PHILLIP ISLAND GOLF CLUB INC. A F SPECIAL PURPOSE FINANCIAL REPORT FOR THE YEAR ENDED

Transcription

1 SPECIAL PURPOSE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2016

2 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME NOTE Revenue from ordinary activities 2 832, ,317 Cost of goods sold (15,294) (11,377) Borrowing expense 3 (22,312) (16,696) Clubhouse expense (28,386) (29,119) Course expense (139,733) (163,617) Depreciation expense 3 (129,153) (113,161) Employee benefits expense (208,424) (226,928) Golf expense (148,240) (132,979) Insurance expense (20,285) (10,730) Loss on disposal of assets (1,320) - Other expenses from ordinary activities (131,202) (109,338) Operating surplus / (deficit) (12,052) 5,372 Other comprehensive income - - Total comprehensive income attributable to members of the association (12,052) 5,372 The accompanying notes form part of these financial statements. 2

3 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016 CURRENT ASSETS NOTE Cash and cash equivalents 4 48,008 15,474 Trade and other receivables 5 20,182 11,096 Prepayments 23,776 9,674 Total Current Assets 91,966 36,244 NON-CURRENT ASSETS Property, plant & equipment 6 1,745,761 1,712,151 Total Non-Current Assets 1,745,261 1,712,151 TOTAL ASSETS 1,837,727 1,748,395 CURRENT LIABILITIES Trade and other payables 7 91,378 85,634 Short term borrowings 8 61,603 89,998 Short term provisions 9 20,936 18,169 Total Current Liabilities 173, ,801 NON-CURRENT LIABILITIES Long term borrowings 8 238, ,379 Long term provisions 9-6,731 Total Non-Current Liabilities 238, ,110 TOTAL LIABILITIES L 412, ,911 NET ASSETS 1,425,432 1,437,484 EQUITY Asset revaluation reserve 893, ,350 Accumulated surplus 532, ,134 ACCUMULATED FUNDS 1,425,432 1,437,484 The accompanying notes form part of these financial statements. 3

4 STATEMENT OF CHANGES IN EQUITY Accumulated surplus Asset Revaluation Reserve Total Balance at 1 July , ,350 1,432,112 Surplus attributable to members 5,372-5,372 Balance at 30 June , ,350 1,437,484 Deficit attributable to members (12,052) - (12,052) Balance at 30 June , ,350 1,425,432 The accompanying notes form part of these financial statements. 4

5 STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES NOTE Inflows/ Inflows/ (Outflows) (Outflows) Receipts from members and customers 895, ,799 Payments to suppliers and employees (776,539) (813,700) Interest paid (22,312) (16,696) Interest received Net cash provided by operating activities 10b 97,013 65,361 CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant & equipment (164,083) (28,151) Proceeds from sale of property, plant & equipment - - Net cash used in investing activities (164,083) (28,151) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from finance lease 154,545 - Repayment of finance lease (46,774) (61,627) Repayment of bank loan (8,167) (7,478) Repayment of debentures - (5,500) Net cash provided by / (used in) financing activities 99,604 (74,605) NET INCREASE IN CASH HELD 32,534 (37,395) Cash at the beginning of the financial year 15,474 52,869 Cash at the end of the financial year 10a 48,008 15,474 The accompanying notes form part of these financial statements. 5

6 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The financial statements cover Phillip Island Golf Club Inc. as an individual entity and is a special purpose financial report prepared in order to satisfy the financial reporting requirements of the Associations Incorporation Reform Act (Vic) The committee has determined that the association is not a reporting entity. The financial report was authorised for issue by the Board of Management on 19 October Basis of preparation The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar. The following significant accounting policies, which are consistent with the previous period unless otherwise stated, have been adopted in the preparation of this financial report. a) Income Tax No provision for income tax has been raised as the association is exempt from income tax under Div 50 of the Income Tax Assessment Act b) 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 losses. Property Land is shown at its fair value based on the present value of the future net income stream derived from the association s golfing activities. Increases in the carrying amount arising on reassessment of the future net income stream are credited to a revaluation reserve in equity. Decreases that offset previous increases are charged against fair value reserves directly in equity. Buildings, Course Improvements, Plant and Equipment Buildings, course improvements, plant and equipment are measured on the cost basis less depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by the association s Board of Management to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Depreciation The depreciable amount of all fixed assets including buildings and capitalised lease assets, is depreciated on a straight-line basis over their useful lives commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. 6

7 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) ( The depreciation rates used for each class of depreciable assets are: Class of fixed asset Depreciation Rate Buildings 2.5% Equipment & Fittings % Course Improvements 2-10% Finance Leased Course Equipment 16% The assets residual values and useful lives are reviewed and adjusted, if appropriate, at each balance date. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation relating to that asset are transferred to retained earnings. c) Impairment of Assets At each reporting date, the association 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 income statement. Where it is not possible to estimate the recoverable amount of an individual asset, the association estimates the recoverable amount of the cash-generating unit to which the asset belongs. d) Leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership of the asset, are transferred to the association are classified as finance leases. Finance leases are capitalised by recording an asset and liability at the lower of the amount equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the association will obtain ownership of the asset or ownership over the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as an expense on a straight-line basis over the lease term. e) 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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. 7

8 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) f) Employee Benefits Provision is made for the association s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits expected to be settled within one year have been measured at their nominal amount. Other 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. Contributions are made by the association to an employee superannuation fund and are charged as expenses when incurred. g) Revenue Revenue from the rendering of a service or the sale of goods is recognised upon the delivery of the service to the customers. The membership year commences on 1 July. Memberships received up to 30 June are recorded as memberships received in advance for the coming financial year. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. h) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of the 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 cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. i) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. j) Critical Accounting Estimates and Judgments The association s Board of Management evaluates estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the association. Key Estimates Impairment The association assesses impairment at each reporting date by evaluating conditions specific to the association that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. Key Judgments Doubtful Debts Provision The association s Board of Management has estimated the value of debt which may not be recoverable and no doubtful debt provision has been made accordingly at 30 June

9 NOTE 2: REVENUE Operating activities Sale of goods 29,434 25,514 Competition fees 132, ,439 Green fees 287, ,280 Members subscriptions 352, ,246 Other income received 2,431 4,880 Interest received Lease income 24,000 24,000 Bequest received 4,421 - TOTAL 832, ,317 Interest from: Other persons NOTE 3: RESULT FROM ORDINARY ACTIVITIES The surplus / (deficit) from operations has been determined after: Borrowing Costs: Machinery 15,644 8,644 Loan 6,668 8,052 Total Borrowing costs 22,312 16,696 Depreciation of non-current assets: Buildings 9,433 9,572 Plant & equipment 16,270 46,067 Amortisation of finance leased assets 103,450 57,522 Total Depreciation 129, ,161 Bad and doubtful debts: Trade debtors - - Remuneration of auditor: Audit of the financial report 3,900 3,795 Other services - - Remuneration for other services to related practices of the auditor NOTE 4: CASH AND CASH EQUIVALENTS Cash at bank 47,585 15,254 Cash on hand Total 48,008 15,474 9

10 NOTE 5: TRADE AND OTHER RECEIVABLES Receivables 15,898 9,971 GST receivable 4,284 1,125 Total 20,182 11,096 NOTE 6: PROPERTY, EQUIPMENT AND FITTINGS Land at fair value 846, ,000 Buildings 591, ,381 Accumulated depreciation (237,896) (228,463) Written down value 353, ,918 Course improvements 559, ,407 Accumulated depreciation (239,038) (222,768) Written down value 320, ,639 Equipment and fittings 616, ,301 Accumulated depreciation (521,467) (505,213) Written down value 95, ,088 Financed leased course machinery 499, ,240 Accumulated amortisation (369,168) (287,734) Written down value 130,617 57,506 Total property, plant & equipment at written down value 1,745,761 1,712,151 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 reporting period. Land Buildings Course Equipment Total Improvements Balance at start 846, , , ,594 1,712,151 Additions - 6,909 1, , ,083 Depreciation - (9,433) (16,270) (103,450) (129,153) Disposals (net) (1,320) (1,320) Balance at end 846, , , ,791 1,745,761 10

11 NOTE 7: TRADE AND OTHER PAYABLES CURRENT Trade payables and accrued expenses 29,383 15,313 Accrued salaries and wages 1,072 - Lease rental in advance - 2,200 Memberships received in advance 58,167 64,745 PAYG payable 2,756 3,376 Total 91,378 85,634 NOTE 8: BORROWINGS CURRENT Bank overdraft - - Bank loan 8,496 8,027 Finance lease liability 53,107 81,971 61,603 89,998 NON CURRENT Bank loan 101, ,379 Finance lease liability 136, , ,379 Total 299, ,377 (a) Total current and non-current secured liabilities 299, ,377 (b) The carrying amounts of non-current assets pledged as security are: Land (mortgage) 846, ,000 Equipment (chattel mortgage) 130,617 57,506 NOTE 9: PROVISIONS CURRENT Employee benefits 20,936 18,169 NON-CURRENT Employee benefits - 6,731 Aggregate employee entitlement liability 20,936 24,900 Number of employees at the end of the reporting period

12 NOTE 10: 1 : CASH FLOW INFORMATION a) Reconciliation of cash for purposes of cash flows: Cash on hand Cash at bank 47,585 15,254 Bank overdraft ,008 15,474 b) Reconciliation of net cash provided by operating activities to operating surplus / (deficit) Surplus / (deficit) from ordinary activities (12,052) 5,372 Non cash flows in surplus / (deficit) from ordinary activities: Depreciation 129, ,161 Net (profit)/loss on disposal of property plant and equipment 1,320 - Changes in assets & liabilities: (Increase) / decrease in receivables/prepayments (23,188) 3,654 Increase / (decrease) in payables 14,522 (52,550) Increase / (decrease) in provisions (3,964) 7,089 Increase / (decrease) in income in advance (8,778) (11,365) NET CASH PROVIDED BY OPERATING ACTIVITIES 97,013 65,361 c) The association has loan arrangements and an overdraft facility with the Bendigo Bank. All terms and conditions are being complied with and there is no reason to believe they will not be complied with in the future. There was an unused overdraft facility of $100,000 at 30 June (2015: $100,000) d) There were no non cash financing or investing activities during the reporting period. NOTE 11: 1 : RELATED PARTY TRANSACTIONS Members of the association s Board of Management act in an honorary capacity apart from circumstances where a member may act in a special capacity and receive an honorarium. Total honorariums paid were Nil. ( Nil). Members of the association s Board of Management do not receive any benefit other than those available to any member of the association. 12

13 NOTE 12: 1 : WORKING CAPITAL DEFICIENCY As at 30 June 2016, the total current liabilities of $173,917 exceeded the total current assets of $91,966 by $81,951. Notwithstanding the deficiency in working capital, the financial report has been prepared on a going concern basis because the Board of Management has assessed that the association will be able to pay its debts as and when they fall due during the next 12 months. NOTE 13: 1 FUTURE LEASE COMMITMENTS 1. Finance Leases: Payable - Not later than 1 year 61,477 82,474 - Between 1 year and 2 years 61, Between 2 years and 5 years 82, ,662 82,474 Less future finance charges (15,920) (503) Present value of minimum lease payments 189,742 81,971 NOTE 14: 1 : ECONOMIC DEPENDENCE The association is substantially dependent upon the continued use of its facilities for golf and for income derived from use of the association s facilities by members and visitors. NOTE 15: : FINANCIAL INSTRUMENTS The association s financial instruments consist mainly of deposits with banks, investments, accounts receivable and payable and leases. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of financial position and in the notes to the financial statements. Financial Risk Management Policies The associations Treasurer is responsible for, among other issues, monitoring and managing financial risk exposures of the association. The treasurer monitors the association s financial transactions and reviews the effectiveness of controls relating to credit risk, financial risk and interest rate risk. Discussions on monitoring financial risk exposures are held on a regular basis and minuted by the Board of Management. 13

14 NOTE 15: 1 : FINANCIAL INSTRUMENTS (continued) Financial Risk Exposures (a) Interest Rate Risk The association s exposure to interest rate risk which is the risk that a financial instrument s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on those financial assets and financial liabilities is not material. (b) Credit Rate Risk The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount of those assets, net of any provisions for doubtful debts, as disclosed in the statement of financial position and notes to the financial statements. The association does not have any material credit risk exposure to any single debtor or group of debtors. (c) Liquidity Risk Liquidity risk arises from the possibility that the association may encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The association manages this risk by regularly reviewing available cash and future cash inflows and ensuring appropriate levels of cash and credit are available to meet financial liabilities. Net Fair Values For assets and other liabilities the net fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments. Financial assets where the carrying amount exceeds net fair values have not been written down as the economic entity intends to hold these assets to maturity. NOTE 16: : ASSOCIATION DETAILS The association was registered on 30 January The registered office and principal place of business is: Phillip Island Golf Club Inc. Settlement Road COWES VIC

15 STATEMENT BY MEMBERS OF THE BOARD OF MANAGEMENT The Board of Management has determined that the association is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies outlined in Note 1 to the financial statements. In the opinion of the Board of Management the financial report as set out on pages 2 to 14: 1. Presents a true and fair view of the financial position of Phillip Island Golf Club Inc. as at 30 June 2016 and its performance for the year ended on that date. 2. At the date of this statement, there are reasonable grounds to believe that Phillip Island Golf Club Inc. will be able to pay its debts as and when they fall due. This statement is made in accordance with a resolution of the Board of Management and is signed for and on behalf of the Board of Management by: Rick Colling Chairman Faye Morris Treasurer 19 October

16 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF PHILLIP ISLAND GOLF CLUB INC. We have audited the accompanying financial report, being a special purpose financial report, of Phillip Island Golf Club Inc., which comprises the statement of financial position as at 30 June 2016, 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 notes, and the statement by members of the Board of Management. Board of Management s Responsibility for the Financial Report The Board of Management of the association is responsible for the preparation of the financial report, and have determined that the basis of preparation described in Note 1 to the financial report is appropriate to meet the requirements of the Associations Incorporation Reform Act (Vic) 2012 and is appropriate to meet the needs of the members. The Board of Management s responsibility also includes such internal control as the Board determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. Auditor's Responsibility sibility Our responsibility is to express an opinion on the financial report based on our audit. We 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 judgment, 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 and fair presentation of the financial report 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 directors, 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. Auditor s Opinion In our opinion the financial report of Phillip Island Golf Club Inc., in all material respects, gives a true and fair view of the financial position of Phillip Island Golf Club Inc. at 30 June 2016 and of its financial performance and its cash flows for the year then ended in accordance with Section 100(2) of the Associations Incorporation Reform Act (Vic) 2012 and the accounting policies described in Note 1 to the financial report. Emphasis of Matter Without qualifying our opinion, we draw attention to Note 12 to the financial report which indicates that at 30 June 2016 the association s current liabilities exceeded its total current assets by $81,951. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the entity s ability to continue as a going concern and therefore the entity may be unable to realise its assets and discharge its liabilities in the normal course of business. Basis of Account and Restriction on Distribution Without modifying our opinion, we draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared to assist Phillip Island Golf Club Inc. to meet the requirements of the Associations Incorporation Reform Act (Vic) As a result, the financial report may not be suitable for any other purpose. CARDELL ASSURANCE & AUDIT Lyndal J. McKenzie 3A Billson Street WONTHAGGI VIC October 2016