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ANNUALREPORTBRISBANE BRONCOS LEAGUES CLUB LIMITED 2015 / 2016

www.broncosleagues.com.au

BRISBANE BRONCOS LEAGUES CLUB LIMITED ANNUAL REPORT 2013 / 2014

Notice of Annual General Meeting 1

Chairman’s Report 2

Directors’ Report 4

Auditor’s Independence Declaration 6

Directors’ Declaration 7

Independent Auditor’s Report 8

Statement of Comprehensive Income 10

Statement of Financial Position 11

Statement of Changes in Equity 12

Statement of Cash Flows 13

Notes to the Financial Statements 14

Gender Report 29

NOTICE OFANNUAL GENERAL MEETING

Notice is hereby given that the 28th Annual General Meeting of Brisbane Broncos Leagues Club Ltd, ACN 010 798 679, will be held in the Darcey Mitchell Room, Brisbane Broncos Leagues Club Ltd, Fulcher Road, Red Hill on Thursday 10 November 2016 at 6.00pm.

AGENDA

1. Apologies2. Confirmation of minutes from the last Annual General Meeting held on Thursday 12 November 20153. Business arising out of minutes4. Annual reports for adoption: 4.1 Chairman’s Report 4.2 Directors’ Report, Independent Auditor’s Report and Financial Statements.5. Election of Officers 5.1 President 5.2 Vice President 5.3 Treasurer 5.4 Committee Members6. Approval of Committee Members’ remuneration year ended 30 June 20177. General Business (of which seven days written notice has been given).

NOMINATIONS FOR BOARD OF DIRECTORS

Persons wishing to nominate for the position of Director of Brisbane Broncos Leagues Club Limited are invited to do so before 6.00pm on Thursday 03 November, 2016. Nomination forms are available upon request from the Secretary and attention is drawn to section 3.7 of the Constitution of the Brisbane Broncos Leagues Club Limited.

Dated 10 October 2016 by order of the Board of Directors.

Lawrence BrindleCompany Secretary

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1CONTENTS


The Board of Directors of the Brisbane Broncos Leagues Club Limited present the 2015/2016 Annual Report to members.

During the year under review the Club reported a profit for the year of $1.389m (2015: loss $2.033m). EBITDARD (Earnings Before Interest, Tax, Depreciation, Amortisation, Rent and Donations) increased to $3.916m (2015: Decreased $0.843m) and net cash balances increased by $1.528m (2015: Decreased $0.987m).

A summary of the Club’s financial performance for the 2015/2016 financial year is set out below.

COMMENTARY ON OPERATIONS

On 1 September 2015 the company received approval from the Office of Liquor and Gaming to implement a management agreement with Club Services Pty Limited.

The new management implemented significant efficiency measures and drove improvements for the benefit of members.

Total revenue fell by $1.29m or 6.8%, a significant improvement in last year’s trend. The majority of the fall occurred in low margin catering revenues. We are in the process of reinvigorating our food offering and members can expect further developments in this area.

Cost control targeted industry best practice KPI’s and as a result expenses fell by $2.67m (15.8%). Once again the club was unable to sponsor the football club. The improvement in underlying profitability meant that it was unnecessary to

2016 2015

$’000 $’000

Revenue

Sales – food and beverage 4,964 5,857

Gaming machine takings 11,481 11,758

Other 1,251 1,367

17,696 18,982

ExpensesCost of sales (1,846) (2,499)

Gaming machine related expenses (4,202) (4,896)

Employee & other (8,158) (9,476)

(14,206) (16,871)

Profit before interest, tax, depreciation & sponsorship 3,490 2,111

Finance costs (392) (606)

Depreciation (1,709) (1,973)

Profit/(loss) from operations 1,389 (468)

Impairment – property, plant and equipment – (1,965)

Fair value gain – investment properties – 420

Sponsorship – Brisbane Broncos – –

Profit/(loss) before tax 1,389 (2,013)

Income tax credit/(expense) – (20)

Profit/(loss) for the year 1,389 (2,033)

CHAIRMAN’S REPORT

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repeat last years impairment write off ($1.965m). Last year’s fair value gain on the investment properties ($.42m) was also not repeated, however 2016 sundry revenue includes a gain of $0.343m due to the sale of these properties.

Our club exists primarily for the use of members. To improve the facilities we provide members we have reinvested our surplus cash flows into:• New and upgraded gaming machines,• Renovated foyer, new internal signage and some long overdue maintenance• Conversion of the Buffet to a Bistro facility• Staff development and training

Going forward membership fees for the 2017 year have been reduced to $2 from $7 per year and we expect surplus cash flows in the 2017 year to once again be reinvested into areas that will benefit members. Cash flows and debt over the next two years will also benefit from the repayment of all current gaming machine debt and the full year benefit of the initiatives already implemented.

Having stabilised the performance of the club by outsourcing it’s management to Club Services the Board now awaits the decision of the Supreme Court in the long running litigation disclosed in the accounts. Long term strategic initiatives are being developed to rebuild the club’s operational and financial strength.

On behalf of the Board I wish to thank our management team and staff, and in particular Russell Reeves, who has implemented the restructuring needs of the club. The involvement of other Club Services staff has de-risked the implementation of the significant changes to operations that had to occur for the club to survive and develop. Also mention must be given to those members who have continued to support the club through their regular attendance and by encouraging their family and friends to visit us.

Lawrence BrindleChairman

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The Directors of Brisbane Broncos Leagues Club Ltd “The Club” present their report together with the financial statements of the entity, for the year ended 30 June 2016.

1. GENERAL INFORMATIONCommittee membersThe names of committee members throughout the year and at the date of this report are:Lawrence Brindle (President)Richard Kennerley (Vice President)Gene MilesAnthony JosephBrendan Power (appointed 19 July 2016)

Company secretary – Lawrence Brindle held the position of company secretary at the end of the financial year.Principal activitiesThe principal activities of the company are to provide a social and sporting club and to support the game of rugby league specifically through the Brisbane Broncos.

No significant changes in the nature of the company’s activities occurred during the financial year.

Short term objectivesThe short term objective is to meet lending covenants by improving operating performance by conducting its business affairs in a sound and responsible manner.

Long term objectivesThe long term objectives of the club emanate from its stated principal purposes, which are:

(a) To provide for members and for members’ guests, a social and sporting club with all the usual facilities of a club, including liquor, and other refreshments, libraries and provision for sporting, musical and educational activities and other social amenities; and

(b) To sponsor, promote, foster, support and encourage the aims and objects of Brisbane Broncos Rugby League Club Limited and all matters pertaining thereto.

STRATEGY FOR ACHIEVING THE OBJECTIVESDuring the current financial year the club completed the sale of surplus assets and the renegotiation of its funding facilities to restructure the debt profile and provide funding for the upgrade of facilities. To implement the necessary changes to the operating performance the club employed an experienced club management group. Business plans, budgets and cash flows are being refined to ensure that the goals, objectives and business strategies are achieved.New departmental/management operating and reporting strategies are being implemented to support this objective.

The club utilises industry benchmarks and budgets to develop key KPI’s. External and internal management and the Board of Directors meet on a regular basis to monitor performance and ensure that operations are managed so as to ensure that the most relevant KPI’s are kept in focus.

INFORMATION ON DIRECTORSThe names, qualifications, experience and special responsibilities of each person who has been a directorduring the year and to the date of this report are:

LAWRENCE BRINDLE – PresidentLawrence Brindle joined the Board of Directors of Broncos Leagues Club in 2014. Previously he was the Chairman of Brisbane Broncos Ltd from 2011 to 2013, a Non-Executive Director from 2008 until 2013 and a Director of Brisbane Broncos (previously Pacific Sports Entertainment Ltd) from 1996 to 1998. Mr Brindle held the position of Finance Director of the Queensland Press Group from 1990 to 2009. He served as Director of the Australian Stockman’s Hall of Fame and Outback Heritage Centre and a Director of the North Queensland Cowboys Rugby League Football Ltd. Lawrence was also appointed Company Secretary on 26 March 2015.

RICHARD KENNERLEY – Vice President and Treasurer Richard Kennerley joined the Board of Directors of Broncos Leagues Club in 2014. He is Executive Director of the University of Queensland Business School, Executive Education and a Member of Youngcare Changemakers Advisory Council. Richard was previously State General Manager of the National Australia Bank. Richard has professional qualifications in banking and corporate treasury and is a Graduate of the Australian Institute of Company Directors.

GENE MILES Gene Miles has been a Director for 17 years and represented Australia in rugby league and is a former captain of the Brisbane Broncos. He is currently Executive Chairman of the Former Origin Greats (FOGS). Gene has been a selector for the Qld State of Origin team for the previous 15 years. He is also a life member of Broncos Leagues Club.

ANTHONY JOSEPHTony Joseph joined the Board of Directors of Broncos Leagues Club in 2014. He has been a Director of Brisbane Broncos Limited for 5 years. He is Chairman of Brisbane Market Limited and Vice Chairman of Brismark Pty Ltd. Tony is on the Committee for Queensland Men of League as well as a Member of the Australian Institute of Company Directors.

BRENDAN POWER Brendan Power was appointed as a director on 19 July 2016 and previously held positions as a Director of Eastern Suburbs Leagues Club and the Easts Leagues Foundation. Brendan holds a Bachelor of Business, a Master of Business Administration (MBA) and is a Graduate of the Institute of Company Directors.

MEMBER GUARANTEEBrisbane Broncos Leagues Club Ltd is a company limited by guarantee incorporated and domiciled in Australia. In the event of, and for the purpose of winding up of the company, the amount capable of being called up from each member and any person or association who ceased to be a member in the year prior to the winding up, is limited to $100 for all members, subject to the provisions of the club’s constitution.

MEETINGS OF DIRECTORSDuring the financial year, 12 meetings of directors (including committees of directors) were held.

Attendances by each director during the year were as follows:

AUDITOR’S INDEPENDENCE DECLARATIONThe lead auditor’s independence declaration in accordance with section 307C of the Corporations Act 2001, for the year ended 30 June 2016 has been received and can be found on page 6 of the financial report.

ROUNDING OF AMOUNTSPursuant to class order 98/0100, issued by the Australian Securities & Investments Commission, amounts in the directors report and financial report have been rounded off to the nearest thousand dollars unless otherwiseindicated.

Signed in accordance with a resolution of the Board of Directors:

Lawrence BrindlePresident

Dated:18 August 2016

DIRECTORS’ REPORT

Eligible to Attend Number Attended

Gene Miles 12 11Lawrence Brindle 12 11Richard Kennerley 12 10Anthony Joseph 12 9

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AUDITOR’S INDEPENDENCE DECLARATION

DIRECTORS’ DECLARATION

The Directors of the Club declares that:

The Directors have determined that the Club is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies described in Note 1 to the financial statements.

1. The financial statements and notes, as set out on pages 10 to 28 are in accordance with the Corporations Act 2001, and

(a) Comply with Accounting Standards and the Corporations Regulations 2001; and

(b) Give a true and fair view of the Group’s financial position as at 30 June 2016 and of its performance for the year ended on that date.

2. In the Director’s opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Lawrence Brindle President

Dated: 18 August 2016


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AUDITOR’S REPORT


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11STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION


NOTES 2016 2015$’000 $’000

Food & beverage 4,964 5,857Gaming machine takings 11,481 11,758Other revenue 2 1,251 1,367Gain on fair value adjustment 9 – 420

Food & beverage expense (3,920) (5,190)Gaming expense (4,202) (4,896)Promotions and entertainment expense (1,464) (1,708)Membership expense (297) (565)Property costs (1,280) (1,589)Administration expense (2,661) (2,707)Depreciation and amortisation (1,709) (1,752)Impairment charge - property, plant and equipment 8 – (1,965)Finance costs (392) (606)Other expenses (382) (437)Profit/(loss) before income tax 1,389 (2,013)Income tax credit/(expense) 3 – (20)Profit/(loss) for the year 1,389 (2,033)Other comprehensive income – –Total comprehensive income/(loss) for the year 1,389 (2,033)

NOTES 2016 2015$’000 $’000

AssetsCurrentCash and cash equivalents 4 823 303Trade and other receivables 5 49 50Inventories 6 50 56Investment properties held for sale 8 – 2,665Other assets 7 239 99Total Current Assets 1,161 3,173Non-CurrentProperty, plant and equipment 9 10,417 10,767Intangible assets 10 16 –Deferred tax assets 14 51 50Total Non-Current Assets 10,484 10,817Total Assets 11,645 13,990

LiabilitiesCurrentTrade and other payables 11 1,442 1,740Borrowings 12 5,415 8,928Provisions 13 199 377Unearned revenue 38 61Total Current Liabilities 7,094 11,106Non CurrentBorrowings 12 1,243 883Long term provisions 13 8 86Unearned revenue – 4Total Non-Current Liabilities 1,251 973Total Liabilities 8,345 12,079

Net Assets 3,300 1,911

EquityRetained earnings 3,300 1,911Total Equity 3,300 1,911

FOR THE YEAR ENDED 30 JUNE 2016 AS AT 30 JUNE 2016

The accompanying notes form part of these financial statements. The accompanying notes form part of these financial statements.

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13STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOWS


FOR THE YEAR ENDED 30 JUNE 2016 FOR THE YEAR ENDED 30 JUNE 2016

The accompanying notes form part of these financial statements. The accompanying notes form part of these financial statements.

NOTESRETAINED EARNINGS

TOTAL

$’000 $’000

2015

Balance at 1 July 2014 3,944 3,944Profit attributable to members of the entity (2,033) (2,033)Balance at 30 June 2015 1,911 1,911

2016Balance at 1 July 2016 1,911 1,911Profit attributable to members of the entity 1,389 1,389Balance at 30 June 2016 3,300 3,300

NOTES 2016 2015

$’000 $’000

Cash flow from operating activities

Receipts from customers 18,909 20,845

Payments to suppliers and employees (16,565) (18,779)

Membership fees received 165 210

Interest paid (392) (606)

Net cash inflow from operating activities 17 2,117 1,670

Cash flow from investing activitiesPurchase of property, plant and equipment (1,455) (91)

Purchase of intangible assets (16) –

Proceeds from sale of property, plant and equipment 3,028 4

Net cash used in investing activities 1,557 (87)

Cash flow from financing activitiesProceeds from borrowings 1,183 –

Repayment of bank borrowings (2,298) (900)

Repayments of other loans – (20)

Payment of finance lease liabilities (1,031) (1,650)

Net cash outflow from financing activities (2,146) (2,570)

Net increase/(decrease) in cash and cash equivalents held 1,528 (987)

Cash and cash equivalents at beginning of financial year (705) 282

Cash and cash equivalents at end of financial year 4 823 (705)

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Property, plant and equipment

Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Freehold land and buildings that have been contributed at no cost, or for nominal cost are valued and recognised at the fair value of the asset at the date it is acquired.

Plant and equipmentPlant and equipment are measured on the cost basis less depreciation and impairment losses.

The carrying amount of plant and equipment is reviewed annually by directors 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.

Plant and equipment that have been contributed at no cost, or for nominal cost are valued and recognised at the fair value of the asset at the date it is acquired.

DepreciationThe depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight line basis over the asset’s useful life to the Club 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.

The depreciation rates used for each class of depreciable assets are:Buildings 2.5% - 10%Plant and Equipment 10% - 33%

The assets’ residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

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 or losses are recognised immediately in profit or loss. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.

(e) Intangibles

Software is measured on the cost basis, less amortisation and impairment losses.

Software is considered to have a finite life, and is amortised on a systematic basis over the useful life of the software. The useful life of software on hand is 3 years.

(f) Leases (hire purchase agreements)

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to the Club are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts 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 that period.

Leased assets are depreciated on a straight line basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. The lease is not recognised in the statement of financial position.

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15NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS



1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the material accounting policies adopted by the Brisbane Broncos Leagues Club Limited (the “Club”) in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(a) Basis of preparation

The financial report includes the financial statements and notes of Brisbane Broncos Leagues Club Ltd (“the Club”).

These special purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001.

The directors have prepared the financial statements on the basis that the Club is a non-reporting entity because there are no users dependent on general purpose financial statements. These financial statements are therefore special purpose financial statements that have been prepared in order to meet the requirements of the Corporations Act 2001.

These financial statements have been prepared in accordance with the recognition and measurement requirements specified by the Australian Accounting Standards and Interpretations and the disclosure requirements of AASB 101 Presentation of Financial Statements, AASB 107 Statement of Cash Flows, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, and AASB 1054 Australian Additional Disclosures.

The Club is a not-for-profit company, incorporated and domiciled in Australia.

The significant accounting policies disclosed below are those which the directors have determined are appropriate to meet the needs of members. Such accounting policies are consistent with the previous period unless otherwise stated.

(b) Revenue and other income

The Club recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Club’s activities as discussed below. Revenue is measured at the fair value of the consideration received or receivable.

Revenue from sale of goods, such as food and liquor, is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are considered passed to the buyer at the time of delivery of the goods to the customer.

Revenue from gaming machines is recognised on the basis of daily takings.

Interest revenue is recognised as the interest accrues (using the effective interest rate method).

Revenue from membership fees is recognised over the membership period.

Members’ subscription payments in advance are included in unearned revenue. Other amounts received in advance of provision of goods or services are also included in unearned revenue.

All revenue is net of goods and services tax (GST).

(c) Inventories

Inventories are measured at the lower of cost and net realisable value.

Inventories acquired at no cost, or for nominal consideration are valued at the current replacement cost as at the date of acquisition, which is the deemed cost.


(g) Financial instruments (continued)

with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non cash assets or liabilities assumed, is recognised in profit or loss.

(h) Impairment of assets

At the end of each reporting year, Management 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. Value in use is either the discounted cash flows relating to the asset or depreciated replacement cost if the criteria in AASB 136 ’Impairment of Assets’ are met. Any excess of the asset’s carrying value over its recoverable amount is recognised immediately in the profit or loss.

Where it is not possible to estimate the recoverable amount of an individual asset, Management estimates the recoverable amount of the cash generating unit to which the asset belongs.

Where the future economic benefits of the asset are not primarily dependent upon the asset’s ability to generate net cash inflows and when the Club would, if deprived of the asset, replace its remaining future economic benefits, value in use is determined as the depreciated replacement cost of an asset.

Assets, other than goodwill that have an allocated impairment loss are reviewed for reversal indicators at the end of each reporting period. After recognition of an impairment loss, the amortisation charge for the asset is adjusted in future

periods to allocate the asset’s revised carrying amount on a systematic basis over its remaining useful life.

Impairment losses are recognised as an expense immediately, unless the relevant asset is property, plant and equipment held at fair value (other than investment property carried at a revalued amount) in which case the impairment loss is treated as a revaluation decrease as described in the accounting policy for property, plant and equipment.

(i) Employee benefits

Provision is made for the Club’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.

(j) 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.

(k) Goods and services tax (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 Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial position areshown 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.

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(g) Financial instruments

Initial recognition and measurementFinancial assets and financial liabilities are recognised when the Club becomes a party to the contractual provisions of the instrument. For financial assets, this is the equivalent to the date that the Club commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transactions costs, except where the instrument is classified ’at fair value through profit or loss’ in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurementFinancial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as; the amount at which the financial asset or financial liability is measured at initial recognition; less principal repayments; plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, thecontractual term) of the financial instrument to the

net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

The classification of financial instruments depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and at the end of each reporting period for held to maturity assets.

(i) Financial assets at fair value through profit or lossFinancial assets are classified at ‘fair value through profit or loss’ when they are held for trading for the purpose of short term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

The Club did not hold financial assets at fair value through profit or loss either in the current or comparative financial years.

(ii) Loans and receivablesLoans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period.

DerecognitionFinancial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated

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FOR THE YEAR ENDED 30 JUNE 2016


(l) Income tax

The income tax expense (benefit) for the year comprises current income tax expense (income).

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of reporting year. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred taxDeferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied

by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled

(m) Provisions

Provisions are recognised when the Club 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.

Provisions are measured at the present value of Management’s best estimate of the outflow required to settle the obligation at the end of the reporting period.

(n) Comparatives

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

When the Club applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its financial statements, a statement of financial position as at the beginning of the earliest comparative period will be presented.

(o) Trade and other payables

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Club during the reporting period which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016


(p) Investment properties

Investment properties, principally comprising residential properties, are held for long-term rental yields and are not occupied by the group. Investment properties are carried at fair value, which is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. These valuations are reviewed annually by the Directors. Changes in fair values are recorded in the profit or loss as part of other income or expenditure.

(q) Investment properties held for sale

Investment properties are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at fair value less costs to sell.

(r) Critical accounting estimates and judgements

Management evaluate estimates and judgments incorporated into the financial statements 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 Club.

(s) Adoption of new and revised accounting standards

During the current year, the Club adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. The adoption of these Standards has had no significant impact the financial statements of the Club.

(t) New accounting standards for application in future periods

The Club has considered account standards issued but not yet effective and have determined that there is no significant impact on the Club for future reporting period. The Club has decided against early adoption of these Standards.

(u) Key judgements and estimates

When preparing the financial statements management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses.

The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below.

(i) Useful lives of depreciable assetsManagement reviews the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets to the Club. Actual results, however, may vary due to technical obsolescence, particularly relating to software and IT equipment.

(ii) Recoverable amount of property plant and equipmentThe Club assesses impairment at each reporting date by evaluating conditions specific to the Club that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the assets is determined. The analysis to assess the recoverable amount of property, plant & equipment is based on their value in use which involves an assessment of the Club’s net present value of estimated future cash flows. There are a number of critical assumptions used in the value in use calculation, in particular the growth rate of earnings, the level and timing of future capital expenditure and the impact on earnings, and the discount rate applied to the net cash flows.

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(v) Going Concern

As at 30 June 2016 the Club has a net current asset deficiency of $5,933,000 (2015: $7,933,000) due mainly to the bank loan of $4,560,000 being classified as current in the financial year (refer Note 12). At the end of October 2015, a new facility was entered into with ANZ with an expiry date of 30 August 2017.

As noted in Note 16, there is an ongoing legal case before the Queensland Supreme Court. The Club would not have the financial capacity to pay any award of damages to Principal Properties if it is unsuccessful in this litigation.

The directors believe the Club is a going concern and able to pay its debts as and when they become due and given that a large portion of the current liabilities are not payable immediately but over the following twelve months out of future cash flows e.g. finance lease/hire purchase liabilities and employee benefits. The directors expect the Club’s operations

to generate net cash inflows sufficient to meet the Club’s ongoing liabilities. Additionally, there is an ongoing facility with both ANZ and Club Services which could assist if any cash shortfalls were to occur (Refer Note 12).

Given the above, the financial statements have been prepared on a going concern basis, which assumes that the Club will realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in the financial report. Ongoing operations are dependant on the matters described above. Should the Club not be able to earn sufficient profits to comply with its banking covenants and generate sufficient cash inflows to meets its financial obligations, there is a significant uncertainty that it will be able to continue as a going concern and whether it will realise its assets at the amounts stated in the financial report. No adjustments have been made relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary, should the Club not continue as a going concern.

NOTES 2016 2015$’000 $’000

2. Revenue and Expenses

Other revenue- Commissions 241 197

- Membership fees 165 231

- Rent & recovery of outgoings 336 362

- Entertainment shows 106 152

- Other 403 425

1,251 1,367

3. Income Tax

Income tax expense / (credit)

Current tax – –

Deferred tax – 20

– 20

Numerical reconciliation of income tax expense to prima facie tax payableProfit/(loss) for the year before income tax expense 1,389 (2,013)

Income tax calculated at the Australian rate of 30% (2015: 30%) 417 (604)

Tax effect of amounts which are not deductible/(taxable) in calculat-ing taxable income:- Non-assessable net mutual income (219) (88)

- Net taxable gain on sale of properties 125 –

- Net members only income (6) 96

- Impairment charge not deductible – 589

- Other items (91) 7

226 –

Benefit of carried forward tax losses utilised (226) –

Movement in temporary differences – 20

Income tax expense/(credit) 0 20

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NOTES 2016 2015$’000 $’000

4. Cash and cash equivalents

Cash on hand 280 248

Cash at bank 543 55823 303

Reconciliation of cashCash 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 823 303

Bank overdraft 12 – (1,008)

Balance as per statement of cash flows 823 (705)

5. Trade and other receivablesCurrentTrade receivables 49 48Provision for doubtful debts – (3)

49 45Other receivables – 5

49 50

6. InventoriesCurrentAt cost:Inventories 50 50

50 50

7. Other assetsCurrentPrepayments 239 99

239 99

NOTES 2016 2015$’000 $’000

8. Investment properties held for sale

Investment properties held for sale - at fair value – 2,665

Movement in investment properties:- Opening balance 2,665 –

- Reclassification from investment properties – 2,245

- Fair value adjustment – 420

- Sale (2,665) –

- Closing balance – 2,665During the financial year, the investment properties held for sale were sold for $3,100,000. The difference between the carrying value of the assets and the contract price less incidental costs to sell resulted in $343,000 being recognised as a gain on sale in the current period.

9. Property, plant and equipmentLandAt cost 5,620 5,620Provision for impairment (1,620) (1,620)

4,000 4,000

Buildings

At cost 19,717 19,717

Accumulated depreciation and impairment (16,048) (15,915)

3,669 3,802

Plant and equipment

At cost 14,253 13,203

Provision for impairment (1,965) (1,965)

Accumulated depreciation (9,540) (8,273)

2,748 2,965

Total property, plant and equipment 10,417 10,767

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9. Property, plant and equipment (continued)

At 30 June 2015 the directors considered the recoverable amount of property, plant and equipment based on their value in use which was based on an assessment of the Club’s net present value of estimated future cash flows. Future cash flows includes estimated earnings over the next three years, extrapolated thereafter using an estimated growth rate, and future capital expenditure in respect of plant and equipment and refurbishments. A pre-tax discount rate of 13% per annum was applied to the net cash flows. Based on these assumptions, an impairment of $1,965,000 has been applied to plant and equipment at 30 June 2015 as the carrying value of plant and equipment exceed its recoverable amount.

In the current year the directors have considered the requirements of AASB 136 and determined that there has been insufficient long term evidence in relation to the prior year assumptions to reverse this impairment. Based on the assumptions used in the prior periods, there has been no additional impairment noted in relation to the carrying value of plant and equipment.

ReconciliationsReconciliations of the carrying amounts of each class of property, plant and equipment are set out below:

LAND BUILDINGSPLANT &

EQUIPMENTTOTAL

Balance at 1 July 2014 4,000 3,935 6,203 14,138

Additions – – 507 507

Reverse prior year supplier rebate receivable – – 50 50

Depreciation – (133) (1,830) (1,963)

Impairment charge – – (1,965) (1,965)

Balance at 30 June 2015 4,000 3,802 2,965 10,767

Additions – – 1,455 1,455

Disposals – – (21) (21)

Depreciation – (133) (1,651) (1,784)

Balance at 30 June 2016 4,000 3,669 2,748 10,417

NOTES 2016 2015$’000 $’000

10. Intangible assets

SoftwareAt cost 77 71

Accumulated amortisation (61) (71)

Total intangible assets 16 –

ReconciliationBalance at 1 July – 10Additions 19 –Amortisation (3) (10)

Balance at 30 June 16 –

11. Trade and other payablesCurrentTrade payables 694 575Sundry payables and accrued expenses 689 1,165GST payable 59 –

1,442 1,740

12. Borrowings

Current

Secured liabilities

Bank overdrafts – 1,008

Finance lease obligation 809 1,010

Commercial loans 4,560 6,858

Unsecured liabilities

Other loans 46 52

Total current borrowings 5,415 8,928

Non Current

Secured liabilities

Finance lease obligation 53 883

Loan payable to Club Services Pty Ltd 1,190 –

Total non-current borrowings 1,243 883

Total borrowings 6,658 9,811

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NOTES 2016 2015$’000 $’000

15. Capital and leasing commitments

Payable - minimum lease payments

- no later than one year 830 1,079

- between 1 year and 5 years 53 904

883 1,983

Future finance charges (21) (90)

862 1,893

16. Contingent liabilities and contingent assets

The club entered into a call option agreement with Principal Properties Pty Ltd (Principal Properties) in November 2009. That option, if exercised, would have entitled Principal Properties to acquire a portion of the Club’s land at Fulcher Road located at the southern car parking area. The option has lapsed or in Principal Properties’ view, has been terminated. Principal Properties is seeking, under a claim lodged in the Queensland Supreme Court in July 2012, damages against the Club in an amount of approximately $7.5 million for the loss of profits Principal Properties says it has suffered as a result of the Club’s alleged repudiation of the option by not approving the draft development approval application prepared by Principal Properties. The Club has lodged its defence to that claim and is vigorously defending the action.

Principal Properties has provided an amount of $330,000 on account of security for the Club’s legal fees in this litigation which should be released to the Club if it is successful in its defence of Principal Properties’ claim. A substantial part (but not all) of the Club’s litigation costs are covered under an insurance policy held by the Club. The Club would not have the financial capacity to pay any award of damages to Principal Properties if it is unsuccessful in this litigation. A trial was held in September 2015. The judgement is reserved. There have been no further developments. Therefore, the board consider consistent treatment and disclosure to be appropriate.

12. Borrowings (continued)

Bank finance facilitiesThe Club renegotiated its finance facility with ANZ as at 22 October 2015 and has a current facility limit of $5,009,962 (2015: $6,858,000). The unused portion of this facility at year end is $449,000 (2015: $0) and the expiry date of the facility is 30 August 2017. Additionally the ANZ facility has an asset finance facility of $1,400,000 (unused facility: $920,000) as at 30 June 2016 which has an expiry not before the next review date.

The loan facilities require the Club to comply with certain financial covenants which include an interest cover ratio and debt to earnings ratio which are required to be tested quarterly.

During the period Club Services Pty Limited made available a facility of $1,500,000 for the purchase specifically of gaming machines, the facility has security over the gaming machines purchased. At the year end the total drawn down of this facility was $1,190,000.

The Club also has hire purchase liabilities under the same finance facilities. At 30 June 2016 the total amount owing in relation to hire purchase liabilities under these facilities was $862,000 (2015: $1,073,000).

Under the revised finance facility with ANZ, the financier holds a fixed and floating charge over all present and future assets and undertakings of the Club. The security held over the investment properties which were sold in the period was released under the revised facility dated 22 October 2015.

NOTES 2016 2015$’000 $’000

13. Provisions

Current

Employee entitlements 199 377

199 377

Non current

Employee entitlements 8 86

8 86

14. Deferred tax asset

51 50

Deferred income tax relates to the following:

Tax losses – 126

Employee benefits 12 36

Accrued expenses 39 14

Investment properties – (126)

Net deferred tax assets 51 50

Benefit of tax losses not recognised 13 124

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28 NOTES TO THE

FINANCIAL STATEMENTS


FOR THE YEAR ENDED 30 JUNE 2016

NOTES 2016 2015$’000 $’000

17. Cash flow information

Reconciliation of result for the year to cash flows from operatingactivities

Reconciliation of net income to net cash provided by operating activitiesNet profit for the period 1,389 (2,033)

Cash flows excluded from profit attributable to operating activities

Non-cash flows in profit:

- depreciation 1,784 1,973

- gain on fair value adjustment - investment properties – (420)

- impairment charge - property, plant and equipment – 1,965

- gain on sale of property, plant and equipment (343) (4)

Changes in assets and liabilities, net of the effects of purchase ofsubsidiaries:- (Increase)/decrease in receivables 1 114

- (Increase)/decrease in other prepayments (140) –

- (Increase)/decrease in inventories 6 40

- (Increase)/decrease in deferred tax assets – 20

- Increase/(decrease) in payables (298) 181

- Increase/(decrease) in unearned revenue (26) (21)

- Increase/(decrease) in provisions (256) (145)

Cash flows from operations 2,117 1,670

18. Events after the reporting date

No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Club, the results of those operations, or the state of affairs of the Club in future financial years.

19. Company details

Brisbane Broncos Leagues Club Ltd is incorporated under the Corporations Act 2001 and 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 $100 each towards meeting any outstanding obligations of the company. At 30 June 2016 the number of members was 35,117 (2015: 35,993).

The registered office and principal place of business of the company is:Brisbane Broncos Leagues Club LtdFulcher RoadRED HILL QLD 4059

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29GENDER REPORT

Brisbane Broncos Leagues Club Limited submitted the annual compliance report for the period of 1 April 2015 to 31 March 2016 to the Workplace Gender Equality Agency. The Club will be issued with a compliance certificate in September 2016 by the Workplace Gender Equality Act 2012 (Act).

The 2015-16 public report form submitted by Brisbane Broncos Leagues Club Limited to the Workplace Gender Equality Agency is available from the Human Resource Manager via email request to [email protected] or can be downloaded from the Club’s website at http://broncosleagues.com.au/our-club/annual-report/

Fulcher Rd Red Hill3858 9000

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