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Bathurst RSL Club Limited ABN: 66 001 031 947

Financial Statements For the Year Ended 31 March 2020

Bathurst RSL Club Limited

ABN: 66 001 031 947

Contents For the Year Ended 31 March 2020

Page

Financial Statements Directors' Report 1 Auditors Independence Declaration under Section 307C of the Corporations Act 2001 4 Statement of Cash Flows 5 Statement of Profit or Loss and Other Comprehensive Income 6 Statement of Financial Position 7 Statement of Changes in Equity 8 Notes to the Financial Statements 9 Directors' Declaration 26 Independent Audit Report 27


ABN: 66 001 031 947

Directors' Report For the Year Ended 31 March 2020

1

The directors present their report on Bathurst RSL Club Limited for the financial year ended 31 March 2020.

1. General information

Information on directors

The names of each person who has been a director during the year and to the date of this report are:

Ian Miller President

Occupation/Qualifications Retired Storeman

Experience 16 years

Ron Hollebone Vice President

Occupation/Qualifications Retired Salvation Army Chaplain

Experience 14 years

Coral Miller

Occupation/Qualifications Retired Insurance Broker

Experience 6 years

Brett Kenworthy

Occupation/Qualifications Executive Secretary

Experience 8 years

Les Anderson

Occupation/Qualifications Retired Senior Technical Officer

Experience 7 years

Harry Robertson Vice President/ Treasurer

Occupation/Qualifications Retired Process Manager

Experience 6 years

Paul Hennessy

Occupation/Qualifications Retiree/Carer

Experience 6 years

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Company Secretary

The following person held the position of Company Secretary at the end of the financial year:

Peter Sargent (General Manager) has been the Company Secretary since 20 February 2012 and remains in this position as at the end of the financial reporting period.

Principal activities

The principal activity of Bathurst RSL Club Limited during the financial year was that of a licensed club, providing a range of functions, food, beverage, sporting, family, outdoor and gaming facilities to its patrons.


ABN: 66 001 031 947



Principal activities

2

No significant changes in the nature of the Company's activity occurred during the financial year.

Short term objectives

The Company's short term objectives are to:

• Maintain and / or modernise the Club's premises;

• Provide the best possible hospitality services to members and the local community; and

• Ensure ongoing profitability of the Club to secure its financial future.

Long term objectives

The Company's long term objectives are to:

• Increase the participation level of the Club's members;

• Be an "employer of choice" in the Bathurst region;

• Maintain a financially healthy business;

• Actively manage the Bathurst RSL image in the community; and

• Plan for the continued development and future expansion of the Club.

Strategy for achieving the objectives

To achieve these objectives, the Company has adopted the following strategies:

• Market the Club and its facilities through social media, radio, television, electronic and print media;

• Create a safe and family friendly Club environment through ongoing diversification;

• Upgrade technology and systems;

• Further develop and improve on the membership base;

• Improve Club facilities;

• Benchmark the industry; and

• Continued support to sponsored community, cultural and sporting organisations to improve patronage

of the Club.

Core and non core property

In accordance with Section 41J of the Registered Clubs Act, the Company's property assets are classified as follows:

• Core property - The land and building upon which the Club's licensed premises are located at 114 Rankin Street, Bathurst NSW.

• Non core property - Consists of the residential properties (including land owned by the Club) located at 241 Russell Street, 243 Russell Street and 247 Russell Street, Bathurst NSW. Also includes tenanted commercial property located at 106 Rankin Street, Bathurst NSW.


ABN: 66 001 031 947



3

Members guarantee

Bathurst RSL Club Limited is a company limited by guarantee. In the event of, and for the purpose of winding up of the company, the amount capable of being called up from each member and any person or association who ceased to be a member in the year prior to the winding up, is limited to $ 2 for members, subject to the provisions of the Club's constitution.

At 31 March 2020 the collective liability of members was $ 28,344 (2019: $ 32,664).

Events after reporting date

The Club expects to re-open in the months subsequent to year end in line with the staged lifting of the lockdown restrictions imposed by Federal and State Government.

The Club and commercial investment property located at 106 Rankin Street expect to return to normal operating conditions during the year to 31 March 2021.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Club, the results of those operations or the state of affairs of the Club in the future financial years.

Meetings of directors

During the financial year, 14 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

Directors' Meetings

Number attended

Number eligible to

attend

Ian Miller 13 14

Ron Hollebone 14 14

Coral Miller 13 14

Brett Kenworthy 12 14

Les Anderson 13 14

Harry Robertson 13 14

Paul Hennessy 13 14

Auditor's Independence Declaration

The lead auditor's independence declaration in accordance with section 307C of the Corporations Act 2001, for the year ended 31 March 2020 has been received and can be found on page 4 of the financial report.

Signed in accordance with a resolution of the Board of Directors:

Director: ............................................................... Director: ...............................................................

Ian Miller Harry Robertson President Vice President/ Treasurer

Dated: 3 June 2020

4

Auditors Independence Declaration under Section 307C of the Corporations Act 2001 to the Directors of Bathurst RSL Club Limited

I declare that, to the best of my knowledge and belief, during the year ended 31 March 2020, there have been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in

relation to the audit; and(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

PKF

CLAYTON HICKEYPARTNER

3 JUNE 2020NEWCASTLE, NSW

PKF(NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

For office locations visit www.pkf.com.au

Sydney

Level 8, 1 O’Connell StreetSydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001

p +61 2 8346 6000 f +61 2 8346 6099

PKF(NS) Audit & Assurance Limited Partnership

ABN 91 850 861 839

Liability limited by a scheme

approved under Professional

Standards Legislation

Newcastle

755 Hunter Street Newcastle West NSW 2302 Australia PO Box 2368 Dangar NSW 2309

p +61 2 4962 2688 f +61 2 4962 3245


ABN: 66 001 031 947

Statement of Cash Flows For the Year Ended 31 March 2020

The accompanying notes form part of these financial statements. 5

Note

2020

$

2019

$

CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers 16,866,211 17,161,608

Payments to suppliers and employees (14,979,458) (15,271,722)

Interest received 40,015 56,369

Interest paid (75,254) (113,250)

Income taxes paid (47,956) -

Net cash provided by/ (used in) operating activities 1,803,558 1,833,005

CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of plant and equipment 101,112 46,920

Purchase of property, plant and equipment (746,076) (629,986)

Purchase of intangible assets - (289,267)

Purchase of financial assets (170,000) -

Net cash used by investing activities (814,964) (872,333)

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 100,000 247,871

Repayment of borrowings (1,043,800) (989,216)

Net cash used by financing activities (943,800) (741,345)

Net increase in cash and cash equivalents held 44,794 219,327

Cash and cash equivalents at beginning of year 1,261,623 1,042,296

Cash and cash equivalents at end of financial year 7 1,306,417 1,261,623


ABN: 66 001 031 947

Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 March 2020


Note

2020

$

2019

$

Revenue 4 15,271,599 15,718,898

Cost of goods sold (2,905,687) (2,821,917)

Employee benefits expense 5 (5,796,148) (5,862,021)

Depreciation and amortisation expense 5 (1,134,954) (1,244,200)

Advertising and promotions (914,404) (927,720)

Poker machine duty (1,686,559) (1,787,574)

Insurance (189,764) (177,815)

Gaming machine expense (218,233) (267,429)

Rates and utilities (508,067) (484,856)

Repairs and maintenance (290,254) (338,060)

Members amenities (229,634) (266,052)

Consulting and professional fees (50,037) (50,160)

Donations and sponsorship (237,196) (275,229)

Other expenses (611,022) (686,807)

Finance costs (75,254) (113,250)

Profit before income tax 424,386 415,808 Income tax benefit / (expense) 6 133,546 (29,733)

Profit for the year 557,932 386,075

Other comprehensive income - -

Total comprehensive income for the year 557,932 386,075


ABN: 66 001 031 947

Statement of Financial Position As At 31 March 2020


Note

2020

$

2019

$

ASSETS CURRENT ASSETS Cash and cash equivalents 7 1,306,417 1,261,623

Trade and other receivables 16,110 88,351

Inventories 8 108,135 141,711

Financial assets 9 2,015,228 2,029,052

Current tax receivable 15 40,451 -

Other assets 28,256 28,757

TOTAL CURRENT ASSETS 3,514,597 3,549,494 NON-CURRENT ASSETS Financial assets 9 170,000 -

Property, plant and equipment 10 4,809,366 5,215,562

Investment property 11 3,907,950 3,907,950

Deferred tax assets 15 595,192 462,012

Intangible assets 12 1,057,036 1,057,036

TOTAL NON-CURRENT ASSETS 10,539,544 10,642,560 TOTAL ASSETS 14,054,141 14,192,054

LIABILITIES CURRENT LIABILITIES Trade and other payables 13 812,693 631,813

Borrowings 16 1,151,233 2,069,216

Current tax liabilities 15 - 5,186

Employee benefits 17 844,878 804,256

Other liabilities 14 133,326 118,056

TOTAL CURRENT LIABILITIES 2,942,130 3,628,527 NON-CURRENT LIABILITIES Borrowings 16 - 25,817

Deferred tax liabilities 15 137,408 140,093

Employee benefits 17 109,975 90,921

TOTAL NON-CURRENT LIABILITIES 247,383 256,831 TOTAL LIABILITIES 3,189,513 3,885,358 NET ASSETS 10,864,628 10,306,696

EQUITY Retained earnings 10,864,628 10,306,696

TOTAL EQUITY 10,864,628 10,306,696


ABN: 66 001 031 947

Statement of Changes in Equity For the Year Ended 31 March 2020


Retained Earnings

$

Total

$

Balance at 1 April 2019 10,306,696 10,306,696 Profit for the year 557,932 557,932

Balance at 31 March 2020 10,864,628 10,864,628

Balance at 1 April 2018 9,920,621 9,920,621

Profit for the year 386,075 386,075

Balance at 31 March 2019 10,306,696 10,306,696


ABN: 66 001 031 947

Notes to the Financial Statements For the Year Ended 31 March 2020

9

The financial report covers Bathurst RSL Club Limited as an individual entity. Bathurst RSL Club Limited is an unlisted, public company limited by guarantee, incorporated in Australia.

Note 1 Basis of Preparation

The financial statements are general purpose financial statements that have been prepared in accordance with the Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001.

Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated.

The financial statements 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.

Note 2 Summary of Significant Accounting Policies

(a) Impact of COVID-19 and temporary Club closure

The Club was forced to temporarily close at 12pm on Monday 23 March 2020 by order of the Federal Government in line with the stage one restrictions of a lockdown to reduce the spread of COVID-19.

Although the Club itself was closed, The Grind coffee shop has remained open for takeaway and the Club is continually reviewing the situation which is changing on a daily basis. The commercial investment property located at 106 Rankin Street was also forced to temporarily close on 23 March 2020.

The Club is currently in the process of assessing and implementing their business continuity plan along with availing any government offered support available to them. Future cash flow forecasts are also being revisited to assess the ability of the Club to sustain future activity and cashflows from normal operations, however management is confident that the Club can adapt to the changing environment as necessary and is confident the going concern basis remains appropriate at 31 March 2020.

(b) Revenue and other income

Revenue from contracts with customers

The core principle of AASB 15 is that revenue is recognised on a basis that reflects the transfer of promised goods or services to customers at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Revenue is recognised by applying a five-step model as follows:

1. Identify the contract with customers

2. Identify the performance obligations

3, Determine the transaction price

4. Allocate the transaction price to the performance obligations

5. Recognise revenue as and when control of the performance obligations is transferred

Gaming Revenue

Gaming machine revenue is recognised on an accrual basis calculated as net of gaming machine collections and payouts, less any costs associated with future jackpot contributions.

Sale of Goods - Beverage and Catering

Revenue is recognised on transfer of goods to the customer as this is deemed to be the point in time where the performance obligations have been met and transfer of control have been completed. Revenue is recognised net of any discounts given to members/patrons.


ABN: 66 001 031 947



(b) Revenue and other income

10

Rental Income

Rental income is recognised on a straight-line basis over a period of the lease term so as to reflect a constant periodic rate of return on the net investment.

Subscriptions

Revenue from the provision of membership subscriptions is recognised on a straight-line basis over the financial year. Promotions

Promotions income is recognised at the point of sale in relation to ticketed events as this corresponds to the transfer of significant risks and rewards of ownership.

(c) Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

(d) Goods and services tax (GST)

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payable are stated inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position.

Cash flows in the statement of cash flows are included 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 ATO is classified as operating cash flows.

(e) Income Tax

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting year. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.


ABN: 66 001 031 947



(e) Income Tax

11

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Non-member income of the association is only assessable for tax, as member income is excluded under the principle of mutuality.

(f) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

(g) Inventories

Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined using the first-in-first-out basis and is net of any rebates and discounts received.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the costs necessary to make the sale. Net realisable value is estimated using the most reliable evidence available at the reporting date and inventory is written down through an obsolescence provision if necessary.

(h) Property, plant and equipment

Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment.

Under the cost model, the asset is carried at its cost less any accumulated depreciation and any impairment losses. Costs include purchase price, other directly attributable costs and the initial estimate of the costs of dismantling and restoring the asset, where applicable.

Land and buildings

Land and buildings are measured on a cost basis less accumulated depreciation and impairment losses for buildings.

Plant and equipment

Plant and equipment are measured on the cost basis less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the asset.

Depreciation

Property, plant and equipment, excluding freehold land, is depreciated on a straight-line basis over the assets useful life to the Company, commencing when the asset is ready for use.

The depreciation rates used for each class of depreciable asset are shown below:

Fixed asset class Depreciation rate

Buildings 20 years

Building improvements 5-15 years

Plant and Equipment 2-5 years

At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.

During the year, the Club has reassessed the useful life of specific items recorded in the Buildings asset category. Certain items previously recorded as Buildings have now been reclassified as Building improvements with effect 1 April 2019 to more accurately reflect their useful life.


ABN: 66 001 031 947



(h) Property, plant and equipment

12

The Club has also re-assessed and increased the useful life of specific items in the Buildings asset category with the effect of 1 April 2019. This has resulted in an overall decrease in the rate of depreciation for these assets during the year to 31 March 2020.

(i) Investment property

Investment property is held to generate long-term rental yields and/or for capital appreciation. All tenant leases are on an arm's length basis. Investment property is carried at fair value determined by the current market values. Changes to fair value are recorded in the statement of profit or loss and other comprehensive income and as other income/expenses.

(j) Trade and other payables

Trade and other payables represent the liability outstanding at the end of the reporting period for foods and services received by the Club during the reporting period which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

(k) Leases

For comparative year

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in the statement of profit or loss and comprehensive income as an integral part of the total lease expense and spread over the lease term.

For current year

At inception of a contract, the Company assesses whether a lease exists - i.e. does the contract convey the right to control the use of an identified asset for a period of time in exchange for consideration.

This involves an assessment of whether:

• The contract involves the use of an identified asset - this may be explicitly or implicitly identified within the agreement. If the supplier has a substantive substitution right then there is no identified asset.

• The Company has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use.

• The Company has the right to direct the use of the asset i.e. decision making rights in relation to changing how and for what purpose the asset is used.

Lessee accounting

The non-lease components included in the lease agreement have been separated and are recognised as an expense as incurred.

At the lease commencement, the Company recognises a right-of-use asset and associated lease liability for the lease term. The lease term includes extension periods where the Company believes it is reasonably certain that the option will be exercised.

The right-of-use asset is measured using the cost model where cost on initial recognition comprises of the lease liability, initial direct costs, prepaid lease payments, estimated cost of removal and restoration less any lease incentives received.


ABN: 66 001 031 947



(k) Leases

13

The right-of-use asset is depreciated over the lease term on a straight line basis and assessed for impairment in accordance with the impairment of assets accounting policy.

The lease liability is initially measured at the present value of the remaining lease payments at the commencement of the lease. The discount rate is the rate implicit in the lease, however where this cannot be readily determined then the Company's incremental borrowing rate is used.

Subsequent to initial recognition, the lease liability is measured at amortised cost using the effective interest rate method. The lease liability is remeasured whether there is a lease modification, change in estimate of the lease term or index upon which the lease payments are based (e.g. CPI) or a change in the Company's assessment of lease term.

Where the lease liability is remeasured, the right-of-use asset is adjusted to reflect the remeasurement or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Exceptions to lease accounting

The Company has elected to apply the exceptions to lease accounting for both short-term leases (i.e. leases with a term of less than or equal to 12 months) and leases of low-value assets. The Company recognises the payments associated with these leases as an expense on a straight-line basis over the lease term.

(l) Financial instruments

Financial instruments are recognised initially on the date that the Company becomes party to the contractual provisions of the instrument.

On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).

Financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Classification

On initial recognition, the Company classifies its financial assets into the following categories, those measured at:

• amortised cost; and

• fair value through profit or loss - FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets.

Amortised cost

Assets measured at amortised cost are financial assets where:

• the business model is to hold assets to collect contractual cash flows; and

• the contractual terms give rise on specified dates to cash flows are solely payments of principal and interest on the principal amount outstanding.

The Company's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the statement of financial position.


ABN: 66 001 031 947




Financial assets

14

Subsequent to initial recognition, these assets are carried at amortised cost using the effective interest rate method less provision for impairment.

Interest income, foreign exchange gains or losses and impairment are recognised in profit or loss. Gain or loss on derecognition is recognised in profit or loss.

Financial assets through profit or loss

All financial assets not classified as measured at amortised cost or fair value through other comprehensive income as described above are measured at FVTPL.

Impairment of financial assets

Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets:

• financial assets measured at amortised cost

When determining whether the credit risk of a financial assets has increased significant since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company's historical experience and informed credit assessment and including forward looking information.

The Company uses the presumption that an asset which is more than 30 days past due has seen a significant increase in credit risk.

The Company uses the presumption that a financial asset is in default when:

• the other party is unlikely to pay its credit obligations to the Company in full, without recourse to the Company to actions such as realising security (if any is held); or

• the financial assets is more than 90 days past due.

Credit losses are measured as the present value of the difference between the cash flows due to the Company in accordance with the contract and the cash flows expected to be received. This is applied using a probability weighted approach.

Trade receivables

Impairment of trade receivables have been determined using the simplified approach in AASB 9 which uses an estimation of lifetime expected credit losses. The Company has determined the probability of non-payment of the receivable and multiplied this by the amount of the expected loss arising from default.

The amount of the impairment is recorded in a separate allowance account with the loss being recognised in finance expense. Once the receivable is determined to be uncollectable then the gross carrying amount is written off against the associated allowance.

Where the Company renegotiates the terms of trade receivables due from certain customers, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in profit or loss.


ABN: 66 001 031 947




Financial assets

15

Other financial assets measured at amortised cost

Impairment of other financial assets measured at amortised cost are determined using the expected credit loss model in AASB 9. On initial recognition of the asset, an estimate of the expected credit losses for the next 12 months is recognised. Where the asset has experienced significant increase in credit risk then the lifetime losses are estimated and recognised.

Financial liabilities

The Company measures all financial liabilities initially at fair value less transaction costs, subsequently financial liabilities are measured at amortised cost using the effective interest rate method.

The financial liabilities of the Company comprise trade payables, bank and other loans and finance lease liabilities.

(m) Impairment of non-financial assets

At the end of each reporting year, the Club reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the asset's carrying value. Value in use is either the discounted cash flows relating to the asset or depreciated replacement cost if the criteria in AASB 136 'Impairment of Assets' are met. Any excess of the asset's carrying value over its recoverable amount is expensed to the statement of profit or loss and other comprehensive income.

Where it is not possible to estimate the recoverable amount of an individual asset, the Club estimates the recoverable amount of the cash generating unit to which the asset belongs.

Where an impairment loss on a revalued asset is identified, this is debited against the revaluation surplus in respect of the same class of asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same class of asset.

(n) Intangible assets - poker machine entitlements

Poker machine entitlements are initially recorded at cost. Poker machine entitlements have indefinite life and are tested annually for impairment and are carried at cost less any accumulated amortisation and impairment losses.

(o) Employee benefits

Provision is made for the Company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled.

Employee benefits expected to be settled more than one year after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cashflows are discounted using market yields on high quality corporate bond rates incorporating bonds rated AAA or AA by credit agencies, with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss.


ABN: 66 001 031 947



16

(p) Adoption of new and revised accounting standards

The Club has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 January 2019.

• AASB 16 Leases; and

• AASB 1058 Income of Not-for-Profit Entities

AASB 16 Leases

In the current year, the Club has applied AASB 16 Leases and the related consequential amendments to other Accounting Standards that are effective for an annual period that begins on or after 1 January 2019.

AASB 16 introduces a single lease accounting model that eliminates the requirements for leases to be classified as operating or finance leases.

AASB 16 will cause the majority of leases of an entity to be brought onto the statement of financial position.

There are limited exceptions relating to short-term leases and low value assets which may remain off-balance sheet. The calculation of the lease liability will take into account appropriate discount rates, assumptions about lease term and increases in lease payments. A corresponding right-of-use asset will be recognised which will be amortised over the term of the lease. Rent expense will no longer be shown, the profit and loss impact of the leases will be through amortisation and interest charges.

The Directors reviewed and assessed that the application of AASB 16 has no material impact on the financial position and/or performance of the Club.

AASB 1058 Income of Not for Profit Entities

In the current year, the Club has applied AASB 1058 Income of Not for Profit Entities which is effective for an annual period that begins on or after 1 January 2019. AASB 1058 supersedes all the income recognition requirements relating to private sector NFP entities, and the majority of income recognition requirements relating to public sector NFP entities, previously AASB 1004 Contribution. The timing of income recognition depends on whether such transaction gives rise to a liability or other performance obligation (a promise to transfer a good or service), or a contribution by owners, related to an asset (such as cash or another asset) received by an entity.

The Club's accounting policies for its revenue streams are disclosed in detail in Note 2(b). Apart from providing more extensive disclosure for the Club's revenue transactions, the application of AASB 1058 has not had a significant impact on the financial position and/or financial performance of the Club.


ABN: 66 001 031 947


17

Note 3 Critical Accounting Estimates and Judgements

The directors make estimates and judgements during the preparation of these financial statements regarding assumptions about current and future events affecting transactions and balances.

These estimates and judgements are based on the best information available at the time of preparing the financial statements, however as additional information is known then the actual results may differ from the estimates.

The significant estimates and judgements made have been described below:

Key estimates - fair value of investment property

On 25 October 2018 the investment properties were independently valued by Global Valuation Services. The valuations were based on the market values and the critical assumptions adopted in determining the valuation included the location of the properties, the current market demand in the area and the recent sales data for similar properties.

The directors have made an assessment at the year end and have concluded the fair values relevant on 25 October 2018 are still appropriate at 31 March 2020. In particular, the directors have reassessed the fair values with consideration for the impact of COVID-19 on local property prices and the rental income derived during the year.

In the absence of further information the directors have determined any impact to be immaterial at 31 March 2020. The directors will continue to re-assess this estimate during the year to 31 March 2021 as the impact of COVID-19 and potential for material impairment becomes clearer.

Key estimates - impairment of intangible assets

The recoverable amount of intangible assets was assessed by reference to the intangibles value in use. Value in use is calculated based on the present value of cash flow projections over a 5 year period, with consideration for COVID-19 and its potential impact on future cash flows. Cash flow projections are based on 6 months expected trading revenue in the year to 31 March 2021 and allow for sufficient headroom.

The cash flows are discounted using a rate of 15%. Management believes that any reasonable possible change in key assumptions on which the recoverable amount is based would not cause the aggregate carrying amount of intangible assets to exceed its recoverable amount. The assumptions used in the discounted cash flow model are tested against a sensitivity model (+/ 5%).

Key estimates - useful life of the Club premises

During the year, the directors have reassessed the useful life of specific items recorded in the Buildings asset category. Certain items previously recorded as Buildings have now been reclassified as Building improvements with effect 1 April 2019 to more accurately reflect their useful life.

The directors have also re-assessed and increased the useful life of specific items in the Buildings asset category with the effect 1 April 2019. This has resulted in an overall decrease in the rate of depreciation for these assets during the year to 31 March 2020. As detailed in Note 24, the Club expects to return to normal operating conditions during the year to 31 March 2021 and will continue to derive economic benefit from the Club premises in the short to medium term.


ABN: 66 001 031 947


18

Note 4 Revenue and Other Income

2020

$

2019

$

Sales revenue - Beverage 1,881,724 1,938,576

- Catering 3,918,345 3,772,306

- Gaming Revenue 8,202,941 8,683,957

- Promotions 390,312 370,119

- TAB and Keno Commissions 197,492 195,672

- Gaming Tax Rebate 17,161 15,730

- Member Subscriptions 95,250 90,046

14,703,225 15,066,406

Other revenue - Interest Received 40,015 56,369

- Rent Received 252,843 287,904

- Insurance Recoveries 13,554 1,198

- Sundry income 211,962 252,021

- Government cash flow boost 50,000 -

- Revaluation of investment property - 55,000

568,374 652,492

Total Revenue 15,271,599 15,718,898

Note 5 Result for the Year

Depreciation Depreciation - buildings 78,493 213,127

Depreciation - building improvements 318,367 355,502

Depreciation - plant and equipment 738,094 736,058

Impairment reversal - plant and equipment - (60,487)

Total depreciation 1,134,954 1,244,200

Employee benefits expense Wages and salaries 4,850,517 4,819,415

Employee leave entitlement movement 64,953 208,283

Payroll tax 239,241 233,550

Amenity benefits 206,606 175,107

Superannuation 434,831 425,666

Total employee benefits 5,796,148 5,862,021


ABN: 66 001 031 947


19

Note 6 Income Tax Expense

(a) The major components of tax expense (income) comprise:

2020

$

2019

$

Current tax expense Current tax 11,269 12,547

Overprovision in respect of prior year (8,950) (428)

Change in tax rate - 28,294

Deferred tax expense/ (benefit) (135,865) (10,680)

Income tax expense/ (benefit) (133,546) 29,733

(b) Reconciliation of income tax to accounting profit: Prima facie tax payable on profit from ordinary activities before income tax at 27.5% (2019: 27.5%) 116,706 114,347

Add:

Tax effect of: - Net income/(loss) and expenditure items relating to member activities (250,252) (102,228)

- Tax effect of temporary differences - (10,680)

- Change in tax rate - 28,294

Income tax expense/ (benefit) (133,546) 29,733

Note 7 Cash and Cash Equivalents

Cash on hand 14,499 293,800

Bank balances 1,291,918 967,823

1,306,417 1,261,623

Note 8 Inventories

CURRENT

At cost: Beverage and catering stock 108,135 141,711

Note 9 Financial assets

CURRENT Financial assets (amortised cost) 2,015,228 2,029,052

NON-CURRENT Financial assets (FVPL) 170,000 -


ABN: 66 001 031 947


20

Note 10 Property, plant and equipment

2020

$

2019

$

LAND AND BUILDINGS

Freehold land At cost 1,862,400 1,862,400

BUILDINGS At cost 1,569,851 1,569,851

Accumulated depreciation (984,053) (905,560)

Total buildings 585,798 664,291

BUILDING IMPROVEMENTS At cost 3,136,741 3,113,819

Accumulated depreciation (1,816,218) (1,497,851)

Total building improvements 1,320,523 1,615,968

PLANT AND EQUIPMENT

Plant and equipment At cost 4,654,288 4,148,548

Accumulated depreciation (3,613,643) (3,075,645)

Total plant and equipment 1,040,645 1,072,903

Total property, plant and equipment 4,809,366 5,215,562

(a) Movements in Carrying Amounts

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year:

Land

$

Buildings

$

Building Improvements

$

Plant and Equipment

$

Total

$

Year ended 31 March 2020 Balance at the beginning of the year 1,862,400 664,291 1,615,968 1,072,903 5,215,562 Additions - - 22,922 723,154 746,076 Disposals - - - (17,318) (17,318) Depreciation - (78,493) (318,367) (738,094) (1,134,954)

Balance at the end of the year 1,862,400 585,798 1,320,523 1,040,645 4,809,366


ABN: 66 001 031 947


21

Note 11 Investment Property

2020

$

2019

$

Balance at beginning of year 3,907,950 3,852,950

Fair value adjustments - 55,000

Balance at end of year 3,907,950 3,907,950

The fair value model is applied to investment properties. Fair value of investment properties is determined on a continuing basis. Values are based on an active liquid market value and were performed by registered independent valuers. A director's valuation is performed in periods where no independent valuers assessment is obtained, with no impairment noted.

The investment properties in Bathurst owned by the Club are listed as follows:

- 241 Russell Street; - 243 Russell Street; - 247 Russell Street; and - 106 Rankin Street.

On 25 October 2018 investment properties were independently valued by Global Valuation Services. The valuation resulted in a revaluation increment of $55,000 being recognised in prior year.

Investment properties have not been subject to independent valuation during the year to 31 March 2020.

Note 12 Intangible Assets

Poker machine entitlements

Cost 1,057,036 1,057,036

Note 13 Trade and other payables

CURRENT Trade payables 511,542 177,376

Other payables 301,151 454,437

812,693 631,813

Note 14 Other liabilities

CURRENT Member subscriptions in advance 125,123 109,963

Other liabilities 8,203 8,093

133,326 118,056


ABN: 66 001 031 947


22

Note 15 Tax

(a) Current tax liabilities

2020

$

2019

$

Income tax (receivable)/ payable (40,451) 5,186

(b) Recognised as deferred tax assets and liabilities Deferred tax assets 595,192 462,012

Deferred tax liabilities (137,408) (140,093)

Note 16 Borrowings

CURRENT Secured liabilities: Finance lease obligation 26,233 39,216

Bank loans 1,125,000 2,030,000 1,151,233 2,069,216

NON-CURRENT Secured liabilities: Finance lease obligation - 25,817

- 25,817

The bank loan facility with the Commonwealth Bank of Australia, and is secured over 114 Rankin Street property which is the main clubhouse of Bathurst RSL Club Limited.

Finance lease liabilities are secured by the underlying leased assets.

As at 31 March 2020 the bank loans are classified as current. This is due to the term of the loan ending on 18 January 2021. The club is in the processes of extending the loan term and have been advised by the Club's financial institution that the bank has no intention of calling in the clubs loan facilities.

Note 17 Provisions

CURRENT Employee entitlements 844,878 804,256

NON-CURRENT Employee entitlements 109,975 90,921


ABN: 66 001 031 947


23

Note 18 Capital and Leasing Commitments

(a) Finance leases

2020

$

2019

$

Minimum lease payments: - between one year and five years 26,233 39,216

- later than 5 years - 25,817

Minimum lease payments 26,233 65,033

(b) Operating leases

Minimum lease payments: - not later than one year - 18,650

- between one year and five years - 27,976

- 46,626

Note 19 Key Management Personnel Disclosures

The total remuneration paid to the key management personnel of Bathurst RSL Club Limited during the year was $301,596 (2019 : $315,716).

Note 20 Fair Value Measurement

The Company measures the following assets and liabilities at fair value on a recurring basis:

• Investment property.

The Club does not subsequently measure any liabilities at fair value on a recurring basis, or any assets or liabilities at fair value on a non-recurring basis.

This note explains the judgements and estimates made in determining the fair values of the non-financial assets that are recognised and measured at fair value in the financial statements.

31 March 2020

Total

$

Recurring fair value measurements Investment property 3,907,950

31 March 2019

Recurring fair value measurements Investment property 3,907,950

Valuation techniques used to determine fair values

The Club obtains independent valuations for its investment properties at least 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. Further details are disclosed in Note 11.


ABN: 66 001 031 947


24

Note 21 Financial Risk Management

The Company‘s financial instruments consist mainly of deposits with banks, short-term and long-term investments, accounts receivable and payable, and lease liabilities.

The carrying amounts for each category of financial instruments, measured in accordance with AASB 9 : Financial Instruments as detailed in the accounting policies to these financial statements, are as follows:

2020

$

2019

$

Financial assets Cash and cash equivalents 1,306,417 1,261,623

Financial assets 2,185,228 2,029,052 Trade and other receivables 16,110 88,351

Total financial assets 3,507,755 3,379,026

Financial liabilities Trade and other payables 812,693 631,813

Borrowings 1,151,233 2,095,033

Total financial liabilities 1,963,926 2,726,846

Objectives, policies and processes

The Board of Directors have overall responsibility for the establishment of Bathurst RSL Club Limited’s financial risk management framework. This includes the development of policies covering specific areas such as interest rate risk and credit risk.

The day-to-day risk management is carried out by Bathurst RSL Club Limited’s finance function under policies and objectives which have been approved by the Board of Directors. The General Manager has been delegated the authority for designing and implementing processes which follow the objectives and policies. This includes monitoring the levels of exposure to interest rate and assessment of market forecasts for interest rate movements.

Note 22 Contingencies

In the opinion of the Directors, the Company did not have any contingencies at 31 March 2020 (31 March 2019: None).

Note 23 Related Parties

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties except for butcher shop sales at cost.


ABN: 66 001 031 947


25

Note 24 Events after the end of the Reporting Period

The financial report was authorised for issue on 3 June 2020 by the Board of Directors.

The Club expects to re-open in the months subsequent to year end in line with the staged lifting of the lockdown restrictions imposed by Federal and State Government.

The Club and commercial investment property located at 106 Rankin Street expect to return to normal operating conditions during the year to 31 March 2021.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Club, the results of those operations or the state of affairs of the Club in future financial years.

Note 25 Statutory Information

The registered office and principal place of business of the company is:


114 Rankin Street

Bathurst NSW 2795


ABN: 66 001 031 947

Directors' Declaration

26

The directors of the Company declare that: 1. The financial statements and notes, as set out on pages 5 - 25, are in accordance with the Corporations Act 2001 and:

a. comply with Accounting Standards - Reduced Disclosure Requirements; and

b. give a true and fair view of the financial position as at 31 March 2020 and of the performance for the year ended on that date of the Company.

2. In the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and

when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Director: .................................................................. Director: ..................................................................

Ian Miller Harry Robertson President Vice President/ Treasurer

Dated: 3 June 2020

27

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF BATHURST RSL CLUB LIMITED

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Bathurst RSL Club Limited (the Club), which comprises the statement of financial position as at 31 March 2020, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

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

(i) giving a true and fair view of the Club's financial position as at 31 March 2020 and of its financial performance for the year ended; and

(ii) complying with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Club in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Club, would be in the same terms if given to the directors as at the time of this auditor's report.

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

Responsibilities of Directors for the Financial Report

The directors of the Club are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the Club’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Club or to cease operations, or have no realistic alternative but to do so.

PKF(NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

For office locations visit www.pkf.com.au

Sydney

Level 8, 1 O’Connell StreetSydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001

p +61 2 8346 6000 f +61 2 8346 6099

PKF(NS) Audit & Assurance Limited Partnership

ABN 91 850 861 839

Liability limited by a scheme

approved under Professional

Standards Legislation

Newcastle

755 Hunter Street Newcastle West NSW 2302 Australia PO Box 2368 Dangar NSW 2309

p +61 2 4962 2688 f +61 2 4962 3245

28

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Club’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Club’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Club to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

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.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

PKF

CLAYTON HICKEYPARTNER

3 JUNE 2020NEWCASTLE, NSW:

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