2020 Annual Report

2020 ANNUAL REPORT F O R T H E Y E A R E N D E D 3 1 O C TO B E R 2 0 2 0

Parramatta Leagues Club Limited ABN 52 000 218 655

52,359 M EMBERS

$4 million M EMBER BENEFITS

$804,974 D ONATED THROU GH

CONT ENTS President’s Report..................................................................................... 4

CEO Report.................................................................................................. 6

Eels CEO Report......................................................................................... 8

Strategic Plan.............................................................................................10

Community.................................................................................................. 12

Notice of AGM............................................................................................19

Directors’ Report......................................................................................20

Annual Financial Report 2020............................................................23

Notes to the Consolidated Financial Statements........................ 27

Directors’ Declaration.............................................................................55

Independent Auditor’s Report............................................................56

Appendix.....................................................................................................59

ANNUAL REPORT 2020 | 3

P R E SI DEN T’S REPORT

GR EG M O N AG HAN Dear Members With all the challenges of this unprecedented year, the Parramatta Leagues Group achieved great progress, and is positioned well for a bright future.

Highlights included; •O verwhelming approval by Members of a new Constitution •A ppointment of a new independent, highly qualified Board •O vercoming the unprecedented challenges of COVID–19, with resilience and innovation •A profitable financial result despite a 10-week shutdown

“Directors and the Senior Leadership Team are

• Parramatta Eels achieving a top four finish •A new Strategic Plan setting the pathway to the future • Repairs to the Parra Clubhouse façade

working hard to meet Member needs with the development of plans to refresh and refurbish the Clubhouse, to expand facilities for social interaction, refresh gaming and dining areas, and explore opportunities for expansion in our precinct.”

Certainly a year to remember!

The new Constitution, supported by 91% of Members, has set the platform for years to come. Appointment of the new Board in March 2020 signalled the departure of Administrator Max Donnelly, job done! Max demonstrated great skill, resilience, and persistence to achieve the goal of establishing the process to return full control of the Club to Members in an orderly fashion.

The current Directors are all Parramatta Leagues Club Members, with a combined 104 years of continuous membership. All are Eels supporters, and have formed an independent, highly skilled, and dedicated team.

Profiles of each Director are available on the Parra Leagues website, and we encourage all Members to check the outstanding credentials of those now proudly representing them.

The advent of COVID-19 highlighted the priority of safety and security of Members and staff. Our Club’s rapid response to frequent regulatory changes, and

4 | PARRAMATTA LEAGUES CLUB LIMITED

its innovation in introducing online delivery and takeaway services along with community support during the closure was outstanding. Our Chief Executive Officer’s report details the many vital steps taken.

We acknowledge and thank all our 200+ staff who made substantial sacrifices in work and income to ensure our great Club’s survival, and to ensure that we were ready to welcome back Members and guests at Parra Leagues and Vikings at the first opportunity. We took great pleasure in seeing the smiles of Members as they returned.

To show their support, Directors also decided to forgo some or all their Member approved honoraria.

Although many parts of the Club industry struggled, our Club avoided retrenchment of staff due to COVID-19. Further, we were able to make a Special Payment to all staff, to compensate in part for financial loss.

We were extremely proud to have maintained the financial strength to be able to recognise staff in this way.

Despite all the hurdles, we emerged strong and profitable. We were able to manage through the COVID-19 shutdown without needing to draw down on emergency lines of credit prudently arranged.

A major review of the Club’s strategic direction was initiated. A key part of the process was a formal survey of Members which received a very positive response. Directors and the Senior Leadership Team are working hard to meet Member needs with the development of plans to refresh and refurbish the Clubhouse, to expand facilities for social interaction, refresh gaming and dining areas, and explore opportunities for expansion in our precinct.

We congratulate the Eels for their achievements in this crisis ridden season. The Eels Board and Management led by Chair Sean McElduff and Chief Executive Jim Sarantinos drove on field success with a top 4 finish and off field efficiencies, reducing the financial commitment of Parramatta Leagues Club, and freeing up resources for future development of the Club. The Eels have emerged with a strong platform for sustained success.

I thank my fellow Directors, and the Staff and Management of Parra Leagues and Vikings for their tremendous commitment and expertise in seeing the Club through. Keeping up with day-to-day changes in COVID-19 rules while continuing to develop future plans has required great flexibility and resilience.

In closing, I have no doubt that the new governance arrangements endorsed by Members, and the substantial groundwork laid by both Parra Leagues and the Eels has indeed positioned our great Club for an outstanding future.

Go Parra!

Throughout we were able to continue with our high levels of community support. Over 60 community groups received ClubGRANTS payments totalling more than $800,000, continuing the Club’s proud tradition of contribution to community groups - in addition to our support of the Eels.

Greg Monaghan President Parramatta Leagues Club Limited

Substantial maintenance work was carried out during COVID-19, and Directors authorised expenditure of over $1.2 million to repair the façade of the Club, damaged in storms two years ago.

ANNUAL REPORT 2020 | 5

C EO REP O RT

B EVA N PAUL Dear Members In previous annual report commentary, I have remarked upon the underlying resilience of the Paramatta Leagues Club business. This capacity was again put to the test in 2020, as it was for many businesses. The financial results were generally impacted in two ways: firstly, the operational impact of COVID-19 and secondly a number of decisions that were taken during this period as a result. Broadly speaking Members will note that revenue and expenditure decreased proportionally in line with the ten-week shutdown period. What the financials don’t tell Members is the stories behind the numbers and how your Club navigated its way through 2020.

“Parramatta Leagues Club made commitments to: maintain budgeted support for the Eels; maintain budgeted support for our community and ClubGRANTS; and maintain communication with staff and Members.”

The first item to note is the amazing agility of staff at Parra Leagues and Vikings. Whilst operating with a skeleton workforce, they were able to close down venues and establish processes for monitoring the venues by utilising building management systems and security. Whilst all employees were uncertain about the future and how they would adapt to life without work, everyone pulled together and both venues were emptied of cash and perishables, secured and a maintenance schedule put in place within a single day.

At the time of the shutdown announcement, clubs were advised that the shutdown could be in place for six-months. Whilst this period was thankfully much shorter, Parramatta Leagues Club made commitments to: maintain budgeted support for the Eels; maintain budgeted support for our community and ClubGRANTS; and maintain communication with staff and Members.

All perishable food in the Club at the time of the shutdown was donated to long time community partner Parramatta Mission. A few weeks later the Club responded to a request from another long-time community partner Northcott for contributions of hand sanitiser dispensers and gel. Prior to entering the shutdown period, the Club had purchased ample supplies of hand sanitiser and we were pleased to be able to provide this support.

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When the JobKeeper scheme was announced, Parramatta Leagues Club moved quickly to ensure all eligible employees accessed the scheme and provided meaningful work for those employees. Staff were employed to contact vulnerable Members and, where needed, delivered basic supplies. The Club quickly developed a home delivery option, and the Club continues to offer our own Jacks Pale Ale online.

the business. In recognition of the efforts of staff as well as their outstanding performance in difficult times, the Board approved a one-off special payment for staff. Staff also undertook training during the shutdown period, including customer service training. This investment has yielded dividends from reopening in June 2020.

With the encouragement of the Board, management took the opportunity to undertake several projects during the shutdown period. Substantial scheduled maintenance work was completed whilst the Club was closed along with several administrative tasks.

Whilst somewhat mundane in nature, these kinds of projects can be challenging to undertake whilst the Club is operating and resources are devoted to day-to-day operations. I estimate that a years’ worth of repairs, maintenance, training and administration work was able to be completed during the shutdown period. These projects ensured that staff remained engaged and that the venues were as well prepared for re-opening as they could be. I need to acknowledge the management team for their diligence and efforts in completing these tasks for the successful reopening of our venues in June.

Jacks Pale Ale

Separate to the operational elements, a number of other items had a material effect upon the annual report results. Australian Accounting Standard AASB16 fundamentally requires businesses to treat long term leases in a different fashion. Rather than lease or rent payments being charged to the income statement over the period of the lease, certain leases are now treated as assets and liabilities and also incur a depreciation charge. Explanation on the impact of this new standard on the Club’s balance sheet is included at note 2.2 and note 13 in the annual report.

Employee Recognition I cannot speak highly enough of our employees who worked with the Club during shutdown on the items mentioned above. They also embraced a culture of hygiene to protect patrons and in doing so protected

2020 was the year that our very own Jacks Pale Ale cans co-branded in a joint venture with the Eels went on sale. As part of the launch of this product a portion of sale proceeds will go to the Cobargo District Emergency Hay Fund to help a town devastated by the bushfires in late 2019. The Cobargo District Emergency Hay Fund is 100% volunteer operated with 100% of funds going directly to members of the Cobargo community.

First year with new constitution In closing it is important to remember that 2020 was also the first year with the operation of a new constitution. As a result of constitutional reform implemented in late 2019 the consolidated Parramatta Leagues Club group now has two separate boards to separately oversee the Football and the Registered Club businesses respectively.

I would like to acknowledge both Boards as well as the Eels CEO Jim Sarantinos for their leadership during this extraordinary year.

Bevan Paul Chief Executive Officer Parramatta Leagues Club Limited

ANNUAL REPORT 2020 | 7

EEL S C EO REPORT

Dear Members

J I M SA RA N TI N OS

I am pleased to present my report for the 2020 financial year for the Parramatta Eels Rugby League Club (“Eels or Football Club”).

2020 was an unprecedented year not only for our Football Club but for our community overall. I am immensely proud of how our staff, coaches and players met the enormous challenges that the COVID-19 pandemic has presented us.

The support we have received from our Members, Corporate partners and fans throughout 2020 was overwhelming and showed the strong connection our Football Club has with key stakeholders.

A key contributor to the Eels’ positive performance in 2020 was the support of the new Parramatta Leagues Club (PLC) Board and their management team. Despite the significant disruption to PLC’s business, the support the Eels received throughout the year across a range of different areas showed the importance of a strong and well coordinated working relationship between the two organisations.

I would like to make mention of some of the major highlights for 2020 starting with our football program.

“The support we have received from our Members, Corporate partners and fans throughout 2020 was overwhelming and showed the strong connection our Football Club has with key stakeholders.”

Football Program The suspension of the NRL competition in March 2020 was incredibly disruptive to our Club, our people and the game as a whole. Credit must be given to the Australian Rugby League Commission (ALRC) and the NRL through the leadership of Peter V’Landys and Andrew Abdo in working hard to ensure the resumption of the game was achieved promptly and safely.

The weeks and months that followed the resumption took a great personal toll on all involved, particularly for our football staff, players and their families who made a number of sacrifices to ensure they complied with the NRL ‘bubble’ requirements. The way Brad, our staff and players responded when the competition resumed was a testament to their character and the resilience the Football Club has developed when faced with adversity.

It’s important to also acknowledge the impact on our Canterbury Cup and elite pathways teams who’s competitions were cancelled in 2020. Our staff, players and volunteers handled this disruption with a Club first mentality and a fierce commitment to ensure that our programs are prepared for success in 2021.

The NRL team built on its performances in 2019 with some great achievements in 2020 including: • Improving our ladder position from 5th to 3rd and recording our highest regular season finish since 2005; • Spending eight weeks at the top of the ladder and having a 75 per cent win / loss ratio; • Playing finals football in three of the last four years and in consecutive years for the first time since 2006 and 2007; and

8 | PARRAMATTA L EAGUES CLUB LIMITED

• Having four players in the 2020 NSW State of Origin squad which is the highest Eels representation since the 2002 season We placed ourselves in a position to win both games in the finals series but unfortunately, we fell short. As a Football Club, we see the 2020 season as one of continued growth, but also missed opportunity.

As a Football Club we strive to be the best and everyone, from the playing group, our football staff, our front office staff, and our board, is committed to learning from the experiences of 2020 and delivering success for all our stakeholders.

The substantial steps we have made in our football program, and the commitment to continuous improvement has us well placed for the years ahead.

Financial and Football Administration The Football Club recorded a profit of $1.358 million for the year ended 31 October 2020, a continuation of the positive trend in business performance in recent years. This result was achieved through the tremendous support of our Members who pledged their support for the Eels and our Corporate Partners who not only remain committed to the Eels but in many instances increased and extended their partnership with us. In what has been a long and challenging year for us all, we are humbled by the way our Members and Corporate Partners passionately support the Eels.

The challenges of 2020 also necessitated a significant reduction in operating costs across all areas of the business as part of the Football Club’s response to the COVID-19 impact.

These factors combined with the commitment of our staff and the economic policy initiatives from State and Federal governments contributed to the positive financial result for the Football Club in 2020.

We have a lot to be proud of that demonstrates not only how far the Eels have come in recent years, but how bright our future is. This includes: • The Football Club and PLC supporting the Sapphire Coast region impacted by the bushfires, with significant funds raised and valuable time spent by our players and staff connecting with those devastated communities; • Our successful relocation to Kellyville Park and the completion of a long-term licence agreement for the site with The Hills Council; • Our Junior League working tirelessly to bring together a COVID safe competition that provided an outlet for so many players in our Parramatta and Western Sydney community; • Breaking our membership record for the 7th consecutive year, with the Eels now ranked 2nd in the NRL with over 29,000 Members. Our growth of 15% was well ahead of the next best club in the NRL; • Securing and extending many of our key partnerships including Actron Air and Lending Association and securing new partnerships with Subaru, Macron and Gatorade;

• Achieving a cumulative live TV audience of over 13.3 million, which ranked 2nd in the NRL; and • Just under 10 million aggregate views across the Football Club’s social media channels, which ranked 1st in the NRL. On most key metrics, the Football Club is performing strongly and is well position to grow in coming years.

The Football Club is in a healthy financial position, however like all businesses we are approaching 2021 with cautious optimism and with a commitment to creating a financially sustainable business and reduce its reliance on funding from PLC. The new Board of the PLC alongside their management team, have worked through the challenges of this year exceptionally well and we want to ensure they can invest in their key strategic initiatives that will ultimately help grow our group in the coming years.

While we are focused on delivering on-field and offfield success in 2021, securing the long-term future of the Football Club is equally important.

We have continued to make progress on our Centre of Excellence project, with construction of Stage 2 planned to commence in 2021. This will see the delivery of a Community Centre at Kellyville Park which will include a boutique style grandstand to allow the Eels to host 2nd tier, elite pathway and community rugby league matches, together with entertainment and education spaces for the community. It is the next step in what will ultimately be the premier rugby league facility in Australia.

I’d like to acknowledge the support of PLC both financially and through the strong working relationship we have with President Greg Monaghan and his management team. The stability at Board and management level of each organisation is critical to our future success.

Finally, I would like to thank our Members and Corporate Partners for a tremendous year and acknowledge how important your support is to the Eels. We now have a level of financial stability which has not been experienced for many years and provides the Football Club with a strong platform for growth and a future that looks bright.

It is a great privilege to lead the Parramatta Eels and we are passionate about seeing the Eels reach its potential, both on and off the field. We truly believe our best days are ahead of us and look forward to sharing those together with you.

Best regards,

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

ANNUAL REPORT 2020 | 9

VA LUES

NORTH KELLYVILLE

DURAL

BEAUMONT HILLS

CASTLE HILL

SCHOFIELDS KELLYVILLE

NORWEST

CASTLE HILL PENNANT HILLS

S ERVI C E We are here for the benefit of our Members and our community.

BELLA VISTA

KINGS PARK

WEST PENNANT HILLS BAULKHAM HILLS

BLACKTOWN

NORTH ROCKS SEVEN HILLS CARLINGFORD

NORTHMEAD

OLD TOONGABBIE GIRRAWEEN EASTERN CREEK

PASSI O N We are ambitious, strive for excellence and love what we do.

WENTWORTHVILLE SOUTH WENTWORTHVILLE

GREYSTANES

HARRIS PARK HOLROYD

MERRYLANDS WEST

HORSLEY PARK

PARRAMATTA

WETHERILL PARK

AUBURN

GUILDFORD BOSSLEY PARK

YENNORA

FAIRFIELD WEST

LIDCOMBE

FAIRFIELD ENDENSOR PARK

CANLEY HEIGHTS

BONNYRIGG

CARRAMAR

CABRAMATTA YAGOONA

T E AMWO RK We are united, collaborative and succeed together.

BANKSTOWN LIVERPOOL

HOXTON PARK

MILPERRA

PRESTONS CASULA

OU R COMMU NITY RES PEC T We are welcoming, inclusive and respectful.

ACCO UN TA BI L IT Y We demonstrate integrity and commitment through transparency and accountability.

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Our Club is intrinsically linked with the Parramatta Eels.

Our community includes the Parramatta District Junior Rugby League catchment area and those who are engaged with our brand, community groups and sporting teams.

2 02 1 -2 02 5 STRAT EGIC PLAN

P U R P OSE

PILLAR S

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

M I SSI O N

VISION

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

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

PE OPLE & C U LTU R E Our service led culture is built around investing in our staff and leadership to demonstrate passion, respect and commitment for our Members and community.

STRATEGIC INITIATIVES Clubhouse Refresh Driven by Member feedback to increase social space, entertainment experiences and upgrade food and beverage facilities across our venues.

FIN A N C IA L ST R E NGTH Generate financial capability to invest in new Member services and initiatives, without compromising future viability.

Engaged Employees Be an Employer of Choice, attracting and retaining high performing employees.

Digital Transformation

M E M BE R E XPE R I E NCE Find new ways to deliver value to our Members and increase our engaged Membership.

Modernise business operations and patron experience through an expansion of our data and technological capabilities.

Increase Non-gaming Services Build our existing non-gaming businesses as well as explore new complementary business opportunities.

Maximise Community Impact Be the heart of our community. Leveraging our amenities and our affiliation with the Eels to provide value in our catchment area.

OPE R AT I O NAL E XC E LL E NCE Leverage data, technology and operational excellence to enhance Member experience, business profitability, stability and longevity.

Diversify Our Business Diversify and invest in options that align with our business needs and purpose, and set our business up for future success.

Create Master Brand

COM M U N IT Y IM PACT Develop programs and initiatives that positively impact and improve our local community.

Consolidated view of our brand to resonate across the Parra Leagues group to better reflect and communicate our purpose, values and mission.

ANNUAL REPORT 2020 | 11

“We extend heartfelt thanks to Parra Leagues for your support of Miracle Babies Foundation via ClubGRANTS, and your commitment to helping premature and sick newborns, their families and the hospitals

60+ COMMU NITY GROU PS RECEIVED DONAT IONS

that care for them”.

KY L I E PUSSE LL, C H IEF EXEC U T IVE OFFICER & CO FO UN DER OF MIRACLE BABIE S

$804,974 “Parramatta Leagues Club, thank you once again for your amazing

DONAT ED T HROU GH

support of the Clown Doctors program. Your support enables us to continue to bring joy and laughter to the bedside of sick children, when and how they need it most. With your help we have touched the lives of over 150,000 children, their families and staff in 24 hospitals across Australia”.

KATRI N A RI CHARDSON, G RA N TS A N D MAJOR GIFTS MA NAG ER AT T HE H UMOUR F O UN DATI O N

www.parraleagues.com.au/community 12 | PARRAMATTA LEAGUES CLUB LIMITED

5,241 JU NIOR LEAGU E PARTICIPANTS

$123,000+ DO N ATED

PARRA LEAGU ES CLU B GROU P BUS HFIRE RES PONSE

“When the bushfires hit, I don’t think anyone was prepared for what would happen. I personally live at Surf Beach and have been as of 9.1.2020, 10 days at home without power, phones, internet and telephones. I would still consider myself one of the lucky ones though.

At my club we had people camping along fairways through the week and the weekend.

The evacuation centre in Moruya overflowed from the amount of people who chose to use it.

We had staff sleeping at the club from Friday to Sunday and we opened it up for anyone else who wanted a place to sleep. This offer was taken up by a few families. We found communication very difficult and it was hard to get the message out to the public that we were offering a place to sleep, shower etc. Thank you for your support!”

JOSH P ROWSE, GE N E R AL MA N AGE R O F MO RU YA G O LF CLU B (PAR RA L EAG UE S DO NAT E D $ 2 0,0 0 0 )

$1 of each can, $4 of each 6 pack and $10 from each case of Jacks Pale Ale sold for an entire year is donated to the Cobargo District Emergency Hay Fund.

www.parraleagues.com.au/community

ANNUAL REPORT 2020 | 13

CO MMUN I TY

AWA R DS Traditionally our Community Awards are held at Parra Leagues exclusively for Community Partners. This year Parra Leagues held our first online awards event, hosted by Tim Mannah on Facebook live.

Congratulations to the winners...

C ATE G O RY 1

CAT E G O RY 1

1st place $5,000 Parramatta Mission

2nd runner up $1,000 Northcott

CAT EG O RY 1

CO MMU NIT Y CO MME NTS

2nd runner up $1,000 Multicultural Disability Advocacy Association of NSW

Anna Ung Parramatta Leagues Club wow thank you I am part of MDAA Susan Ajero-Arda Palparan Parramatta Leagues Club thank you very much on behalf of Mdaa, management, staff, volunteers and members!

Kelly Doyle Congratulations

đ&#x;‘? everyone

Evelyn Gardis Woohoo Kelly Doyle Congratulations to the winners

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CAT E G O RY 2

1st place $5,000 Alive 90.5 FM

www.parraleagues.com.au/community

ANNUAL ANNUALREPORT REPORT2020 2020 | | 15

119 CA R E PACKAG ES DEL I V ERED TO M EMBERS

CO MMU NIT Y CO MME NTS

Elizabeth Munton We received our Care Pack yesterday.

Such a lovely gift. Thank you Parramatta Leagues.

Elisabeth McGibbon Awesome work Parra!

Rod Norris Well done Parra Leagues !!! Can’t wait for you to re-open !

Cheryl Sultana My husband got a box last night, beautiful fruit and a couple of dishes. Thank you.

What a lovely surprise.

Just a huge thank you for your kindness in sending me this lovely package delivered by two beautiful people representing your Club. Such a thoughtful gesture. Actually brought me to tears. Thank you so much.

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Greg Hayward This is why Members should pledge, it helps cover these costs.

KEEP I N G YO U

COV I D SA F E

$273,326

940

I N V ESTED I N COV I D SA F ETY

LIT RES OF SANITIS ER

30,265

72,500

WIPES

FACEMAS KS

COMM UN I T Y CO MME N TS

Michael Johnson It’s a lot of hard work to do physical cleaning, it’s time consuming as well.

Lynette Antonia Thank you for your dedication and hard work. We all appreciate it.

Lynette Antonia Last Monday my husband and I went to The Bistro for dinner. We both had such a lovely meal and we were so impressed by the friendliness of the staff and the care regarding our COVID safety. It had been four months since visiting the club.

It was great to be back.

ANNUAL REPORT 2020 | 17

PA R RA L EAG U ES ONLINE

How people reacted...

651 UN I QUE P EO PL E PLAYING ON L I N E P RO MOTIONS Bingo with Blake

Online Trivia

Weekly Online Raffles

Weekly Members Forum

CO MMU NIT Y CO MME NTS

Hi there, I just wanted to pass along some thanks to everyone at the Club for organising Bingo with Blake, and to Blake especially for hosting it. The McCarthy family as a whole wants to thank you all so much for doing stuff like this (along with the raffles and trivia, and takeout food!) in such an uncertain time. All of us here are classed as ‘high risk’ and have had to be in isolation for our safety for the majority of COVID and with all the online stuff you do it’s given us so much to look forward to and given us so much quality fun time together.

Thank you. All the best, The McCarthy Family.

Susan Tasca Loving this, whole family playing.

Teresa Stone We had and amazing takeaway dinner from Vikings using our vouchers last week Thanks!

đ&#x;˜‹

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NOT I C E O F AG M PARRAMATTA LEAGUES CLUB

NOTICE is hereby given that the 63rd Annual General Meeting of Parramatta Leagues Club Limited (ACN 000 218 655) (“Leagues Club”) will be held on Sunday 21st March 2021 commencing at 10:00AM at the Cumberland Lounge, Bankwest Stadium, Gate F, 11-13 O’Connell Street, Parramatta NSW 2150.

WELCOME BY PRESIDENT, PARRAMATTA LEAGUES CLUB LIMITED MINUTES OF THE PREVIOUS ANNUAL GENERAL MEETING To receive and consider the Minutes of the 62nd Annual General Meeting held on Sunday, 16 February 2020.

2020 ANNUAL REPORT AND FINANCIAL STATEMENTS To receive the 2020 Annual Report of the Leagues Club, including the Financial Statements, Directors’ and Auditor’s Report for the 12-month period ended 31 October 2020.

BUSINESS TO BE CONDUCTED Ordinary Business Questions on Notice To declare Results of Resolutions conducted by electronic and postal ballot Special Resolution – Life Membership - Mr Christopher Jurd Ordinary Resolutions Declaration of Election for the Board of Directors NOTE TO MEMBERS In order to provide informed and properly researched responses, Members are requested to lodge questions in writing to AGM@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.

ANNUAL REPORT The Annual Report will be available by downloading a copy from: www.parraleagues.com.au/annual-report-2020 Hard copies of Parramatta Leagues Club Limited’s 2020 Annual Report will be available from the Club on request.

Members may also request the posting of the Annual Report by emailing AGM@parraleagues. com.au or on (02) 8833 0764.

Full Members will receive the Notice of Meeting including details of Resolutions and voting instructions by post or email.

By Order of the Board

Greg Monaghan President Parramatta Leagues Club Limited Dated 8 February 2021

ANNUAL REPORT 2020 | 19

DI REC TO RS’ REP ORT 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 2020.

Operating results for the period The net profit after tax of the Group for the year ended 31 October 2020 was $2,122,865 (2019: $2,269,737).

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, unless otherwise stated.

Darren Adam

(Appointed: 5 March 2020)

Gregory Monaghan

(Appointed: 5 March 2020)

Joy Cusack

(Appointed: 5 March 2020)

Mark Jenkins

(Appointed: 5 March 2020)

Max Donnelly

(Resigned: 6 March 2020)

Murugan Thangaraj

(Appointed: 5 March 2020; Resigned: 10 August 2020)

Philip Sim

(Appointed: 5 March 2020)

Richard Foda

(Appointed: 5 March 2020)

Susan Coleman

(Appointed: 27 August 2020)

Significant changes in the state of affairs Impact of the Coronavirus (COVID-19) outbreak The COVID-19 outbreak was declared a pandemic by the World Health Organization in March 2020.

Due to COVID-19 pandemic, the business was temporarily shut down during 23 March 2020 to 1 June 2020, and operates under limited capacity as at the date of this report. In addition, the National Rugby League (NRL) competitions were temporarily suspended during March 2020, and resumed in May 2020 with limited attendances. The New South Wales Rugby League (NSWRL) competitions were also cancelled during the financial year ended 31 October 2020. These returned in a much affected way to the business.

No dividends have been paid or declared during the year, nor do the directors recommend the declaration of dividend (2019: $nil).

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.

Principal activities

There have been no other significant changes in the state of affairs of the Group during the year.

Dividends

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.

Significant events after the reporting period The Group’s investment property, 2 Ferris Street, Parramatta NSW 2150, has been entered into a contract of sale subsequent to the financial year end on 4 December 2020.

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.

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DI REC TO RS’ REP ORT Meetings of Directors The number of meetings the Company’s directors held during the year ended 31 October 2020 and the number of meetings attended by the directors was: Full meetings of directors

A B

Darren Adam

9

9

Gregory Monaghan

8

9

Joy Cusack

9

9

Mark Jenkins

9

9

Max Donnelly

5

5

Murugan Thangaraj

6

6

Philip Sim

9

9

Richard Foda

9

9

Susan Coleman

2

2

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.

Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

Membership

A = Number of meetings attended

The Company is a company limited by guarantee and is without share capital. The number of members as at 31 October 2020 was 52,221 (2019: 49,014).

B = Number of meetings held during the time the

director held office during the period.

Members’ limited liability

In addition all Directors were members of Board Committees as set out in Appendix 1.

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

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 17 December 2020

ANNUAL REPORT 2020 | 21

AUDI TO R’ S I N DE PENDENCE DEC L ARATI O N

EV

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

Building a better working world

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 2020, 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

�c£ZDaniel Cunningham Partner 1 7 December 2020

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

22 | PARRAMATTA LEAGUES CLUB LIMITED

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME F OR THE YEAR ENDED 3 1 OCTOBE R 2020

2020

2019

Notes

$

$

4

67,121,573

81,142,628

4,840,500

-

3,829,904

2,270,770

Cost of goods sold

(2,987,361)

(3,404,688)

Poker machine duty

(10,110,034)

(11,609,346)

(7,876,061)

(6,559,562)

(719,389)

(515,778)

(30,708,782)

(34,200,029)

Entertainment, marketing and promotional costs

(4,152,030)

(4,273,080)

Football related expenses

(5,903,010)

(10,025,525)

(1,682,100)

(1,948,499)

(129,923)

(178,423)

(3,322,334)

(4,313,073)

(322,372)

(469,967)

(4,457,756)

(2,578,732)

(1,342,958)

(1,066,959)

44,998

-

2,122,865

2,269,737

-

-

2,122,865

2,269,737

-

-

2,122,865

2,269,737

Revenue from contracts with customers Jobkeeper subsidy income Other income

5

Depreciation expense Donations Employee benefits expense

Repairs and maintenance expenses Licenses and fees Occupancy expenses Legal costs Other 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

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

ANNUAL REPORT 2020 | 23

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 O C TOBER 2020 2020

2019

Notes

$

$

Cash and cash equivalents

8

19,800,584

7,454,607

Trade and other receivables

9

1,182,148

1,589,703

520,992

-

ASSETS Current assets

Contract assets Inventories Asset held for sale

10

Total current assets

419,316

415,760

1,660,000

-

23,583,040

9,460,070

Non-current assets Property, plant and equipment

11

73,678,658

77,309,564

Intangible assets

12

835,000

689,000

Right-of-use assets

13

13,462,843

-

Investment properties

14

18,902,347

20,562,347

Total non-current assets

106,878,848

98,560,911

Total assets

130,461,888

108,020,981

LIABILITIES Current liabilities Trade and other payables

15

13,319,168

9,068,915

Borrowings

16

4,575,237

3,981,906

Grant in advance

17

600,000

600,000

Lease liabilities

13

157,799

-

Employee benefit liabilities

18

1,610,666

1,474,678

Contract liabilities

19

1,519,911

-

Deferred revenue

20

-

1,530,528

21,782,781

16,656,027

21,732,908

19,522,163

Total current liabilities Non-current liabilities Borrowings

16

Grant in advance

17

600,000

1,200,000

Lease liabilities

13

13,451,379

-

Employee benefit liabilities

18

679,393

551,569

Contract liabilities

19

452,030

-

Deferred revenue

20

-

450,690

Total non-current liabilities

36,915,710

21,724,422

Total liabilities

58,698,491

38,380,449

Net assets

71,763,397

69,640,532

Retained earnings

71,763,397

69,640,532

Total members’ funds

71,763,397

69,640,532

Members funds

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

24 | PARRAMATTA LEAGUES CLUB LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY F O R THE YEAR ENDED 3 1 OCTOB E R 2020

Retained Earnings

Total Members’ Funds

$

$

69,640,532

69,640,532

2,122,865

2,122,865

-

-

2,122,865

2,122,865

At 31 October 2020

71,763,397

71,763,397

At 1 November 2018

67,370,795

67,370,795

2,269,737

2,269,737

-

-

2,269,737

2,269,737

69,640,532

69,640,532

At 1 November 2019

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 2019

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

ANNUAL REPORT 2020 | 25

CONSOLIDATED STATEMENT OF CASH FLOWS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

2020

2019

$

$

80,647,068

89,996,338

(63,974,462)

(79,216,591)

Rent received

897,171

1,040,077

Interest received

44,998

81,631

Interest paid

(1,327,581)

(1,039,009)

Net cash flows from operating activities

16,287,194

10,862,446

(6,031,848)

(9,762,988)

-

420,912

(146,000)

-

(6,177,848)

(9,342,076)

Proceeds from NAB loan facility

5,215,899

735,258

Repayment of NAB loan facility

(2,427,200)

(2,000,000)

Payment for principal portion of lease liabilities

(552,068)

-

Net cash flows from/(used in) financing activities

2,236,631

(1,264,742)

Net increase in cash and cash equivalents

12,345,977

255,628

Cash and cash equivalents at 1 November

7,454,607

7,198,979

19,800,584

7,454,607

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

Investing activities Payments for property, plant and equipment Proceeds from sale of property, plant and equipment Payments for intangible assets

12

Net cash flows used in investing activities

Financing activities

Cash and cash equivalents at 31 October

8

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

26 | PARRAMATTA LEAGUES CLUB LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

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 2020 were authorised for issue in accordance with a resolution of the directors on 17 December 2020.

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 report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards - Reduced Disclosure Requirements and other authoritative pronouncements of the Australian Accounting Standards Board. The Group is a not-for-profit entity which is not publicly accountable.

The consolidated financial report has been prepared on a historical cost basis, except for investment properties that have been measured at fair value.

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

2.2 Changes in accounting policies and disclosures New and amended standards and interpretations The Group applied AASB 15 Revenue from Contracts with Customers, AASB 1058 Income of Not-for-Profit Entities, AASB 16 Leases, and AASB Interpretation 23 Uncertainty over Income Tax Treatment for the first time. The nature and effect of the changes as a result of adoption of these new accounting standards are described below.

Several other amendments and interpretations apply for the first time in 2020, but do not have an impact on the consolidated financial statements of the Group.

AASB 15 Revenue from Contracts with Customers AASB 15 supersedes AASB 118 Revenue and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with its customers. AASB 15 establishes a fivestep model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

AASB 15 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.

In addition, the standard requires extensive disclosures.

The Group adopted AASB 15 using the modified retrospective method of adoption. The Group has undertaken an analysis to scope out its revenue streams to identify specific impacts of the standard.

Revenue from third parties is recognised as goods are sold or as services are provided. There was no significant impact on recognition and measurement in the consolidated financial statements as a result of the adoption. There has, however, been a change in the required disclosures to reflect the requirements of the new accounting standard.

The following table summarises the changes in terminology with respect to the timing of revenue recognition between AASB 118 and AASB 15 and the new revenue recognition policies under AASB 15. From the assessment of when performance obligations are satisfied, there is no change in the timing of revenue recognition, other than for NRL distributions and sponsorship and hospitality revenue, when comparing the previous accounting policies to those now under AASB 15.

ANNUAL REPORT 2020 | 27

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

AASB 15 Revenue from Contracts with Customers Type of revenue

Description

Revenue recognition policy under AASB 118

Revenue recognition under AASB 15

NRL distributions

This represents revenue for distribution income received from the NRL

Recognised upon provision of services

Period of time

Sponsorship and hospitality

This represents revenue for sponsorships and hospitality received from an external party

Recognised upon provision of services

Period of time

Merchandise

This represents the revenue for sale of merchandise to customers from either the Company’s shop/s or online

Recognised upon transaction

Period of time

Gate receipts

This represents the revenue for sale of tickets to customers either online or matchday

Recognised upon transaction

Period of time

Membership

This represents the revenue for membership fees for the Company

Recognised over the length of the membership

Period of time

AASB 1058 Income of Not-for-Profit Entities AASB 1058 supersedes AASB 1004 Contributions in respect to income recognition requirements for not-for-profit entities. AASB 1058 will defer income recognition in some circumstances for not-for-profit entities, particularly where there is a performance obligation or any other liability. In addition, certain components in an arrangement, such as donations, may be separated from other types of income and recognised immediately. The standard also expands the circumstances in which not-forprofit entities are required to recognise income for goods and services received for consideration that is significantly less than the fair value of the asset principally to enable the entity to further its objectives (discounted goods and services).

The Group adopted AASB 1058 using the modified retrospective method of adoption. The recognition and measurement requirements of AASB 1058 did not have a material impact in the Group.

AASB 16 Leases AASB 16 supersedes AASB 117 Leases, AASB Interpretation 4 Determining whether an Arrangement contains a Lease, AASB Interpretation 115 Operating Leases-Incentives and AASB Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognise most leases on the consolidated statement of financial position.

28 | PARRAMATTA LEAGUES CLUB LIMITED

Lessor accounting under AASB 16 is substantially unchanged from AASB 117. Lessors will continue to classify leases as either operating or finance leases using similar principles as in AASB 117. Therefore, AASB 16 does not have an impact for leases where the Group is the lessor.

The Group adopted AASB 16 using the modified retrospective method of adoption, with the date of initial application of 1 November 2019. Under this method, the standard is applied retrospectively with the cumulative effect on initially applying the standard recognised at the date of initial application. The Group elected to use the transition practical expedient to not reassess whether a contract is, or contains, a lease at 1 November 2019.

Before the adoption of AASB 16, the Group classified each of its leases (as lessee) at the inception date as either a finance lease or an operating lease.

Upon adoption of AASB 16, the Group applied a single recognition and measurement approach for all leases for which it is the lessee, except for shortterm leases and leases of low-value assets. Refer to Note 2.3(l) Leases for the accounting policy beginning 1 November 2019. The standard provides specific transition requirements and practical expedients, which have been applied by the Group. •L eases previously accounted for as operating leases The Group recognised right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

and leases of low-value assets. The right-of-use assets for most leases were recognised based on the carrying amount as if the standard had always been applied, apart from the use of incremental borrowing rate at the date of initial application.

In some leases, the right-of-use assets were recognised based on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments previously recognised.

Lease liabilities were recognised based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application.

The Group also applied the available practical expedients wherein it:

AASB Interpretation 23 Uncertainty over Income Tax Treatment The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of AASB 112 Income Taxes. It does not apply to taxes or levies outside the scope of AASB 112, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following: •W hether an entity considers uncertain tax treatments separately;

• Used a single discount rate to a portfolio of leases with reasonably similar characteristics

•T he assumptions an entity makes about the examination of tax treatments by taxation authorities;

•R elied on its assessment of whether leases are onerous immediately before the date of initial application

•H ow an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates;

•A pplied the short-term leases exemptions to leases with lease term that ends within 12 months of the date of initial application

•H ow an entity considers changes in facts and circumstances.

•E xcluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application •U sed hindsight in determining the lease term where the contract contained options to extend or terminate the lease Based on the above, as at 1 November 2019:

The lease liabilities as at 1 November 2019 can be reconciled to the operating lease commitments as of 31 October 2019, as follows: $

Weighted average incremental borrowing rate as at 1 November 2019

Certain Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have not been adopted by the Group for the annual reporting year ended 31 October 2020. The directors are in the process of assessing the impact of the applications of these new and amended standards and its amendments to the extent relevant to the consolidated financial statements of the Group.

25,227,443 2.3 Summary of significant accounting policies 2.94%

Discounted operating lease commitments as at 1 November 2019

13,711,694

Add: Commitments relating to leases previously not included in operating lease commitments as at 31 October 2019

268,985

Lease liabilities as at 1 November 2019

The Interpretation did not have an impact on the consolidated financial statements of the Group.

Accounting Standards and Interpretations issued but not yet effective

•R ight-of-use assets of $13,980,679 and lease liabilities of $13,980,679 were recognised and presented separately in the consolidated statement of financial position.

Operating lease commitments as at 31 October 2019

The Group determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty.

a) Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 October 2020. 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.

13,980,679

ANNUAL REPORT 2020 | 29

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

Specifically, the Group controls an investee if, and only if, the Group has: •P ower over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee) •E xposure, or rights, to variable returns from its involvement with the investee •T he ability to use its power over the investee to affect its returns 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: •T he contractual arrangement(s) with the other vote holders of the investee •R ights 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.

30 | PARRAMATTA LEAGUES CLUB LIMITED

b) Going concern The financial statements have been prepared on a going concern basis as Parramatta Leagues’ Club Ltd has unused available cash facilities at 31 October 2020 in excess of the net current liability that can be drawn against if required to meet its financial obligations.

The Group generated an operating profit during the year ended 31 October 2020 of $2,122,865 (2019: $2,269,737), and as at that date the Group’s total current assets exceeded total current liabilities by $1,800,259 (2019: total current liabilities exceeded total current assets by $7,195,957). c) 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: •E xpected to be realised or intended to be sold or consumed in the normal operating cycle; • Held primarily for the purpose of trading; •E xpected to be realised within twelve months after the reporting period, or •C ash 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: • I t is expected to be settled in the normal operating cycle; • It is held primarily for the purpose of trading; • I t is due to be settled within twelve months after the reporting period, or •T here 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. d) Revenue recognition For the year ended 31 October 2020 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

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) 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. (vi) Rental income Revenue from rental receipts is recognised in the period the rental relates to and is recorded in accordance with the rental agreement. (vii) Gate receipts Revenue from gate takings is recognised when the match takes place or when services are provided. (viii) Interest income Interest income is recognised using the effective interest rate (EIR) method. (ix) JobKeeper subsidy income 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: • t he customer simultaneously receives and consumes the benefits as the entity performs, • t he customer controls the asset as the entity creates or enhances it; or • t he 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.

For the year ended 31 October 2019 Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as described below. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

ANNUAL REPORT 2020 | 31

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

e) 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. f) 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. g) 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. h) 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. i) 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. j) 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

32 | PARRAMATTA LEAGUES CLUB LIMITED

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

10 to 40 years

Leasehold improvements

20 to 40 years

Plant and equipment Poker machine

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(m)).

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. k) 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

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.

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. l) 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

79 years 2 years

• Motor vehicles

3 to 4 years

• Other equipments

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(m) 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.

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

ANNUAL REPORT 2020 | 33

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

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. m) 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 (cashgenerating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. n) 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 2020 (refer to Note 3). o) 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. p) 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.

34 | PARRAMATTA LEAGUES CLUB LIMITED

q) 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. r) 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

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. s) 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: •W hen 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;

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: •W hen 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; • I n 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.

• I n 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 2020 | 35

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

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: •W hen 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 •W hen 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. t) Parent entity financial information The financial information for the parent entity, Parramatta Leagues’ Club Ltd, is disclosed in Note 25 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.

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.

36 | PARRAMATTA LEAGUES CLUB LIMITED

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.

As at 31 October 2020, an independent valuation was performed on the two properties being 2 Ferris Street and 20 Wandella Avenue. These independent valuations were conducted by CBRE Valuation & Advisory Services. The valuations were based on the fair value. The remaining twenty-five properties were internally valued by the directors as at 31 October 2020. The critical assumptions adopted in determining the valuations included the impact of the pandemic on the property market and the demand for property in the area.

As at 31 October 2020, there is significant valuation uncertainty arising from the COVID-19 pandemic and the response of Governments to it. This means that the value may change significantly and unexpectedly over a relatively short period of time.

Given the market conditions at balance date, the valuations are prepared on the basis of the existence of ‘material valuation uncertainty’, noting that less certainty, and a higher degree of caution, should be attached to the valuations than would normally be the case. The current response to the COVID-19 pandemic means that PLC has faced an unprecedented set of circumstances on which to base a judgement.

The key assumptions and estimates used in the valuation approaches which have been impacted

by COVID-19 include: • Comparable property market evidence • Demand for properties in the area • Likely rental returns

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

Due to the valuation uncertainty, the value may change significantly and unexpectedly over a relatively short period of time. If the annual operating income were to change by 5% then the value of the investment properties would change by $0.9m. The valuations prepared by the external valuer and directors are based on the information that is available at 31 October 2020.

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).

ANNUAL REPORT 2020 | 37

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

4. Revenue from contracts with customers Set out below is the disaggregation of the Group’s revenue from contracts with customers: 2020

2019

$

$

2,172,414

2,814,325

3,288,227

4,549,657

482,282

709,872

5,942,923

8,073,854

Poker machine

38,753,437

44,921,859

NRL distribution

13,788,282

12,665,375

5,076,252

6,801,457

Commissions received

354,178

425,373

Members subscription

186,186

181,914

2,719,144

5,560,945

301,171

779,158

61,178,650

71,336,081

67,121,573

79,409,935

Types of goods or services Sale of goods Bar sales Catering sales Merchandise sales Total sale of goods Rendering of services

Sponsorship and hospitality

Gate ticket sales Tenpin sales Total rendering of services Total revenue from contracts with customers Timing of revenue recognition At a point in time

48,070,853

Over time

19,050,720

Total revenue from contracts with customers

67,121,573

Other revenue Rent received

1,040,077

Interest income

81,631

Sundry income

610,985

Total other revenue Total revenue 38 | PARRAMATTA LEAGUES CLUB LIMITED

1,732,693

67,121,573

81,142,628

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

5. Other income 2020

2019

$

$

1,993,855

1,061,042

-

1,209,728

897,171

-

938,878

-

3,829,904

2,270,770

2020

2019

$

$

78,566

52,290

Interest on borrowings

709,868

1,014,669

Interest on lease liabilities (Note 13)

554,524

-

1,342,958

1,066,959

2020

2019

$

$

1,913,730

2,048,353

2,438,483

467,375

-

2,529,398

94,057

-

Grants and other activities Fair value adjustment to investment properties Rent received Sundry income

6. Expenses 6.1 Finance costs

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 operating leases Rental expenses relating to short-term leases or leases of low-value assets

ANNUAL REPORT 2020 | 39

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

7. Income tax The major components of income tax expense for the years ended 31 October 2020 and 2019 are:

2020

2019

$

$

-

-

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

-

-

2,122,865

2,269,737

636,860

680,921

(3,297,805)

(3,974,215)

2,010,144

1,899,512

650,801

1,393,782

-

-

55,537,060

53,367,722

16,661,118

16,010,3170

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

Reconciliation of tax expense and the accounting profit multiplied by Australia’s domestic tax rate for 2020 and 2019: Accounting profit before income tax At Australia’s statutory income tax rate of 30% (2019: 30%) Non-assessable income Non-deductible expenses Tax losses not recorded as deferred tax assets Income tax expense reported in the consolidated statement of profit or loss and other comprehensive income

Tax losses Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 30%

40 | PARRAMATTA LEAGUES CLUB LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

8. Cash and cash equivalents

Cash at bank and on hand

2020

2019

$

$

19,800,584

7,454,607

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

9. Trade and other receivables 2020

2019

$

$

380,365

311,946

(286,709)

(217,649)

93,656

94,297

Other receivables

380,553

550,286

Prepayments

707,939

945,120

1,182,148

1,589,703

Current Trade receivables Allowance for expected credit losses

10. Asset held for sale 2020 $ At fair value -

Opening balance at 1 November 2019 Transfer from investment properties

1,660,000

Closing balance at 31 October

1,660,000

Management have reclassified the 2 Ferris Street, Parramatta NSW 2150 property as asset held for sale in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations.

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.

ANNUAL REPORT 2020 | 41

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

11. Property, plant and equipment Land

Buildings

Plant and equipment

Poker Leasehold Capital work machines improvements in progress

$

$

$

$

$

$

$

3,610,500

84,646,350

22,582,105

17,757,871

4,902,235

5,224,497

138,723,558

Additions

-

440,905

2,018,327

912,501

-

2,660,115

6,031,848

Disposals

-

-

(1,490,290)

-

-

(2,418,342)

(3,908,632)

Transfer

-

-

4,995,837

-

-

(4,995,837)

-

3,610,500

85,087,255

28,105,979

18,670,372

4,902,235

470,433

140,846,774

Total

Cost At 1 November 2019

At 31 October 2020

Accumulated depreciation At 1 November 2019

-

31,539,379

15,241,642

11,502,970

3,130,003

-

61,413,994

Depreciation charge for the year

-

2,381,162

2,499,370

2,160,249

139,751

-

7,180,532

Reversal of accumulated depreciation on disposals

-

-

(1,426,410)

-

-

-

(1,426,410)

At 31 October 2020

-

33,920,541

16,314,602

13,663,219

3,269,754

-

67,168,116

At 31 October 2020

3,610,500

51,166,714

11,791,377

5,007,153

1,632,481

470,433

73,678,658

At 31 October 2019

3,610,500

53,106,971

7,340,463

6,254,901

1,772,232

5,224,497

77,309,564

Net book value

During the year, no borrowing costs were capitalised (2019: $nil).

42 | PARRAMATTA LEAGUES CLUB LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

12. Intangible assets Purchased poker machine entitlements $ Cost At 1 November 2019

689,000

Additions

146,000

At 31 October 2020

835,000

Net book value

At 31 October 2020

835,000

At 31 October 2019

689,000

ANNUAL REPORT 2020 | 43

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

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.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year: Car park and building

Motor Vehicles

Other equipments

Total

$

$

$

$

13,711,694

204,768

64,217

13,980,679

69,323

-

-

69,323

-

108,370

-

108,370

(557,573)

(119,608)

(18,348)

(695,529)

13,223,444

193,530

45,869

13,462,843

As at 1 November 2019 (on adoption of AASB 16) Adjustment on lease modification Additions Depreciation expense At 31 October 2020

44 | PARRAMATTA LEAGUES CLUB LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

13. Leases (continued) Set out below are the carrying amounts of lease liabilities and the movements during the year: 2020 $ As at 1 November 2019 (on adoption of AASB 16)

13,980,679

Adjustment on lease modification

72,197

Additions

108,370

Accretion of interest

554,524

Payments

(1,106,592)

At 31 October 2020

13,609,178

Current Non-current

157,799 13,451,379

The following are the amounts recognised in profit or loss: 2020 $ Depreciation expense of right-of-use assets

695,529

Interest expense on lease liabilities

554,524

Expense relating to short-term leases and leases of low-value assets

94,057

Total amount recognised in profit or loss

1,344,110

The Group had total cash outflows for leases of $1,200,649 in 2020. The Group also had non-cash additions to right-of-use assets and lease liabilities of $108,370 in 2020.

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:

2020

2019

$

$

Within one year

423,130

251,227

After one year but not more than five years

1,121,510

103,479

1,544,640

354,706

ANNUAL REPORT 2020 | 45

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

14. Investment properties 2020

2019

$

$

20,562,347

18,202,619

-

1,150,000

(1,660,000)

-

-

1,209,728

18,902,347

20,562,347

At fair value Opening balance at 1 November Transfer from property, plant and equipment Transfer to asset held for sale Net gain from fair value adjustment Closing balance at 31 October

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)

(ii) (iii)

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 discounted cash flow projections based on reliable estimates of future cash flows 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.

46 | PARRAMATTA LEAGUES CLUB LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

14. Investment properties (continued) 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 • Units 1, 2, 3, 4, 5, 8, 9, 10 and 11 at 19 - 21 O’Connell Street, Parramatta NSW 2150 • 2 Ferris Street, Parramatta NSW 2150* • 20 Wandella Avenue, Northmead 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 - 53 Ross Street, Parramatta NSW 2150 * The property has been transferred to asset held for sale.

ANNUAL REPORT 2020 | 47

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

15. Trade and other payables 2020

2019

$

$

Trade payables

3,907,190

3,141,579

Accrued expenses

8,750,522

5,674,287

661,456

253,049

13,319,168

9,068,915

2020

2019

$

$

262,025

246,648

4,313,212

3,735,258

4,575,237

3,981,906

NAB loan facility (i)

21,732,908

19,522,163

Total used facility

26,308,145

23,504,069

Total facilities available

33,383,683

32,898,811

Unused facility

(7,075,538)

(9,394,742)

26,308,145

23,504,069

2020

2019

$

$

26,046,120

23,257,421

Current

GST payable

16. Borrowings

Current Unsecured notes NAB loan facility (i)

Non-current

Secured liabilities and assets pledged as security The total secured liabilities (current and non-current) are as follows: NAB loan facility (i)

48 | PARRAMATTA LEAGUES CLUB LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

16. Borrowings (continued) (i) NAB loan facility The NAB loan facilities include $25.4 million ($24.4 million drawn) Corporate Markets Loan funding capital projects, $6.0 million ($nil drawn) additional Corporate Markets Loan entered during the financial year ended 31 October 2020 to fund the construction costs of the new Kellyville Park training facility, $2.0 million ($1.6 million drawn) master asset finance facility and $0.6 million ($0.3 million drawn) other NAB facilities.

There are also $1.7 million ($0.4 million drawn) other non-NAB unsecured facilities.

17. Grant in advance 2020

2019

$

$

600,000

600,000

600,000

1,200,000

2020

2019

$

$

1,399,374

866,386

211,292

608,292

1,610,666

1,474,678

679,393

551,569

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)

2020

2019

3%

3%

3.51%

3.51%

10

10

ANNUAL REPORT 2020 | 49

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

19. Contract liabilities 2020

2019

$

$

1,144,723

-

375,188

-

1,519,911

-

386,030

-

66,000

-

452,030

-

2020

2019

$

$

-

1,530,528

-

450,690

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

20. Deferred revenue

Current Income received in advance Non-current Income received in advance

50 | PARRAMATTA LEAGUES CLUB LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

21. Commitments 21.1 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

2020

2019

$

$

585,748

1,846,346

21.2 Lease commitments: Group as a lessee The Group has no lease contracts that have not yet commenced as at 31 October 2020.

Commitments for minimum lease payments in relation to non-cancellable operating leases were $25,277,443 as at 31 October 2019.

21.3 Remuneration commitments 2020

2019

$

$

9,558,295

9,786,580

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

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.

ANNUAL REPORT 2020 | 51

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

22. Commitments The Group maintains a credit facility amounting to $350,000 (2019: $350,000) with NAB, maturing on 28 February 2021. This facility bears a weighted average interest rate of nil% (2019: nil%) and the unused facility is $88,125 (2019: $88,125).

23. Related party disclosures (a) Board of Directors On 5 March 2020, the Board of Directors were appointed as replacement to the Club Administrator. During the year, the Company paid the directors an amount of $25,452 which includes superannuation as remuneration for services provided in their roles as the Board of Directors.

As at 31 October 2020, the Club paid a total of $101,092 (2019: $241,075) 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) Parent entity and subsidiaries The parent and ultimate parent entity within the Group is Parramatta Leagues’ Club Ltd. Name

Principal activities

Country of incorporation

% Equity interest

2020

2019

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%

52 | PARRAMATTA LEAGUES CLUB LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

23. Related party disclosures (continued) (c) Key management personnel compensation

Key management personnel compensation

2020

2019

$

$

2,577,694

3,874,400

The amount includes payments made to key management personnel for the services performed in their capacity as CEO, CFO, COO, General Manager of Football, Head Coach and Executives during the year ended 31 October 2020. (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. (d) Transactions and balances with related parties 2020

2019

$

$

-

96,343

Transactions - expenses Consultant fees (i)

(i) Payments made to Jim Sarantinos (Director) in his capacity as a consultant.

24. Events after the reporting period The Group’s investment property, 2 Ferris Street, Parramatta NSW 2150, has been entered into a contract of sale subsequent to the financial year end on 4 December 2020.

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.

ANNUAL REPORT 2020 | 53

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS F O R THE YEAR ENDED 3 1 OCTOB E R 2020

25. Information relating to the Parramatta Leagues’ Club Limited (the Parent) (a) Summary financial information The individual financial statements for the parent entity show the following aggregate amounts: 2020

2019

$

$

22,635,315

9,425,479

Non-current assets*

104,847,985

98,343,323

Total assets

127,483,300

107,768,802

Current liabilities

16,054,564

14,380,969

Non-current liabilities

36,199,797

18,923,417

Total liabilities

52,254,361

33,304,386

Net assets

75,228,939

74,464,416

Retained earnings

75,228,939

74,464,416

Profit for the year

764,523

3,795,221

Total comprehensive income

764,523

3,795,221

Statement of financial position Current assets

Member's equity

*The loan to Parramatta National Rugby League Club Pty Limited of $84,994,472 has been converted into investment in subsidiary during the financial year ended 31 October 2020. (b) Guarantees entered into by the parent entity The Company has not entered into any guarantee contracts during the current financial year (2019: $nil). (c) Contingent liabilities of the parent entity The Company has committed to continue to provide sufficient financial support to Parramatta National Rugby League Club Pty Limited and Parramatta Power Soccer Club Limited to enable them to meet their financial obligations for a period of at least 12 months from the date of signing this financial report. (d) Contractual commitments for acquisition of property, plant or equipment The Company has entered into a contractual commitments for acquisition of property, plant or equipment during the current financial year for a commitment up to $585,748 (2019: $1,846,346).

54 | PARRAMATTA LEAGUES CLUB LIMITED

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 20 to 54 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 2020 and of its performance for the financial year ended on that date, and

(ii) complying with Accounting Standards - Reduced Disclosure Requirements, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and (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 17 December 2020

ANNUAL REPORT 2020 | 55

56 | PARRAMATTA LEAGUES CLUB LIMITED

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ANNUAL REPORT 2020 | 57

â–º

58 | PARRAMATTA LEAGUES CLUB LIMITED

A P P EN DI X 1 The following board committees include all Directors and have been established to assist Directors in undertaking their responsibilities: Board Committees Audit Darren Adam

Governance

Chair Member Member

Property & Development

Strategic Planning

Member

Sue Coleman Joy Cusack

Risk

Member

Chair

Richard Foda (PNRL Director)

Member Chair

Chair

Mark Jenkins (PNRL Director)

Member

Greg Monaghan

Ex-Officio

Phil Sim

Member

59

| PARRAMATTA LEAGUES CLUB LIMITED

Ex-Officio

Member Ex-Officio Member

Chair

Ex-Officio Member

ANNUAL REPORT 2020 | 59

1 Ee l s Pl ace, Parramat t a T. ( 02) 8 8 33 07 7 7 www. p ar ral e agu es.com.au

35 Quar r y Road, Du n das Va lley T. ( 02) 9638 1326 www.v i k i ngssport sclu b.com.au