Victorian Rugby Union Incorporated

Transcription

1 ABN Annual Report - 31 December 2015

2

3 Contents 31 December 2015 Contents Statement of profit or loss and other comprehensive income 3 Statement of financial position 4 Statement of changes in equity 5 Statement of cash flows 6 Notes to the financial statements 7 Officers' declaration 15 Independent auditor's report to the members of Victorian Rugby Union Incorporated 16 General information The financial statements cover Victorian Rugby Union Incorporated as an individual entity. The financial statements are presented in Australian dollars, which is Victorian Rugby Union Incorporated's functional and presentation currency. Victorian Rugby Union Incorporated is a not-for-profit incorporated association. The financial statements were authorised for issue on 8 March

4 Statement of profit or loss and other comprehensive income For the year ended 31 December 2015 Note Revenue 3 1,753,869 1,636,058 Expenses Rugby and competition expenses (332,970) (183,125) Corporate and administration expense (53,349) (46,979) Employee benefits expense (893,843) (1,087,933) Depreciation and amortisation expense 4 (49,885) (64,993) Share service costs (29,621) (175,767) Other expenses (275,218) (243,009) Finance costs 4 (9,817) (8,725) Surplus/(deficit) before income tax expense 109,166 (174,473) Income tax expense - - Surplus/(deficit) after income tax expense for the year attributable to the members of Victorian Rugby Union Incorporated 109,166 (174,473) Other comprehensive income for the year, net of tax - - Total comprehensive income for the year attributable to the members of Victorian Rugby Union Incorporated 109,166 (174,473) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 3

5 Statement of financial position As at 31 December 2015 Note Assets Current assets Cash and cash equivalents 5 68, ,153 Trade and other receivables 6 57, ,090 Other 7 49,426 - Total current assets 175, ,243 Non-current assets Property, plant and equipment 8 63, ,583 Total non-current assets 63, ,583 Total assets 239, ,826 Liabilities Current liabilities Trade and other payables 9 248, ,599 Borrowings 10 44,821 53,715 Employee benefits 11 73,292 56,939 Other 12 52, ,300 Total current liabilities 419, ,553 Non-current liabilities Borrowings 13 53,779 93,669 Employee benefits 14 4,974 25,857 Total non-current liabilities 58, ,526 Total liabilities 478, ,079 Net liabilities (239,087) (348,253) Equity Accumulated deficits (239,087) (348,253) Total deficiency in equity (239,087) (348,253) The above statement of financial position should be read in conjunction with the accompanying notes 4

6 Statement of changes in equity For the year ended 31 December 2015 Accumulated Total deficits deficiency Balance at 1 January 2014 (173,780) (173,780) Deficit after income tax expense for the year (174,473) (174,473) Other comprehensive income for the year, net of tax - - Total comprehensive income for the year (174,473) (174,473) Balance at 31 December 2014 (348,253) (348,253) Accumulated Total deficits deficiency Balance at 1 January 2015 (348,253) (348,253) Surplus after income tax expense for the year 109, ,166 Other comprehensive income for the year, net of tax - - Total comprehensive income for the year 109, ,166 Balance at 31 December 2015 (239,087) (239,087) The above statement of changes in equity should be read in conjunction with the accompanying notes 5

7 Statement of cash flows For the year ended 31 December 2015 Note Cash flows from operating activities Receipts from customers (inclusive of GST) 1,982,511 1,642,362 Payments to suppliers (inclusive of GST) (1,991,595) (1,513,724) (9,084) 128,638 Interest received 217 1,311 Interest and other finance costs paid (9,817) (8,725) Net cash from/(used in) operating activities (18,684) 121,224 Cash flows from investing activities Payments for property, plant and equipment - (86,395) Proceeds from disposal of property, plant and equipment 4,546 4,000 Net cash from/(used in) investing activities 4,546 (82,395) Cash flows from financing activities Proceeds from borrowings - 86,395 Repayment of borrowings (48,784) (48,677) Net cash from/(used in) financing activities (48,784) 37,718 Net increase/(decrease) in cash and cash equivalents (62,922) 76,547 Cash and cash equivalents at the beginning of the financial year 131,153 54,606 Cash and cash equivalents at the end of the financial year 5 68, ,153 The above statement of cash flows should be read in conjunction with the accompanying notes 6

8 Notes to the financial statements 31 December 2015 Note 1. Significant accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. New, revised or amending Accounting Standards and Interpretations adopted The incorporated association has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Going concern The financial report of the Victorian Rugby Union Inc ( VRU ) has been prepared on a going concern basis, which assumes continuity of normal business activities, and the realisation of assets and settlement of liabilities in the ordinary course of business. For the year ended 31 December 2015, the VRU made a net profit of $109,166 (31 December 2014: loss $174,473). At year end, the VRU had a negative working capital, being current liabilities less current assets, of $243,816 (31 December 2014: net current liabilities of $351,310), and total company liabilities exceeded total company assets by $239,087 at 31 December 2015 (31 December 2014: net liabilities of $348,253). Notwithstanding the deficiency of total net assets, the financial report has been prepared on a going concern basis for the following reasons :- An agreement has been reached whereby the Australian Rugby Union will provide a grant of up to $125,000 (exc. GST) to the VRU, matching funds raised by the VRU from additional designated fund raising activities; Since year end, $55,700 has been raised by the VRU and expenses totalling $50,993 have been paid by the Australian Rugby Union on behalf of the VRU; Effective 1 January 2016, the Australian Rugby Union will employ directly one of the VRU s staff members, who is responsible for running the Elite Pathways program, thus reducing VRU salaries and oncosts. In the event that the matters detailed above cease, there is material uncertainty whether the association will continue as a going concern and therefore whether it will realise assets and discharge liabilities that might necessarily be incurred should the association not continue as a going concern. Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and Interpretations issued by the Australian Accounting Standards Board ('AASB'), Victorian legislation the Associations Incorporation Reform Act 2012 and associated regulations, as appropriate for not-for profit oriented entities. Historical cost convention The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss, investment properties, certain classes of property, plant and equipment and derivative financial instruments. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the incorporated association's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2. Revenue recognition Revenue is recognised when it is probable that the economic benefit will flow to the incorporated association and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. Sale of goods and services Revenue from sales of goods and services is recognised upon delivery of the goods and services to the customer. 7

9 Notes to the financial statements 31 December 2015 Note 1. Significant accounting policies (continued) Grant revenue Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to costs that they are compensating. Grants relating to assets are credited to deferred income at fair value and credited to income over the expected useful life of the assets on a straight line basis. Interest Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate. Other revenue Other revenue is recognised when it is received or when the right to receive payment is established. Income tax As the incorporated association is a charitable institution in terms of subsection 50-5 of the Income Tax Assessment Act 1997, as amended, it is exempt from paying income tax. Current and non-current classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as noncurrent. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Trade and other receivables Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the incorporated association will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. Other receivables are recognised at amortised cost, less any provision for impairment. Property, plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. 8

10 Notes to the financial statements 31 December 2015 Note 1. Significant accounting policies (continued) Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows: Leasehold improvements Motor vehicles at cost Motor vehicles under lease Office equipment 5-10 years 3 years 4 years 3-5 years The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter. An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the incorporated association. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits. Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits. Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower, the present value of minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability. Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the incorporated association will obtain ownership at the end of the lease term. Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line basis over the term of the lease. Trade and other payables These amounts represent liabilities for goods and services provided to the incorporated association prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. Borrowings Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the loans or borrowings are classified as non-current. Employee benefits Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. 9

11 Notes to the financial statements 31 December 2015 Note 1. Significant accounting policies (continued) Other long-term employee benefits The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Goods and Services Tax ('GST') and other similar taxes Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. Note 2. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Provision for impairment of receivables The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection rates and specific knowledge of the individual debtors financial position. Estimation of useful lives of assets The incorporated association determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Employee benefits provision As discussed in note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account. No control of entities where more than half of voting rights held In the previous year it was noted that VRU did not control Melbourne Rebels Rugby Union Ltd. (Melbourne Rebels), as VRU sold its interest in Melbourne Rebels (see Note 15), this matter of control does not now apply. 10

12 Notes to the financial statements 31 December 2015 Note 3. Revenue Sales revenue Sales of goods and services 1,468,272 1,349,018 Government grants 233, ,464 1,701,672 1,613,482 Other revenue Interest 217 1,311 Other revenue 51,980 21,265 52,197 22,576 Revenue 1,753,869 1,636,058 Note 4. Expenses Surplus/(deficit) before income tax includes the following specific expenses: Net loss on disposal Net loss on disposal of property, plant and equipment 4,670 8,351 Remuneration of auditor For audit of the financial report 6,700 7,220 Note 5. Current assets - cash and cash equivalents Cash at bank 68, ,153 Note 6. Current assets - trade and other receivables Trade receivables 61, ,876 Less: Provision for impairment of receivables (4,000) (7,000) 57, ,876 Other receivables ,214 Note 7. Current assets - other 57, ,090 Prepayments 49,426-11

13 Notes to the financial statements 31 December 2015 Note 8. Non-current assets - property, plant and equipment Leasehold improvements - at cost 3,472 3,472 Less: Accumulated depreciation (2,157) (1,810) 1,315 1,662 Motor vehicles - at cost 66, ,313 Less: Accumulated depreciation (47,472) (52,762) 19,490 55,551 Motor vehicles under lease 86,395 86,395 Less: Accumulated depreciation (43,718) (22,119) 42,677 64,276 Office equipment - at cost 13,280 13,280 Less: Accumulated depreciation (13,280) (12,186) - 1,094 63, ,583 Reconciliations Reconciliations of the written down values at the beginning and end of the current financial year are set out below: Motor vehicles Motor vehicles Leasehold Office Improvement s at cost under lease equipment Total $ Balance at 1 January ,662 55,551 64,276 1, ,583 Disposals - (9,216) - - (9,216) Depreciation expense (347) (26,845) (21,599) (1,094) (49,885) Balance at 31 December ,315 19,490 42,677-63,482 Note 9. Current liabilities - trade and other payables Trade payables 142, ,741 Other payables 105, ,858 Note 10. Current liabilities - borrowings 248, ,599 Chattel mortgage 30,657 40,526 Lease liability 14,164 13,189 44,821 53,715 12

14 Notes to the financial statements 31 December 2015 Note 11. Current liabilities - employee benefits Employee benefits 73,292 56,939 Note 12. Current liabilities - other Deferred revenue 52, ,300 Note 13. Non-current liabilities - borrowings Chattel mortgage 7,819 33,545 Lease liability 45,960 60,124 Total secured liabilities The total secured liabilities (current and non-current) are as follows: 53,779 93,669 Lease liability 60,124 73,313 Assets pledged as security The lease liabilities are effectively secured as the rights to the leased assets, recognised in the statement of financial position, revert to the lessor in the event of default. Note 14. Non-current liabilities - employee benefits Employee benefits 4,974 25,857 Note 15. Related party transactions On 1 July 2015 VRU sold the Melbourne Rebels Rugby Union Ltd. At that date all amounts owing and receivable were settled and the related party relationship ceased. 13

15 Notes to the financial statements 31 December 2015 Note 15. Related party transactions (continued) Transactions with related parties The following transactions occurred with related parties: Sale of goods and services: Sale of goods and services to Melbourne Rebels * 80,955 97,353 Payment for goods and services: Purchase of goods and services from Melbourne Rebels * 29, ,183 * Current year figures cover the period up to 1 July 2015 when the Melbourne Rebels Rugby Union Ltd ceased to be related party. Receivable from and payable to related parties The following balances are outstanding at the reporting date in relation to transactions with related parties: Current receivables: Trade and other receivables from Melbourne Rebels - 185,942 Current payables: Trade and other payables to Melbourne Rebels - 233,007 Loans to/from related parties There were no loans to or from related parties at the current and previous reporting date. Terms and conditions All transactions were made on normal commercial terms and conditions and at market rates. Note 16. Events after the reporting period No matter or circumstance has arisen since 31 December 2015 that has significantly affected, or may significantly affect the incorporated association's operations, the results of those operations, or the incorporated association's state of affairs in future financial years. 14

16

17 INDEPENDENT AUDIT REPORT TO THE MEMBERS OF THE VICTORIAN RUGBY UNION INC. Report on the Financial Report We have audited the accompanying financial report of Victorian Rugby Union Inc. (the association), which comprises the statement of financial position as at 31 December 2015, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the officers declaration. Officers Responsibility for the Financial Report The officers of the association 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 Associations Incorporation Reform Act 2012 and is appropriate to meet the needs of the members. The officers responsibility also includes such internal control as the officers determine is necessary to enable the preparation of a financial report that is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We have conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the association s preparation of the financial report that gives a true and fair view 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 association s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the officers, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion the financial report of Victorian Rugby Union Inc. is in accordance with the requirements of the Associations Incorporation Reform Act 2012, including: a) giving a true and fair view of the association s financial position as at 31 December 2015 and of its financial performance and cash flows for the year ended on that date; and

18 b) complying with Australian Accounting Standards- Reduced Disclosure Requirements. Emphasis of Matter Regarding Going Concern Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicates that the association made a net profit of $109,166 for the year ended 31 December As of that date however, the association s current liabilities exceeded its current assets by $243,816 and negative cash flow from operations of $18,684 were incurred during the year ended 31 December These conditions, along with other matters set forth in Note 1, indicate the existence of a material uncertainty which may cast significant doubt on the association s ability to continue as a going concern and therefore, the association may be unable to realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the financial report. Yours faithfully JOHN WHELLER Registered Company Auditor Registration: 9003 Dated: 10 March 2016