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Annual Report 2020

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Annual Report 2020 Chairman’s Repor t 1 The Dollar 3 Our Business 4 Board of Director s 5 Our Venues 6 Authorised Purpose 7 Grant Funding Approve d 1 August 2019 to 31 July 2020 8 Grant Funding Decline d 1 August 2019 to 31 July 2020 19 Summary of Financial Statement s & Auditors Repor t 27 Chairman’s Report Year ending 31 July 2020 The reopening of venues was very welcome, and our One certainty over management company worked swiftly to enable all venues to trade within the various conditions the past year was imposed on the sliding scale of lockdown levels. We continuous change. saw a strong resurgence in turnover which also assisted venues with higher venue payments as they re-established their day to day trading. It was Early in the year we embarked on a significant a challenging period for operators and sta, and we structural change to the day to day operations. are very appreciative of their support and patience This involved outsourcing the entire business as new protocols were established and operation to Maxserv, a highly respected implemented. management company in the class 4 sector. We took this decision to lower our cost to serve with The response from DIA was welcomed across the the resulting benefit of increased funds for industry providing both relief from the distribution community distribution. The impact on our sta regulations and allowing a cash reserve to be was mixed. With the welcoming of new babies, two established over the next year of operation. The of our team left to enjoy being new mothers, while inadequacy of balance sheet strength in the sector the remainder of the team were oered a mix of has been a long-term problem highlighting the transitionary and permanent roles with Maxserv. inherent conflict between gambling regulations and The only redundancy was our CEO, Rick McLaren. the expected commercial responsibilities of We thank Rick for his dedicated leadership and Directors running the class 4 businesses. We will contribution to Infinity during his 3 years as CEO. strengthen our financial position in the year ahead and ensure our sustainability and resilience for Our next major challenge was the unexpected when the relief period comes to an end. cessation of all operations in March due to COVID-19. I do not think anyone was fully prepared During this time, we also maintained focus on our for the impact this had on the entire country. We future operating model to ensure that Infinity can moved quickly to ensure we remained viable during continue to operate despite the challenges of being this period of non-operation and fortunately were a small society. We engaged with several other able to continue to meet all obligations through societies early in the year looking for mutual this period. opportunities for the future. Grassroots Trust Central Limited — ANNUAL REPORT — 1 August 2019 - 31 July 2020 1 Growth in venue numbers is our focus for the year Ultimately a meeting ahead. We expect that the recognition of the Grassroots brand will be a positive consideration in of minds was reac hed our conversations with prospective venues. Early signs are encouraging with the significant eort with Grassroots Trust, provided by Maxserv to date. The pace of a large successful acquisition is often challenging as it is generally determined by expiry of existing agreements or society based in sale of venues. The uncertainty created with the impact of COVID-19 may well yield new Hamilton. opportunities. We have a positive outlook for the coming year. Grassroots is currently the fourth largest society in NZ. After many conversations we agreed that During the year we have continued to distribute Infinity would enter into a Collaboration Agreement approximately 90% of grant funds to the with Grassroots Trust. This would entail, among communities where the funds were raised from and other benefits, that Infinity would change its name have seen a good volume of new grant applicants. to “Grassroots Trust Central Limited” and operate We remain focussed on distributing a majority of under the Grassroots banner. We agreed a grants for sports and geing funding as close as territorial split that sees Grassroots operate and we can to the ultimate participants. The lower seek new venues north of Taupo, and Infinity do the amounts available for distribution will be same but south of Taupo. challenging in some areas for the next few months and we remain aware of considering the purpose of We share the same management company grant applications to assist in the most appropriate providing further synergies and benefits. The final way for local communities through this period. agreement was executed towards the end of the year with an eective date of 1 August to align with It is only through gaining more venues and the end of this financial year. We were pleased to improving gaming turnover that we can grow our receive the approval and support of the DIA for this distributions. We also have plans for capital new and innovative approach to operating in the investment over the next year in our various class 4 sectors. We welcomed Martin Bradley, chair gaming rooms to maximise our potential for of Grassroots Trust, to our Board table. We have returns. high expectations for the success of this new operating model and were encouraged by the Finally, a thank you to all the Infinity team and venue feedback from our various venues when the operators, along with the Directors who have changes were presented to them. contributed to the past year. Your continued support is recognised and appreciated. Regards, SEAN HANNAN Board Chairman - Grassroots Trust Central Limited Grassroots Trust Central Limited — ANNUAL REPORT — 1 August 2019 - 31 July 2020 2 The dollar Where does the money go? For every $1 spent at a gaming machine on average For every dollar put in to a gaming machine, 91 cents on 91% average is returned to the player in winnings. This is the RETURNED TO THE PLAYER highest rate of return of any form of legal gambling in New Zealand. At least 40% of revenue generated from gaming 2.7% machines and not returned to the player goes towards community initiatives in the form of grants. Every year, COMMUNITY pub and club gaming machines return around $300 milllion to the community through applications from around 13,000 groups. The Government receives around 40% in taxes, duties 2.6% and fees, and the rest goes towards administration and venue costs, and the mitigation of problem gambling. GOVERNMENT DUTY & TAX Around $11 million of gaming machine revenue goes to the Ministry of Health annually through the problem gambling levy for implementing their harm minimisation 1.1% programme. VENUE 1.1% MACHINE COSTS 0.5% OVERHEADS Grassroots Trust Central Limited — ANNUAL REPORT — 1 August 2019 - 31 July 2020 3 Our Why we do it Business Our Strategy Ethically Based Morally Driven Why we are here We believe in our communities and strive to ensure that our operations do not damage any Our Mission part of them. ‘To provide local funding to local communities’ Accountable We openly and transparently display our Our Vision performance (revenue raised, funds distributed, criteria for decisions) to our communities. funder of sport and community activity in the areas we operate. Empathetic We care about communities and seek to minimisation programmes. understand all we interact with. Our Purpose 1. To support local communities to become vibrant, active and connected places. 2. Remove barriers to participate in sport and community activities. • B est practice governance and management 3. To create an infrastructure of • Holistic in our approach to gaming community facilities. 4. Safe guard vulnerable individuals • Team orientated and communities from potential • Accountable, and innovative gambling harm. What we do 1. PARTNER with gaming venues in local communities. 2. M AXIMISE RETURN to the community and Industry leading minimise harm by providing total gaming Our venue management, compliance, harm solutions to our venues. aim to lead the sector. 3. PROVIDE THE BEST QUALITY gaming technology available. Innovative 4. DISTRIBUTE maximum funds to We learn from best practice and add the local communities. Grassroots touch, or develop our own 5. ENSURE funds are spent as granted. programmes. Grassroots Trust Central Limited — ANNUAL REPORT — 1 August 2019 - 31 July 2020 4 MIKE KNOBLOCH Director Mike is a chartered accountant with more than 25 Board of years’ experience in private practice and business consultancy. He spent 18 years in a private accounting practice, 15 of those as Directors director/principal. Based in Hawke’s Bay, Mike is a director and shareholder of a farming business, and has several business consultancy and advisory roles. Grassroots Trust Mike is a member of the Institute of Directors and the Institute of Chartered Accountants of New Zealand, Central is dedicated and has served on school boards for many years. to providing local ANDREW LOCKYER Director funding to local Andrew is an International Sales Executive with over 20 years experience in the primary export sector. He communities. is a member of the Pip-Fruit Export Advisory Panel and proudly delivers a significant volume of produce We share your passion and enthusiasm for to a variety of global consumers. amateur sport, education and various charitable A former age group provincial rugby representative community initiatives and we’re here to help. and coach, Andrew is a passionate supporter of sport though his participation is now firmly bound to Great care is taken to ensure funds granted are the sidelines. well used and for the authorised purpose, and many local communities have already benefited from a Grassroots Trust Central grant. MART IN BRADL EY Director SEAN HANNAN Martin Bradley joined the Grassroots Trust Central Chairman Limited Board in July 2020.
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