Newcastle University Sport ACN Annual Financial Report

Transcription

1 Annual Financial Report for the Financial Year Ended 31 December

2 Annual Financial Report for the Financial Year Ended 31 December Financial Statements Directors' Report 1 Auditor's Independence Declaration 5 Independent Auditor's Report 6 Directors' Declaration 8 Statement of Profit or Loss and Other Comprehensive Income 9 Statement of Financial Position 10 Statement of Changes in Equity 11 Statement of Cash Flows 12 Notes to the Financial Statements 13 Page

3 Directors' Report 31 December Your directors present their report on Newcastle University Sport (NUsport) for the financial year ended 31 December. 1. General Information Directors The names of the directors in office at any time during, or since the end of the year are listed below. The number of directors' meetings held in the year and the number of meetings attended by each director while holding office in the Company during the year are also listed below: Names Appointed/Resigned Board Meeting Attendance Ms Judith Alexander 7/7 Mr Tim Osborn 7/7 Prof Steven Fityus Mr Alex Hambly Mr Nat McGregor Mr Taylor Johnson Mr Joshua Manvell Ms Gabriella Sainsbury Prof Liz Burd Ms Dianne Allen Mr Derek Kinchela Resigned 21 September Appointed 11 May Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. 7/7 5/7 3/5 6/7 5/7 5/7 5/7 6/7 3/5 Principal activities The principal activity of Newcastle University Sport during the financial year was the provision of sporting and recreational facilities and services. No significant changes in the nature of the Company's activity occurred during the financial year. 2. Business review Operating results The profit of the Company after providing for income tax amounted to 190,779 (: (85,969)). Dividends paid or declared No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made as the Company's constitution precludes the payment of dividends. 1

4 Directors' Report 31 December 2. Business review Information on Directors The particulars of the qualifications, experience and special responsibilities of each Director in office during the year: Ms Judith Alexander (Chair) Bachelor of Mathematics (Newcastle); Graduate Diploma of Medical Statistics (Newcastle); Master of Mathematics (Newcastle); Associate Director, Research Development and Innovation, The University of Newcastle; Represented University of Newcastle in Hockey, Basketball, Cricket, Baseball and Softball. Mr Tim Osborn (Deputy Chair) Bachelor of Laws (Newcastle); Bachelor of Business (Newcastle); Admitted to practice as a legal practitioner in the Supreme Court of NSW and in the High Court of Australia; Member of the Newcastle Law Society; Member of the NSW Law Society; Managing Director of Osborn Law. Director of the Nat Cook Live Out Loud Foundation. Professor Stephen Fityus Bachelor of Engineering (Hons) (Newcastle); B.Sc., PhD (Newcastle); Professor in Geotechnical Engineering in the School of Engineering; Life Member of Newcastle University Sport; Former Head of Discipline of Civil, Surveying & Environmental Engineering at The University of Newcastle ( ); Principal Researcher in the Priority Research Centre for Geotechnical & Materials Modelling; Former elected member and Vice-President of Academic Senate (representing the School of Engineering); Former Chairman of the Newcastle Chapter of the Australian Geomechanics Society ( ) and National Treasurer of the Australian Geomechanics Society (-); Assistant Dean (Research), Faculty of Engineering & Built Environment (2014-); Member Catholic Schools Committee, Maitland- Newcastle Diocese (2014-). Mr Alex Hambly Currently completing a Bachelor of Business degree (Newcastle); President of the University of Newcastle Water Polo & Swimming Club 2013, 2014; Secretary of the University of Newcastle Men s Hockey Club Mr Nat McGregor Appointed as the University of Newcastle's Chief Operating Officer in May 2013; Responsible for the Resources Division, leading the development and implementation of the Campus, Capital and IT Plan and Finance Plan as part of the University's Strategic Plan; Experience in the tertiary education sector for 16 years; Formerly Commercial Manager/Finance Manager, Director of Risk and Commercial Services and Acting Deputy Vice Chancellor (Services) for the University prior to appointment of Chief Operating Officer; Formerly Chief Executive Officer for UoN Services, a controlled entity of the University and has extensive private sector experience in senior financial and commercial management positions; Graduate Member of the Australian Institute of Company Directors; Fellow of the Australia & New Zealand Institute of Insurance & Finance; Qualified CPA; B Commerce (Newcastle, NSW); MBA (Deakin); Currently serves as an Alternate Director for Hunter Medical Research Institute; Previously served as Audit Committee Chair for Newcastle City Council and on the Board of Australian University Procurement Consortium. Mr Taylor Johnson Currently completing a combined Bachelor of Engineering (Honours) (Computer) / Bachelor of Computer Science (Newcastle); Treasurer of the Newcastle University Diving & Exploration Society (NUDES)

5 Directors' Report 31 December 2. Business review Information on Directors (cont'd) Mr Joshua Manvell Currently studying Bachelor of Medicine, University of Newcastle; 2011 Bachelor of Physiotherapy (HONS I, University Medal), University of Newcastle; Physiotherapist, NU Moves Physiotherapy, Newcastle; Casual Lecturer, University of Newcastle; Physiotherapist, NSW Men's Hockey and University of Newcastle Rugby Club; Former Vice-President, NSW Branch, Australian Physiotherapy Association (APA); Past President, National Student Group, Australian Physiotherapy Association; current Australian Medical Students Association member; Musculoskeletal Physiotherapy Australian member; Sports Physiotherapy Australian member; Regional Representative, Newcastle Cricket, Soccer, Baseball and Men's Softball Teams. Ms Gabriella Sainsbury (Company Secretary) Bachelor of Commerce (Newcastle); Bachelor of Laws (Newcastle); Admitted to practice as a legal practitioner in the Supreme Court of NSW and High Court of Australia; Graduate of the Australian Institute of Company Directors; Currently undertaking a Masters in Applied Law (Commercial Transactions); Blue (The University of Newcastle); Colour (The University of Newcastle); Vice President University of Newcastle Sports Laureates Association Present and Secretary 2013; President of Newcastle University Water Polo Club ; Australian University Games Green & Gold Team 2010, 2011, 2012 & 2013; University of Newcastle Australian University Games Captain 2012 & Professor Liz Burd Bachelor of Education (Hons) (Worcester College of Higher Education); Master of Science Human Computer Interaction (University of York); D.Phil. Risk Management (University of York); Ph.D. Software Maintenance (University of Durham). Professor Burd joined the University of Newcastle in 2013 as Pro Vice-Chancellor (Learning and Teaching). With an international reputation in the field of education, Professor Burd is particularly recognised for her pioneering research into Technology Enhanced Learning. Professor Burd has chaired a number of high profile international committees including that of Vice President of Educational Activities for the IEEE Computer Society. She has received 5 University awards for Enhancing the Learning and Teaching experience, 2 awards from the Higher Education Academy Information and Computer Sciences Subject Network, a National Teaching Fellowship and an international teaching award from the Institute of Electrical and Electronic Engineers, and has received three nominations for THE Awards. Professor Burd holds memberships with the Fellow Higher Education Academy, is a Senior member of the IEEE and IEEE Computer Society, and Member of the American Educational Research Association, and holds research collaborations with IBM, Microsoft, British Telecommunication, BAe and Logica. Ms Dianne Allen Bachelor of Commerce (Newcastle); Fellow of the Institute of Chartered Accountants Australia & New Zealand; Graduate of the Australian Institute of Company Directors; Registered Tax Agent; Deputy Chancellor of the University of Newcastle; Former principal of Dianne Allen Chartered Accountants; Board member of Castle Personnel Services Ltd; Former director of UON Services Ltd, University of Newcastle Union Ltd, St John of God Family Services Ltd and Mercy Community Services Ltd. Mr Derek Kinchela Bachelor of Education (Griffith); Masters of Education (Newcastle); Indigenous Student Engagement Officer, The University of Newcastle. Active participant in sport, health and recreation at the University of Newcastle and coordinator of the University's team at the annual National Tertiary Indigenous Games. 3

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7 Auditor's Independence Declaration to the Directors of Newcastle University Sport I declare that, to the best of my knowledge and belief, during the year ended 31 December, there have been: (i) (ii) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. PKF Chartered Accountants MARTIN MATTHEWS Partner Dated: 27 March 2017 Newcastle, NSW 2300 PKF(NS) Audit & Assurance Limited Partnership ABN Liability limited by a scheme approved under Professional Standards Legislation Sydney Level 8, 1 O Connell Street Sydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001 p f Newcastle 755 Hunter Street Newcastle West NSW 2302 Australia PO Box 2368 Dangar NSW 2309 p f 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 5

8 Independent Auditor's Report to the Members of Newcastle University Sport Report on the Audit of the Financial Report Opinion We have audited the financial report of Newcastle University Sport, which comprises the statement of financial position as at 31 December, the statement of profit or loss and other 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 directors' declaration. In our opinion the financial report of Newcastle University Sport has been prepared in accordance with Division 60 of the Australian Charities and Not-for-Profits Commission (ACNC) Act 2012, including: (a) giving a true and fair view of Newcastle University Sport's financial position as at 31 December and of its financial performance for the year ended on that date; and (b) complying with Australian Accounting Standards and International Financial Reporting Standards to the extent described in Note 1 and Division 60 of the Australian Charities and Not-for-profits Commission Regulation 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 Company in accordance with the auditor independence requirements of the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act) 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Directors' Responsibility for the Financial Report The directors of the Company are responsible for the preparation and fair presentation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the ACNC Act, 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 Company'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 director's either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company's financial reporting process. PKF(NS) Audit & Assurance Limited Partnership ABN Liability limited by a scheme approved under Professional Standards Legislation Sydney Level 8, 1 O Connell Street Sydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001 p f Newcastle 755 Hunter Street Newcastle West NSW 2302 Australia PO Box 2368 Dangar NSW 2309 p f 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 6

9 Independent Auditor's Report to the Members of Newcastle University Sport Auditor s Responsibility 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 Company's internal control.! Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Company.! Conclude on the appropriateness of the Company s 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 Company 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 Company 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 those charged with governance 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. PKF Chartered Accountants MARTIN MATTHEWS Partner Newcastle, NSW 2300 Dated: 27 March

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11 Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 December Revenue 2 6,347,654 6,068,772 Employee benefits expense 2 (3,766,623) (3,735,442) Depreciation and amortisation expense 2 (711,532) (816,550) Forum venues and facilities running expense 2 (818,557) (734,992) Raw materials and consumables used (82,672) (90,780) Finance costs and merchant fees 2 (177,550) (193,412) Advertising expense (103,005) (107,735) Representative team and affiliated club expense (113,797) (102,815) Other expenses (383,139) (373,015) Profit/(loss) before income tax 190,779 (85,969) Income tax expense 1(h) - - Profit/(loss) after income tax 190,779 (85,969) Note Other comprehensive income - - Total comprehensive income/(loss) 190,779 (85,969) The accompanying notes form part of these financial statements. 9

12 Statement of Financial Position As At 31 December Note ASSETS CURRENT ASSETS Cash and cash equivalents 18(a) 1,278, ,669 Trade and other receivables 5 116, ,103 Inventories 6 113,665 78,784 Other assets 7 85,561 56,424 TOTAL CURRENT ASSETS 1,594,774 1,014,980 NON-CURRENT ASSETS Property, plant and equipment 8 11,118,557 11,662,486 TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES 11,118,557 11,662,486 12,713,331 12,677,466 Trade and other payables 9 775, ,431 Borrowings , ,587 Provisions , ,906 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES 1,157,093 1,146,924 Borrowings , ,493 Provisions 11 53,702 45,856 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS 524, ,349 1,681,359 1,836,273 11,031,972 10,841,193 EQUITY Retained earnings 12 11,031,972 10,841,193 TOTAL EQUITY 11,031,972 10,841,193 The accompanying notes form part of these financial statements. 10

13 Statement of Changes in Equity For the Year Ended 31 December Ordinary Shares Retained Earnings Total Balance at 1 January - 10,841,193 10,841,193 Profit for the year - 190, ,779 Balance at 31 December - 11,031,972 11,031,972 Ordinary Shares Retained Earnings Total Balance at 1 January - 10,927,162 10,927,162 Loss for the year - (85,969) (85,969) Balance at 31 December - 10,841,193 10,841,193 The accompanying notes form part of these financial statements. 11

14 Statement of Cash Flows For the Year Ended 31 December Note CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers 6,009,014 5,621,238 Receipts from service level agreements 951, ,850 Payments to suppliers and employees (5,890,686) (5,772,793) Interest received 16,910 12,371 Interest paid (177,550) (84,381) Net cash provided by operating activities 18(b) 909, ,285 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of plant and equipment 31,986 36,498 Purchase of property, plant and equipment (203,385) (59,700) Net cash used in investing activities (171,399) (23,202) CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of borrowings (228,813) (362,324) Net cash used in financing activities (228,813) (362,324) Net increase/(decrease) in cash and cash equivalents held 508, ,759 Cash and cash equivalents at beginning of year 769, ,910 Cash and cash equivalents at end of financial year 18(a) 1,278, ,669 The accompanying notes form part of these financial statements. 12

15 Notes to the Financial Statements For the Year Ended 31 December 1 Summary of Significant Accounting Policies General Information The financial report covers Newcastle University Sport as an individual entity. Newcastle University Sport is a Company limited by guarantee, incorporated and domiciled in Australia. The financial report is a general purpose report that has been prepared in accordance with the Corporations Act 2001, Australian Charities and Not-for-Profit Commission (ACNC) Act 2012, Australia Accounting Standards and Interpretations and complies with other requirements of the law. Accounting Standards include Australian equivalents to International Financial Reporting Standards ('A-IFRS'). Compliance with A-IFRS ensures that the Company's financial statements and notes of the Company comply with International Financial Reporting Standards ('A-IFRS'). Basis of Preparation This financial report has been prepared on an accruals basis and is based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The following significant accounting policies have been adopted in the preparation and presentation of the financial report: (a) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held-at-call with banks, other short-term highly liquid investments with original maturities of three months or less which are convertible to a known amount of cash and subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. (b) 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 settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. These cashflows are discounted using market yields on national corporate bonds with terms to maturity that match the expected timing of cashflows. (c) Goods and services tax (GST) Revenue, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (d) Inventories Inventories are measured at the lower of cost and net realisable value. 13

16 Notes to the Financial Statements For the Year Ended 31 December 1 Summary of Significant Accounting Policies (e) Leased assets Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. (f) Plant and equipment Depreciation is provided on plant and equipment on a straight-line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method is reviewed at the end of each annual reporting period. The depreciation rates used for each class of depreciable assets are shown below: Class of Fixed Asset Depreciation rate Plant and Equipment 10% - 33% Leasehold improvements shorter of life of the lease or useful life (g) Impairment of assets At each reporting date, the Company 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. 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. (h) Income tax The Company is exempt from income tax under Subdivision 50-B of the Income Tax Assessment Act Accordingly no provision for income tax is required. (i) Payables Trade payables and other accounts payable are recognised when the Company becomes obliged to make future payments resulting from the purchase of goods and services. (j) Provisions Provisions are recognised when the Company 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 outflow can be reliably measured. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows. 14

17 Notes to the Financial Statements For the Year Ended 31 December 1 Summary of Significant Accounting Policies (k) Revenue recognition Service fee revenue is recognised on a basis which reflects the stage of completion of the contract performed. Revenue from the sale of goods and disposal of other assets is recognised when the entity has passed control of the goods or other assets to the buyer. (l) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in profit/ (loss) in the period in which they are incurred. (m) New accounting standards for application in future periods The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The Company has decided against early adoption of these Standards. The following summarises those future requirements, and their impact on the Company. AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting periods commencing on or after 1 January 2018). This standard is not expected to have a significant impact on the Company's financial statements. AASB 15: Revenue from contracts with customers and associated Amending Standards (applicable for annual reporting periods commencing on or after 1 January 2018). This standard is not expected to have a significant impact on the Company's financial statements. AASB 16: Leases (applicable for annual reporting periods commencing on or after 1 January 2019). Whilst the impact of AASB 16 has not yet been quantified, the Company currently has operating leases as detailed in note 14(c) which will be recorded in the statement of financial position in future periods. 15

18 Notes to the Financial Statements For the Year Ended 31 December 1 Summary of Significant Accounting Policies (n) 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. Estimation of useful lives The Company determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment. 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 or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Long service leave provision As discussed in Note 1(b), the liability for long service leave is 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. Provision for doubtful debts The valuation of provision for doubtful debts is estimated by considering the ageing receivables, communication with the debtors and prior history. The directors determined that nil provision for impairment of receivables was an appropriate provision based on aged receivables and industry debtor days. 16

19 Notes to the Financial Statements For the Year Ended 31 December 2 Result for the Year The following items of revenue and expense items are relevant in explaining the financial performance: Membership and hire fees 5,102,986 4,797,838 Service level agreement revenue 865, ,500 Sport & recreation course revenue 17,957 18,818 Personal training revenue 122, ,356 Merchandise sales 132, ,407 Rental income 25,557 24,348 Interest received 23,756 13,028 Other revenue 57,733 55,477 6,347,654 6,068,772 Employee benefits expense 3,766,623 3,735,442 Depreciation & amortisation expense 711, ,550 Forum venues & facilities running expense 818, ,992 Finance costs & merchant fees 177, ,412 5,474,262 5,480,396 Included in the operating result for the year ended 31 December was the depreciation and amortisation expense of 711,532 (: 816,550). The depreciation and amortisation expense reflects the diminishing value of the Company's plant, equipment and leasehold improvements. The significant value of the leasehold improvements includes amounts contributed by Newcastle University Sport and its predecessors for the construction of major sporting and recreational infrastructure including The Forum Sports & Aquatic Centre, The Forum Health & Wellness Centre, sporting ovals and squash courts. The following analysis shows the Company's result should the depreciation and amortisation expense be excluded from the accounting result: Accounting profit/(loss) 190,779 (85,969) Plus: Depreciation of property, plant and equipment 711, , , ,581 The directors consider that the exclusion of depreciation and amortisation provides a better reflection of trading performance in light of the circumstances noted above. 17

20 Notes to the Financial Statements For the Year Ended 31 December 3 Remuneration of Directors All directors of the Company act in honorary capacity and receive no remuneration from the company in respect of their directorship. 4 Auditor's Remuneration Remuneration of the auditor of the company for: Audit of the financial report 23,500 22,940 Other non-audit services (i) - 4,000 23,500 26,940 (i) Non-audit services relate to the Strategic Planning services provided by PKF Business Advisory Services in. 5 Trade and Other Receivables Trade receivables 116, , , ,103 6 Inventories Merchandise 72,604 78,784 Other inventories 41, ,665 78,784 7 Other Current Assets Prepayments and deposits 85,561 56,424 18

21 Notes to the Financial Statements For the Year Ended 31 December 8 Property, plant and equipment Capital works in progress At cost 59,316 - Total capital works in progress 59,316 - Plant and equipment At cost 2,258,649 2,294,861 Accumulated depreciation (1,913,606) (1,778,582) Total plant and equipment 345, ,279 Leasehold improvements At cost 18,420,995 18,388,601 Accumulated depreciation (7,706,797) (7,242,394) Total leasehold improvements 10,714,198 11,146,207 Total property, plant and equipment 11,118,557 11,662,486 (a) Movements in carrying amounts of property, plant and equipment Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Capital Works in Progress Plant and Equipment Leasehold Improvements Total Balance at the beginning of year at 1 January - 516,279 11,146,207 11,662,486 Additions 59, ,675 32, ,385 Disposals - (35,782) - (35,782) Depreciation expense - (247,129) (464,403) (711,532) Balance at 31 December 59, ,043 10,714,198 11,118,557 Balance at the beginning of year at 1 January - 801,647 11,601,787 12,403,434 Additions - 89,572 9,506 99,078 Disposals - (23,476) - (23,476) Depreciation expense - (351,464) (465,086) (816,550) Balance at 31 December - 516,279 11,146,207 11,662,486 19

22 Notes to the Financial Statements For the Year Ended 31 December 9 Trade and Other Payables Unsecured liabilities Deposits collected 26,976 26,036 Trade payables 298, ,440 Sundry payables and accrued expenses 135, ,725 Unexpired term memberships (i) 314, , , ,431 (i) Unexpired term memberships reflects the remaining value of term memberships paid in advance and in the normal course of business, these amounts will not be required to be repaid. 10 Borrowings CURRENT Unsecured liabilities: Loan from the University of Newcastle 74,007 69,445 Secured liabilities: Lease liability secured (i) 87, ,142 NON-CURRENT 161, ,587 Unsecured liabilities: Loan from the University of Newcastle 449, ,688 Secured liabilities: Lease liability secured (i) 20, , , ,493 (i) Secured over the assets leased. 11 Provisions Current employee entitlements 219, ,906 Non-current employee entitlements 53,702 45, , ,762 20

23 Notes to the Financial Statements For the Year Ended 31 December 12 Retained Earnings Balance at the beginning of financial year 10,841,193 10,927,162 Net loss attributable to the members of the entity 190,779 (85,969) Retained earnings at end of the financial year 11,031,972 10,841, Members' Guarantee The Company is limited by guarantee. The constitution states that each member is required to contribute a maximum of 1 each towards meeting any outstandings and obligations of the Company on winding up. 14 Capital and Leasing Commitments (a) Finance lease commitments as the lessee The finance lease commitments relate to the acquisition by NUsport of gymnasium equipment and motor vehicles. Minimum lease payments: - no later than one year 92, ,107 - between 12 months and 5 years 21, ,274 Minimum lease payments 113, ,381 Less: future finance changes (5,299) (26,434) Lease Liability 108, ,947 Included in the financial statements as: Current lease liability 87, ,142 Non-current lease liability 20, , , ,947 21

24 Notes to the Financial Statements For the Year Ended 31 December 14 Capital and Leasing Commitments (b) Operating lease commitments as the lessor Newcastle University Sport's lessor leasing arrangements in the current year relate to: - Lease of premises to a Physiotherapy practice. Term of lease from 1 September 2013 to 31 December Lease of the Forum Cafe premises. Term of lease from 1 November to 31 December 2019 with an option to renew for a further four years. Minimum lease receipts: - no later than one year 54,696 22,000 - between 12 months and 5 years 87,396 44, ,092 66,400 (c) Operating Lease Commitments - as the lessee Newcastle University Sport's lessee leasing arrangements relate to: - Lease of a photocopier with a term of 5 years commencing from 6 November Lease of digital signage equipment with a term of 5 years commencing from January Payable: minimum lease payments - no later than 12 months 38,991 38,853 -between 12 months and 5 years 91,493 68, , , Commitments for expenditure There were no commitments for expenditure in respect of the Company other than those disclosed in Note Contingent Liabilities and Contingent Assets The directors are not aware of any contingent assets or liabilities existing in respect to the Company at the date of signing this report. 22

25 Notes to the Financial Statements For the Year Ended 31 December 17 Related Party Transactions Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Transaction with related parties: (a) The University of Newcastle Revenue from hire of facilities for academic use 76, ,121 SSAF funding received 865, ,500 Loans owing to The University of Newcastle 523, ,133 Payment to UoN for utilities and parking permits 379, ,852 (b) Osborn Law Pty Ltd Tim Osborn is the Director of Osborn Law Pty Ltd and also the Deputy Chair of the NUsport Board of Directors. NUsport engage with Osborn Law Pty Ltd for legal services therefore giving rise to the following related party transactions: Legal services provided 8,531 4, Cash Flow Information (a) Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents 1,278, ,669 23

26 Notes to the Financial Statements For the Year Ended 31 December 18 Cash Flow Information (b) Reconciliation of result for the year to cashflows from operating activities Reconciliation of net income to net cash provided by operating activities: Profit/(loss) for the period 190,779 (85,969) Cash flows excluded from profit attributable to operating activities Depreciation 711, ,550 Net gain/(loss) on disposal of property, plant and equipment 3,796 (13,356) Changes in assets and liabilities (Increase)/decrease in trade and other receivables (6,800) 59,702 (Increase)/decrease in inventories (34,881) (8,273) (Increase)/decrease in other assets (29,137) (19,249) Increase/(decrease) in trade and other payables 60,217 21,531 Increase/(decrease) in provisions 13,682 (22,651) Cashflow from operations 909, ,285 (c) Non-cash Financing and Investing Activities During the financial year the Company did not acquire plant and equipment under finance lease (: 39,045). 19 Segment information The Company manages and operates sporting facilities and activities in Newcastle, New South Wales, Australia. 20 Financial Instruments (a) Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect to each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements. (b) Net fair values The aggregate net fair values of financial assets and financial liabilities both recognised and unrecognised at balance date are the values as disclosed in the statement of financial position and the notes to the financial statements. (c) Credit risk The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognise financial assets is the carrying amount, net of any provision for doubtful debts, as disclosed in the statement of financial position and the notes to the financial statements. 24

27 Notes to the Financial Statements For the Year Ended 31 December 20 Financial Instruments (d) Interest Rate Risk The Company's exposure to interest rate risk, which is the risk that a financial instruments value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows: Weighted Average Effective Interest Rate % % Floating Interest Rate Maturing within 1 Year Maturing 1 to 5 Years Maturing Over 5 Years Non-interest Bearing Total Financial Assets: Cash and cash equivalents , , Receivables Total Financial Assets 1, , Financial Liabilities: Loan from UoN Lease liabilities Payables Employee benefits Total Financial Liabilities , ,682 1,836 25

28 Notes to the Financial Statements For the Year Ended 31 December 20 Financial Instruments (e) Financing Facilities Unsecured bank facility, reviewed annually and payable at-call: Amount used - - Amount unused 250, , Events After the Balance Date There have not been any events subsequent to balance date which require separate disclosure in this report. 22 Company Details Newcastle University of Sport is a Company limited by guarantee, incorporated and operating in Australia. The registered office of and principal place of business of the company is: Newcastle University Sport c/- The University of Newcastle University Drive CALLAGHAN NSW 2308 Tel: (02)