Annual Report 2018/19 Contents

ANNUAL REPORT 2018/19 CONTENTS

Notice of Annual General Meeting 1 Director’s Report 2 Chairman’s Report 5 Auditor’s Independence Declaration 7 Statement of profit or loss and other comprehensive income 8 Statement of financial position 9 Statement of changes in equity 10 Statement of cash flows 11 Notes to the financial statements 12 Director’s Declaration 27 Independent Auditor’s Report 28 Community Support 30 NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 31st 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, 28 November 2019 at 6.00pm.

AGENDA 1. Apologies 2. Confirmation of minutes from the last Annual General Meeting held on Thursday, 29 November 2018 3. Business arising out of minutes 4. Annual reports for adoption: 4.1 Chairman’s Report 4.2 Director’s Report, Independent Auditor’s Report and Financial Statements. 5. Approval of Committee Members’ remuneration year ended 30 June 2020 6. General Business (of which seven days written notice has been given).

Dated 01 October 2019 by order of the Board of Directors.

Lawrence Brindle Company Secretary

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 1 DIRECTOR’S REPORT

The Directors of Brisbane Broncos Leagues Club Limited “The Club” present their report together with the financial statements of the entity, for the year ended 30 June 2019. GENERAL INFORMATION Committee members The names of committee members throughout the year and at the date of this report are: Lawrence Brindle (President) Richard Kennerley (Vice President and Treasurer) (Resigned November 2018) Brendan Power (Vice President) Anthony Joseph (Treasurer) Gene Miles Jason Greenhalgh (Appointed 29 Nov 2018) David Asplin (Appointed 29 Nov 2018) Company Secretary The following person held the position of company secretary at the end of the financial year: Lawrence Brindle Principal activities The 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 entity’s activity occurred during the financial year. Short term objectives The short term objective is to manage the cash flows of the company so as to meet liabilities and finance facility improvements. Long term objective The 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 OBJECTIVES The strategy to achieve the short and long term objectives of the Club is through the provision of effective corporate strategies, including: - Making decisions that are consistent with the Club’s long term objectives. - Compliance with any relevant legislative industrial and administrative requirements. - Support of the community. - Providing a safe, healthy and discrimination-free Club environment. - Retaining quality staff, by promoting a culture of continuous professional development and training. The Club utilises industry benchmarks and budgets to develop key KPIs. 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.

2 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 DIRECTOR’S REPORT

INFORMATION ON DIRECTORS The names, qualifications, experience and special responsibilities of each person who has been a director during the year and to the date of this report are: Lawrence Brindle – President Lawrence Brindle joined the Board of Directors of the 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 resigned from the Board in November 2018. Brendan Power - Vice President Brendan Power joined the Board of Directors of the Club in 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. Brendan is the Chairman of the Club’s Audit, Risk and Remuneration committee. Anthony Joseph - Treasurer Tony Joseph joined the Board of Directors of the Club in 2014, and was appointed treasurer in November 2018. He has been a Director of Brisbane Broncos Limited for 8 years. He is Chairman of Brisbane Market Limited. Tony is a Member of the Australian Institute of Company Directors. Tony also sits on the Club’s Audit, Risk and Remuneration Committee. Gene Miles Gene Miles has been a Director of the Club for 18 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 the Club. Jason Greenhalgh Jason Greenhalgh joined the Board of Directors of the Club in November 2018. Jason holds a Bachelor of Business and was the Assistant Marketing Manager of Brisbance Broncos Ltd from 1992-1996. He is currently the Managing director of Major League Marketing & Events and a Queensland Committee Member of Redkite. David Asplin David Asplin joined the Board of Directors of the Club in November 2018. David holds a Bachelor of Business and is currently the Chief Operating Officer for QIC Global Real Estate. David was a member of the fund raising committee for the Clive Berghofer Centre, the Brisbane Broncos new state of the art training and community facility. David played rugby league in the Queensland Cup for Norths and Wests and also in the French Rugby League. David also sits on the Club’s Audit, Risk and Remuneration Committee. Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. The total loss after tax for the year is $799,000 (2018: profit of $417,000).

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 3 DIRECTOR’S REPORT

MEMBER GUARANTEE Brisbane 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 members 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 DIRECTORS During the financial year, 11 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows: Eligible to Attend Number Attended Lawrence Brindle 11 11 Richard Kennerley 5 2 (resigned November 2018) Anthony Joseph 11 10 Gene Miles 11 10 Brendan Power 11 10 Jason Greenhalgh 6 5 (appointed November 2018) David Asplin 6 6 (appointed November 2018)

AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration in accordance with section 307C of the Corporations Act 2001, for the year ended 30 June 2019 has been received and can be found on page 7 of the financial report. ROUNDING OF AMOUNTS Pursuant to class order 2016/191, 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 otherwise indicated. Signed in accordance with a resolution of the Board of Directors:

Lawrence Brindle President Dated: 22 August 2019

4 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 CHAIRMAN’S REPORT

GENERAL INFORMATION During the year under review the Club recorded a loss of $0.8m (2018: profit $0.42m). The fall of $1.2m was largely due to non-recurring items including the finalisation of costs for the legal dispute with Principal Properties and the tax assets write off. Cash from operating activities, excluding the non-recurring legal costs were impacted by reduced net gaming profits, lower rental incomes and some costs relating to our new brand positioning. This is an outstanding result given the business disruption caused by the renovation and the difficult trading conditions experienced during the year. A summary of the Club’s financial performance for the 2018/2019 financial year is set out below: 2019 2018 $’000 $’000 Revenue Sales – food and beverage 3,898 3,755 Gaming machine takings 11,056 11,323 Other 434 596 15,388 15,674 Expenses Cost of sales (3,127) (2,971) Gaming machine related expenses (4,062) (4,113) Employee & other (6,147) (6,407) (13,336) (13,491)

Profit before interest, tax, depreciation (EBITDA) 2,052 2,183 Finance costs (258) (280) Depreciation (1,393) (1,485) Profit/(loss) from operations 401 417 Court case costs (1,150) - Profit/(loss) before tax (749) 417 Income tax credit/(expense) (50) - Profit/(loss) for the year (799) 417

Your Board’s focus in recent years has been to secure the future of the Club. It is pleasing to report that substantial progress has been made. Of note are the following initiatives which have contributed to the revitalisation of your Club and the establishment of a solid base for the future. • Prior to June 30 we finalised the costs associated with the Principal Properties dispute allowing the Board & management to concentrate on the business. • The Club’s operations were restructured by initially outsourcing management and more recently bringing back in-house management under our new CEO Joe Kelly. • Under Mr Kelly’s management we were able to implement a significant upgrade to the food and beverage offering to provide a better service for members and attract the local community. • New funding from the National Australia Bank has allowed the commencement of a $6 million upgrade to the Club’s facilities.

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 5 CHAIRMAN’S REPORT

GENERAL INFORMATION (continued) • To reflect a more vibrant image the Club was rebranded as “The Broncos Club” to coincide with the upgrade to our facilities. • We upgraded our sponsorship of the premiership winning Brisbane Broncos NRLW team to reflect the diversity of our membership and reinforce our new brand proposition. The Club’s 2019/2020 results will be impacted by the disruption from the renovation in the first quarter and relaunch marketing costs. Your Club is very conscious of its community obligations. We directly contributed $3.08M to Queensland Government revenues, we employ 80 Queenslanders and invest over $230k in local Queensland organisations (sport & community). The Club now provides space to the Brisbane Broncos Old Boys at no cost to allow past players to continue their good works in the community. On behalf of the Board I wish to once again thank our management team and staff. All that has been achieved reflects the efforts of management and staff. We must also recognise the efforts of our CEO Joe Kelly, BSPN Architecture and the Rohrig Group for their work on the renovation project, a vital platform for the transformation of our business.

6 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 AUDITOR’S INDEPENDENCE DECLARATION

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 7 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 30 June 2019

NOTE 2019 2018 $’000 $’000 Food & beverage 3,898 3,755 Gaming machine takings 11,056 11,323 Other revenue 2 434 596

Food and beverage expense (3,127) (2,972) Gaming expense (4,062) (4,113) Promotions and entertainment expense (2,197) (2,058) Membership expense (147) (130) Property costs (1,216) (1,305) Administration expense (2,587) (2,914) Depreciation and amortisatio (1,393) (1,485) Finance costs (258) ( 280) Settlement of court case (1,150) - Profit/(loss) before income tax (749) 417 Income tax (expense) 3 (50) - Profit/(loss) for the year (799) 417 Other comprehensive income - - Total comprehensive income for the year (799) 417

The accompanying notes form part of these financial statements.

8 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 STATEMENT OF FINANCIAL POSITION as at 30 June 2019

NOTE 2019 2018 $’000 $’000 ASSETS Current Cash and cash equivalents 4 1,211 1,878 Trade and other receivables 5 90 43 Prepayments 6 405 248 Inventories 80 52 Total current assets 1,786 2,221 Non current Property, plant and equipment 7 12,870 10,662 Intangible assets 29 8 Deferred tax assets 11 - 51 Total non current assets 12,899 10,721 Total assets 14,685 12,942

LIABILITIES Current Trade and other payables 8 2,231 1,423 Borrowings 9 1,664 1,003 Provisions 10 649 169 Unearned revenue 66 38 Total current liabilities 4,610 2,633 Non current Borrowings 9 4,925 4,360 Long term provisions 10 5 5 Total non current liabilities 4,930 4,365 Total liabilities 9,540 6,998

Net assets 5,145 5,944

Equity Retained profits 5,145 5,944 Total equity 5,145 5,944

The accompanying notes form part of these financial statements.

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 9 STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2019

RETAINED NOTE TOTAL EARNINGS $’000 $’000 2018 Balance at 1 July 2017 5,527 5,527 Profit attributable to members of the entity 417 417 Balance at 30 June 2018 5,944 5,944

2019 Balance at 1 July 2018 5,944 5,944 Profit attributable to members of the entity (799) (799) Balance at 30 June 2019 5,145 5,145

The accompanying notes form part of these financial statements.

10 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 STATEMENT OF CASH FLOWS for the year ended 30 June 2019

NOTE 2019 2018 $’000 $’000 Cash flow from operating activities Receipts from customers 16,867 17,097 Payments to suppliers and employees (16,026) (15,108) Membership fees received 50 50 Interest paid (252) (273) Net cash provided by operating activities 12 639 1,766

Cash flow from investing activities Purchase of property, plant and equipment (2,092) (849) Purchase of intangible assets (33) (8) Proceeds from sale of property, plant and equipment 63 - Net cash used in investing activities (2,062) (857)

Cash flow from financing activities Proceeds from borrowings 1,728 986 Repayments of other loans (750) (1,157) Payment of finance lease liabilities (222) (113) Net cash used in financing activities 756 (284)

Net increase/(decrease) in cash and cash equivalents (667) 625 held Cash and cash equivalents at beginning of financial 1,878 1,253 year Cash and cash equivalents at end of financial year 4 1,211 1,878

The accompanying notes form part of these financial statements.

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 11 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

1. STATEMENT OF SIGNIFICANT The financial statements have been ACCOUNTING POLICIES prepared on an accrual basis and are based on historical costs unless (a) Basis of preparation otherwise stated in the notes. The financial report includes the financial statements and notes of Brisbane (b) Revenue and other income Broncos Leagues Club Ltd (“the Club”). The Club recognises revenue when the amount of revenue can be reliably These special purpose financial measured, it is probable that future statements have been prepared in economic benefits will flow to the entity accordance with Australian Accounting and specific criteria have been met for Standards and Interpretations issued each of the Club’s activities as discussed by the Australian Accounting Standards below. Revenue is measured at the fair Board and the Corporations Act 2001. value of the consideration received or The directors have prepared the financial receivable. statements on the basis that the Club Revenue from sale of goods, such as is a non-reporting entity because there food and liquor, is recognised when are no users dependent on general the significant risks and rewards of purpose financial statements. These ownership of the goods have passed to financial statements are therefore special the buyer and the costs incurred or to be purpose financial statements that have incurred in respect of the transaction can been prepared in order to meet the be measured reliably. Risks and rewards requirements of the Corporations Act of ownership are considered passed to 2001. the buyer at the time of delivery of the These financial statements have goods to the customer. been prepared in accordance with Revenue from gaming machines is the recognition and measurement recognised on the basis of daily takings. requirements specified by the Australian Accounting Standards and Interest revenue is recognised as the Interpretations and the disclosure interest accrues (using the effective requirements of AASB 101 Presentation interest rate method). of Financial Statements, AASB 107 Revenue from membership fees is Statement of Cash Flows, AASB recognised over the membership period. 108 Accounting Policies, Changes in Accounting Estimates and Errors, Members’ subscription payments in and AASB 1054 Australian Additional advance are included in unearned Disclosures. revenue. Other amounts received in advance of provision of goods or Brisbane Broncos Leagues Club Ltd is a services are also included in unearned not-for-profit company, incorporated and revenue. domiciled in Australia. All revenue is net of goods and services The significant accounting policies tax (GST). 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.

12 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

1. STATEMENT OF SIGNIFICANT The depreciation rates used for each ACCOUNTING POLICIES class of depreciable assets are: (continued) Buildings 1.33% - 10% Plant and equipment 10% - 33% (c) Property, plant and equipment Each class of property, plant and The assets’ residual values, depreciation equipment is carried at cost or fair value methods and useful lives are reviewed, as indicated less, where applicable, and adjusted if appropriate, at the end of any accumulated depreciation and each reporting period. impairment losses. An asset’s carrying amount is written Freehold land and buildings that have down immediately to its recoverable been contributed at no cost, or for amount if the asset’s carrying amount is nominal cost are valued and recognised greater than its estimated recoverable at the fair value of the asset at the date amount. it is acquired. Gains and losses on disposals are Plant and equipment determined by comparing proceeds Plant and equipment are measured on with the carrying amount. These gains the cost basis less depreciation and or losses are recognised immediately in impairment losses. profit or loss. When revalued assets are sold, amounts included in the revaluation The carrying amount of plant and surplus relating to that asset are equipment is reviewed annually by transferred to retained earnings. directors to ensure it is not in excess of the recoverable amount from these assets. (d) Leases The recoverable amount is assessed on Leases of fixed assets where the basis of the expected net cash flows substantially all the risks and benefits that will be received from the assets incidental to the ownership of the asset, employment and subsequent disposal. but not the legal ownership that are The expected net cash flows have been transferred to the Club are classified as discounted to their present values in finance leases. determining recoverable amounts. Finance leases are capitalised by Plant and equipment that have been recording an asset and a liability at contributed at no cost, or for nominal cost the lower of the amounts equal to the are valued and recognised at the fair value fair value of the leased property or the of the asset at the date it is acquired. present value of the minimum lease payments, including any guaranteed Depreciation residual values. Lease payments are The depreciable amount of all fixed allocated between the reduction of the assets including buildings and capitalised lease liability and the lease interest leased assets, but excluding freehold expense for that period. land, is depreciated on a straight line basis over the asset’s useful life to the Leased assets are depreciated on a Club commencing from the time the straight line basis over the shorter of asset is held ready for use. Leasehold their estimated useful lives or the lease improvements are depreciated over the term. shorter of either the unexpired period of

the lease or the estimated useful lives of the improvements.

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 13 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

1. STATEMENT OF SIGNIFICANT as hedging instruments are classified ACCOUNTING POLICIES into the following categories upon initial (continued) recognition: • amortised cost (d) Leases (continued) • fair value through profit or loss (FVPL) Lease payments for operating leases, • equity instruments at fair value where substantially all of the risks and through other comprehensive income benefits remain with the lessor, are (FVOCI) charged as expenses in the periods in • debt instruments at fair value which they are incurred. The lease is not through other comprehensive income recognised in the statement of financial (FVOCI) position. All income and expenses relating to financial assets that are recognised in (e) Financial instruments profit or loss are presented within finance Recognition, initial measurement and costs, finance income or other financial derecognition items, except for impairment of trade Financial assets and financial liabilities receivables which is presented within are recognised when the Club becomes other expenses. a party to the contractual provisions of the financial instrument, and are Classifications are determined by both: measured initially at fair value adjusted • The entity’s business model for by transaction costs, except for those managing the financial asset carried at fair value through profit or • The contractual cash flow loss, which are measured initially at fair characteristics of the financial assets value. Subsequent measurement of financial assets and financial liabilities Financial assets at amortised cost are described below. Financial assets are measured at amortised cost if the assets meet Financial assets are derecognised when the following conditions (and are not the contractual rights to the cash flows designated as FVPL): from the financial asset expire, or when • they are held within a business the financial asset and all substantial model whose objective is to hold risks and rewards are transferred. A the financial assets and collect its financial liability is derecognised when it contractual cash flows is extinguished, discharged, cancelled or • the contractual terms of the financial expires. assets give rise to cash flows that Classification and subsequent are solely payments of principal and measurement of financial assets interest on the principal amount Except for those trade receivables that outstanding do not contain a significant financing After initial recognition, these are component and are measured at the measured at amortised cost using the transaction price in accordance with effective interest method. Discounting is AASB 15, all financial assets are initially omitted where the effect of discounting measured at fair value adjusted for is immaterial. The Club’s cash and cash transaction costs (where applicable) equivalents, trade and most other For the purpose of subsequent receivables fall into this category. measurement, financial assets other than those designated and effective

14 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

1. STATEMENT OF SIGNIFICANT Financial liabilities are initially measured ACCOUNTING POLICIES at fair value, and, where applicable, (continued) adjusted for transaction costs unless the Club designated a financial liability (e) Financial instruments (continued) at fair value through profit or loss. Financial assets at fair value through Subsequently, financial liabilities are profit or loss (FVPL) measured at amortised cost using Financial assets that are held within a the effective interest method except different business model other than ‘hold for derivatives and financial liabilities to collect’ or ‘hold to collect and sell’ are designated at FVPL, which are carried categorised at fair value through profit subsequently at fair value with gains or and loss. Further, irrespective of business losses recognised in profit or loss (other model financial assets whose contractual than derivative financial instruments that cash flows are not solely payments of are designated and effective as hedging principal and interest are accounted for instruments). at FVPL. All interest-related charges and, if Equity instruments at fair value through applicable, changes in an instrument’s other comprehensive income (Equity fair value that are reported in profit or FVOCI) loss are included within finance costs or The Club has no equity instruments at finance income. fair value through other comprehensive income as at 30 June 2019. (f) Impairment of assets

Debt instruments at fair value through At the end of each reporting year, other comprehensive income (Debt FVOCI) Management reviews the carrying The Club has no debt instruments at values of its tangible and intangible fair value through other comprehensive assets to determine whether there is any income as at 30 June 2019. indication that those assets have been impaired. If such an indication exists, Trade and other receivables the recoverable amount of the asset, The Club makes use of a simplified being the higher of the asset’s fair value approach in accounting for trade and less costs to sell and value in use, is other receivables and records the loss compared to the asset’s carrying value. allowance at the amount equal to the Value in use is either the discounted expected lifetime credit losses. In using cash flows relating to the asset or this practical expedient, the Club uses its depreciated replacement cost if the historical experience, external indicators criteria in AASB 136 ‘Impairment of Assets’ and forward-looking information to are met. Any excess of the asset’s calculate the expected credit losses carrying value over its recoverable using a provision matrix. The Club assess amount is recognised immediately in the impairment of trade receivables on a profit or loss. collective basis as they possess credit risk characteristics based on the days Where it is not possible to estimate the past due. recoverable amount of an individual asset, Management estimates the Classification and measurement of recoverable amount of the cash financial liabilities generating unit to which the asset The Club’s financial liabilities include belongs. borrowings and trade and other payables.

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 15 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

1. STATEMENT OF SIGNIFICANT (h) Cash and cash equivalents ACCOUNTING POLICIES Cash and cash equivalents include cash (continued) on hand, deposits held at call with banks, (f) Impairment of assets (continued) other short term highly liquid investments with original maturities of three months Where the future economic benefits of or less which are convertible to a known the asset are not primarily dependent amount of cash and subject to an upon the asset’s ability to generate net insignificant risk of change in value, and cash inflows and when the Club would, bank overdrafts. Bank overdrafts are if deprived of the asset, replace its shown within short term borrowings remaining future economic benefits, value in current liabilities on the statement of in use is determined as the depreciated financial position. replacement cost of an asset. (i) Goods and services tax (GST) Assets, other than goodwill that have an allocated impairment loss are reviewed Revenues, expenses and assets are for reversal indicators at the end of each recognised net of the amount of GST, reporting period. After recognition of an except where the amount of GST incurred impairment loss, the amortisation charge is not recoverable from the Australian for the asset is adjusted in future periods Tax Office. In these circumstances the to allocate the asset’s revised carrying GST is recognised as part of the cost of amount on a systematic basis over its acquisition of the asset or as part of the remaining useful life. expense. Receivables and payables in the statement of financial position are Impairment losses are recognised as an shown inclusive of GST. expense immediately, unless the relevant asset is property, plant and equipment Cash flows are presented in the held at fair value (other than investment statement of cash flows on a gross property carried at a revalued amount) basis, except for the GST component of in which case the impairment loss is investing and financing activities, which treated as a revaluation decrease as are disclosed as operating cash flows. described in the accounting policy for (j) Income tax property, plant and equipment. The income tax expense (benefit) for (g) Employee benefits the year comprises current income tax Provision is made for the Club’s liability for expense (income). employee benefits arising from services Current income tax expense charged rendered by employees to the end of to the profit or loss is the tax payable the reporting period. Employee benefits on taxable income calculated using that are expected to be settled within applicable income tax rates enacted, one year have been measured at the or substantially enacted, as at the end amounts expected to be paid when the of reporting year. Current tax liabilities liability is settled. (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

16 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

1. STATEMENT OF SIGNIFICANT realisation and settlement of the ACCOUNTING POLICIES respective asset and liability will occur (continued) in future periods in which significant (k) Deferred tax amounts of deferred tax assets or liabilities are expected to be recovered or Deferred income tax expense reflects settled. movements in deferred tax asset and deferred tax liability balances during (l) Provisions the year as well as unused tax losses. Provisions are recognised when the Club Deferred tax assets and liabilities has a legal or constructive obligation, are ascertained based on temporary as a result of past events, for which it differences arising between the tax is probable that an outflow of economic bases of assets and liabilities and benefits will result and that outflow can their carrying amounts in the financial be reliably measured. statements. Deferred tax assets also result where amounts have been fully Provisions are measured at the present expensed but future tax deductions are value of Management’s best estimate available. No deferred income tax will be of the outflow required to settle the recognised from the initial recognition of obligation at the end of the reporting an asset or liability, excluding a business period. combination, where there is no effect on (m) Trade and other payables accounting or taxable profit or loss. Trade and other payables represent the Deferred tax assets and liabilities are liability outstanding at the end of the calculated at the tax rates that are reporting period for goods and services expected to apply to the period when received by the Club during the reporting the asset is realised or the liability is period which remain unpaid. The balance settled, based on tax rates enacted or is recognised as a current liability with substantively enacted at reporting date. the amounts normally paid within 30 Their measurement also reflects the days of recognition of the liability. manner in which management expects (n) Comparative figures to recover or settle the carrying amount When required by Accounting Standards, of the related asset or liability. comparative figures have been adjusted Deferred tax assets relating to temporary to conform to changes in presentation for differences and unused tax losses are the current financial year. recognised only to the extent that it is When the Club applies an accounting probable that future taxable profit will be policy retrospectively, makes a available against which the benefits of retrospective restatement or reclassifies the deferred tax asset can be utilised. items in its financial statements, a Deferred tax assets and liabilities are statement of financial position as at the offset where a legally enforceable right beginning of the earliest comparative of set-off exists, the deferred tax assets period will be presented. 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

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 17 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

1. STATEMENT OF SIGNIFICANT Information about significant judgements, ACCOUNTING POLICIES estimates and assumptions that have (continued) the most significant effect on recognition and measurement of assets, liabilities, (o) Critical accounting estimates and income and expenses is provided below. judgements (i) Useful lives of depreciable assets: Management evaluate estimates Management reviews the useful lives and judgments incorporated into the of depreciable assets at each reporting financial statements based on historical date, based on the expected utility of knowledge and best available current the assets to the Club. Actual results, information. Estimates assume a however, may vary due to technical reasonable expectation of future events obsolescence, particularly relating to and are based on current trends and software and IT equipment. economic data, obtained both externally and within the Club. (ii) Recoverable amount of property plant and equipment: The Club assesses (p) Adoption of new and revised accounting impairment at each reporting date by standards evaluating conditions specific to the Club During the current year, the Club that may lead to impairment of assets. adopted all of the new and revised Where an impairment trigger exists, the Australian Accounting Standards recoverable amount of the assets is and Interpretations applicable to its determined. The analysis to assess the operations which became mandatory. recoverable amount of property, plant & equipment is based on their value in use The adoption of these Standards has which involves an assessment of the had no significant impact on the financial Club’s net present value of estimated statements of the Club. future cash flows. There are a number of (q) New accounting standards for critical assumptions used in the value in application in future periods use calculation, in particular the growth rate of earnings, the level and timing The Club has considered account of future capital expenditure and the standards issued but not yet effective impact on earnings, and the discount and have determined that there is rate applied to the net cash flows. Refer no significant impact on the Club for to note 7. future reporting period. The Club has decided against early adoption of these (s) Going Concern Standards. While the Club is in a net current liability (r) Key judgements and estimates position of $2,824,000 (2018: $412,000) the Directors are of the view that the Club is When preparing the financial statements a going concern on the basis the Club is management undertakes a number of currently generating positive operating judgements, estimates and assumptions cash flows and has existing undrawn about recognition and measurement of debt facilities capable of extinguishing assets, liabilities, income and expenses. the deficiency. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

18 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

NOTE 2019 2018 $’000 $’000 2. REVENUE AND EXPENSES

Other revenue Commissions 223 220 Membership fees 53 50 Rent and recovery of outgoings 90 140 Entertainment shows 30 161 Other 38 25 434 596

3. INCOME TAX

Income tax (expense)/credit Current tax - - Deferred tax (50) - (50) - Reconciliation of income tax expense to prima facie tax payable (Loss)/profit for the year before income tax expense (749) 417

Income tax calculated at the Australian rate of 30% (225) 125 (2017: 30%) Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: Non-assessable net mutual income (397) (202) Net members only income 248 71 Impairment charge reversed not assessable - - Other items 374 6 - -

Utilisation of carried forward tax losses - - Movement in temporary differences 11 (50) - Income tax (expense)/credit (50) -

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 19 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

NOTE 2019 2018 $’000 $’000 4. CASH AND CASH EQUIVALENTS

Cash and cash equivalents Cash on hand 411 309 Cash at bank 800 1,569 1,211 1,878

Reconciliation of cash Cash 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 1,211 1,878 Balance as per statement of cash flows 1,211 1,878

5. TRADE AND OTHER RECEIVABLES

Current Trade receivables 37 34 Provision for doubtful debts - - 37 34 Other receivables 9 9 GST receivables 44 - 90 43

6. PREPAYMENTS

Prepayments 405 248 405 248

20 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

NOTE 2019 2018 $’000 $’000 7. PROPERTY, PLANT AND EQUIPMENT

Land At cost 5,620 5,620 Provision for impairment (1,620) (1,620) 4,000 4,000

Buildings At cost 19,590 19,602 Accumulated depreciation and impairment (16,413) (16,293) 3,177 3,309

Plant and equipment At cost 13,621 14,732 Accumulated depreciation (11,041) (11,422) 2,580 3,310

Work-In-Progress 3,113 43

Total property, plant and equipment 12,870 10,662

PLANT & WORK IN LAND BUILDINGS TOTAL EQUIPMENT PROGRESS $’000 $’000 Reconciliations Reconciliations of the carrying amounts of each class of property, plant and equipment are set out below: Balance at 1 July 2017 4,000 3,536 3,822 31 11,391 Additions - - 844 12 856 Disposals - (94) (6) - (100) Depreciation - (133) (1,352) - (1,485) Balance at 30 June 2018 4,000 3,309 3,308 43 10,662

Additions - - 643 3,070 3,713 Disposals - - (122) - (122) Depreciation - (133) (1,248) - (1,381) Balance at 30 June 2019 4,000 3,176 2,581 2,581 12,870

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 21 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

NOTE 2019 2018 $’000 $’000 8. TRADE AND OTHER PAYABLES

Current Trade payables 322 369 Sundry payables and accrued expenses 1,909 979 GST payable - 75 2,231 1,423

9. BORROWINGS Current Secured liabilities: Finance lease obligation 13(a) 281 178 Commercial loans 1,300 750

Unsecured liabilities: Other loans 83 75 Total current borrowings 1,664 1,003

Non current Secured liabilities Finance lease obligation 13(a) 315 170 Commercial loans 4,610 4,190 Total non-current borrowings 4,925 4,360 Total borrowings 6,589 5,363

Bank finance facilities At 30 June 2019 the Club has fully drawn down on two finance facilities for an amount of $4,190,000. The expiry date for these facilities are 30 April 2021. An additional finance facility has been made available to the Club for the purpose of renovations for $6,000,000. This facility has been drawn down to an amount of $1,720,334 and has an expiry of 30 April 2021. The Club also has hire purchase liabilities under an additional facility. This facility has a revolving limit of $1,000,000. At 30 June 2019 the total amount owing in relation to hire purchase liabilities under these facilities was $596,000 (2018: $347,000). Under the finance facilities, the financier holds a security interest and charge over all of the present and future rights, property and undertaking of the Club.

22 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

NOTE 2019 2018 $’000 $’000 10 PROVISIONS

Current Employee entitlements 194 169 Other provisions 14 455 - 649 169

Non current Employee entitlements 5 5 5 5

11. DEFERRED TAX ASSET

Deferred tax assets - 51

Deferred income tax relates to the following: Tax losses - - Employee benefits - 18 Accrued expenses - 33 Net deferred tax assets - 51

Benefit of tax losses not recognised 60 126

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 23 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

NOTE 2019 2018 $’000 $’000 12. CASH FLOW INFORMATION

(a) Reconciliation of result for the year to cash flows from operating activities Reconciliation of net income to net cash provided by operating activities Net profit for the period (799) 417 Cash flows excluded from profit attributable to operating activities Non-cash flows in profit: - depreciation and amortisation 1,393 1,485 - loss on disposal of property, plant and equipment 61 6 - loss on revaluation of property, plant and equipment - 94 - Capital expenditure not yet paid (1,151) - Changes in assets and liabilities, net of the effects of purchase of subsidiaries: - (Increase)/decrease in receivables (47) 24 - (Increase)/decrease in prepayments (157) 3 - (Increase)/decrease in inventories (28) (1) - (Increase)/decrease in deferred tax assets 51 - 143 - Increase/decrease in payables 808 (52) - Increase/(decrease) in unearned revenue 28 (353) - Increase/(decrease) in provisions 480 Cash flows from operations 639 1,766

(b) Non-cash activities During the 2019 year, the Club acquired plant and equipment with an aggregation fair value of $470,000 by means of hire purchase loans (2018: $306,000)

24 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

NOTE 2019 2018 $’000 $’000 13. CAPITAL AND LEASING COMMITMENTS

(a) Finance lease commitments Payable - minimum lease payments - no later than one year 299 167 - between 1 year and 5 years 327 180 Minimum lease payments 626 347

Future finance charges (30) (15) 596 332

Finance leases comprise of items of plant and equipment, mainly poker machines, under commercial hire purchase terms and conditions. These liabilities are secured by the underlying assets.

(b) Capital commitments

Capital expenditure commitments contracted for:

Club renovation 2,224 - 2,224 -

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 25 NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2019

14. CONTINGENT LIABILITIES AND CONTINGENT ASSETS As disclosed in the prior year financial statements, the Club had a case before the Supreme Court and subsequently the Court of Appeal in relation to a property transaction with Principal Properties. In the previous financial year the Club was required to pay Principal Properties $312,000 in damages and interest. This amount was paid, however an order of costs remained unquantifiable at the end of the prior period and as such a contingent liability existed. During the financial year, the parties reached an agreement to settle the liability for the Costs Order. The Club was to pay $1,150,000 to Principal Properties in instalments between June 2019 and December 2019. As at 30 June 2018 $700,000 of these costs have been paid consistent with the instalment dates and the outstanding $450,000 remain payable, refer to note 10. There are no contingencies or unknown future amounts in relation to this case or any other matters as at 30 June 2019.

15. 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.

16. COMPANY DETAILS Brisbane Broncos Leagues Club Limited 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 2019 the number of members was 28,934 (2018: 27,343). The registered office and principal place of business of the company is: Brisbane Broncos Leagues Club Ltd Fulcher Road RED HILL QLD 4059

26 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 DIRECTOR’S 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. 1. The financial statements and notes, as set out on pages 8 to 26 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 2019 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: 22 August 2019

BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 27 INDEPENDENT AUDITOR’S REPORT

28 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 | 29 COMMUNITY SUPPORT

The Brisbane Broncos Leagues Club Ltd is dedicated to assisting community programs and businesses that are devoted the provision of sporting, musical and educational activities and also those devoted to the care, well-being and assistance of others. This year the Club has provided assistance to the following businesses, events and charities: Ashgrove State School Brisbane Broncos Charity Fund Brisbane Broncos NRLW Brisbane Broncos Old Boys Brisbane Broncos Training Administration Community Facility Broncos Social Golf Club Cancer Council Queensland The Carbine Car Club Dancing Stars Toowoomba Ithaca Creek State School Laidley Lions Junior Rugby League Club Leukaemia Foundation MATES in Construction Men of League Foundation Multicultural Community Centre Oxenham Irish Dance Studio Pine Hills Lightning Baseball Club Red Hill Community Sports Club Red Hill Special School RSPCA Rural Aid (Parma for a Farmer) Starlight Children’s Foundation Five Chefs Dinner Surf Life Saving Australia The Salvation Army Australia

30 | BRISBANE BRONCOS LEAGUES CLUB ANNUAL REPORT 2018/2019 https://www.facebook.com/BroncosLeaguesClub/

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https://www.broncosclub.com.au Fulcher Rd Red Hill 3858 9000 www.broncosclub.com.au