Newcastle University Sport AGM/Final...2019/12/31 · Sydney Level 8, 1 O’Connell Street Sydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001 p +61 2 8346 6000 f +61 2 8346 6099

Newcastle University Sport ACN 096 090 372

Annual Financial Statements

For the Financial Year Ended 31 December 2019

Newcastle University Sport

ACN 096 090 372

Contents For the Year Ended 31 December 2019

Page

Annual Financial Statements Directors' Report 1 Auditor's Independence Declaration 5 Independent Audit 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


ACN 096 090 372

Directors' Report 31 December 2019

1

The directors present their report on Newcastle University Sport for the financial year ended 31 December 2019.

Directors

The names of the directors in office at any time during, or since the end of, the year are: Names Appointed/resigned Meeting attendanceMs Judith Alexander 5 / 6

Prof Steven Fityus 6 / 6

Mr Joshua Manvell Resigned 1 May 2019 1 / 2

Ms Gabriella Sainsbury 6 / 6

Prof Liz Burd 1 / 6

Ms Dianne Allen 6 / 6

Mr Samuel Stephens Resigned 1 May 2019 2 / 2

Mr Mitchell Jones 5 / 6

Mr Tambalyn Durney 4 / 6

Appointed 1 May 2019 4 / 4

Appointed 1 May 2019 2 / 4

Mr Murray Bennett

Ms Tracy Chalk

Mr Morgan Wynn Appointed 1 May 2019 4 / 4

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Company secretary

Ms Trudy Craig has been the company secretary since October 2018.

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.

Operating results

The loss of the Company amounted to $ 202,997 (2018: $ 347,251).

Events after the reporting date

The impact of the COVID-19 outbreak resulted in the closure of the Company's facilities effective 23 March 2020. The Company re-opened in a reduced capacity on 13 June 2020 in accordance with its COVID-19 safety plan. The directors are continuing to adjust discretionary spending and obtain available financial support to ensure the ongoing financial viability of the Company.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years.


ACN 096 090 372


2

Auditors independence declaration

The lead auditors independence declaration for the year ended 31 December 2019 has been received and can be found on page 5 of the annual financial report.

Information on Directors

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.

Ms Gabriella Sainsbury (Deputy Chair)

Master of Applied Law (Commercial Transactions) (Collaw), 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; Blue (The University of Newcastle); Colour (The University of Newcastle); Vice President University of Newcastle Sports Laureates Association 2014-Present and Secretary 2013; President of Newcastle University Water Polo Club 2011-2013; Australian University Games Green & Gold Team 2010, 2011, 2012 & 2013; University of Newcastle Australian University Games Captain 2012 & 2013.

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 (2008-2010); 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 (2008-2009) and National Treasurer of the Australian Geomechanics Society (2016-Present); Assistant Dean (Research), Faculty of Engineering & Built Environment (2014-Present); Member Catholic Schools Committee, Maitland- Newcastle Diocese (2014-Present).

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; 2008-13 Regional Representative, Newcastle Cricket, Soccer, Baseball and Men's Softball Teams, Sports Medicine Australia Lecturer and Vice President Sports and Exercise Medicine Student Association.


ACN 096 090 372



3

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 has held a number of 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; Director - Lake Macquarie Economic Development Company Ltd; Chair of Audit, Risk and Improvement Committee - Lake Macquarie City Council; Member of Audit and Risk Committee - Hunter New England Local Health District; 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; Former Principal of Dianne Allen Chartered Accountants.

Mr Samuel Stephens

Bachelor of Medicine at UON (currently completed 3rd year); Bachelor of Physiotherapy at UON (2012-2014, completed 3 years); UON Tennis Club President (2015-Present); UON Tennis Club Vice President (2014-2015); UON Tennis Club Community Liaison (2013-2014); UON University Games Tennis Captain (2013-2017); UON Faculty of Health and Medicine - Discipline of Anatomy; Anatomy Laboratory Demonstrator (2016-Present) and UON Faculty of Health and Medicine - Faculty Scholar Program Member (2015-Present).

Mr Mitchell Jones

Newcastle University Accounting & Finance Scholarship; Bachelor of Commerce (Newcastle University); Eastern University Games Volleyball; Graduate Diploma of Chartered Accounting; Member–Institute of Chartered Accountants Australia & New Zealand; Financial Controller PRDnationwide Newcastle 2018-2019 & Lake Macquarie; Former Treasurer Newcastle Volleyball Association.

Ms Tambalyn Durney

Bachelor of Environmental Science and Management (Earth Systems major) (Newcastle) (In progress); Consultant at Global Acoustics; The Great Bubble Barrier, Ambassador; RAID Instructor for Total Immersion Diving; Newcastle University Diving and Exploration Society (NUDES) President; former NUDES Treasurer.

Mr Murray Bennett

Bachelor of Psychology (Honours), President of the UoN Men’s Hockey Club 2018-2019, Current Vice President of the UoN Men’s Hockey Club 2014-2015, 2020


ACN 096 090 372



4

Ms Tracy Chalk

Bachelor of Arts (UNSW); Chief Marketing Officer, University of Newcastle (2018 – present); member University of Newcastle Marketing Discipline Advisory Board (2019 – present); former Director, Strategic Communication and Engagement, University of the West of England (2016-2018); Director, Marketing, The Australian National University (2009-2016); former Director (Proxy) Canberra Convention Bureau (2010 – 2016); former member ACT Chief Minister’s Brand Strategic Advisory Board (2015-2016); former member ANU Sport and Recreation Association Board (2015); former member Bristol Communications Committee (2016-2017).

Mr Morgan Wynn

Bachelor of Arts, Bachelor of Laws (completing 2020), AMusA Violin, President of the UoN Men’s Basketball Club 2016-2019, Vice President of the UoN Men’s Basketball Club 2015-2015.

Signed in accordance with a resolution of the Board of Directors

Director: ............................................................... Director: ...............................................................

Dated

5

Auditor's Independence Declaration under Section 60-40 of the Charities and Not-for-profits Commission Act 2012 to the Directors of Newcastle University Sport

I declare that, to the best of my knowledge and belief, during the year ended 31 December 2019, there have been:

(i) no contraventions of the auditor independence requirements as set out in section 60-40 of theAustralian Charities and Not-for-profits Commission Act 2012 and the Corporations Act 2001 in relationto the audit; and

(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

PKF

CLAYTON HICKEY PARTNER

7 JULY 2020 NEWCASTLE NSW

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 www.pkf.com.au

Sydney

Level 8, 1 O’Connell StreetSydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001

p +61 2 8346 6000 f +61 2 8346 6099

PKF(NS) Audit & Assurance Limited Partnership

ABN 91 850 861 839

Liability limited by a scheme

approved under Professional

Standards Legislation

Newcastle

755 Hunter Street Newcastle West NSW 2302 Australia PO Box 2368 Dangar NSW 2309

p +61 2 4962 2688 f +61 2 4962 3245

6

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 2019, the statement of profit or loss and other comprehensive income, the statement of changes in equity 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 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 Act 2012, including:

(i) giving a true and fair view of Company's financial position as at 31 December 2019 and of its financial performance for the year ended; and

(ii) complying with Australian Accounting Standards - Reduced Disclosure Requirements, Division 60 of theAustralian Charities and Not-for-profits Commission Regulation 2013 and Corporations Act 2001.

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 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.

Responsibilities of Responsible Entities for the Financial Report

The responsible persons of Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the ACNC Act, and for such internal control as the responsible entities 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, the responsible persons are responsible for assessing 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 responsible entities either intends to liquidate Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing Company's financial reporting process.

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 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.

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 www.pkf.com.au

Sydney

Level 8, 1 O’Connell StreetSydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001

p +61 2 8346 6000 f +61 2 8346 6099

PKF(NS) Audit & Assurance Limited Partnership

ABN 91 850 861 839

Liability limited by a scheme

approved under Professional

Standards Legislation

Newcastle

755 Hunter Street Newcastle West NSW 2302 Australia PO Box 2368 Dangar NSW 2309

p +61 2 4962 2688 f +61 2 4962 3245

7

Auditor's Responsibilities for the Audit of the Financial Report (cont’d)

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 Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the responsible entities.

Conclude on the appropriateness of the responsible entities’ 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 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 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

CLAYTON HICKEY PARTNER

13 JULY 2020 NEWCASTLE NSW


ACN 096 090 372

Directors' Declaration

8

The directors declare that in the directors' opinion:

• there are reasonable grounds to believe that the registered entity is able to pay all of its debts, as and when they become due and payable; and

• the annual financial statements and notes satisfy the requirements of the Australian Charities and Not-for-profits Commission Act 2012 and the Corporations Act 2001.

Signed in accordance with subsection 60.15(2) of the Australian Charities and Not-for-profit Commission Regulation 2013.

Director .............................................................. Director .............................................................. Dated


ACN 096 090 372

Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 December 2019

The accompanying notes form part of these financial statements. 9

Note

2019

$

2018

$ Revenue 5 6,666,180 6,075,186

Raw materials and consumables used (84,160) (83,962)

Employee benefits expense (4,016,759) (3,785,038)

Depreciation and amortisation expense (852,789) (698,551)

Forum venues and facilities running expense (888,244) (983,310)

Representative team and affiliated club expense (120,400) (151,669)

Advertising expense (153,994) (140,626)

Other expenses (632,275) (463,691)

Finance expenses (120,556) (115,590)

Loss before income tax (202,997) (347,251) Income tax expense 3(b) - -

Loss for the year (202,997) (347,251)

Other comprehensive income for the year, net of tax - -

Total comprehensive income for the year (202,997) (347,251)


ACN 096 090 372

Statement of Financial Position As At 31 December 2019


Note

2019

$

2018

$

ASSETS CURRENT ASSETS Cash and cash equivalents 6 251,782 568,334

Trade and other receivables 7 246,556 234,207

Inventories 81,511 78,028

Other financial assets 8 1,200,000 950,000

Other assets 105,110 57,316

TOTAL CURRENT ASSETS 1,884,959 1,887,885 NON-CURRENT ASSETS Property, plant and equipment 9 10,854,439 10,543,043

TOTAL NON-CURRENT ASSETS 10,854,439 10,543,043 TOTAL ASSETS 12,739,398 12,430,928

LIABILITIES CURRENT LIABILITIES Trade and other payables 10 1,123,373 846,194

Borrowings 11 290,861 170,999

Employee benefits 198,129 200,280

TOTAL CURRENT LIABILITIES 1,612,363 1,217,473 NON-CURRENT LIABILITIES Borrowings 11 634,113 536,114

Employee benefits 80,808 62,230

TOTAL NON-CURRENT LIABILITIES 714,921 598,344 TOTAL LIABILITIES 2,327,284 1,815,817 NET ASSETS 10,412,114 10,615,111

EQUITY Retained earnings 10,412,114 10,615,111

TOTAL EQUITY 10,412,114 10,615,111


ACN 096 090 372

Statement of Changes in Equity For the Year Ended 31 December 2019


Retained Earnings

$

Total

$

Balance at 1 January 2019 10,615,111 10,615,111 Loss for the year (202,997) (202,997)

Balance at 31 December 2019 10,412,114 10,412,114

Balance at 1 January 2018 10,962,362 10,962,362

Loss for the year (347,251) (347,251)

Balance at 31 December 2018 10,615,111 10,615,111


ACN 096 090 372

Statement of Cash Flows For the Year Ended 31 December 2019


Note

2019

$

2018

$

CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers 6,268,529 5,560,847

Receipts from service level agreements 987,924 992,202

Payments to suppliers and employees (6,314,303) (6,210,670)

Interest received 21,305 19,352

Interest paid (120,556) (115,590)

Net cash provided by/(used in) operating activities 842,899 246,141

CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of plant and equipment 59,589 -

Purchase of property, plant and equipment (717,082) (86,476)

Transferred to term deposit (250,000) -

Net cash provided by/(used in) investing activities (907,493) (86,476)

CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of borrowings (251,958) (179,252)

Net cash provided by/(used in) financing activities (251,958) (179,252)

Net increase/(decrease) in cash and cash equivalents held (316,552) (19,587)

Cash and cash equivalents at beginning of year 568,334 587,921

Cash and cash equivalents at end of financial year 6 251,782 568,334


ACN 096 090 372

Notes to the Financial Statements For the Year Ended 31 December 2019

13

The annual financial report covers Newcastle University Sport as an individual entity. Newcastle University Sport is a not-for-profit Company, registered and domiciled in Australia.

The functional and presentation currency of Newcastle University Sport is Australian dollars.

The financial report was authorised for issue by those charged with governance on 26 June 2020.

Comparatives are consistent with prior years, unless otherwise stated. The Company reclassified Term Deposits with maturities greater than 3 months amounting to $950,000 from Cash and Cash equivalents to Financial Assets within the comparative balances.

1 Basis of Preparation

The financial statements are general purpose financial statements that have been prepared in accordance with the Australian Accounting Standards - Reduced Disclosure Requirements and the Australian Charities and Not-for-profits Commission Act 2012.

The financial statements 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.

2 Change in Accounting Policy

Revenue from Contracts with Customers - Adoption of AASB 15

The company has adopted AASB 15 from 1 January 2019. The standard provides a single comprehensive model for revenue recognition. The core principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction price. This is described further in the accounting policies below. Credit risk is presented separately as an expense rather than adjusted against revenue. Contracts with customers are presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset and amortised over the contract period.

The company has adopted AASB 1058 from 1 January 2019. The standard replaces AASB 1004 'Contributions' in respect to income recognition requirements for not-for-profit entities. The timing of income recognition under AASB 1058 is dependent upon whether the transaction gives rise to a liability or other performance obligation at the time of receipt. Income under the standard is recognised where: an asset is received in a transaction, such as by way of grant, bequest or donation; there has either been no consideration transferred, or the consideration paid is significantly less than the asset's fair value; and where the intention is to principally enable the entity to further its objectives. For transfers of financial assets to the entity which enable it to acquire or construct a recognisable non-financial asset, the entity must recognise a liability amounting to the excess of the fair value of the transfer received over any related amounts recognised. Related amounts recognised may relate to contributions by owners, AASB 15 revenue or contract liability recognised, lease liabilities in accordance with AASB 16, financial instruments in accordance with AASB 9, or provisions in accordance with AASB 137. The liability is brought to account as income over the period in which the entity satisfies its performance obligation. If the transaction does not enable the entity to acquire or construct a recognisable non-financial asset to be controlled by the entity, then any excess of the initial carrying amount of the recognised asset over the related amounts is recognised as income immediately.

The Company has applied AASB 15 and AASB 1058 using the cumulative effect method which means the comparative information has not been restated and continues to be reported under AASB 111, AASB 118, AASB 1004 and related interpretations.


ACN 096 090 372


2 Change in Accounting Policy

14

Leases - Adoption of AASB 16

The Company has adopted AASB 16 Leases using the modified retrospective (cumulative catch-up) method from 1 January 2019 and therefore the comparative information for the year ended 31 December 2018 has not been restated and has been prepared in accordance with AASB 117 Leases and associated Accounting Interpretations.

Impact of adoption of AASB 16

The impact of adopting AASB 16 is described below:

Company as a lessee

Under AASB 117, the Company assessed whether leases were operating or finance leases based on its assessment of whether the significant risks and rewards of ownership had been transferred to the Company or remained with the lessor. Under AASB 16, there is no differentiation between finance and operating leases for the lessee and therefore all leases which meet the definition of a lease are recognised on the statement of financial position (except for short-term leases and leases of low value assets).

3 Summary of Significant Accounting Policies

(a) Revenue and other income

Revenue from contracts with customers

The core principle of AASB 15 is that revenue is recognised on a basis that reflects the transfer of promised goods or services to customers at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

Generally the timing of the payment for sale of goods and rendering of services corresponds closely to the timing of satisfaction of the performance obligations, however where there is a difference, it will result in the recognition of a receivable, contract asset or contract liability.

None of the revenue streams of the Company have any significant financing terms as there is less than 12 months between receipt of funds and satisfaction of performance obligations.

Specific revenue streams

The revenue recognition policies for the principal revenue streams of the Company are:

Membership fees - Contract

The Company recognises revenue from membership fees relating from customer contracts proportionally over the period of the contract period. The customer is billed in advance with the receipt recognised as unearned income.

Membership and hire fees - No contract

The Company recognises revenue from membership and hire fees upon receipt from the customer as this aligns with the customer entering the facility and therefore receiving the benefit.


ACN 096 090 372



(a) Revenue and other income

Specific revenue streams

15

Service level agreement revenue

The Company recognises revenue from the service agreement with the University of Newcastle proportionally over the period of the contract. The Company receives milestone payments under the contract.

Rental income

Investment property revenue is recognised on a straight-line basis over a period of the lease term so as to reflect a constant periodic rate of return on the net investment.

(b) Income Tax

The Company is exempt from income tax under Division 50 of the Income Tax Assessment Act 1997.

(c) Goods 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.

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.

(d) Property, plant and equipment

Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment.

Items of property, plant and equipment acquired for nil or nominal consideration have been recorded at the acquisition date fair value.

Depreciation

Property, plant and equipment, excluding freehold land, is depreciated on a straight-line basis over the assets useful life to the Company, commencing when the asset is ready for use.

Leased assets and leasehold improvements are amortised over the shorter of either the unexpired period of the lease or their estimated useful life.

The depreciation rates used for each class of depreciable asset are shown below:


ACN 096 090 372



(d) Property, plant and equipment

16

Fixed asset class Depreciation rate

Plant and Equipment 10% - 33%

Improvements Shorter of life of the lease or useful life

At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.

(e) Financial instruments

Financial assets

The Company's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the statement of financial position.

Subsequent to initial recognition, trade and other receivables are carried at amortised cost less expected credit loss, cash and cash equivalents are carried at amortised cost using the effective interest rate method.

Term deposits with original maturities greater than three months, are classified as Other Financial Assets in the statement of financial position. Term deposits are carried at amortised cost using the effective interest rate method.

Interest income, foreign exchange gains or losses and impairment are recognised in profit or loss. Gain or loss on derecognition is recognised in profit or loss.

Trade receivables

Impairment of trade receivables have been determined using the simplified approach in AASB 9 which uses an estimation of lifetime expected credit losses. The Company has determined the probability of non-payment of the receivable and multiplied this by the amount of the expected loss arising from default.

The amount of the impairment is recorded in a separate allowance account with the loss being recognised in finance expense. Once the receivable is determined to be uncollectable then the gross carrying amount is written off against the associated allowance.

Where the Company renegotiates the terms of trade receivables due from certain customers, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in profit or loss.

Other financial assets measured at amortised cost

Impairment of other financial assets measured at amortised cost are determined using the expected credit loss model in AASB 9. On initial recognition of the asset, an estimate of the expected credit losses for the next 12 months is recognised. No asset has experienced significant increase in credit risk that would result in lifetime loss recognition.


ACN 096 090 372



(e) Financial instruments

17

Financial liabilities

The Company measures all financial liabilities initially at fair value less transaction costs, subsequently financial liabilities are measured at amortised cost using the effective interest rate method.

The financial liabilities of the Company comprise trade payables, loans and lease liabilities.

(f) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments with original maturities of three months or less which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

(g) 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 wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled.

Employee benefits expected to be settled more than one year after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cashflows are discounted using market yields on high quality government bond rates, with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss.

(h) Adoption of new and revised accounting standards

The Company has adopted all standards which became effective for the first time at 31 December 2019, the adoption of these standards has not caused any material adjustments to the reported financial position, performance or cash flow of the Company or refer to Note 2 for details of the changes due to standards adopted.

4 Critical Accounting Estimates and Judgments

Those charged with governance make estimates and judgements during the preparation of these annual 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.

Key estimates - impairment of property, plant and equipment

The Company assesses impairment at the end of each reporting period by evaluating conditions specific to the Company that may be indicative of impairment triggers. No impairment indicators were noted.


ACN 096 090 372


4 Critical Accounting Estimates and Judgments

18

Key estimates - receivables

The receivables at reporting date have been reviewed to determine whether there is any objective evidence that any of the receivables are impaired. An impairment provision is included for any receivable where the entire balance is not considered collectible. The impairment provision is based on the best information at the reporting date.


ACN 096 090 372


2019

$

2018

$

5 Revenue and Other Income

19

Revenue from contracts with customers (AASB 15) - Membership fees 2,453,883 2,351,115

- Service level agreement revenue 898,113 902,002

Revenue recognised on receipt (AASB 1058) - Merchandise sales 104,497 115,621

- Membership and hire fees 2,943,705 2,530,079

- Rental income 56,105 55,275

- Personal training revenue 44,829 42,232

- Interest income 21,305 29,066

- Other revenue 143,743 49,796

6,666,180 6,075,186

Employee benefits expense 4,016,759 3,785,038

Depreciation and amortisation expense 852,789 698,551

Forum venues and facilities running expense 888,244 983,310

Finance costs 120,556 115,590

5,878,348 5,582,489

Included in the operating result for the year ended 31 December 2019 was the depreciation and amortisation expense of $852,789 (2018: $698,551).

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:

Loss for the year (202,997) (347,251)

Depreciation and amortisation expense 852,789 698,551

649,792 351,300

The Directors consider that the exclusion of depreciation and amortisation provides a better reflection of trading performance in light of the circumstances noted above.

6 Cash and Cash Equivalents Cash on hand 1,140 1,600

Bank balances 250,642 366,734

Short-term deposits - 200,000

251,782 568,334


ACN 096 090 372


2019

$

2018

$

7 Trade and other receivables

20

CURRENT Trade receivables 246,412 232,282

GST receivable 144 -

Short term loans - 1,925 246,556 234,207

8 Other Financial Assets

CURRENT Term deposits - at amortised cost 1,200,000 950,000

9 Property, plant and equipment

PLANT AND EQUIPMENT

Capital works in progress At cost 40,612 13,302

Plant and equipment At cost 3,649,904 2,794,128

Accumulated depreciation (2,563,544) (2,246,044)

1,086,360 548,084

Leasehold Improvements At cost 18,842,162 18,621,318

Accumulated depreciation (9,114,695) (8,639,661)

9,727,467 9,981,657

10,854,439 10,543,043

(a) Movements in Carrying Amounts

Capital Works in Progress

$

Plant and Equipment

$

Leasehold Improvements

$

Total

$

Opening balance 13,302 548,084 9,981,657 10,543,043 Additions 40,612 852,255 280,732 1,173,599 Disposals - (9,414) - (9,414) Depreciation - (317,867) (534,922) (852,789) Transfers (13,302) 13,302 - -

Closing balance 40,612 1,086,360 9,727,467 10,854,439


ACN 096 090 372


2019

$

2018

$

10 Trade and Other Payables

21

CURRENT Trade payables 241,228 223,095

Sundry payables and accrued expenses 427,862 274,565

Deposits collected 56,168 26,233

Unexpired term memberships (i) 398,115 322,301

1,123,373 846,194

i. Unexpired term memberships reflect the remaining value of term memberships paid in advance and in the normal course of business, these amounts will not require cash settlement.

11 Borrowings

CURRENT Unsecured liabilities: Loan from the University of Newcastle 89,573 84,051

Secured liabilities: Lease liability secured 201,288 86,948 290,861 170,999

NON-CURRENT Unsecured liabilities: Loan from the University of Newcastle 197,188 286,761

Secured liabilities: Lease liability secured 436,925 249,353

634,113 536,114

(a) Leased Liabilities

Leased liabilities are secured by the underlying leased assets.

12 Leasing Commitments

(a) Finance leases

Minimum lease payments: - not later than one year 234,642 113,524

- between one year and five years 466,708 279,660

Minimum lease payments 701,350 393,184 Less finance charges (63,138) (56,884)

638,212 336,300


ACN 096 090 372


2019

$

2018

$

12 Leasing Commitments

22

(b) Concessionary lease

The Company has concessionary (below market value) leases with the University of Newcastle and Honeysuckle Development Corporation in relation to the sporting facilities and buildings utilised by the Company. The Company has elected to adopt the relief under AASB 2018-8 to measure the leases at cost.

• The Newcastle University lease agreement commenced on 1 January 2003 and expires on 31 December 2023, with an annual rent of $1.

• The Honeysuckle Development Corporation lease agreement commenced on 1 July 2015 and expires on 4 September 2101, with an annual rent of $1.

The Company may only utilise the sporting facilities and buildings for the purpose of recreation, sporting, educational and aquatic activities.

13 Lessor Commitments

Operating lease commitments receivable - Company as 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 January 2019 to 31 December 2021.

• Lease of the Forum Cafe premises. Term of lease from 21 October 2019 to 31 December 2021 with an option to renew for a further two years.

The future minimum lease payments under non-cancellable leases are: - no later than 1 year 55,970 54,696

- between 1 year and 5 years 55,970 43,992

Total minimum lease payments 111,940 98,688

14 Members' Guarantee

The Company is a Company limited by guarantee. If the Company is wound up, the constitution states that each member is required to contribute a maximum of $ 1 each towards meeting any outstandings and obligations of the Company.

15 Remuneration of Directors

All Directors of the Company act in an honorary capacity and receive no remuneration from the Company in respect of their directorship.


ACN 096 090 372


2019

$

2018

$

16 Contingencies

23

In the opinion of those charged with governance, the Company did not have any contingencies at 31 December 2019 (31 December 2018: None).

17 Related Parties

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

The following transactions occurred with related parties:

(a) The University of Newcastle

Revenue from hire of facilities 114,594 86,649

Loan liability 286,761 370,812

Loan repayments 105,279 105,279

Payment for utilities 397,641 405,655

18 Cash Flow Information

(a) Non-cash financing and investing activities Acquisition of assets by means of leases 469,819 -

(b) Borrowing facilities

Bank facility Facility limit 250,000 250,000

Amount used - -

250,000 250,000

19 Events after the end of the Reporting Period

The annual financial report was authorised for issue on 26 June 2020 by those charged with governance.

The impact of the COVID-19 outbreak resulted in the closure of the Company's facilities effective 23 March 2020. The Company re-opened in a reduced capacity on 13 June 2020 in accordance with its COVID-19 safety plan. The directors are continuing to adjust discretionary spending and obtain available financial support to ensure the ongoing financial viability of the Company.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years.


ACN 096 090 372


24

20 Statutory Information

The registered office and principal place of business of the company is:


c/- The University of Newcastle

University Drive

CALLAGHAN NSW 2308

Documents

Newcastle University Sport AGM/Final...2019/12/31 · Sydney Level 8, 1 O’Connell Street Sydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001 p +61 2 8346 6000 f +61 2 8346 6099