02194J SPECIAL PURPOSE FINANCIAL REPORT FOR THE YEAR ENDED 28 FEBRUARY 2017
INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2017 INCOME 2017 2016 Bar sales 118,337 107,719 Opening stock 5,939 6,859 Plus purchases 61,063 55,397 Less closing stock (6,940) (5,939) Cost of sales 60,062 56,317 Bar trading profit 58,275 51,402 Merchandise sales 1,866 2,434 Opening stock 1,361 2,150 Plus purchases 2,595 1,803 Less closing stock (1,925) (1,361) Cost of sales 2,031 2,592 Merchandise trading loss (165) (158) Gross profit from trading 58,110 51,244 Bingo receipts 8,010 9,372 Catering 31,806 26,654 Donations 3,424 7,457 Donations - Name Bricks & Pavers - 857 Grants operating 938 2,860 Green fees 32,187 31,806 Greens prize money 10,866 12,146 Interest received 3,951 4,059 Other income 3,927 1,270 Raffles 30,391 30,090 Sponsorships 11,250 9,064 Subscriptions 25,281 26,365 Total operating income 220,141 213,244 The accompanying notes form part of these financial statements. 2
INCOME AND EXPENDITURE STATEMENT (continued) ( FOR THE YEAR ENDED 28 2 FEBRUARY 2017 EXPENDITURE 2017 2016 Accreditation fees 52 174 Advertising 176 103 Audit fees 2,100 2,250 Affiliation fees 7,092 6,847 Bank fees & charges 932 392 Bingo expenses 1,712 1,389 Building design costs 500 1,890 Catering expenses 25,498 24,809 Cleaning & laundry 1,091 1,304 Depreciation 51,137 40,732 Donations 1,000 600 Electricity 4,236 3,702 General expenses 2,319 2,556 Debenture interest expense 6,015 2,649 Insurance 3,834 3,577 Licences & permits - 523 Loss on disposal of assets 32,103 22,387 Name Bricks & Pavers - 572 Printing, postage & stationery 1,659 1,493 Raffle prizes 6,849 5,584 Rates 2,333 2,045 Rent - Bass Coast Shire Council 2,000 3,750 Repairs & Maintenance Plant & equipment 4,665 3,180 Repairs & Maintenance Greens & surrounds 598 7,255 Green Keeper s fees 11,319 30,633 Security 1,063 1,195 Sign writing 400 1,240 Telephone & internet 1,643 1,643 Training 182 145 Trophies (including cash prizes) 12,223 13,789 Water rates 2,292 1,636 Total operating expenditure 187 87,023 190,044 Operating surplus 33,118 23,200 Add capital grants received: Bass Coast Shire Council (synthetic green) - 5,000 Department of Social Services (kitchen items) 2,090 - Department of Justice grant (fence) - 8,160 Less building costs not capitalised: Site demolition costs (7,050) - Net surplus 28,158 36,360 The accompanying notes form part of these financial statements. 3
BALANCE SHEET AS AT 28 FEBRUARY 2017 NOTE 2017 2016 CURRENT ASSETS Cash on hand 2 1,906 1,951 Cash at bank 2 88,616 125,453 Receivables 3 1,281 5,500 Inventories 4 8,865 7,300 Accrued interest and prepayments 5 4,035 5,648 Investment 6 121,542 109,846 TOTAL CURRENT ASSETS 226,245 255,698 NON-CURRENT ASSETS Shares 7 1,000 1,000 Property, plant and equipment 8 751,158 544,315 TOTAL NON-CURRENT ASSETS 752,158 545,315 TOTAL ASSETS 978,403 801,013 CURRENT LIABILITIES Trade creditors and accrued expenses 20,100 11,785 Unexpended income 10 26,160 20,359 GST payable 2,441 2,825 Debentures 9 24,350 10,800 TOTAL CURRENT LIABILITIES 73,051 45,769 NON-CURRENT LIABILITIES Debentures 9 219,150 97,200 TOTAL NON-CURRENT LIABILITIES 219,150 97,200 TOTAL LIABILITIES 292,201 142,969 NET ASSETS 686,202 658,044 Accumulated funds 658,044 621,684 Current year surplus 28,158 36,360 TOTAL MEMBERS FUNDS 686,202 658,044 The accompanying notes form part of these financial statements. 4
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 28 FEBRUARY 2017 ACCUMULATED SURPLUS Balance at 1 March 2015 621,684 Surplus attributable to members 36,360 Balance at 28 February 2016 658,044 Surplus attributable to members 28,158 Balance at 28 2 February 2017 686,202 The accompanying notes form part of these financial statements. 5
CASH FLOW STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2017 CASH FLOWS FROM OPERATING ACTIVITIES 2017 2016 Receipts from customers and members 315,518 324,650 Payments to suppliers and employees (185,810) (211,724) Interest received 3,952 4,115 Interest and other finance costs paid (6,015) (3,114) NET CASH PROVIDED BY OPERATING ACTIVITIES 127,645 113,927 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds on disposal of assets 4,909 - Payment for property, plant & equipment (293,240) (172,053) Investment accounts (additions) / withdrawals (11,696) (7,720) NET CASH USED IN INVESTING ACTIVITIES (300,027) (179,773) CASH FLOWS FROM FINANCING ACTIVITIES Receipts from debentures 163,000 - Repayment of debentures (27,500) (28,500) NET CASH PROVIDED BY FINANCING ACTIVITIES 135,500 (28,500) NET INCREASE/(DECREASE) IN CASH HELD (36,882) (94,346) CASH AT BEGINNING OF REPORTING PERIOD 127,404 221,750 CASH AT END OF REPORTING PERIOD 90,522 127,404 The accompanying notes form part of these financial statements. 6
A. Reconciliation of Cash INVERLOCH BOWLING CLUB INC. NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED E 28 FEBRUARY 2017 For the purposes of the statement of cash flows, cash includes cash on hand and in banks, net of bank overdrafts. Cash at the end of the reporting period as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows: Cash & bank deposits: 2017 2016 Bank accounts 88,616 125,453 Cash floats 1,906 1,951 Total 90,522 127,404 B. Non-cash Financing and Investing Activities During the reporting period the reporting entity did not acquire any plant and equipment by means of finance leases (2016-nil). C. Financing Facilities The reporting entity has no external financing arrangements. D. Reconciliation of net cash provided by operating activities to operating surplus: 2017 2016 Operating surplus 28,158 36,360 Add back: Depreciation 51,137 40,732 Net loss on assets disposed 30,351 22,387 Change in assets and liabilities: (Increase)/decrease in trade and other receivables 4,219 (964) (Increase)/decrease in accrued interest and prepayments 1,613 (952) (Increase)/decrease in inventories (1,565) 1,709 Increase/(decrease) in trade other payables unexpended income 13,732 14,655 NET CASH PROVIDED BY OPERATING ACTIVITIES A 127,645 113,927 7
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2017 NOTE 1: 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES This financial report is a special purpose financial report prepared in order to satisfy the financial reporting requirements of the Associations Incorporation Reform Act (Vic) 2012. The committee has determined that the association is not a reporting entity. The financial report has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where specifically stated, current valuations or non-current assets. The following significant accounting policies, which are consistent with the prior period unless otherwise stated, have been adopted in the preparation of this financial report: a. Income Tax The income of the club is exempt from income tax under Div 50 of the Income Tax Assessment Act 1997 whilst the dominant purpose of the club is the provision of bowling facilities. b. Inventories ntories Inventories are measured at the lower of cost and net realisable value. Costs have been assigned to inventory quantities on hand at balance date using the first-in first-out ( fifo ) basis. c. Property, Plant & Equipment Leasehold improvements and plant & equipment are carried at cost less, where applicable, any accumulated depreciation. The depreciable amount of all assets are depreciated over their estimated useful lives to the association commencing from the time the asset is held ready for use. Leasehold improvements are amortised over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The land is leased from the Department of Sustainability and Environment under the Crown Land (Reserves) Act 1978. Annual rental is paid to the Bass Coast Shire Council and the lease has now been extended until 2036. The depreciation rates used for each class of assets are: Class of fixed asset Leasehold improvements Plant & equipment Greens & improvements Depreciation Rate 2.5 15% straight line 10-40 % straight line 2.5 15% straight line d. Impairment ment of Assets At each reporting date, the association reviews the carrying value of its 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. 8
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 2 FEBRUARY 2017 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)( e. Revenue Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Revenue from the rendering of a service is recognised upon the delivery of the service to the customers. Income from donations and fundraising activities is recognised upon receipt. f. Goods and Services Tax The club is registered for GST. 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 Taxation Office (ATO). 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 balance sheet are shown inclusive of GST. 9
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2017 NOTE 2: Cash 2017 2016 Cash float bar 1,000 1,000 Cash float bingo 701 701 Cash float Friday night 150 150 Cash float secretary 55 100 Total cash on hand 1,906 1,951 Bendigo cheque account 87,106 120,907 Bendigo bingo account 1,510 4,546 Total cash at bank 88,616 125,453 NOTE 3: Receivables Sponsorship receivable - 5,500 Other Receivables 1,281 - Total 1,281 5,500 NOTE 4: Inventories Bar 6,940 5,939 Merchandise 1,925 1,361 Total 8,865 7,300 NOTE 5: Accrued interest and prepayments Accrued interest 381 380 Prepayments 3,654 5,268 Total 4,035 5,648 NOTE 6: Investments Bendigo term deposit (2.05% maturing 18 March 2017) 25,970 25,360 Sandhurst Trustees common fund (2.35%, at call) 95,572 84,486 Total 121,542 109,846 NOTE 7: Shares Bendigo local bank 1,000 1,000 10
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 2 FEBRUARY 2017 NOTE 8: Property, plant & equipment 2017 2016 Leasehold improvements at cost 397,123 333,359 Accumulated depreciation (91,208) (85,676) 305,915 247,683 Plant & equipment at cost 130,270 150,944 Accumulated depreciation (55,133) (68,711) 75,137 82,233 Greens & improvements at cost 401,570 272,829 Accumulated depreciation (31,464) (58,430) 370,106 214,399 Total property, plant & equipment 751,158 544,315 Leasehold Improvements Plant & Equipment Greens & Improvements Total Balance at beginning of year 247,683 82,233 214,399 544,315 Additions 79,075 8,660 205,505 293,240 Depreciation expense (17,390) (12,599) (21,148) (51,137) Disposals (net) (3,453) (3,157) (28,650) (35,260) Carrying value at the end of the year 305,915 75,137 370,106 751,158 NOTE 9: Debentures 2017 2016 Current 24,350 10,800 Non-current 219,150 97,200 Total debentures 243,500 108,000 During 2014 the association issued $136,500 of interest bearing and non-interest bearing debentures to existing members on the following terms: - Initial interest rate of 4% payable annually on 1 November for interest bearing debentures - Commitment for annual repayment of 10% of capital to debenture holders; however, the decision to repay debentures is at the discretion of the committee. The association repaid $27,500 of the principal to debenture holders during the financial year. During 2016 the association issued $163,000 of interest bearing and non-interest bearing debentures to existing members on the following terms: - Initial interest rate of 4% payable annually on 1 August for interest bearing debentures - Commitment for annual repayment of 10% of capital to debenture holders; however, the decision to repay debentures is at the discretion of the committee. There were no repayments of the principal to debenture holders during the financial year. For financial reporting purposes, interest has been accrued to 28 February 2017 for interest bearing debentures and 10% of the capital has been recorded as a current liability. 11
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 2 FEBRUARY 2017 NOTE 10: Unexpended income 2017 2016 Bendigo Bank 5-year sponsorship (see below) 15,699 20,239 Grant - Dept. of Infrastructure and Community 9,090 - Development Donation to be made to Childrens Hospital 1,251 - Broadband for Seniors 120 120 Total unexpended income 26,160 20,359 During 2015, the association entered into a 5-year sponsorship agreement with Inverloch & District Financial Enterprises Limited (Inverloch & District Community Bank). The total sponsorship of $25,000 including GST was received to assist with the Club s infrastructure. This amount is being recorded as income on a straight-line basis over the term of the agreement. NOTE 11: 1 : Capital commitments The association has committed to the construction of new shade shelters on the north side of greens 1 and 2 during 2017 with an estimated cost of $40,000 (ex GST). This will be financed from the $9,090 grant received from the Department of Infrastructure and Community Development that was received in 2016 with the balance financed from the association s cash reserves. 12
STATEMENT BY THE COMMITTEE FOR THE YEAR ENDED 28 FEBRUARY 2017 The committee has determined that the association is not a reporting entity and that the 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 committee, the financial report as set out on pages 2 to 12: 1. Presents a true and fair view of the financial position of Inverloch Bowling Club Inc. as at 28 February 2017 and its performance for the year ended on that date. 2. At the date of this statement, there are reasonable grounds to believe that Inverloch Bowling 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 committee and is signed for and on behalf of the committee by: Ron Burge President John Sutcliffe Treasurer 24 April 2017 13
Opinion INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF INVERLOCH BOWLING CLUB INC. We have audited the accompanying financial report, being a special purpose financial report, of Inverloch Bowling Club Inc., which comprises the balance sheet as at 28 February 2017, the income and expenditure statement, statement of changes in equity and statement of cash flows for the year then ended, notes to the financial statements including a summary of significant accounting policies, and the statement by members of the Board of Management. In our opinion, the accompanying financial report, in all material respects, gives a true and fair view of the financial position of Inverloch Bowling Club Inc. at 28 February 2017, 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. 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 Inverloch Bowling Club Inc. 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter Basis of Accounting We draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared for the purpose of fulfilling Inverloch Bowling Club Inc. s financial reporting responsibilities under the Associations Incorporation Reform Act (Vic) 2012. As a result, the financial report may not be suitable for another purpose. Our opinion is not modified in respect of this matter. Other Information The Board of Management of the association of responsible for other information. The other information comprises the information included in the association s annual report for the financial year ended 28 February 2017 but does not include the financial report and our auditor s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Management for the Financial Report The Board of Management of the association is responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards 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. This responsibility also includes such internal control as the Board of Management determine is necessary to enable the preparation of the 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 the Board of Management either intends to liquidate the association or to cease operations, or has no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but it 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 this financial report. As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgment 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, other 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 association s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relates disclosures made by the Board of Management. Conclude on the appropriateness of the Board of Management 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 association 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. Out 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 association to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Board of Management 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 from our audit. CARDELL ASSURANCE & AUDIT Lyndal J. McKenzie 3A Billson Street WONTHAGGI VIC 3995 28 April 2017 2