to ensure that our best young talent represents the Blue and Gold at the NRL level.

This year also saw the departure of a number of players who have represented the Blue and Gold with pride. The Club extends its thanks to Blake Ferguson, Will Smith, Keegan Hipgrave, Joey Lussick, Michael Oldfield and Sam Hughes for their contribution and commitment throughout their time with the Eels. All of these players leave the Club with our best wishes for the next phase of their careers and with their contributions noted in our history.

In what is an important milestone for the Club, in 2021 the Australian Rugby League Commission (ALRC) granted a license for the Eels to enter a team in the NRLW competition. The Club’s participation in the NRLW competition is directly linked to our commitment to growing the women’s game at all levels and the objective of providing world class facilities for women’s Rugby League within the Kellyville project.

Our key signings in Simaima Taufa, Bo Vette-Welsh, Tiana Penitani, Kennedy Cherrington and Filomina Hanisi, shows how committed we are to being successful from our inaugural season. Eels old boy Dean Widders has been appointed as our first NRLW Head Coach with Andrew Patmore appointed to head up the women’s program.

An advisory committee was also established to support our NRLW program’s mantra of creating memories and connection being brought to life. We look forward to their inaugural season in early 2022 with great excitement and anticipation.

Finally, the Parramatta Eels NRL squad and staff would like to acknowledge and thank the Club’s corporate partners, members and fans for the amazing support received during the 2021 season as we look forward to a bigger and better 2022.

ANNUAL REPORT 2021

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Meet the Board

Pictured from left to right

Richard Foda

Joy Cusack

Richard holds a Bachelor of Economics and is a Graduate of the Australian Institute of Company Directors. He has held senior executive roles for financial services companies in Australia, Asia and America for over 25 years and he is currently the Australasian Chief Risk Officer for Swiss Reinsurance.

Joy is a graduate of the Company Directors Course of the Australian Institute of Company Directors, a Fellow of the Governance Institute of Australia and member of Women on Boards. She is an experienced chair and non-executive Director with more than 20 years’ experience in the corporate and not-for-profit areas, in particular social enterprise businesses. Her recent community emphasis has been on social impact measurement.

Richard chairs the Risk Committee where his expertise is vital to managing COVID and the Club’s license to operate in the challenging area of gaming. Richard is also a member of the Audit and Community Committees, and on the Board of the Parramatta National Rugby League Club.

Darren Adam Darren is a Chartered Accountant and holds a Bachelor of Commerce degree and a Master of Laws. He held senior finance and strategy roles at Foxtel, Telstra and Optus, where he worked in several executive roles, leading finance and operational teams in some of its largest trading divisions. He is currently Finance Director for the NRMA and a Director of the Fair Fight Foundation.

Darren chairs the Audit Committee and is a member of the Risk Committee and the Property & Development Committee where his deep financial expertise is invaluable.

Sue Coleman Sue has extensive senior management, governance and leadership experience gained over nearly 30 years in local government including 12 years as an executive at City of Parramatta and earlier with the not-for-profit sector. She has also held a number of previous Board positions including as a Director of the Parramatta National Rugby League Club.

Sue is a member of the Community, Property & Development and Risk Committees where her public sector experience and strong Parramatta networks are invaluable to the Club’s future developments.

Greg Monaghan – President The President of the Board. He holds a Bachelor of Economics degree, Graduate Diploma of Marketing and is a Fellow of the Australian Institute of Company Directors, the highest level, reflecting his extensive experience as a Director, including; CricketNSW, Cystic Fibrosis Australia, Customers Limited (ASX 300 listed) and Bankcard Australia to name a few.

Greg chairs the Board, and the Property & Development Committee, leading the upgrades to our Clubs, and is ex officio on the other Committees.

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PARRAMATTA LEAGUES CLUB LIMITED

Joy chairs the Governance Committee and is a member of the Audit Committee where her broad experience contributes to the Club members relying on sound governance including latest trends in membership and social impact.

Phil Sim Phil is the Chief Executive Officer of the MediaConnect Group, a media and technology business he founded and has grown into a multi-national business. His professional expertise encompasses business strategy and management, technology, data, media, marketing, and communications.

Phil chairs the Community Committee leading the Clubs’ vital Community interface and is a member of the Risk and Audit Committees providing valuable insights to member and community perceptions, social media and IT.

Mark Jenkins APM Mark is a former Assistant Commissioner of the New South Wales Police Force having retired in August 2019.

Mark was awarded the Australian Police Medal in the Australian Day Honours 2008. In addition to senior leadership and crisis management roles, he is experienced in licensing and regulatory issues, anti-money laundering and cyber security. He holds a Master’s degree in Public Policy (Charles Sturt University) and is a member of the Australian Institute of Company Directors.

Mark chairs the Digital Transformation Steering Committee and is a member of the Governance and Property & Development Committees utilising his expertise in the areas of money laundering and cyber security. Mark is one of two nominated Directors on the Board of the Parramatta National Rugby League Club.

Notice of AGM NOTICE is hereby given that the 64th Annual General Meeting of Parramatta Leagues’ Club Limited (ABN 52 000 218 655) (“Leagues Club”) will be held on Sunday 27th March 2022 commencing at 10:00am at Jacks Bar and Grill, Lvl 3, Parramatta Leagues Club, Parramatta NSW 2150.

MINUTES OF THE PREVIOUS ANNUAL GENERAL MEETING To receive and consider the Minutes of the previous 63rd Annual General Meeting.

2021 ANNUAL REPORT AND FINANCIAL STATEMENTS To receive the 2021 Annual Report of the Leagues Club, including the Financial Statements, Directors’ and Auditor’s Report for the 12-month period ended 31 October 2021.

BUSINESS TO BE CONDUCTED Ordinary Business Questions on Notice To declare Results of Resolutions conducted by electronic and postal ballot Special Resolution – Life Membership – Dr Michael Johnson Ordinary Resolutions Declaration of Election for the Board of Directors

Greg Monaghan President Parramatta Leagues Club Limited Date: 24 February 2022

NOTE TO MEMBERS In order to provide informed and properly researched responses, Members are requested to lodge questions to the Chief Executive Officer in writing ceo@parraleagues.com.au or by post PO Box 2428 North Parramatta, NSW, 1750 not less than seven (7) days prior to the Annual General Meeting. Questions received in writing will be answered first in order of being received.

ANNUAL REPORT Hard copies of Parramatta Leagues Club’s 2021 Annual Report will be available from the Club from Monday, 28 February 2022. Members may also request the posting of the reports by contacting AGM@parraleagues.com.au or on (02) 8833 0764.

Members will receive the notice of meeting via post or email however the annual report will be available by downloading a copy from the website from the links below: https://www.parraleagues.com.au/annual-report/ Dated 24 February 2022 By direction of the Board

Chris Dimou Chief Executive Officer, and Company Secretary Parramatta Leagues Club Limited

ANNUAL REPORT 2021

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Directors’ Report Your directors submit their report on Parramatta Leagues’ Club Ltd (the “Company”) and the entities it controlled (collectively, the “Group”) for the year ended 31 October 2021.

Directors The names of the Group’s directors in office during the financial year and until the date of this report are set out below. The directors were in office for this entire period.

Gregory Monaghan Darren Adam Joy Cusack Mark Jenkins Philip Sim Richard Foda Susan Coleman

Dividends The Group is limited by guarantee and is prevented by its constitution from paying dividends (2020: $nil).

Principal activities The principal activities of the Group during the course of the financial year consisted of the conduct and promotion of licensed social clubs for members of the club and promotion of rugby league football within the Parramatta district.

There were no significant changes in the nature of the Group’s activities during the year.

Overall objectives To ensure Parramatta Leagues’ Club Ltd is the most professional and progressive multi-purpose hospitality venue in Greater Western Sydney, by providing excellence in service and amenities for all members; and to foster, encourage, promote and control the development, playing and interests of rugby league football within the area of the geographical boundaries of Parramatta National Rugby League Club Pty Limited, a subsidiary within the Group, as defined from time to time in the by-laws of the league’s governing body.

The short term objectives of the Group are to focus on member satisfaction through the refresh of the Clubhouses and new development opportunities, while operating within a robust governance and compliance framework.

The long term objectives of the Group are to: •

Bring together our community and support local causes, sport and the Eels to promote wellbeing happiness and pride;

•

Provide a network of premium hospitality, entertainment, sporting and complementary businesses and services for the benefit of our community; and

•

Ensure our long term financial viability by the diversification of our business within our catchment area.

The Group measures success by focusing on the following key areas: •

Improved facilities for our members;

•

Increasing clubs engaged membership;

•

Engaged and well trained employees;

•

Strong focus on governance, risk and compliance initiatives; and

•

Sound financial management and measurement of key performance indicators.

Operating results for the year The net profit after tax of the Group for the year ended 31 October 2021 was $3,025,066 (2020: $2,122,865).

Impact of the Coronavirus (COVID-19) outbreak The COVID-19 outbreak was declared a pandemic by the World Health Organization in March 2020 and has continued to develop in 2021.

The outbreak and the response of Governments in dealing with the pandemic is interfering with general activity levels within the community, the economy and the operations of the business. The scale and duration of these developments remain uncertain as at the date of this report however they may have an impact on the future earnings, cash flow and financial condition.

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PARRAMATTA LEAGUES CLUB LIMITED

Directors’ Report (continued) Significant changes in the state of affairs There have been no significant changes in the state of affairs of the Group during the year.

Significant events after the reporting period Subsequent to the financial year, on 11 December 2021, the Group’s investment property, Unit 1, 50–52 Ross St, Parramatta NSW 2150, entered into a contract of sale for $582,000 and is scheduled to be settled on 24 January 2022.

There have been no other significant events occurring after the reporting period which may affect either the Group’s operations or results of those operations or the Group’s state of affairs.

Likely developments and expected results Likely developments in the operations of the Group and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the Group.

Environmental regulation The Group is not subject to any particular or significant environmental regulation under laws of the Commonwealth or of a State or Territory.

Meetings of directors The number of meetings the Company’s directors held during the year ended 31 October 2021 and the number of meetings attended by the directors was: Full meetings of directors A

B

Gregory Monaghan

16

16

Darren Adam

16

16

Joy Cusack

15

16

Mark Jenkins

16

16

Philip Sim

15

16

Richard Foda

16

16

Susan Coleman

16

16

A = Number of meetings attended B = Number of meetings held during the time the directors held office during the period.

Committee membership Members acting on the committees of the board during the year were: Audit

Risk

Governance

Property and development

Community and Club grants

Darren Adam

Chairman

Member

-

Member

-

Gregory Monaghan

Ex-Officio

Ex-Officio

Ex-Officio

Chairman

Ex-Officio

Member

-

Chairman

-

-

-

Member

Member

Member

-

Philip Sim

Member

Member

-

-

Chairman

Richard Foda

Member

Chairman

-

-

Member

-

Member

-

Member

Member

Joy Cusack Mark Jenkins

Susan Coleman

ANNUAL REPORT 2021

19

Directors’ Report (continued) Insurance of directors and officers During the financial year, Parramatta Leagues’ Club Ltd held a management liability insurance policy under the directors and officers liability cover.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the directors and officers in their capacity as officers of the Company, and any other payments arising from liabilities incurred by the directors and officers in connection with such proceedings.

This does not include such liabilities that arise from conduct involving a wilful breach of duty by the directors and officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.

Indemnification of auditor To the extent permitted by law, the Company has agreed to indemnify its auditor, Ernst & Young (Australia), as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young (Australia) during or since the financial year.

Membership The Company is a company limited by guarantee and is without share capital. The number of members as at 31 October 2021 was 55,088 (2020: 52,221).

Members’ limited liability In accordance with the Constitution of the Company, every member of the Company undertakes to contribute an amount limited to $4 per member in the event of the winding up of the Company during the time that he or she is a member or within one year thereafter.

Auditor’s independence declaration The directors have received a declaration from the auditor of Parramatta Leagues’ Club Ltd. This has been included on page 4.

Ernst & Young (Australia) was appointed as auditor in accordance with Section 327 of the Corporations Act 2001.

Signed in accordance with a resolution of the directors.

Gregory Monaghan Director Sydney 21 January 2022

20

PARRAMATTA LEAGUES CLUB LIMITED

Auditor’s Independence Declaration

Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au

Auditor’s Independence Declaration to the Directors of Parramatta Leagues Club Limited and its controlled entities As lead auditor for the audit of the financial report of Parramatta Leagues Club Limited for the financial year ended 31 October 2021, I declare to the best of my knowledge and belief, there have been: a.

No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

b.

No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Parramatta Leagues Club Limited and the entities it controlled during the financial year.

Ernst & Young

Daniel Cunningham Partner Sydney 21 January 2021

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

ANNUAL REPORT 2021

21

Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 October 2021 2021 $

2020 $

68,440,331

67,121,573

-

4,840,500

1,029,858

-

3,886,879

3,829,904

Cost of goods sold

(2,885,184)

(2,987,361)

Poker machine duty

(9,044,659)

(10,110,034)

Depreciation expense

(7,485,806)

(7,876,061)

(547,524)

(719,389)

Employee benefits expense

(31,827,650)

(30,708,782)

Entertainment, marketing and promotional costs

(3,290,780)

(4,152,030)

Football related expenses

(7,531,677)

(5,903,010)

Repairs and maintenance expenses

(1,288,725)

(1,682,100)

(172,326)

(129,923)

(2,816,305)

(3,322,334)

Legal costs

(420,932)

(322,372)

Other expenses

(1,891,277)

(4,457,756)

(1,143,693)

(1,342,958)

Note Revenue from contracts with customers

4

Jobkeeper subsidy income Jobsaver subsidy income Other income

5

Donations

Licenses and fees Occupancy expenses

Finance costs

6.1

Finance income Profit before income tax Income tax expense Profit for the year Other comprehensive income Total comprehensive income for the year

7

14,536

44,998

3,025,066

2,122,865

-

-

3,025,066

2,122,865

-

-

3,025,066

2,122,865

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

22

PARRAMATTA LEAGUES CLUB LIMITED

Consolidated Statement of Financial Position As at 31 October 2021

Note

2021 $

2020 $

Assets Current assets Cash and cash equivalents

8

17,900,113

19,800,584

Trade and other receivables

9

2,085,016

1,182,148

Contract assets

179,489

520,992

Inventories

341,070

419,316

1,431,681

1,660,000

21,937,369

23,583,040

Assets held for sale

10

Total current assets Non-current assets Property, plant and equipment

11

70,810,310

73,678,658

Intangible assets

12

835,000

835,000

Right-of-use assets

13

13,169,364

13,462,843

Investment properties

14

17,470,666

18,902,347

Total non-current assets

102,285,340

106,878,848

Total assets

124,222,709

130,461,888

Liabilities Current liabilities Trade and other payables

15

7,527,142

13,319,168

Borrowings

16

8,002,868

4,575,237

Grant in advance

17

600,000

600,000

Lease liabilities

13

18,736

157,799

Employee benefit liabilities

18

1,749,178

1,610,666

Contract liabilities

19

3,101,316

1,519,911

20,999,240

21,782,781

Total current liabilities Non-current liabilities Borrowings

16

14,058,175

21,732,908

Grant in advance

17

-

600,000

Lease liabilities

13

13,432,947

13,451,379

Employee benefit liabilities

18

570,191

679,393

Contract liabilities

19

373,693

452,030

Total non-current liabilities

28,435,006

36,915,710

Total liabilities

49,434,246

58,698,491

Net assets

74,788,463

71,763,397

Retained earnings

74,788,463

71,763,397

Total members’ fund

74,788,463

71,763,397

Members funds

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2021

23

Consolidated Statement of Changes in Equity For the year ended 31 October 2021

Retained earnings $

Total members’ funds $

71,763,397

71,763,397

3,025,066

3,025,066

-

-

3,025,066

3,025,066

At 31 October 2021

74,788,463

74,788,463

At 1 November 2019

69,640,532

69,640,532

2,122,865

2,122,865

-

-

2,122,865

2,122,865

71,763,397

71,763,397

At 1 November 2020 Profit for the year Other comprehensive income Total comprehensive income for the year

Profit for the year Other comprehensive income Total comprehensive income for the year At 31 October 2020

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

24

PARRAMATTA LEAGUES CLUB LIMITED

Consolidated Statement of Cash Flows As at 31 October 2021

Note

2021 $

2020 $

79,546,551

80,647,068

(73,874,563)

(63,974,462)

Operating activities Receipts from customers, sponsors and government (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Rent received Interest received

903,603

897,171

14,536

44,998

Interest paid

(1,080,867)

(1,327,581)

Net cash flows from operating activities

5,509,260

16,287,194

1,900,000

-

Investing activities Proceeds from sale of non-current assets Payments for property, plant and equipment

(4,333,307)

Payments for intangible assets

-

Net cash flows used in investing activities

(2,433,307)

(6,031,848) (146,000) (6,177,848)

Financing activities Proceeds from NAB loan facility

-

Repayment of NAB loan facility Payment for principal portion of lease liabilities Net cash flows (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at 1 November Cash and cash equivalents at 31 October

8

5,215,899

(4,263,212)

(2,427,200)

(713,212)

(552,068)

(4,976,424)

2,236,631

(1,900,471)

12,345,977

19,800,584

7,454,607

17,900,113

19,800,584

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2021

25

Notes to the Consolidated Financial Statements For the year ended 31 October 2021

1.

Corporate information

The consolidated financial statements of Parramatta Leagues’ Club Ltd (the “Company”) and its subsidiaries (collectively, the “Group”) for the year ended 31 October 2021 were authorised for issue in accordance with a resolution of the directors on 21 January 2022.

Parramatta Leagues’ Club Ltd is a not-for-profit entity limited by guarantee, incorporated and domiciled in Australia.

The Company’s registered office and principal place of business is 1 Eels Place, Parramatta, NSW 2150.

The nature and operations and principal activities of the Group are described in the directors’ report.

Information on other related party relationships of the Group is provided in Note 23.

2. Significant accounting policies 2.1

Basis of preparation and statement of compliance

The consolidated financial report is a general purpose financial statements have been prepared in compliance with the requirements of the Corporations Act 2001, Australian Accounting Standards – Simplified Disclosures.

The Group is a not-for-profit entity which is not publicly accountable.

Other than the change in disclosure requirements, the adoption of AASB 1060 has no significant impact on the financial statements because the Group’s previous financial statements were prepared in full compliance with the recognition and measurement requirements of Australian Accounting Standards.

The consolidated financial report is presented in Australian dollars ($).

2.2 Changes in accounting policies and disclosures New and amended standards and interpretations The new and amended Australian Accounting Standards and Interpretations that apply for the first time in 2021 do not materially impact the consolidated financial statements of the Group.

Accounting Standards and Interpretations issued but not yet effective Certain Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective. Other than the early adoption of AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities, the Group has not early adopted any other standards, interpretations or amendments that have been issued but are not yet effective for the annual reporting year ended 31 October 2021.

2.3 Summary of significant accounting policies a) Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 October 2021. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has: •

Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)

•

Exposure, or rights, to variable returns from its involvement with the investee

•

The ability to use its power over the investee to affect its returns

26

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: •

The contractual arrangement(s) with the other vote holders of the investee

•

Rights arising from other contractual arrangements

•

The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets, liabilities and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. b) Current versus non-current classification The Group presents assets and liabilities in the consolidated statement of financial position based on current/non-current classification. An asset is current when it is: •

Expected to be realised or intended to be sold or consumed in the normal operating cycle;

•

Held primarily for the purpose of trading;

•

Expected to be realised within twelve months after the reporting period, or

•

Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when: •

It is expected to be settled in the normal operating cycle;

•

It is held primarily for the purpose of trading;

•

It is due to be settled within twelve months after the reporting period, or

•

There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current

ANNUAL REPORT 2021

27

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 2.

2.3

Significant accounting policies (continued) Summary of significant accounting policies (continued)

c) Revenue recognition The Group is in the business of providing sporting, social and entertainment activities and amenities to their members and guests. Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer.

Revenue is recognised for the major business activities as follows: (i) Sale of goods Revenue from the sale of goods comprises revenue earned from the provision of food, beverage and other goods and is recognised (net of rebates, returns, discounts and other allowances) at the point of sale or delivery as this corresponds to the transfer of control of the goods. (ii) Rendering of services Revenue from rendering of services comprises revenue from gaming facilities together with other services to members and other patrons of the club. Revenue from rendering of services is recognised when the services are provided and is measured at the fair value of the consideration received or receivable. (iii) Sponsorship Revenue from sponsorship is recognised over a period when the Group satisfies a performance obligation by transferring a promised good or service to a customer. Revenue is measured at the fair value of the consideration received or receivable. (iv) Membership income Revenue from membership subscription and future ticket purchases by the members are deferred as unearned income and are brought to account evenly over the course of the membership period in accordance with contractual performance obligations. (v) Grants income Government grants received to fund specific programmes arise from an agreement which is enforceable and contains specific performance obligations. Revenue is recognised as income when the performance obligations of the contract are satisfied. Each performance obligation is considered to ensure that the revenue recognition reflects the transfer of a control, there may be some performance obligation where controls transfers at a point in time and others which have continues transfer of control over the life of the contract. Where control is transferred over time, generally input method of cost is deemed to be the most appropriate method to reflect the transfer of the benefit. Any income received where the performance obligation is not yet satisfied as at reporting date, is recorded as grant in advance. (vi) National Rugby League (“NRL”) distribution grant Grants from the National Rugby League are recognised as revenue in the period in which the funding relates to the extent that expenditure has been incurred in accordance with the terms and conditions attached to these grants. (vii) Rental income Revenue from rental receipts is recognised in the period the rental relates to and is recorded in accordance with the rental agreement. (viii) Gate receipts Revenue from gate takings is recognised when the match takes place or when services are provided. (ix) Interest income Interest income is recognised using the effective interest rate (EIR) method.

28

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 (x) Jobsaver and JobKeeper subsidy income Jobsaver and JobKeeper subsidy income is a government grant which relates to wages and salaries. It is recognised as income on a systematic basis over the period that the related costs, for which it is intended to compensate, are expensed.

Classification and measurement of revenue Revenue is recognised over time if: •

the customer simultaneously receives and consumes the benefits as the entity performs,

•

the customer controls the asset as the entity creates or enhances it; or

•

the seller’s performance does not create an asset for which the seller has an alternative use and there is a right to payment for performance to date.

Where the above criteria are not met, revenue is recognised at a point in time.

Contract balances Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer.

If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

Contract liabilities The Group’s contract liabilities represent membership income in advance. A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Group performs under the contract. d) Finance income Interest income is recorded using the EIR. The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income is included in finance income in the consolidated statement of profit or loss and other comprehensive income. e) Finance costs Finance costs are expensed in the period in which they occur. Finance costs consist of interest and other costs that the Group incurs and are calculated using the EIR method. f)

Cash and cash equivalents

Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank and on hand.

For the purpose of the consolidated statement of cash flows, cash and cash equivalents include cash at bank and on hand. g) Trade and other receivables A receivable represents the Group’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). They are generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components when they are recognised at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the EIR method.

For trade receivables, the Group applies a simplified approach in calculating expected credit losses (ECLs).

Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

ANNUAL REPORT 2021

29

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 2.

2.3

Significant accounting policies (continued) Summary of significant accounting policies (continued)

h) Inventories Inventories are valued at the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Costs are assigned on the basis of weighted average costs. i)

Property, plant and equipment

Capital work in progress is stated at cost, net of accumulated impairment losses, if any. Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to consolidated profit or loss during the reporting period in which they are incurred.

Depreciation on assets is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements, the shorter lease term as follows: Buildings Leasehold improvements Plant and equipment Poker machine

10 to 40 years 20 to 40 years 3 to 10 years 3 to 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. (Note 2.3(l)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the consolidated statement of profit or loss and other comprehensive income. j)

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or losses when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of profit or loss and other comprehensive income.

30

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 Purchased poker machine entitlements Purchased poker machine entitlements are not amortised. Instead, purchased poker machine entitlements are tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and are carried at cost less accumulated impairment losses. k) Leases The Group 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.

Group as a lessee The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. (i) Right-of-use assets The Group 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, as follows: • • • •

Car park Building Motor vehicles Other equipments

79 years 2 years 3 to 4 years 2 to 5 years

If ownership of the leased asset transfers to the Group 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. Refer to the accounting policies in Note 2.3(l) Impairment of assets. (ii) Lease liabilities At the commencement date of the lease, the Group 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 in‑substance 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 Group and payments of penalties for terminating the lease, if the lease term reflects the Group 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 Group 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. (iii) Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases (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 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 2021

31

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 2.

2.3 (iii)

Significant accounting policies (continued) Summary of significant accounting policies (continued) Short-term leases and leases of low-value assets (continued)

Group as a lessor Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the consolidated statement of profit or loss and other comprehensive income due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. l)

Impairment of assets

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. m) Investment properties Investment properties, principally comprising freehold buildings, are held for long-term rental yields and are not occupied by the Group. Investment properties are carried at fair value and are based on the directors’ valuation which in turn is subject to third party verification once every three years. The valuations prepared by the external valuer and directors are based on the information that is available at 31 October 2021 (refer to Note 3). n) Asset held for sale The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification.

Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position. o) Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. p) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. After initial recognition, borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the consolidated statement of profit or loss and other comprehensive income. For more information, refer to Note 16.

Borrowings are removed from the consolidated statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowing costs are expensed as incurred.

32

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 q) Employee benefit liabilities Short-term obligations Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months after the end of each reporting period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables.

Other long-term employee benefit obligations The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the reporting period in which the employees render the related service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.

Expected future payments are discounted using market yields at the end of the reporting period on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Superannuation plan The Group contributes to several defined contribution superannuation plans. Contributions are recognised as an expense as they are made. The Group has no legal or constructive obligation to fund any deficit.

Termination benefits Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or to providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value. r)

Taxes

Current income tax The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except: •

When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;

•

In respect of taxable temporary differences associated with investments in subsidiaries, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

ANNUAL REPORT 2021

33

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 2.

2.3 r)

Significant accounting policies (continued) Summary of significant accounting policies (continued) Taxes (continued)

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except: •

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;

•

In respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Parramatta Leagues’ Club Ltd and its wholly owned Australian controlled entities have implemented the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Tax consolidation legislation Parramatta Leagues’ Club Ltd and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as of 1 January 2004.

The head entity, Parramatta Leagues’ Club Ltd in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a standalone taxpayer in its own right.

Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except: •

When the GST incurred on a sale or purchase of assets or services is not payable to or recoverable from the taxation authority, in which case the GST is recognised as part of the revenue or the expense item or as part of the cost of acquisition of the asset, as applicable

•

When receivables and payables are stated with the amount of GST included

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the consolidated statement of financial position. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

Cash flows are included in the consolidated statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part of operating cash flows.

34

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 s) Parent entity financial information The financial information for the parent entity, Parramatta Leagues’ Club Ltd, is disclosed in Note 26 and has been prepared on the same basis as the consolidated financial statements, except as set out below.

Investments in subsidiaries Investments in subsidiaries are accounted for at cost less impairment in the financial statements of Parramatta Leagues’ Club Ltd. t)

Comparatives

Where necessary, comparative figures have been reclassified to conform with changes in presentation in the current year.

3. Significant accounting judgements, estimates and assumptions Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Estimated fair values of investment properties The Group carries its investment properties at fair value with changes in the fair values recognised in profit or loss. It obtains independent valuations at least once every three years. The fair value of each property is updated by taking into account the most recent independent valuations.

The properties were internally valued by the directors as at 31 October 2021.

The key assumptions and estimates used in the valuation approaches include: •

Comparable property market evidence

•

Demand for properties in the area

•

Likely rental returns

If the annual operating income were to change by 5% then the value of the investment properties would change by $0.9 million.

ANNUAL REPORT 2021

35

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 3.

Significant accounting judgements, estimates and assumptions (continued)

Provision for expected credit losses of trade receivables and contract assets The Group uses a provision matrix to calculate expected credit losses (ECLs) for financial assets, specifically trade receivables. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type and rating, and coverage by letters of credit and other forms of credit insurance).

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.

Leases – Estimating the incremental borrowing rate The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency).

The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating).

36

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

4. Revenue from contracts with customers Set out below is the disaggregation of the Group’s revenue from contracts with customers: 2021 $

2020 $

Sale of goods Bar sales

1,794,098

2,172,414

Catering sales

3,134,116

3,288,227

767,541

482,282

5,695,755

5,942,923

Poker machine

35,074,907

38,753,437

NRL distribution

14,004,000

13,788,282

Sponsorship and hospitality

7,969,912

5,076,252

Commissions received

304,200

354,178

Members subscription

155,380

186,186

4,891,788

2,719,144

344,389

301,171

Total rendering of services

62,744,576

61,178,650

Total revenue from contracts with customers

68,440,331

67,121,573

46,324,587

48,070,853

22,115,744

19,050,720

Total revenue from contracts with customers

68,440,331

67,121,573

Total revenue

68,440,331

67,121,573

2021 $

2020 $

Grants and other activities

2,169,636

1,993,855

Net gain on disposal of non-current assets

240,000

-

Rent received

903,603

897,171

Sundry income

573,640

938,878

3,886,879

3,829,904

Types of goods or services

Merchandise sales Total sale of goods Rendering of services

Gate ticket sales and membership revenue TenPin sales

Timing of revenue recognition At a point in time Over time

5. Other income

ANNUAL REPORT 2021

37

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

6. Expenses 6.1

Finance costs 2021 $

2020 $

46,715

78,566

Interest on borrowings

548,404

709,868

Interest on lease liabilities

548,574

554,524

1,143,693

1,342,958

Bank charges

Total finance costs

6.2 Profit before income tax includes the following specific expenses:

Defined contribution superannuation expense Net loss on disposal of non-current assets Rental expenses relating to short-term leases or leases of low-value assets

2021 $

2020 $

2,104,056

1,913,730

-

2,438,483

137,460

94,057

7. Income tax The major components of income tax expense for the years ended 31 October 2021 and 2020 are: 2021 $

2020 $

-

-

Relating to the origination and reversal of temporary differences

-

-

Income tax expense reported in the consolidated statement of profit or loss and other comprehensive income

-

-

Consolidated profit or loss and other comprehensive income Current income tax charge: Current income tax charge Deferred tax:

38

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 Reconciliation of tax expense and the accounting profit multiplied by Australia’s domestic tax rate for 2021 and 2020:

Accounting profit before income tax At Australia’s statutory income tax rate of 30% (2020: 30%) Non-assessable income

2021 $

2020 $

3,025,066

2,122,865

907,520

636,860

(4,859,130)

(3,297,805)

Non-deductible expenses

4,957,027

2,010,144

Tax (benefit)/losses not recorded as deferred tax assets

(1,005,417)

650,801

Income tax expense reported in the consolidated statement of profit or loss and other comprehensive income

-

-

2021 $

2020 $

43,710,853

47,062,243

13,113,256

14,118,673

2021 $

2020 $

17,900,113

19,800,584

Tax losses Unused tax losses for which no deferred tax assets have been recognised Potential tax benefit @ 30%

8. Cash and cash equivalents

Cash at bank and on hand

For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the above.

ANNUAL REPORT 2021

39

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

9. Trade and other receivables 2021 $

2020 $

1,173,408

380,365

Current Trade receivables Allowance for expected credit losses

(283,311)

(286,709)

890,097

93,656

Other receivables

529,630

380,553

Prepayments

665,289

707,939

2,085,016

1,182,148

Set out below is the movement in the allowance for expected credit losses of trade receivables.

2021 $ As at 1 November 2020

286,709

Write-off

(3,398)

As at 31 October

283,311

10. Assets held for sale 2021 $

2020 $

1,660,000

-

1,431,681

1,660,000

At fair value Opening balance at 1 November Transfer from investment properties Disposals Closing balance at 31 October

(1,660,000) 1,431,681

1,660,000

In 2020, management reclassified 2 Ferris Street, Parramatta NSW 2150 property to assets held for sale Following the year ended 31 October 2020, the property was sold and $1.6 million was disposed from assets held for sale in 2021.

Management reclassified 20 Wandella Avenue, Northmead NSW 2152 property as assets held for sale in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operation.

The Group’s investment property, Unit 1, 50–52 Ross St, Parramatta NSW 2150, entered into a contract of sale subsequent to the financial year end.

Management have applied the exception to AASB 5 whereby investment property recorded in accordance with AASB 140 Investment Property to carry property at fair value until the date of disposal and therefore have not recognised costs to sell.

40

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

11. Property, plant and equipment Land $

Leasehold Poker improvemachine ments $ $

Plant and Buildings equipment $ $

Capital work in progress $

Total $

Cost At 1 November 2020

3,610,500

85,087,255

Additions

-

760,117

1,057,077

736,916

-

1,779,197

4,333,307

Disposals

-

-

(95,601)

-

-

-

(95,601)

Transfer

-

293,179

-

-

-

(293,179)

-

At 31 October 2021

3,610,500

28,105,979 18,670,372 4,902,235

86,140,551 29,067,455 19,407,288 4,902,235

470,433 140,846,774

1,956,451 145,084,480

Accumulated depreciation At 1 November 2020

-

33,920,541

16,314,602

13,663,219 3,269,754

-

67,168,116

Depreciation charge for the year

-

2,305,158

2,665,976

2,081,398

139,751

44

7,192,327

Disposals

-

-

(86,273)

-

-

-

(86,273)

At 31 October 2021

-

36,225,699 18,894,305 15,744,617 3,409,505

44

74,274,170

Net book value At 31 October 2021

3,610,500

49,914,852

10,173,150

3,662,671 1,492,730 1,956,407

70,810,310

At 31 October 2020

3,610,500

51,166,714

11,791,377

5,007,153

73,678,658

1,632,481

470,433

During the year, no borrowing costs were capitalised (2020: $nil).

ANNUAL REPORT 2021

41

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

12. Intangible assets Purchased poker machine entitlements $ Cost At 1 November 2020

835,000

Additions

-

Disposals

-

At 31 October 2021

835,000

Accumulated amortisation and impairment At 1 November 2020

-

Amortisation

-

At 31 October 2021

-

Net book value At 31 October 2021

835,000

At 31 October 2020

835,000

13. Leases Group as a lessee The Group has lease contracts for car park, building, motor vehicles and other equipments used in its operations. Leases of motor vehicles generally have lease terms between 3 and 4 years, while other equipments generally have lease terms of 2 and 5 years. The car park and part of the Group’s premises are situated on land leased from the Parramatta Regional Park Trust. The lease is for a term of 79 years from 5 March 1999 with a 49 year option at its expiration. The lease rental is subject to review annually for CPI and a review every five years. Management have also entered into a lease for the rental of the George Street building for a term of 2 years commencing 8 January 2019 with an option of extending by one year at its expiration.

The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Group is restricted from assigning and subleasing the leased assets and some contracts require the Group to maintain certain financial ratios. There are several lease contracts that include extension and termination options and variable lease payments.

The Group also has certain leases of plant and equipment with lease terms of 12 months or less or with low value less than $5,000. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases.

42

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021 Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year:

As at 1 November 2020 Depreciation expense As at 31 October 2021

Car park and building $

Motor vehicles $

Other equipments $

Total $

13,223,444

193,530

45,869

13,462,843

(103,469)

(18,346)

90,061

27,523

(171,664) 13,051,780

(293,479) 13,169,364

Presented below is a maturity analysis of future lease payments: 2021 $ Not later than 1 year

93,009

Later than 1 year and not later than 5 years

13,358,674 13,451,683

Current

18,736

Non-current

13,432,947

The amount of expense relating to short-term leases and leases of low-value assets recognised in profit or loss during the year ended 31 October 2021 was $137,460 (2020: $94,057).

Group as a lessor Some of the investment properties are leased to tenants under long-term operating leases with rentals receivable monthly. Minimum lease payments receivable on leases of investment properties are as follows: 2021 $

2020 $

Not later than 1 year

339,448

423,130

Later than 1 year and not later than 5 years

599,968

1,121,510

939,416

1,544,640

ANNUAL REPORT 2021

43

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

14. Investment properties 2021 $

2020 $

18,902,347

20,562,347

At fair value Opening balance at 1 November Transfer to assets held for sale Closing balance at 31 October

(1,431,681) 17,470,666

(1,660,000) 18,902,347

a) Valuation basis The Group obtains independent valuation for its investment properties at least once every three years.

At the end of each reporting period, the directors update their assessment of the fair value of each property, taking into account the most recent independent valuations. The directors determine a property’s value within a range of reasonable fair value estimates. The directors update their assessment of the fair value of each property by taking into account the most recent independent valuation. The directors determine a property’s value within a range of reasonable fair value estimates.

The best evidence of fair value is current prices in an active market for similar investment properties. Where such information is not available, the directors consider information from a variety of sources including: (i) current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences (ii) discounted cash flow projections based on reliable estimates of future cash flows (iii) capitalised income projections based upon a property’s estimated net market income, and a capitalisation rate derived from an analysis of market evidence. b) Non-current assets pledged as security Refer to Note 16 for information on non-current assets pledged as security by the Group. c) Leasing arrangements Please refer to Note 13 for details relating to leasing arrangements of the Group as a lessor. The following are core properties: •

13–15 O’Connell Street, Parramatta NSW 2150

•

35 Quarry Road, Dundas NSW 2117

The following are non-core properties: •

6–8 Grose Street, Parramatta NSW 2150

•

2 Eels Place, Parramatta NSW 2150

•

10–12 Grose Street, Parramatta NSW 2150

•

50 O’Connell Street, Parramatta NSW 2150 (Ground Floor)

•

3C Trott Street, Parramatta NSW 2150

•

20 Wandella Avenue, Northmead NSW 2150*

•

Units 1, 2, 3, 4, 5, 8, 9, 10 and 11 at 19–21 O’Connell Street, Parramatta NSW 2150

•

Units 1, 2, 3, 4 and 5 at 17 O’Connell Street, Parramatta NSW 2150

•

Units 1*, 3, 4 and 6 at 50–52 Ross Street, Parramatta NSW 2150

* The properties have has been transferred to assets held for sale.

44

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

15. Trade and other payables 2021 $

2020 $

Trade payables

1,623,344

3,907,190

Accrued expenses

5,429,013

8,750,522

474,785

661,456

7,527,142

13,319,168

2021 $

2020 $

278,136

262,025

7,724,732

4,313,212

8,002,868

4,575,237

14,058,175

21,732,908

22,061,043

26,308,145

30,561,818

33,383,683

Current

GST payable

16. Borrowings

Current Unsecured notes NAB loan facility (i)

Non-current NAB loan facility (i) Total used facility Total facilities available Unused facility

(8,500,775)

(7,075,538)

22,061,043

26,308,145

2021 $

2020 $

21,782,907

26,046,120

Secured liabilities and assets pledged as security The total secured liabilities (current and non-current) are as follows: NAB loan facility (i) (i) NAB loan facility The NAB loan facilities include $22.3 million ($20.8 million drawn) Corporate Markets Loan funding capital projects, $6 million ($nil drawn) Corporate Markets Loans entered into during the prior year, $2.0 million ($0.9 million drawn) master asset finance facility and $0.6 million ($0.1 million drawn) in other NAB facilities.

There are also $0.8 million ($0.3 million) drawn other non-NAB unsecured facilities. All assets are secured against NAB loan facility.

ANNUAL REPORT 2021

45

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

17. Grant in advance 2021 $

2020 $

600,000

600,000

-

600,000

2021 $

2020 $

1,389,386

1,399,374

359,792

211,292

1,749,178

1,610,666

570,191

679,393

Current Grant in advance Non-current Grant in advance

18. Employee benefit liabilities Current Annual leave Long service leave

Non-current Long service leave

The present value of employee benefits not expected to be settled within 12 months of reporting date have been calculated using the following weighted averages:

Assumed rate of increase in wage and salary rates Discount rate Settlement term (years)

2021 $

2020 $

3%

3%

3.51%

3.51%

10

10

2021 $

2020 $

2,388,996

1,144,723

712,320

375,188

3,101,316

1,519,911

340,693

386,030

33,000

66,000

373,693

452,030

19. Contract liabilities Current Membership income received in advance Sponsorship and hospitality income received in advance

Non-current Membership income received in advance Sponsorship and hospitality income received in advance

46

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

20. Commitments and contingencies 20.1 Capital commitments Significant capital expenditures contracted for at the end of the reporting period but not recognised as liabilities are as follows:

Property, plant and equipment

2021 $

2020 $

-

585,748

20.2 Lease commitments: Group as a lessee The Group had commitments of $37,022 (2020: none) as at 31 October 2021 in respect of purchases of motor vehicles under finance lease arrangements on 30 November 2021.

The Group has no other lease contracts that have not yet commenced as at 31 October 2021 (2020: none).

20.3 Contingent liabilities A claim was lodged against Parramatta National Rugby League Club Pty Limited, a subsidiary of Parramatta Leagues’ Club Ltd, by the Liquidator of a former supplier in May 2021. The directors have obtained legal advice with respect to this matter. After considering the advice, the directors do not believe that Parramatta National Rugby League Club Pty Limited has any further obligations in relation to this matter.

20.4 Remuneration commitments The Group has entered into contracts with players with respect to subsequent seasons, whereby certain minimum amounts are payable.

The minimum amounts payable are as follows:

Within one year

2021 $

2020 $

9,672,000

9,558,295

Amounts contracted beyond one year are cancellable under certain conditions and therefore not reflected.

Match payments are payable in varying circumstances, in addition to the above amounts.

21. Bank guarantees The Group maintains a credit facility amounting to $350,000 (2020: $350,000) with National Australia Bank (NAB), maturing on 28 February 2022. This facility bears a weighted average interest rate of nil% (2020: nil%) and the unused facility is $250,000 (2020: $88,125).

ANNUAL REPORT 2021

47

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

22. Subsidiaries The consolidated financial statements of the Group include the following subsidiaries: % Equity interest

Name

Principal activities

Country of incorporation

Parramatta National Rugby League Club Pty Limited

To compete in the National Rugby League competition and to encourage, promote and control the development, playing and interests of rugby league football.

Australia

100%

100%

Parramatta Power Soccer Club Limited

The Club does not trade and hasn’t had any activity since 2006.

Australia

100%

100%

2021

2020

23. Related party disclosures The parent and ultimate parent entity within the Group is Parramatta Leagues’ Club Ltd. (a) Board of Directors During the year, the Company paid the directors an amount of $134,489 (2020: $25,452) which includes superannuation as remuneration for services provided in their roles as the Board of Directors.

As at 31 October 2021, the Club paid a total of $nil (2020: $101,092) to the Club Administrator as remuneration for services provided in his role as the Club Administrator prior to the appointment of the new Board.

Apart from the remuneration outlined above, the Company did not enter into any further contract with the Board of Directors, nor were there any transactions entered into between the Company and a related party of the Board of Directors. (b) Key management personnel compensation Amounts paid to related parties $ Key management personnel of the group 2021

3,457,735

2020

2,577,697

The amount includes payments made to key management personnel for the services performed in their capacity as CEO, CFO, COO, CCO, General Manager of Football and Head Coach during the year ended 31 October 2021. Compensation of the Board of Directors is disclosed in Note 23(a) above. (i) Transactions with key management personnel From time to time key management personnel of the Company, or their related entities, may sell goods or provide services to the Group. The Group makes these purchases on the same terms and conditions as other non-key management personnel related transactions.

There are no outstanding balances from the above transactions entered into with key management personnel or their related parties.

48

PARRAMATTA LEAGUES CLUB LIMITED

Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2021

24. Events after the reporting period Subsequent to the financial year, on 11 December 2021, the Group’s investment property, Unit 1, 50–52 Ross St, Parramatta NSW 2150, entered into a contract of sale for $582,000 and is scheduled to be settled on 24 January 2022.

There have been no other significant events occurring after the reporting period which may affect either the Group’s operations or results of those operations or the Group’s state of affairs.

25. Auditor’s remuneration The auditor of Parramatta Leagues’ Club Ltd is Ernst & Young (Australia).

2021 $ Amounts received or due and receivable by Ernst & Young (Australia) for: An audit of the financial report of the entity

147,260

Taxation services

134,080 281,340

26. Information relating to the Parramatta Leagues’ Club Ltd (the Parent) a) Summary financial information The individual financial statements for the parent entity show the following aggregate amounts: 2021 $

2020 $

18,335,660

22,635,315

101,141,619

104,847,985

119,477,279

127,483,300

Statement of financial position Current assets Non-current assets Total assets Current liabilities

14,140,983

16,054,564

Non-current liabilities

28,128,965

36,199,797

42,269,948

52,254,361

77,207,331

75,228,939

Retained earnings

77,207,331

75,228,939

Profit for the year

1,978,392

764,523

Total comprehensive income

1,978,392

764,523

Total liabilities Net assets Members’ equity

b) Guarantees entered into by the parent entity The Company has not entered into any guarantee contracts during the current financial year (2020: $nil). c) Contractual commitments for acquisition of property, plant or equipment The Company has not entered into any contractual commitments for acquisition of property, plant or equipment during the current financial year (2020: a contractual commitment for acquisition of property, plant and equipment for a commitment up to $585,748).

ANNUAL REPORT 2021

49

Directors’ Declaration In accordance with a resolution of the directors of Parramatta Leagues’ Club Ltd, I state that: In the opinion of the directors: (a) the consolidated financial statements and notes set out on pages 6 to 34 are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s financial position as at 31 October 2021 and its performance for the financial year ended on that date; and (ii) complying with Australian Accounting Standards – Simplified Disclosures, to the extent described in Note 2.1 to the financial statements and complying with the Corporations Regulations 2001; (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the board

Gregory Monaghan Director Sydney 21 January 2022

50

PARRAMATTA LEAGUES CLUB LIMITED

Independent Auditor’s Report

Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au

Independent auditor’s report to the members of Parramatta Leagues Club Limited and its subsidiaries Opinion We have audited the financial report of Parramatta Leagues Club Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 31 October 2021, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a.

Giving a true and fair view of the consolidated financial position of the Group as at 31 October 2021 and of its consolidated financial performance for the year ended on that date; and

b.

Complying with Australian Accounting Standards – Simplified Disclosures and the Corporations Regulations 2001.

Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group 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 (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information is the directors’ report accompanying the financial report.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

ANNUAL REPORT 2021

51

Independent Auditor’s Report (continued)

Page 2

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 – Simplified Disclosures and the Corporations Act 2001 and for such internal control 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 Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial report Our 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 our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and 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, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ►

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our 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 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 Group’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 the going concern basis of 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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group 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. We are

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

52

PARRAMATTA LEAGUES CLUB LIMITED

Independent Auditor’s Report (continued)

Page 3

responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We 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 we identify during our audit.

Ernst & Young

Daniel Cunningham Partner Sydney 21 January 2021

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

ANNUAL REPORT 2021

53

Honour Roll SURNAME

FIRST NAME

MEMBERSHIP

Anderson*

Jack

Foundation

Anson*

Keith

Foundation

Bambrick*

David

Foundation

Barnes*

Noel

Foundation

Bosnich*

George

Foundation

Cater*

Ronald

Foundation

Catt*

Brian Norman

Foundation

Cohen*

Basil

Foundation

Connolly*

Patrick

Foundation

Duncan*

Douglas H

Foundation

Eades*

Sidney

Foundation

Feletti*

John

Foundation

Friend*

Peter

Foundation

Gates OAM*

Thomas

Foundation

Gray*

Roy

Foundation

Griffiths*

Charles

Foundation

Hinson*

Raymond

Foundation

Ingram*

Stanley Lawrence

Foundation

Kensitt*

Frederick

Foundation

Martin*

Daniel

Foundation

Mcburney*

Arthur R

Foundation

Mcgarrigle*

Richard

Foundation

Mclean*

Don

Foundation

Mitchell*

Herbert

Foundation

Mulvihill*

James

Foundation

Murray*

Stuart Keith

Foundation

Oliver*

Colin Thomas

Foundation

Partridge*

Gillian L

Foundation

Pond*

Ronald Alexander

Foundation

Pratt*

Cecil

Foundation

Reid*

Henry

Foundation

Rochester*

Norman J

Foundation

Spence*

Kenneth

Foundation

Stevenson*

Clifford

Foundation

Stewart*

Ross

Foundation

Styles*

John L

Foundation

Tarrant*

Ronald F

Foundation

Webster OAM*

Wally

Foundation

Weekes*

Allan

Foundation

Wiffen*

Albert

Foundation

Williams*

Alan J

Foundation

Wootton*

Cedric Alan

Foundation

Barlow

Colin

Life Foundation

Boulous*

Eddie

Life Foundation

Carter

Raymond

Life Foundation

Collyer*

Ronald

Life Foundation

Cooney*

Dennis

Life Foundation

Cresswell*

Allan

Life Foundation

Croghan*

Ronald

Life Foundation

Dixon*

Ronald

Life Foundation

Doolan*

William

Life Foundation

Doolan*

Laurence

Life Foundation

Freeman

Ronald

Life Foundation

54

PARRAMATTA LEAGUES CLUB LIMITED

SURNAME

FIRST NAME

MEMBERSHIP

Hartley*

Alvin

Life Foundation

Hughes*

Kevin

Life Foundation

Johnston

Matthew

Life Foundation

Johnstone*

Leonard

Life Foundation

Lyons*

John

Life Foundation

Lyons

John

Life Foundation

Manning*

Reg

Life Foundation

Mayo*

Maxwell C

Life Foundation

Mccaffery

Frank Edward

Life Foundation

Mclean*

Ronald John

Life Foundation

Mcleod

Robert

Life Foundation

Miller OAM*

John

Life Foundation

Molloy

Gordon A

Life Foundation

Morey*

Spencer

Life Foundation

Newland*

Raymond E

Life Foundation

Parkes*

Ronald

Life Foundation

Pickering*

Noel

Life Foundation

Prudames*

Reg

Life Foundation

Prudames*

Ronald

Life Foundation

Purves*

John Edwin

Life Foundation

Simmons

Norman J

Life Foundation

Simpson*

Ronald

Life Foundation

Simpson*

Bryan

Life Foundation

Vernon*

Thomas

Life Foundation

Vine*

Ken

Life Foundation

Winch

Peter

Life Foundation

Argent*

Jack

Life Elected

Baker*

Albert

Life Elected

Boyle*

Jack

Life Elected

Drew*

Arthur

Life Elected

Fisher*

Roy

Life Elected

Fitzgerald

Denis W

Life Elected

Gillett*

Keith

Life Elected

Hilditch

Ronald Paul

Life Elected

Jones*

Bob

Life Elected

Joseph*

Joseph M

Life Elected

Jurd*

Christopher

Life Elected

Keane*

Frank

Life Elected

Leach*

Peter

Life Elected

Lewis*

Stan

Life Elected

Maddocks*

Kevyn

Life Elected

Mahoney*

Daniel

Life Elected

Miller

Peter John

Life Elected

Morris

Gary John

Life Elected

O’Keefe*

William Tamsett

Life Elected

O’Neill*

Spencer

Life Elected

Overton AM

Alan

Life Elected

Rayner*

William

Life Elected

Ritchie

Donald V

Life Elected

Rogers*

Peter

Life Elected

Shean*

Cyril

Life Elected

Simpson*

Stan

Life Elected

Sutton*

Harold Frank

Life Elected

Foundation: Founding member of the Club since its inception Life Foundation: The original 37 members who founded the Club Life Elected: Elected by the general members based on their outstanding contribution to the Club * Deceased

ANNUAL REPORT 2021

55

1 Eels Place, Parramatta T (02) 8833 0777 www.parraleagues.com.au

35 Quarry Road, Dundas Valley T (02) 9638 1326 www.vikingssportsclub.com.au