ANNUAL REPORT 2019
Annual Financial Report DIRECTORS REPORT Your directors have pleasure in submitting to members their annual report on the Hornsby RSL Club Limited (the Club) covering year ended 31 December 2019.
remain financially viable by adopting prudent financial management, whilst incorporating best practice corporate governance standards. Measurement of performance: The Club measures its overall performance from the implementation of its mission statement and strategic plan through the
OPERATIONS
performance of the Club against financial budgets,
The principal activity of the Club is the operation of licensed premises, including the provision of sporting, social and entertainment activities for members of the Club.
The strategy for achieving these objectives is to
The income from those
activities is directed towards the improvement and maintenance of the Club’s facilities and the promotion of the social welfare of members including affiliated sub-clubs. There were no significant changes to this activity during the financial year. The short-term objectives of the Club are to make continuous improvements towards excellence in serving our members and community; reduce debt and implement revenue diversification strategies to ensure long-term financial sustainability. The long-term objectives of the Club are to maintain the Anzac tradition and support the RSL movement, support our affiliated sub-clubs, charities and community organisations, and achieve excellence in serving our community by providing exceptional customer service and premium recreational and leisure facilities in order to remain relevant to our members and the local community.
operating plans and by benchmarking identified key performance indicators (KPIs) against industry best practice. The Board of Directors meet monthly to review and evaluate the Clubs operating and financial performance and the Board meets a minimum of once per year to review and monitor the Club’s strategic plan. DIRECTORS' PARTICULARS Harry Anderson
President, Director 15 Years Committees - Sports Convenor, Building Remuneration/Audit and Investigating/Disciplinary Robert Kennerley
Vice President, Director 5 Years Committees – Building Remuneration/Audit and Investigating/Disciplinary Michael Brodie
Director 26 Years, Life Member Committees – Remuneration/Audit and Investigating/Disciplinary
Hornsby RSL Club Annual Report 2019
3
Annual Financial Report John Deane
DIRECTORS MEETINGS
Director 30 Years, Life Member, JP Committees – Building Remuneration/Audit and Investigating/Disciplinary
DIRECTORS
ELIGIBLE TO ATTEND
MEETINGS ATTENDED
Norm Bakker
H. Anderson
15
14
Director 15 Years
R. Kennerley
15
14
M. Brodie
15
14
J. Deane
15
15
N. Bakker
15
11
D. Dempsey
15
13
T. Clarke
15
13
M. Dowel*
4
4
S. Ho**
3
3
Committees – Sports Secretary Remuneration/Audit and Investigating/Disciplinary Denis Dempsey
Director 7 Years Committees – Building Remuneration/Audit and Investigating/Disciplinary Terence Clarke
Director 3 Years Committees – Remuneration/Audit and Investigating/Disciplinary
*Resigned effective 24th April 2019 **Appointed effective 30th October 2019
Mark Dowel
Retired effective 24 April 2019 Wai Han Ho (Sharon)
Director appointed 30 October 2019 Committees – Remuneration/Audit and Investigating/Disciplinary
MEMBERSHIP LIABILITY The Club is incorporated under the Corporation Act 2001 and is a company limited by guarantee. If the Club is wound up, the constitution states that each member is required to contribute $2.00 towards meeting the outstanding obligations of the Club. Further details of this liability can be found at Note 23 of the financial statements.
4
Hornsby RSL Club Annual Report 2019
AUDITORS INDEPENDENCE DECLARATION The lead auditor’s independence declaration for the year ended 31 December 2019 has been received and is included with the financial report. Made and signed in accordance with a resolution of the Board of Directors on 26 February 2020.
AUDITOR’S INDEPENDENCE DECLARATION This declaration is made under Section 307C of the Corporations Act 2001 to the Directors of Hornsby RSL Club Limited. As lead auditor of Hornsby RSL Club Limited, I declare that, to the best of my knowledge and belief, during the year ended 31 December 2019 there has been: (a)
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and (b)
no contraventions of any applicable code of professional conduct in relation to the audit.
David SMITH – DIRECTOR BRIGDEN & PARTNERS PTY LTD CHARTERED ACCOUNTANTS HORNSBY – 26 February 2020
Hornsby RSL Club Annual Report 2019
5
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 Notes
2019 ($)
2018 ($)
CURRENT ASSETS Cash and cash equivalents
4
3,854,415
3,319,116
Trade and other receivables
5
221,708
307,370
Inventories
6
398,895
491,794
Other current assets
8
335,526
218,789
4,810,544
4,337,069
TOTAL CURRENT ASSETS NON-CURRENT ASSETS Financial assets
7
15,000
""
Property, plant & equipment
9
85,564,717
86,839,840
Intangible assets
10
1,956,224
1,956,224
Deferred tax assets
11
200,412
254,206
TOTAL NON-CURRENT ASSETS
87,736,353
89,050,270
TOTAL ASSETS
92,546,898
93,387,339
CURRENT LIABILITIES Trade and other payables
12
2,350,425
1,713,000
Financial liabilities
13
2,393,509
2,362,541
Employee benefit liabilities
15
1,412,108
1,413,013
Other current liabilities
16
182,960
144,592
6,339,002
5,633,146
3,563,000
TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Financial liabilities
13
1,086,074
Employee benefit liabilities
14
240,727
152,079
Deferred tax liabilities
15
6,394,141
6,394,141
Other non-current liabilities
16
TOTAL NON-CURRENT LIABILITIES
215,236
216,090
7,936,178
10,325,310
TOTAL LIABILITIES
14,275,180
15,958,456
NET ASSETS
78,271,718
77,428,883
MEMBERS FUNDS Accumulated Funds
41,662,284
40,815,449
Asset Revaluation Reserve
36,552,034
36,552,034
Members Benefit Fund
57,400
61,400
78,271,718
77,428,883
92,546,898
93,387,339
TOTAL MEMBERS FUNDS Total Liabilities & Members Funds
6
The accompanying notes form part of these financial statements
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 Notes
2019 ($)
2018 ($)
10,953,536
10,438,627
22,050,209
21,685,788
Revenue: Sale of goods Rendering of services Other income Total Revenue and Other Income
241,554
248,135
33,245,299
32,372,550
Expenses: Cost of goods sold
4,645,650
4,356,126
Employee benefit expenses
11,525,815
11,339,612
Marketing & entertainment
2,370,854
2,266,673
Poker machine gaming tax
5,100,514
4,976,375
Poker machine monitoring fees Property & maintenance
220,212
213,821
2,464,003
2,473,598
Security expenses
423,538
391,913
Welfare, ClubGrants & Sub-Clubs
317,375
263,890
Other expenses Earnings before Interest & Depreciation
1,161,854
1,120,985
28,229,815
27,402,993
5,015,484
4,969,557
Interest Income
15,138
17,251
Finance costs
2
(226,411)
(257,849)
Depreciation & amortisation
2
(3,907,582)
(3,646,804)
Net Profit before income tax
2
896,629
1,082,155
3
53,794
2,007
842,835
1,080,148
0
13,274,361
0
13,274,361
842,835
14,354,509
Income tax expense (benefit) Net profit for the year Other Comprehensive Income Net gain on revaluation of non-current assets
8
Total other comprehensive income for the year Total comprehensive income attributable to members of the entity
The accompanying notes form part of these financial statements
7
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2019
Balance as at 31 December 2017
ACCUMULATED FUNDS
ASSET REVALUATION RESERVE (A)
MEMBERS BENEFIT FUND (B)
TOTAL
39,718,101
23,277,673
78,600
63,074,374
1,080,148
0
0
1,080,148 0
Net profit (loss) attributable to members of the entity Transfer from members benefit fund: - for payment of death benefits - to reflect non-renewing members Revaluation surplus (loss)
5,100
0
(5,100)
12,100
0
(12,100)
0
0
13,274,361
0
13,274,361
40,815,449
36,552,034
61,400
77,428,883
842,835
0
0
842,835
3,500
0
(3,500)
0
500
0
(500)
0
41,662,284
36,552,034
57,400
78,271,718
Balance as at 31 December 2018 Net profit (loss) attributable to members of the entity Transfer from members benefit fund: - for payment of death benefits - to reflect non-renewing members Balance as at 31 December 2019
(a)
Asset Revaluation Reserve
The asset revaluation reserve records revaluations of non-current assets. Generally the balance in the reserve will reflect the after tax unrealised gain on non-current assets. The Club's land and buildings were revalued as at 31 December 2018. (b)
Members Benefit Fund
The members benefit fund is an amount set aside for the payment of funeral benefits to eligible members. The payment of this benefit is at the discretion of the directors, and at balance date there were 22 members eligible for a $500 benefit and 168 eligible for a $300 benefit.
8
The accompanying notes form part of these financial statements
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019 Notes
2019 ($)
2018 ($)
Cash Flows From Operations: Receipts from members & guests Payments to suppliers & employees Interest received Financing costs paid Net Operating Cash Flows
19
36,678,005
35,556,740
(30,838,015)
(30,657,533)
15,138
17,251
(192,989)
(267,138)
5,662,139
4,649,320
(15,000)
0
Cash Flows From Investments: Investments in financial assets Asset purchases Furniture, plant & equipment Land & building additions/ renovations Gaming machine entitlements Net Investment Cash Flows
(2,502,621)
(3,172,224)
(129,838)
(2,345,025)
0
(296,606)
(2,647,459)
(5,813,855)
Cash Flows From Financing: Asset finance borrowings
788,250
1,108,990
Asset finance repayments
(1,017,631)
(948,894)
Borrowings received
0
1,423,684
Repayment of borrowings
(2,250,000)
(500,000)
Net Financing Cash Flows
(2,479,381)
1,083,780
535,299
(80,755)
3,319,116
3,399,871
3,854,415
3,319,116
Net Surplus/(Deficit) in Cash Flows Cash at the Beginning of the Year Cash at Year End
19
The accompanying notes form part of these financial statements
9
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 The financial report is for Hornsby RSL Club Ltd
The financial report has been prepared on a going
(“the Company/Club”) as an individual entity for the
concern basis, which contemplates continuity of
year ended 31 December 2019, and was authorised
normal business activities, and the realisation of
for issue in accordance with a resolution of the
assets and settlement of liabilities in the ordinary
directors on 26 February 2020.
course of business. The directors considered the profitability, liquidity and solvency of the Club and
The Club is a company limited by guarantee,
have concluded that the use of the going concern
incorporated and domiciled in Australia. The Club
assumption in the preparation of the financial
is a not-for-profit entity for financial reporting
report is appropriate.
purposes
under
the
Australian
Accounting
Standards.
Accounting Policies
The Club’s registered office and business address is
(a)
4 High Street Hornsby NSW 2077.
the accounts from the sale of goods and services
Revenue - Revenue is recognised in
upon delivery of the goods and services. Revenue 1. SUMMARY OF ACCOUNTING POLICIES Basis of Preparation The financial statements are a general purpose financial report and have been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements (RDR) (including Australian Accounting Interpretations) and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently
is measured based on the cash or cash equivalent consideration received, after deducting discounts. The Club operates a member loyalty and rewards program whereby members accumulate points for dollars spent. The redemption of points for Club products and services is treated as revenue at the time of sale, with a corresponding expense at that time. Interest revenue is recognised on an accruals basis in the period it is derived. (b)
Goods & Service Tax (GST) - Revenues,
expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is
applied unless otherwise stated.
recognised as part of the cost of acquisition of the
The financial statements, except for the cash flow
and payables in the statement of financial position
information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar.
10
Hornsby RSL Club Annual Report 2019
asset or as part of an item of expense. Receivables are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (c)
Cash and Cash Equivalents - Cash and
of revaluation gain/loss. All other decreases are
cash equivalents include cash on hand, deposits
charged to the statement of comprehensive
held at-call with banks, other short-term highly
income.
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts
Any accumulated depreciation at the date of the
are shown within short-term borrowings in current
revaluation is eliminated against the gross carrying
liabilities on the statement of financial position.
amount of the asset and the net amount is restated to the revalued amount of the asset.
(d)
Trade and Other Receivables - Trade
and other receivables represent the principal
Plant and equipment are measured on the
amounts due at balance date less where applicable
cost basis less accumulated depreciation and
a provision for doubtful debts. These accounts are
impairment losses.
generally non-interest bearing on 30-day terms and are treated as current assets. A provision for
The carrying amount of plant and equipment is
doubtful debt is recognised when there is objective
reviewed annually by directors to ensure it is not
evidence that an account is impaired.
more than the recoverable amount from these assets. The recoverable amount is assessed based
(e)
Inventories - Inventories are measured
at the lower of cost or net realisable value.
on the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been
(f)
Property, Plant and Equipment, and
Depreciation - Each class of property, plant and
discounted to their present values in determining recoverable amounts.
equipment is carried at cost or fair values as indicated, less, where applicable, accumulated
Depreciation The depreciable amount of all fixed
depreciation and impairment losses.
assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated
Freehold land and buildings are shown at their
on a straight-line basis over the asset's useful life
fair value based on periodic valuations by an
to the entity commencing from the time the asset
independent valuer, less subsequent depreciation
is held ready for use. The depreciable amount of
for buildings and accumulated impairment. In
buildings includes revaluations where applicable.
periods when the freehold land and buildings are not subject to an independent valuation, the
Depreciation rates:
directors assess whether the carrying values for the land and buildings are materially different to the
Buildings
2.5% - 5%
fair value.
Plant & Equipment
7.5% - 25%
Poker machines
25%
revaluation of land and buildings are recognised
(g)
Intangible Assets - Gaming machine
in other comprehensive income and accumulated
entitlements are initially recognised at their
in the revaluation reserve in members’ equity.
acquisition cost. Entitlements acquired or granted
Revaluation decreases that offset previous increases
for no cost are not brought to account. Entitlements
Increases in the carrying amount arising on
of the same class of assets shall be recognised in other comprehensive income under the heading
Hornsby RSL Club Annual Report 2019
11
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 have an indefinite life and so their costs are not
reporting period, which remain unpaid. The balance
amortised. The carrying value is assessed annually
is recognised as a current liability with the amounts
for impairment.
normally paid within 30 days of recognition of the liability.
(h)
Financial
Instruments
-
Financial
instruments are accounted for in accordance with
(k)
AASB139: Financial Instruments – Measurement
been made for long service leave and annual leave
Employees’ Benefits - Provision has
and Recognition.
in accordance with statutory requirements, based on pro rata entitlement on the wage and salary
Broadly, financial assets and financial liabilities are
levels, including salary on-costs, of employees at
recognised when the entity becomes a party to
reporting date.
the contractual provisions to the instrument. For financial assets, this is equivalent to the date that
The long service leave provision applies only to
the company commits itself to either purchase or
those employees who have completed at least
sell the asset (ie trade date accounting is adopted).
five years’ service with the Club, which is based on experience of staff turnover.
The amounts
Financial instruments are initially measured at
attributable to employees with at least ten years’
fair value plus transactions costs except where
service is shown as a current liability, and the
the instrument is classified “at fair value through
balance is shown as a non-current liability
profit or loss” in which case transaction costs are expensed to profit or loss immediately.
Employee benefits that are expected to be settled within one year have been measured at the
(i)
Impairment of Assets - At each reporting
amounts expected to be paid when the liability is
date the Club reviews the carrying values of
settled. Employee benefits that are payable later
its tangible and intangible assets to determine
than one year have been calculated using a nominal
whether there is any indication that those assets
value basis rather than the standards based present
have been impaired. If such indication exists, then
value of future cash flows method, however the
the recoverable amount of the asset is compared to
result under each of these methods is not materially
the carrying value, and any excess in carrying value
different.
over the recoverable amount is expensed to the statement of comprehensive income.
Superannuation contributions are made to an employee superannuation fund and charged as
Where the future economic benefits of the asset
expenses in the period in which they are incurred.
are not primarily dependent upon the asset's ability to generate net cash inflows and when the entity
(l)
would, if deprived of the asset, replace its remaining
the year comprises current income tax expense
Income Tax - Income tax expense for
future economic benefits, value in use is determined
and deferred income tax expense. Current income
as the depreciated replacement cost of an asset.
tax expense charged to the profit and loss is tax payable on taxable income calculated using current
(j)
Trade and Other Payables - Trade and
tax rates as at reporting date. Current tax liabilities
other payables represent the liability outstanding
are therefore the amounts expected to be paid in
at the end of the reporting period for goods and
the forthcoming financial year.
services received by the company during the
12
Hornsby RSL Club Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 Deferred income tax expense reflects movements
presentation for the current financial year. When an
in the deferred tax asset and deferred tax liability
entity applies an accounting policy retrospectively,
balances during the year as well as where applicable
makes a retrospective restatement or reclassifies
unused tax losses.
items in its financial statements, a statement of financial position as at the beginning of the earliest
Deferred tax assets and liabilities are ascertained
comparative period must be disclosed.
based on temporary differences between the tax bases of assets and liabilities and their carrying
(o)
amount in the financial statements.
Judgements and Assumptions - The Directors
Significant
Accounting
Estimates,
evaluate estimates, judgments and assumptions Deferred
tax
assets
arising
from
deductible
incorporated in the financial statements based on
temporary differences and unused tax losses are
historical knowledge and best available current
recognised only to the extent that it is probable
information.
that future taxable profit will be available against
expectation of future events and are based on
which the deferred tax assets can be utilised.
current trends and economic data, obtained both
Estimates
assume
a
reasonable
externally and within the company. The directors The Club is a non-profit entity and can apply the
review these key estimates, assumptions and
“principle of mutuality” whereby net income
judgements annually.
derived from members is exempt from income tax. The key estimates used are: (m) Current
versus
Non-Current
(1)
Useful lives of fixed assets are estimated
Classification - The Club presents assets and
to calculate depreciation rates.
liabilities in the statement of financial position
(2)
based on current/non-current classification.
calculate net present values for impairment
Future cash flows are estimated to
calculations and for long-term liabilities. An asset is current when it is: expected to be
(3)
realised, sold or consumed in the normal operating
points redemption.
Member loyalty program liability for
cycle; held for the purpose of trading; expected to be realised within twelve months after reporting
(p)
date; or cash or cash equivalent. All other assets are
Disclosures, Standards and Interpretations
Changes
in
Accounting
Policies,
classified as non-current.
During the current year the company adopted all of the new and revised Australian Accounting
A liability is current when it is expected to be
Standards and Interpretations applicable to its
settled in the normal operating cycle; held primarily
operations which became mandatory.
for trading; due to be settled within twelve months after the reporting date; or there is no unconditional
The new or amended Australian Accounting
right to defer settlement of the liability for at least
Standards that apply for the first time in this
twelve months after reporting date.
financial year do not have a significant impact on
All other
liabilities are classified as non-current.
the disclosures in the Club’s financial statements or the measurement of the Club’s revenue, expenses,
(n)
Comparative Figures - Where required
assets and liabilities.
by Accounting Standards comparative figures have been adjusted to conform with changes in
Hornsby RSL Club Annual Report 2019
13
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 2019 ($)
2018 ($)
(a) Finance costs:
124,627
161,563
- Bank interest
101,784
96,286
- Hire purchase charges
226,411
257,849
2. PROFIT FOR THE YEAR The following specific items are included in the net profit for the year:
(b) Depreciation & amortisation
1,013,731
958,896
- buildings
1,837,647
1,707,795
- gaming equipment
1,041,222
957,897
- other plant & equipment - loss on disposal of fixed assets
14,982
22,216
3,907,582
3,646,804
30,480
30,480
925,073
893,331
15,000
0
53,794
2,007
(c) Other specific expenses Operating lease expenses Employee benefits: - defined contribution superannuation plans Bad & doubtful debts 3. INCOME TAX EXPENSE (BENEFIT) The Club is a non-profit entity for income tax purposes and is able to apply the "principle of mutuality" whereby income derived from club members is exempt from income tax. Prima facie tax expense (benefit) on Net Profit after adjusting for mutual net income and other permanent tax differences, at the corporate tax rate of 30% is: Current tax expense (benefit) Deferred tax asset - decrease (increase)
14
Hornsby RSL Club Annual Report 2019
0
0
53,794
2,007
53,794
2,007
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 2019 ($)
2018 ($)
4. CASH AND CASH EQUIVALENTS Cash at bank and in hand Cash on short-term deposit
3,353,176
2,317,914
501,239
1,001,202
3,854,415
3,319,116
211,009
207,059
25,699
100,311
5. TRADE AND OTHER RECEIVABLES Trade debtors Sundry debtors Provision for doubtful debts
(15,000)
0
221,708
307,370
398,895
491,794
398,895
491,794
15,000
0
15,000
0
335,526
218,789
335,526
218,789
At independent valuation - 2018
68,000,000
68,000,000
Additions & renovations - at cost
271,593
246,924
Capital works in progress - at cost
182,123
76,955
68,453,716
68,323,879
6. INVENTORIES
Bar and catering stock - at cost
7. FINANCIAL ASSETS
Non-Current Assets Investments in listed securities, at cost
8. OTHER CURRENT ASSETS Prepayments
9. PROPERTY, PLANT & EQUIPMENT Freehold land & buildings, at fair value Clubhouse & carpark:
Less: Accumulated depreciation
(1,499,131)
(485,400)
66,954,585
67,838,479
Hornsby RSL Club Annual Report 2019
15
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 2019 ($)
2018 ($)
9. PROPERTY, PLANT & EQUIPMENT (CONT) Other properties:
At independent valuation - 2018
8,750,000
Additions & renovations - at cost
0
0
8,750,000
8,750,000
Less: Accumulated depreciation Total Land & Buildings
Plant and equipment, furniture and fittings:
At cost Less: Accumulated depreciation Gaming machines: At cost Less: Accumulated depreciation
8,750,000
0
0
8,750,000
8,750,000
75,704,585
76,588,479
19,253,222
18,277,504
(13,201,910)
(12,178,474)
6,051,312
6,099,030
13,581,723
13,468,479
(9,772,903)
(9,316,148)
3,808,820
4,152,331
Total Property, Plant & Equipment
85,564,717
86,839,840
The freehold land and buildings were independently valued by Global Valuation Services Pty Ltd on 30 June 2018 and the directors made the decision to use that valuation as the fair value of the Club's land and buildings as at 31 December 2018. The valuation model is based on fair value of the land plus depreciated replacement cost of the buildings. The critical assumptions adopted in determining the valuation were the location, zoning and use of the land and buildings, and comparative recent property sales in the area. The directors have reviewed the key assumptions made by the independent valuers in 2018. They concluded that these assumptions remain materially unchanged, and are satisfied that the carrying values do not exceed the recoverable amount of the land and buildings. The directors do not believe that there has been a material movement in the fair values since valuation date. Accordingly, no revaluation or impairment losses were recognised this financial year.
16
Hornsby RSL Club Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 2019 ($)
2018 ($)
9. PROPERTY, PLANT & EQUIPMENT (CONT) Reconciliations of Carrying Values Land & Buildings Carrying value at start of year
76,588,479
64,252,844
Additions
129,837
2,617,841
Disposals
0
0
Revaluations
0
13,274,361
Depreciation
(1,013,731)
(958,896)
0
(2,597,671)
75,704,585
76,588,479
Other movements - transfer to Plant & Equip Carrying value at year end Plant & Equipment Carrying value at start of year
6,099,030
3,736,846
Additions
992,963
722,410
Disposals
541
0
Revaluations
0
0
Depreciation
(1,041,222)
(957,897)
Other movements - transfer from Renovations
0
2,597,671
6,051,312
6,099,030
Carrying value at start of year
4,152,331
3,705,344
Additions
1,509,118
2,177,406
Disposals
(14,982)
(22,624)
Carrying value at year end Gaming Machines
Revaluations
0
0
Depreciation
(1,837,647)
(1,707,795)
Other movements
0
0
3,808,820
4,152,331
85,564,717
86,839,840
32,576,287
33,318,393
- Freehold land & buildings
58,418,713
59,310,274
- Gaming machines & equipment
2,023,738
2,236,822
60,442,451
61,547,096
Carrying value at year end Total Carrying Value Carrying value under the cost model of assets at fair value: - Freehold land & buildings The carrying amount of assets pledged as security are:
Hornsby RSL Club Annual Report 2019
17
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 2019 ($)
2018 ($)
Core Properties Pursuant to Section 41J of the Registered Clubs Act 1976, the following properties that are owned by the Club are core properties: 4 High Street, Hornsby The following properties owned by the Club are non-core properties: 2-5 William Street, Hornsby 2 Ashley Lane, Hornsby 7-17 Ashley Street, Hornsby 19 Ashley Street, Hornsby 2-4 Webb Avenue, Hornsby
10. INTANGIBLE ASSETS Gaming machine entitlements, at cost Less: Provision for Impairment
1,956,224
1,956,224
0
0
1,956,224
1,956,224
1,956,224
1,659,618
Additions
0
296,606
Impairments
0
0
1,956,224
1,956,224
Opening balance
254,206
256,213
Net movement
(53,794)
(2,007)
Closing balance
200,412
254,206
2,350,425
1,713,000
2,350,425
1,713,000
Carrying value at start of year
Carrying value at year end 11. DEFERRED TAX ASSETS
12. TRADE AND OTHER PAYABLES Trade creditors & accruals
18
Hornsby RSL Club Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 2019 ($)
2018 ($)
13. FINANCIAL LIABILITIES Current Bank overdraft
0
0
1,500,000
1,500,000
Hire purchase liability
959,298
944,254
Deferred HP charges
(65,789)
(81,713)
2,393,509
2,362,541
Bank loan
Non-Current Bank loan
420,891
2,670,891
Hire purchase liability
690,039
934,462
Deferred HP charges
(24,855)
(42,353)
1,086,074
3,563,000
3,479,583
5,925,541
Total Borrowings
The bank overdraft, bank loan facility, commercial bank bills and bank guarantees are all secured by a first registered mortgage over real property located at 4 High Street Hornsby and a first registered equitable mortgage over the whole of the company's assets and undertakings. A Market Rate Loan facility commenced on 16 March 2018 with a maturity date of 16 March 2021. The facility limit is $2,250,000. The facility includes an EBITDA Covenant whereby the earnings before interest, tax, depreciation and amortisation for each reporting period be not less than $3,200,000. The facility requires quarterly principal repayments of $375,000 commencing from 18 March 2019. The Club has an equipment finance facility of $2,500,000 which expires on 8 March 2020, and is generally renewed annually. Equipment purchased using this facility are subject to a specific security agreement, whereby the Club has granted a security interest to the specific equipment purchased. The facility is not secured by mortgage. The weight average interest rates on the bank bill and hire purchase facilities are: Loan facility
2.80%
Asset purchase finance facilities
5.79%
The proportion of borrowings to net tangible assets at year end was 4.4% which is less than the 60% limit prescribed in the Club's constitution.
Hornsby RSL Club Annual Report 2019
19
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 2019 ($)
2018 ($)
14. EMPLOYEE BENEFITS LIABILITIES Accrued annual leave
797,063
769,314
Long service leave
855,772
795,778
1,652,835
1,565,092
1,412,108
1,413,013
Represented by: Current Liability Non-current Liability
240,727
152,079
1,652,835
1,565,092
Superannuation - in accordance with the relevant law, the Club contributes 9.50% of each employee's base salary to a superannuation fund. 15. TAX LIABILITIES Current Income tax payable
0
0
6,394,141
6,394,141
182,960
144,592
Income received in advance
163,236
216,090
Supplier rebate agreement
52,000
0
Income received in advance
215,236
216,090
100,000
100,000
94,643
95,127
Non-Current Provision for deferred tax liabilities 16. OTHER LIABILITIES Current Income received in advance Non-Current -
17. CONTINGENT LIABILITIES (a) Bank guarantees (b) Gaming machine jackpots (c) Legal liabilities There are no other material legal matters pending against the Club.
20 Hornsby RSL Club Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 2019 ($)
2018 ($)
18. CAPITAL AND LEASING COMMITMENTS (a) Capital Expenditure Commitments Capital expenditure commitments contracted for: - Building costs
0
0
- Plant and equipment purchases
471,595
0
471,595
0
471,595
0
0
0
471,595
0
- within 1 year
30,480
30,480
- between 1 and 5 years
29,060
59,540
Total Commitment
59,540
90,020
Payable - within 1 year - greater than 1 year (b) Finance Leasing Commitments There are no finance lease commitments. (c) Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements: Payable
(d) Hire Purchase Commitments Payable - within 1 year
959,298
944,254
- between 1 and 5 years
690,039
934,462
Total Commitment
1,649,337
1,878,716
Hornsby RSL Club Annual Report 2019
21
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 Notes
2019 ($)
2018 ($)
842,835
1,080,148
3,907,582
3,646,804
Receivables
85,662
(118,806)
Inventories
92,899
28,516
Income tax assets
53,794
2,007
(116,737)
(15,518)
19. CASH FLOW INFORMATION (a) Reconciliation of Net Profit to Net Operating Cash Flows Net profit after tax Non-cash (income) and expenses Depreciation & amortisation (Increases)/decreases in assets -
Other assets Increases/(decreases) in liabilities Trade creditors & accruals
637,425
(99,579)
Deferred hire purchase charges
33,422
(15,768)
Employee leave provisions
87,743
69,296
Commercial bill discount Other liabilities
0
6,479
37,514
65,741
5,662,139
4,649,320
3,319,116
Net Operating Cash Flows (b) Cash at Year End Cash assets
4
3,854,415
Bank overdraft
13
0
0
3,854,415
3,319,116
Bank lending facilities
2,250,000
4,500,000
Asset finance facilities
2,500,000
2,500,000
100,000
100,000
Bank overdraft
50,000
50,000
Corporate credit cards
70,000
70,000
4,970,000
7,220,000
(c) Financing Facilities The Club has the following financing facilities:
Bank guarantees
Amounts used
3,479,583
5,925,541
Unused facilities
1,490,417
1,294,459
22
Hornsby RSL Club Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
20. KEY MANAGEMENT PERSONNEL Key management personnel are those persons having authority and responsibility for planning, directing and controlling activities of the Club, including the directors. (a) Directors – the following persons were non-executive directors of the Club during the financial year: Harry Anderson Robert Kennerley Michael Brodie John Deane Norm Bakker Dennis Dempsey Terence Clarke Mark Dowel (retired 24/4/2019) Wai Han Ho (Sharon) (appointed 30/10/2019) (b) Other key management personnel: Mario Machado (Chief Executive Officer) Steve Rigney (Assistant Chief Executive Officer) Stuart Gabriel (Human Resources Manager) Andy Fung (Chief Financial Officer) James Nicholas (Executive Chef) (c) Total remuneration to key management personnel
994,402
1,034,951
Hornsby RSL Club Annual Report 2019
23
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019
21. RELATED PARTY TRANSACTIONS From time to time, related parties including key management personnel, have purchased goods and services from the Club. These purchases were made on an arms-length basis, on the same commercial terms as those entered into by other Club employees or customers. From time to time, certain directors have provided additional services to the Club. These services and the compensation paid for these services were on commercial arms-length terms, and are fully disclosed in accordance with the applicable regulations. Details of these services arrangements are available on request from the CEO. Apart from the detail disclosed in this note, no related party has entered into a material contract with the Club since the end of the previous financial year, and no such material contracts existed at year end. There were no amounts receivable from or payable to related parties at the current or previous reporting date. The directors receive an honorarium each month and have received other benefits as approved by the members at last year's annual general meeting. The directors' honorariums are included in the key management personnel remuneration in Note 20. 22. EVENTS SUBSEQUENT TO BALANCE DATE There have been no significant events occurring after the reporting date which may affect either the Club's operations or results of those operations, or the Club's state of affairs. 23. MEMBERS GUARANTEE The entity is incorporated under the Corporations Act 2001 and is an entity limited by guarantee. If the entity is wound up, the constitution states that each member is required to contribute a maximum of $2.00 towards meeting any outstanding obligations of the entity. At 31 December 2019 the number of members was 32,289 (2018: 31,539), and the total members' liability was $64,578.
24 Hornsby RSL Club Annual Report 2019
DIRECTORS DECLARATION
The directors have determined that the company is a reporting entity that does not have public accountability as defined in AASB 1053: Application of Tiers of Australian Accounting Standards and that these general purpose financial statements should be prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements. In accordance with a resolution of the directors of Hornsby RSL Club Limited, the directors of the company declare that: 1.
The accompanying financial statements and notes are in accordance with the Corporations
Act 2001 and:
(a) comply with Australian Accounting Standards – Reduced Disclosure Requirements;
and
(b) give a true and fair view of the Company’s financial position as at 31 December 2019 and
of its performance and cash flows for the year ended on that date.
2.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be
able to pay its debts as and when they become due and payable.
Harry Anderson
Director John Deane
Director
Dated: 26 February 2020
Hornsby RSL Club Annual Report 2019
25
Independent Auditor's Report To the Members of Hornsby RSL Club Limited OPINION We have audited the financial report of Hornsby
We confirm that the independence declaration
RSL Club Limited (the company), which comprises
required by the Corporations Act 2001, which has
the statement of financial position as at 31
been given to the directors of the company, would
December 2019, the statement of profit or loss and
be in the same terms if given to the directors as at
other comprehensive income, statement of changes
the time of this auditor’s report.
in equity and statement of cash flows for the year then ended, and notes to the financial statements,
We believe that the audit evidence we have
including a summary of significant accounting
obtained is sufficient and appropriate to provide a
policies, and the directors’ declaration.
basis for our opinion.
In our opinion, the accompanying financial report
INFORMATION OTHER THAN THE FINANCIAL
of Hornsby RSL Club Limited is in accordance with
REPORT AND AUDITOR’S REPORT THEREON
the Corporations Act 2001, including:
The directors are responsible for the other
(a)
giving a true and fair view of the
information. The other information comprises the
company's financial position as at 31 December 2019
information included in the company’s annual
and of its performance for the year then ended; and
report for the year ended 31 December 2019 but does not include the financial report and our auditor’s
complying with Australian Accounting
report thereon. Our opinion on the financial
Standards – Reduced Disclosure Requirements and
report does not cover the other information
the Corporations Regulations 2001.
and accordingly we do not express any form of
(b)
assurance conclusion thereon. In connection with BASIS FOR OPINION
our audit of the financial report, our responsibility
We conducted our audit in accordance with
is to read the other information and, in doing
Australian Auditing Standards. Our responsibilities
so, consider whether the other information is
under those standards are further described in
materially inconsistent with the financial report or
the Auditor’s Responsibilities for the Audit of
our knowledge obtained in the audit or otherwise
the Financial Report section of our report. We
appears to be materially misstated. If, based on the
are independent of the company in accordance
work we have performed, we conclude that there is
with the auditor independence requirements
a material misstatement of this other information,
of the Corporations Act 2001 and the ethical
we are required to report that fact. We have nothing
requirements of the Accounting Professional and
to report in this regard.
Ethical Standards Board’s APES 110 : Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
26 Hornsby RSL Club Annual Report 2019
RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL REPORT
As part of an audit in accordance with Australian
The directors of the company are responsible for
Auditing
the preparation of the financial report that gives
judgement and maintain professional scepticism
a true and fair view in accordance with Australian
throughout the audit. We also:
Standards,
we
exercise
professional
Accounting Standards and the Corporations Act
•
2001 and for such internal control as the directors
misstatement of the financial report, whether
Identify and assess the risks of material
determine is necessary to enable the preparation
due to fraud or error, design and perform
of the financial report that gives a true and fair view
audit procedures responsive to those risks,
and is free from material misstatement, whether
and obtain audit evidence that is sufficient
due to fraud or error.
and appropriate to provide a basis for our opinion. The risk of not detecting a material
In preparing the financial report, the directors
misstatement resulting from fraud is higher
are
company's
than for one resulting from error, as fraud
ability to continue as a going concern, disclosing,
may involve collusion, forgery, intentional
as applicable, matters related to going concern
omissions, misrepresentations, or the override
and using the going concern basis of accounting
of internal control.
responsible
for
assessing
the
unless the directors either intend to liquidate the company or to cease operations, or have no realistic
•
alternative but to do so.
control relevant to the audit in order to design
Obtain an understanding of internal
audit procedures that are appropriate in the AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
circumstances, but not for the purpose of
OF THE FINANCIAL REPORT
expressing an opinion on the effectiveness of
Our objectives are to obtain reasonable assurance
the company’s internal control.
about whether the financial report as a whole is free from material misstatement, whether due to
• Evaluate
fraud or error, and to issue an auditor’s report that
of
includes our opinion. Reasonable assurance is a
reasonableness of accounting estimates and
high level of assurance, but is not a guarantee that
related disclosures made by the directors.
accounting
the policies
appropriateness used
and
the
an audit conducted in accordance with Australian Auditing Standards will always detect a material
•
misstatement when it exists. Misstatements can
the directors’ use of the going concern basis of
Conclude on the appropriateness of
arise from fraud or error and are considered
accounting and, based on the audit evidence
material if, individually or in the aggregate, they
obtained, whether a material uncertainty
could reasonably be expected to influence the
exists related to events or conditions that
economic decisions of users taken on the basis of
may cast significant doubt on the company’s
the financial report.
ability to continue as a going concern. If we
Hornsby RSL Club Annual Report 2019
27
Independent Auditor's Report conclude that a material uncertainty exists, we
Signed on: 1 March 2020
are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
BRIGDEN & PARTNERS PTY LTD,
on the audit evidence obtained up to the date
CHARTERED ACCOUNTANTS
of our auditor’s report. However, future events or conditions may cause the company to cease
David Smith – Director
to continue as a going concern.
Level 3, 20 George Street, Hornsby NSW 2077
•
Evaluate
the
overall
presentation,
structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. •
Obtain
sufficient
appropriate
audit
evidence regarding the financial information of the entities or business activities within the company to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
28
Hornsby RSL Club Annual Report 2019
Hornsby RSL Club Annual Report 2019
29