Melbourne Vicentre Swimming Club Inc. Reg no. A X

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1 Melbourne Vicentre Swimming Club Inc. Reg no. A X Financial Statements For the Year Ended 30 June 2018

2 Melbounre Vicentre Swimming Club Inc.. Contents For the Year Ended 30 June 2018 Director s Report... 3 Statement of Profit or Loss and Other Comprehensive Income... 4 Statement of Financial Position... 5 Statement of Cash Flows... 6 Notes to the Financial Statements... 7 Directors' Declaration Independent Audit Report to the members of Melbourne Vicentre Inc

4 Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June Income Membership and Squad income 597, ,371 Learn to Swim income 536, ,661 Swimming Australia Funding 158, ,320 Fundraising 68,547 90,785 Merchandise 11,063 20,791 Other 106,638 67,083 Investment income 688 3,423 Cost of sales and uniforms (13,875) (27,411) Net income 1,464,620 1,374,023 Expenditure Salaries and Wages 974, ,532 Pool hire 233, ,698 Coaching and staff development 112,764 23,600 Swimmer development 178, ,645 Compliance 6,107 5,845 Depreciation 6,538 9,156 Doubtful debts 0 96 Bank fees 12,968 14,325 Accounting and legal 12,996 6,105 Administration and other 32,579 30,267 Total expenditure 1,570,919 1,429,269 Loss for the year (106,299) (55,246) 4

5 Statement of Financial Position As at 30 June Notes $ $ Assets Current Cash and cash equivalents 3 52, ,828 Trade and other receivables 4 11,746 31,642 Inventory 18,263 29,498 Prepayments 5,075 10,933 Total current assets 87, ,901 Non-current assets Property, plant and equipment 5 7,378 8,244 Total non-current assets 7,378 8,244 Total assets 95, ,145 Liabilities Current liabilities Trade and other payables 86,821 77,725 Income received in advance 6 6,497 11,044 Accured liabilities 11,319 11,319 Employee benefits 7 93, ,370 Total current liabilities 197, ,458 Non-current liabilities Employee benefits 7 2,773 4,959 Total non-current liabilities 2,773 4,959 Total liabilities 200, ,417 Net assets (105,571) 728 Equity Equity- reserves ,974 Loss for the period (106,299) (55,246) Total equity (105,571) 728 5

6 Statement of Cash Flows For the Year Ended 30 June Note $ $ Cash flows from Operating Activities Receipts from customers (inclusive GST) 1,493,157 1,346,984 Payments to suppliers and employees (inclusive GST) (1,563,442) (1,545,968) Interest received 688 3,423 Interest expense - - Net cash/ (used in) operating activities (69,597) (195,561) Cash flows from investing activities Withdrawal from term deposits - 264,189 Purchase of property, plant and equipment (5,672) (1,835) Net cash from/ (used in) operating activities (5,672) 262,354 Net increase/(decrease) in cash and cash equivalents held (75,269) 66,793 Cash and cash equivalents at beginning of year 127,828 61,035 Cash and cash equivalents at end of financial year 3 52, ,828 6

7 Notes to the Financial Statements For the Year Ended 30 June 2018 The financial report covers Melbourne Vicentre Swimming Club Inc as an individual entity. Melbourne Vicentre Swimming Club Inc. is a not-for-profit Company limited by guarantee, incorporated and domiciled in Australia. The functional and presentation currency of is Australian dollars. The financial report was authorised for issue by the Directors on 24 January Comparatives are consistent with prior years, unless otherwise stated. Amounts in the financial statements have been rounded to the nearest dollar. 1 Basis of Preparation The financial statements are special purpose financial statements prepared in order to satisfy the financial reporting requirements of the Associations Incorporation Reform Act The Board has determined that the association is not a reporting entity. The financial statements have been prepared on an accruals basis and are based on historical costs and does not take into account changing money values except where specifically stated. Significant accounting policies adopted in the preparation of these financial statements are presented below and are consistent with prior reporting periods unless otherwise stated. 2 Summary of Significant Accounting Policies (a) Revenue and other income Revenue is measured at the fair value of the consideration received or receivable and is presented net of returns, discounts and rebates. For this purpose, deferred consideration is not discounted to present values when recognising revenue. Interest revenue is recognised on a cash basis. All revenue is stated net of the amount of goods and services tax (GST). (b) Income Tax The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to 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 date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets relating to temporary timing 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. 7

8 2. Summary of Significant Accounting Policies (continued)2 (c) Cash and cash equivalents Cash and cash equivalents comprises cash on hand, demand deposits 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. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash in hand, bank deposits and term deposits with terms of up to three months. (d) 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. (e) Property, plant and equipment Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment of losses. Items of property, plant and equipment acquired for nil or nominal consideration have been recorded at the acquisition date fair value. Where the cost model is used, 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. (f) Provisions Provision are recognised when the association has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that the outflow can be reliably measured. Provisions are measured at the best estimate of the amounts required to settle the obligation at the end of the reporting period. (g) Good 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. In prior year the amount recoverable from (asset) or payable to the ATO (liability) was reported separately. 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 taxation authority is classified as operating cash flows. (h) 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 a 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 equivalents 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 a 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 non-current. 8

9 2. Summary of Significant Accounting Policies (continued) (i) Going concern The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business. As disclosed in the financial statements, the association incurred a loss of $106,299 and had net cash outflows from operating activities of $69,597 for the year ended 30 June As at that date the association had net current liabilities of $110,176 and net non-current assets of $4,605. The Directors believe that it is reasonably foreseeable that the association will continue as a going concern and that it is appropriate to adopt the going concern basis in the preparation of the financial report. However, the Board have taken short term action to reduce expenditure and initiated significant structural changes and a review of the operating model of the Club to reach that position. Specifically the Board, taking into account the structural changes, is of the view that the Club can be cash flow positive for the next financial year. A summary of the changes and initiatives includes a agreement for Korowa Girls school and Melbourne Sports and Acquatic centre to reduce rent with an effective date of I July Additionally the Club reached agreement with Swimming Australia to employ, at its cost, Mr Craig Jackson for the High Performace squad at MSAC. Finally, the Club has reached agreement for MSAC to assume responsibility for the delivering the squad training program. These structural reforms will allow the club to operate with little overhead costs, be run by volunteers and exist for the purpose of competition and social activities with club members. 9

10 3 Cash and Cash Equivalents $ $ Cheque accounts 14,426 6,655 Online savings accounts 36, ,886 Other cash and cash equivalents 1,578 1,288 Total cash and cash equivalents 52, ,828 4 Trade and Other Receivables Trade receivables 11,746 31,642 Provision for impairment - - Total current trade and other receivables 11,746 31,642 5 Property, plant and equipment Office equipment At cost 38,997 33,325 Accumulated depreciation (34,041) (28,310) Total office equipment 4,956 5,015 Gym equipment At cost 32,777 32,777 Accumulated depreciation (30,355) (29,549) Total office equipment 2,423 3,229 Total property, plant and equipment 7,378 8,244 6 Income received in advance The amount recognised as a liability in the Statement of financial position will be recognised as income when the services have been provided. Income received in advance 6,497 11,044 Total income received in advance 6,497 11,044 10

11 7 Employee Benefits $ $ Current Annual leave provision 37,601 42,248 Long service leave provision 55,581 60,122 Total current provision 93, ,370 Non-current Long service leave provision 2,773 4,959 Total non-current provision 2,773 4,959 8 Cash Flow Information Reconciliation of Cash flow from Operations with profit / (loss) after income tax Loss for the year (106,299) (55,246) Non cash flows in loss for the year Depreciation 6,538 9,156 Doubtful debts 0 (1,560) Changes in assets and liabilities (Increase)/ decrease in trade and other receivables 19,896 (20,671) (Increase)/ decrease in inventories 11,235 16,745 (Increase)/ decrease in prepayments 5,859 (2,121) Increase/ (decrease) in trade and other payables 9,096 (64,848) Increase/ (decrease) in employee entitlements (11,374) (8,020) Increase/ (decrease) in income received in advance (4,547) (28,796) Increase/ (decrease) in other liabilities 0 (40,200) Net cash used in operating activities (69,597) (195,562) 9 Contingencies A previous employee of the entity lodged a general protections involving dismissal application at the Fair Work Commission on 29 May 2018 and filed with Federal Court of Australia on 29 October The application sought payment of unspecified compensation for losses. In addition to this, the employee has sought "in excess of $200,000" on account of an alleged underpayment. The matter was not resolved as at the approval date of the financial statements. The directors are of the opinion that the claim can be successfully resisted by the entity. On the basis of the evidence available when the financial statements were approved, there is no obligation as a result of a past event. Therefore, no provision is recognised in the financial statements. The matter is disclosed as a contingent liability (30 June 17: Nil). 10 Related Parties During the year the Company did not enter into any related party transactions. 11

12 11 Commitments $ $ Lease commitments- operating Committed at the reporting date but not recognised as liabilities, payables: Within one year 58,750 55,875 One to five years - - Total commitments 58,750 55,875 Operating lease commitments include contracted amounts for pool hires under operating leases expiring within one to two years (with, in some cases, options to extend). On renewal, the terms of the leases are renegotiated. 12 Events after the end of the Reporting Period MVSC currently use Korowa Girl s School s pool to carry out various squad club swimming programs and operation of a commercial learn to swim program The school announced a decision to redevelop the pool and it will be demolished in approximately April The club has been unable to source an alternative venue. The Club has reached agreement to cease operating a training squad structure at MSAC, however MSAC itself will commence to operate a new squad structure from Jan A previous employee of the entity lodged a general protections involving dismissal application at the Fair Work Commission on 29 May 2018 and filed with Federal Court of Australia on 29 October The application sought payment of unspecified compensation for losses. In addition to this, the employee has sought "in excess of $200,000" on account of an alleged underpayment. The matter was not resolved as at the approval date of the financial statements. The directors are of the opinion that the claim can be successfully resisted by the entity. On the basis of the evidence available when the financial statements were approved, there is no obligation as a result of a past event. Therefore, no provision is recognised in the financial statements. The matter is disclosed as a contingent liability. 12

14 RSM Australia Pty Ltd Level 21, 55 Collins Street Melbourne VIC 3000 PO Box 248 Collins Street West VIC 8007 T +61 (0) F +61 (0) INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF MELBOURNE VICENTRE SWIMMING CLUB INC. Disclaimer Opinion We have audited the financial report of Melbourne Vicentre Swimming Club Inc (the Association), which comprises the statement of financial position as at 30 June 2018, the statement of comprehensive income 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 and the members assertion statement. We do not express an opinion on the accompanying financial report of the association. Because of the significance of the matter described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on this financial report. Basis for Disclaimer Opinion As discussed in Note 1 and Note 12, the Korowa Girl s High School Pool will be shut down and demolished in April 2019, which will deteriorate the membership fees and school program fees. The Association has been unable to conclude re-negotiations at the date of this report. This situation casts significant doubt on the Association's ability to continue as a going concern. The financial report has been prepared on going concern basis. As a result of these matters, we are unable to determine the appropriateness of the going concern assumption in the Association s financial report. Responsibilities of Management and Those Charged with Governance for the Financial Report Management is responsible for the preparation and fair presentation of the financial report in accordance with the financial reporting requirements of the applicable legislation and for such internal control as management determines is necessary to enable the preparation and fair presentation of a financial report that is free from material misstatement, whether due to fraud or error. In preparing the financial report, management is responsible for assessing the Association s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless management either intends to liquidate the Association or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Association s financial reporting process. Auditor's Responsibilities for the Audit of the Financial Report Our responsibility is to conduct an audit of the financial report in accordance with Australian Auditing Standards and to issue an auditor's report. However, because of the matter described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial report. THE POWER OF BEING UNDERSTOOD AUDIT TAX CONSULTING 14 RSM Australia Pty Ltd is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each memb er of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Pty Ltd ACN aft Birdanco Practice Trust ABN trading as RSM Liability limited by a scheme approved under Professional Standards Legislation

15 We are independent of the Group in accordance with 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. RSM AUSTRALIA PTY LTD KRISTIE DUNDON Partner Dated: 24 January 2018 Melbourne, Victoria 15

Aumake Australia Pty Limited

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