ADELAIDE FOOTBALL CLUB LIMITED | DIRECTORS’ REPORT | FOR THE YEAR ENDED 31 OCTOBER 2009
Your directors present their report on the Adelaide Football Club Limited (the Information of Directors Company) for the financial year ended 31 October 2009. Robert Chapman (Chairman) Qualifications Directors - Associate Dip Bus; MAICD; A Fin The names of the directors in office at any time during or since the end - Fellow, Australian Institute of Company Directors (FAICD) of the year are: - Fellow, Financial Services Institute of Australia (FFIN) R I Chapman (Chairman) A McEvoy (Appointed 12 December 2008) P J Hurley A J Payze Experience J S Sutton N J Smart (Deputy Chairman) - Managing Director, Bank SA (2002-current) A G Sheppard W B Sanders (Retired 12 December 2008) - Group Executive, St George Bank (2002-current) Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. - Regional General Manager- WA, SA, NT Commonwealth Bank of Australia Company Secretary - General Manager, Southern Australia, Colonial State Bank The following person held the position of Company Secretary at the end of - Manager SA & NT, Prudential Corporation the financial year: S G Trigg - President, Business SA (2005-2007) Principal Activities - President, Committee of Economic Development of Australia (2003-2006) The principal activities of the Company during the financial year were: - Catholic Church Diocesan Finance Council • the playing and promotion of Australian Rules Football - 2005 SA Great Award for Business There were no significant changes in the nature of the principal activities - “Can do for Kids” Ambassador during the financial year. - Chairman, Adelaide Football Club Ltd, 2009-current State of Affairs - Deputy Chairman, Adelaide Football Club Ltd 2008 In the opinion of the directors there were no significant changes in the state - Finance & Audit Committee Member 2007-current of affairs of the Company during the financial year under review. - Investment Committee Member 2008-current Operating Results The Net profit from ordinary activities before grant revenue and discontinuing operations for the year ended 31 October 2009 Nigel Smart (Deputy Chairman) was $98,652 (2008: 1,726,634). Qualifications Review of Operations - Bachelor of Arts, Flinders University During the year the Company continued to engage in its principal activities, - MBA, Adelaide University as described above, which includes the sale of merchandise from the shop, sponsorships, AFL distributions, membership, match day and season ticket sales. The results of which are disclosed in the attached financial report. Experience The Company has again had a financially successful year. - Adelaide Football Club Life Member, 2000 After Balance Date Events - Inaugural player of the Adelaide Football Club 1991 – 2004 No matters or circumstances have arisen since the end of the financial year - Played 310 AFL games with Adelaide Football Club which significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the - Played 8 State of Origin Matches Company in future financial years. - All Australian three times 1991, 1993, 1998 Future Developments - Adelaide Deputy Vice Captain, 1996 The need to explore further income streams is a major consideration of the - Adelaide Vice Captain 1997 – 2000 Board. - Premiership Player 1997, 1998 Further information about the likely developments in the operation of the - Member, Adelaide Team of the Decade Company and the expected results of these operations in future financial years have not been included in this report because disclosure of the - Wizard Cup Premiership Player 2003 information would be likely to result in unreasonable prejudice to the - Life Member, Australian Football League Company. - National Business Development Manager Jobs Statewide/Excel Recruitment 2008- current Environmental Issues - Business Development Manager, Disability Works Australia 2006 – 2008 The directors have considered environmental regulations under - Director, Adelaide Football Club Limited 2005 – current the law of the Commonwealth and State. The Company is unaware of any breaches to these regulations. - Director, Reclink Charity Organisation 2001 – 2003 - Network Development Manager, Toyota SA/NT 1997 – 2000 - Sales Manager, Lion Nathan Ltd 1993 – 1997
Special Responsibilities - Chairman Membership Committee - Deputy Chairman, Adelaide Football Club Limited 2009- current
02 | ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au ADELAIDE FOOTBALL CLUB LIMITED | DIRECTORS’ REPORT | FOR THE YEAR ENDED 31 OCTOBER 2009
Peter Hurley, DipT Andrew Payze Experience Experience - National Senior Vice President, Australian Hotels Association 2005 - current - Played 308 SANFL games - South Australian President, Australian Hotels Association 1994 – current - Represented South Australia on 6 occasions - Deputy Chairman, Independent Gaming Corporation 1996 – current - Captain, 1994 State Team - Chairman, Hospitality Group training 1997 – current - Premiership Player, Woodville West Torrens Football Club 1993 - Director, Australian Broadcasting Corporation 2006 - current - Life Governor, Woodville West Torrens Football Club - National President, Australian Hotels Association 1998 – 2000 - Vice Captain, Woodville West Torrens Football Club 1994 – 1998 - National Vice President, Australian Hotels Association 2002 - 2003 - Vice Captain, West Torrens Football Club 1988 – 1990 - Board Member, South Australian Tourist Commission 1997 – 2003 - Played 14 games with Adelaide Football Club 1991 – 1993 - Board Member, Australian Tourist Commission 2000 – 2004 - SANFL Life Member - Chairman, National Alcohol Beverage Industry Council 1998 – 2001 - Regional Sales Manager, HSBC Bank Australia Ltd (SA, WA, Vic) - Owner/Operator of 9 suburban hotels - Director, Adelaide Football Club Limited 2001 – current - Coterie Member of the Adelaide Football Club Limited - Director, Adelaide Football Club Limited 2000 – current Special Responsibilities - Chairman, List Management Committee Special Responsibilities - Deputy Chairman, Board of Directors, 2003 – 2006 Andrew McEvoy - Finance & Audit Committee Member 2009-current Qualifications - MA in International Communications (City University, London) - BA (University of Melbourne) Alan Sheppard - CPM (Australian Institute of Marketing) Experience - Managing Director & Owner, Alan Sheppard Constructions Pty Ltd Experience - Adelaide Football Club Life Member - Member, Australian Institute of Company Directors - Director, Adelaide Football Club Limited, 1995 – present - Chief Executive SA Tourism Commission 2007- current - Deputy Chairman, Adelaide Football Club Limited 2002 - Deputy Managing Director Tourism Australia 2004-2007 - Past Player & Official, Sturt Football Club - Board member, SA Great 2007- current - AFC Coterie Member 1991 – 2005 - Board member, Education Adelaide 2007- current - Board member, Indigenous Tourism Australia 2004-2007 Special Responsibilities - Director, Adelaide Football Club Limited 2009- current - Superintendent Training Facility Redevelopment - Chairman, Auction Committee Steven Trigg Qualifications John Sutton, FCA - Dip.T BEd Qualifications - MBA, University of Southern Cross - Fellow of the Institute of Chartered Accountants - Graduate, Australian Institute of Company Directors
Experience Experience - Director PKF, Chartered Accountants & Business Advisors - Chief Executive Officer, Adelaide Football Club Limited 2002 – current - Director, Adelaide Football Club Limited 2001 – current - Membership/Communications Manager, Adelaide Football Club Limited 1997 – 2001 - Chairman, Rope & Plastic International Group of Companies - Lloyd Helicopters – HR & Administration Manager 1991 – 1996 - Director, Crows Foundation - SANFL League Player, Central District Football Club and North Adelaide - Director, Accumalux Australia Pty Ltd Football Club - Captain Central District Football Club 1983 – 1984 Special Responsibilities - SANFL League Coach, Sturt Football Club 1991 – 1992 - Chairman, Finance & Audit Committee - Chairman, Rivergum Group of Companies Strategic Advisory Board - Chairman, Investment Committee - White Ribbon Ambassador - Director, Prostate SA Cancer Council Alliance
Special Responsibilities - Representative on all Committees - AFL Chief Executives Officer Meetings - AFL Presidents/CEO’s meetings - SANFL General Manager’s Meetings
ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au | 03 ADELAIDE FOOTBALL CLUB LIMITED | DIRECTORS’ REPORT | FOR THE YEAR ENDED 31 OCTOBER 2009
Meeting of Directors
During the financial year, 12 meetings of directors were held. Attendances were: DIRECTORS’ MEETINGS COMMITTEE MEETINGS Meetings Meetings Meetings Meetings Eligible to Attend Attended Eligible to Attend Attended Robert Chapman 12 12 4 2 Nigel J Smart 12 10 4 4 Peter J Hurley 12 10 4 3 Alan G Sheppard 12 12 - - John S Sutton 12 11 8 8 Andrew J Payze 12 10 14 10 Andrew McEvoy 10 6 - -
Indemnifying Officers or Auditor During the financial year, the Company paid premiums to insure the directors and officers of the Company. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the Company, arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium amounts between amounts relating to the insurance against legal costs and those relating to other liabilities. Proceedings on Behalf of the Company No person has applied for leave of court to bring proceedings on behalf of the Company to intervene in any proceedings to which the Company is party for the purpose of taking the responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. Auditor’s Independence Declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 7 of this financial report
SIGNED in accordance with a resolution of the Board of Directors:
CHAIRMAN R I Chapman
DIIRECTOR J S Sutton
Signed at Adelaide this 4th day of December 2009
04 | ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au ADELAIDE FOOTBALL CLUB LIMITED | INCOME STATEMENT | FOR THE YEAR ENDED 31 OCTOBER 2009
Note 2009 2008
$ $ Football operations revenue 2 24,963,994 24,426,095 Net merchandise revenue 3 328,632 311,830 Other revenue from operations 2 1,104,371 1,510,815 26,396,997 26,248,740 Employee benefits expense (16,869,240) (15,142,009) Season ticket, AFL membership, and sponsorship expense (4,582,889) (4,175,922) Football charges 4 (1,176,513) (1,211,321) Travel and training expenses (687,308) (761,822) Administration expense (675,782) (815,462) Marketing and advertising expense (445,450) (479,769) Depreciation and amortisation expense (261,192) (359,163) Other expenses from ordinary activities (1,571,085) (1,582,733) Net profit from operating activities before grant revenue and write off of player facility 98,652 1,726,634
Grant revenue 2 7,162,672 - Write off of player facility - demolished 4(a) - (1,586,971) Profit/(loss) from discontinuing operations 4(b) (883,990) (45,163) Net profit for the year 6,377,334 88,405
ADELAIDE FOOTBALL CLUB LIMITED | BALANCE SHEET | AS AT 31 OCTOBER 2009
Note 2009 2008 $ $ CURRENT ASSETS Cash and cash equivalents 6 213,566 13,528,058 Trade and other receivables 7 1,036,003 669,346 Inventories 80,787 188,236 Other current assets 8 55,107 37,342 TOTAL CURRENT ASSETS 1,385,463 14,422,982
NON-CURRENT ASSETS Property, plant and equipment 9 22,709,599 7,014,987
TOTAL NON-CURRENT ASSETS 22,709,599 7,014,987 TOTAL ASSETS 24,095,062 21,437,969
CURRENT LIABILITIES Trade and other payables 10 1,091,362 1,859,016 Unearned income 11 72,280 5,660,226 Borrowings 12 2,531,278 - Short-term provisions 13 739,898 681,531
CURRENT LIABILITIES 4,434,818 8,200,773
NON-CURRENT LIABILITIES Long-term provisions 13 126,527 80,813
TOTAL NON-CURRENT LIABILITIES 126,527 80,813
TOTAL LIABILITIES 4,561,345 8,281,586 NET ASSETS 19,533,717 13,156,383
EQUITY Issued capital 14 2 2 Reserves 15 371,615 371,615 Retained earnings 19,162,100 12,784,766 TOTAL EQUITY 19,533,717 13,156,383
ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au | 05 ADELAIDE FOOTBALL CLUB LIMITED | STATEMENT OF CHANGES IN EQUITY | FOR THE YEAR ENDED 31 OCTOBER 2009
Issued Capital Reserves Retained Earnings Total $ $ $ $ Balance at 1 November 2007 2 371,615 12,696,361 13,067,978 Net profit for the year - - 88,405 88,405 Balance at 31 October 2008 2 371,615 12,784,766 13,156,383 Net profit for the year - - 6,377,334 6,377,334 Balance at 31 October 2009 2 371,615 19,162,100 19,533,717
ADELAIDE FOOTBALL CLUB LIMITED | STATEMENT OF CASH FLOW | FOR THE YEAR ENDED 31 OCTOBER 2009 Note 2009 2008 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Receipts from football and other operations 30,097,575 33,451,318 Payments to suppliers, players, employees and licenser (29,318,301) (25,373,136) Interest received 243,634 816,142 Net cash provided by operating activities 16(a) 1,022,908 8,894,324 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (17,118,678) (3,970,980) Proceeds from the sale of investments - 1,350,000 Proceeds from the sale of plant and equipment 250,000 - Net cash used in investing activities (16,868,678) (2,620,980) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 2,500,000 - Net cash used in investing activities 2,500,000 - Net increase/(decrease) in cash held (13,345,770) 6,273,344 Cash at the beginning of the financial year 13,528,058 7,254,714 Cash at the end of the financial year 6(a) 182,288 13,528,058
ADELAIDE FOOTBALL CLUB LIMITED | NOTES TO THE FINANCIAL STATEMENTS | FOR THE YEAR ENDED 31 OCTOBER 2009 NOTE 1 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The depreciation rates used for each class of depreciable assets are: The financial report is for the Adelaide Football Club Limited (the “Company”) Class of non-current asset Depreciation Rate Basis of depreciation as an individual entity incorporated and domiciled in Australia. The Company is Plant and equipment 20% (straight line) limited by guarantee. Buildings 5-6% (straight line) Basis of preparation Motor vehicles 20% (diminishing value) Gaming machines 20% (straight line) The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards (including Australian The assets’ residual values and useful lives are reviewed, and adjusted if Accounting Interpretations) and the Corporations Act 2001. appropriate, at each balance sheet date. Australian Accounting Standards set out accounting policies that the AASB has An asset’s carrying amount is written down immediately to its recoverable concluded would result in a financial report containing relevant and reliable amount if the asset’s carrying amount is greater than its estimated recoverable information about transactions, events and conditions. Compliance with amount. Australian Accounting Standards ensures that the financial statements and Gains and losses on disposals are determined by comparing proceeds with the notes also comply with International Financial Reporting Standards. Material carrying amount. These gains or losses are included in the income statement. accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated. (b) Inventories The financial report has been prepared on an accruals basis and is based on Inventories are measured at the lower of cost and net realisable value. Inventory historical costs, modified, where applicable, by the measurement at fair value of held for re-sale is recognised on an average cost basis. selected non-current assets, financial assets and financial liabilities. (c) Income Tax Accounting Policies No income tax is payable as the company is an exempt sporting organisation in (a) Property, plant and equipment accordance with Section 50-45 of the Income Tax Assessment Act 1997. Each class of property, plant and equipment is measured on the cost basis less (d) Financial Instruments any accumulated depreciation and impairment losses. Initial recognition and measurement Plant and equipment Financial assets and financial liabilities are recognised when the Company Plant and equipment is measured on the cost basis less depreciation and becomes a party to the contractual provisions to the instrument. For financial impairment losses. assets, this is equivalent to the date that the Company commits itself to either purchase or sell the asset (ie trade date accounting is adopted). Financial The carrying amount of property, plant and equipment is reviewed annually by instruments are initially measured at fair value plus transactions costs except directors to ensure it is not in excess of the recoverable amount. The recoverable where the instrument is classified ‘at fair value through profit or loss’ in which amount is assessed on the basis of the expected net cash flows which will be case transaction costs are expensed to profit or loss immediately. received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining Classification and Subsequent Measurement recoverable amounts. Finance instruments are subsequently measured at either fair value, amortised Subsequent costs are included in the asset’s carrying amount or recognised as cost using the effective interest rate method or cost. Fair value represents the a separate asset, as appropriate, only when it is probable that future economic amount for which an asset could be exchanged or a liability settled, between benefits associated with the item will flow to the entity and the cost of the item knowledgeable, willing parties. Where available, quoted prices in an active can be measured reliably. All other repairs and maintenance are charged to the market are used to determine fair value. In other circumstances, valuation income statement during the financial period in which they are incurred. techniques are adopted. Depreciation (i) Loans and receivables The depreciable amount of all fixed assets including buildings is depreciated Loans and receivables are non-derivative financial assets with fixed or using a combination of straight line and diminishing value methods commencing determinable payments that are not quoted in an active market and are stated at from the time the asset is held ready for use. cost using the effective interest rate method.
06 | ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au ADELAIDE FOOTBALL CLUB LIMITED | NOTES TO THE FINANCIAL STATEMENTS | FOR THE YEAR ENDED 31 OCTOBER 2009
(ii) Financial liabilities brought to account as revenue received in advance. Non-derivative financial liabilities are recognised at amortised cost, comprising (k) Player Acquisition Costs original debt less principal payments and amortisation. Player acquisition costs are written off in the year they are incurred as uncertainty Impairment exists as to the term over which the benefit will be received. At each reporting date, the Company assesses whether there is objective (l) Borrowing costs evidence that a financial instrument has been impaired. Impairment losses are Borrowing costs directly attributable to the acquisition, construction recognised in the Income Statement. or production of assets that necessarily take a substantial period of time to Derecognition prepare for their intended use or sale, are added to the cost of those assets, until Financial assets are derecognised where the contractual rights to receipt of cash such time as the assets are substantially ready for their intended use or sale. flows expires or the asset is transferred to another party whereby the entity All other borrowing costs are recognised in income in the period in which they are no longer has any significant continuing involvement in the risks and benefits incurred. associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between (m) Revenue the carrying value of the financial liability, which is extinguished or transferred to Revenues are recognised at fair value of the consideration received net of the another party and the fair value of consideration paid, including the transfer of amount of goods and services tax (GST) payable to the Australian Taxation Office non-cash assets or liabilities assumed, is recognised in profit or loss. (ATO). No revenue is recognised if there are significant uncertainties regarding the recovery of the consideration due, the costs incurred or to be incurred cannot (e) Employee Benefits be measured reliably, there is a risk of return of goods or there is continuing Wages, salaries and annual leave management involvement with the goods. Provision is made for the company’s liability for employee benefits arising Sales Revenue from services rendered by employees to balance sheet date. Employee benefits expected to be settled within one year together with benefits arising from Sales revenue from football activities comprises revenue earned from the sales of wages, salaries and annual leave which may be settled after one year, have been memberships, corporate marketing, sponsorships, the sale of merchandise, gate measured at the amounts expected to be paid when the liability is settled. Other receipts and AFL distributions. employee benefits payable later than one year have been measured at the net AFL Distribution and prize money present value. AFL distribution and prize money income is recognised as it is received. Long service leave Membership and match day income The provision for employee benefits for long service leave represents the Membership income is recognised throughout the duration of the AFL Home present value of the estimated future cash outflows to be made resulting from and Away season. Match day income is recognised at the conclusion of each AFL employees’ services provided up to reporting date. home game. The provision is calculated using expected future increases in wage and salary rates including related on-costs and expected settlement dates based Sponsorship income on turnover history and is discounted using the rates attaching to national Sponsorship income is recognised in the income statement in proportion to the government securities at balance date which most closely match the terms of state of completion of the transaction at balance date in accordance with the maturity of the related liabilities. The unwinding of the discount is treated as terms and conditions of the sponsorship contract. long service leave expense. (n) Government Grants In 2003 the AFL announced an agreed Player Long Service Leave policy which was Government grants are recognised at fair value where there is reasonable ratified by the AFL Players Association and the Industrial Relations Commission. assurance that the grant will be received and all grant conditions will be met. AFL Players will have an annual long service leave entitlement built into the end Grants relating to expense items are recognised as income over the periods of season break, based on the number of years service. An AFL Player with greater necessary to match the grant to the costs they are compensating. than 4 years continuous service, but less than 8 years will be entitled to 1 week additional entitlement and a player with greater than 8 years continuous service Capital grants relating the construction or acquisition of assets are initially will be entitled to 2 weeks. deferred as unearned revenue and are recognised as revenue in the period in which all grant conditions are met. The Company continues to recognise an accrual for long service leave in accordance with the Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which Long Service Leave Act 1987 (SA) for players with greater than 7 years service are recoverable from, or payable to, the ATO are classified as operating cash flows. prior to the establishment of the above AFL policy (2 September 2002). Prior to this agreement players with greater than 7 years service accrued between 5 - 8 (o) Goods and services tax (GST) days long service leave per season. The terms of these agreements between the Government grants are recognised at fair value where there is reasonable Company and individual players regarding long service leave entitlements are assurance that the grant will be received and all grant conditions will be met. now superseded by the new AFL policy. Grants relating to expense items are recognised as income over the periods Superannuation necessary to match the grant to the costs they are compensating. Contributions are made by the company to an employee superannuation fund Capital grants relating the construction or acquisition of assets are initially and are charged as expenses when incurred. deferred as unearned revenue and are recognised as revenue in the period in (f) Impairment of Assets which all grant conditions are met. At each reporting date, the entity reviews the carrying value of its assets to Cash flows are included in the statement of cash flows on a gross basis. The GST determine wither there is any indication that those assets have been impaired. If components of cash flows arising from investing and financing activities which such an indication exists, the recoverable amount of the asset, being the higher are recoverable from, or payable to, the ATO are classified as operating cash flows. of the asset’s fair value less costs to sell and value in use, is compared to the (p) Comparative figures asset’s carrying value. Any excess of the asset’s carrying value over its recoverable When required by Accounting Standards, comparative figures have been adjusted amount is expensed to the Income Statement. to conform to changes in presentation for the current financial year. Where it is not possible to estimate the recoverable amount of an assets class, the entity estimates the recoverable amount of the cash-generating unit to (q) Critical Accounting Estimates and Judgements which the class of assets belong. The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. (g) Cash and cash equivalents Estimates assume a reasonable expectation of future events and are based on Cash and cash equivalents include cash on hand, deposits held at call with banks, current trends and economic data, obtained both from within the Company and other short-term highly liquid investments with original maturities of three externally. Actual results may be different from these estimates. months or less. Bank overdrafts are recognised within short-term borrowings on the balance sheet. (r) new Accounting Standards for Application in Future Periods (h) Provisions The AASB has issued new, revised and amended standards and interpretations that have mandatory application dates for future reporting periods. The company Provisions are recognised when the group has a legal or constructive obligation, has decided against early adoption of these standards. A discussion of those as a result of past events, for which it is probable that an outflow of economic future requirements and their impact on the company is as follows: benefits will result and that outflow can be reliably measured. Provisions recognised represent the best estimate of the amounts required to settle the • AASB 101: Presentation of Financial Statements, AASB 2007-8: Amendments obligation at reporting date. to Australian Accounting Standards arising from AASB 101, and AASB 2007-10: Further Amendments to Australian Accounting Standards arising from AASB (i) trade and other payables 101 (all applicable to annual reporting periods commencing from 1 January These amounts represent liabilities for goods and services provided to the 2009). The revised AASB 101 and amendments supersede the previous AASB 101 Company prior to the end of the financial year which are unpaid. The amounts and redefines the composition of financial statements including the inclusion are unsecured and usually paid within 60 days of recognition. of a statement of comprehensive income. There will be no measurement or recognition impact on the company. If an entity has made a prior period (j) Revenue received in advance adjustment or reclassification, a third balance sheet as at the beginning of the Sponsorship revenue received relating to subsequent accounting periods is comparative period will be required.
ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au | 07 ADELAIDE FOOTBALL CLUB LIMITED | NOTES TO THE FINANCIAL STATEMENTS | FOR THE YEAR ENDED 31 OCTOBER 2009
Note 2009 2008 $ $ NOTE 2 - REVENUE The following significant revenue items are relevant in explaining the financial Football operations revenue Season ticket sales and AFL membership 6,781,590 6,861,583 Sponsorship and fundraising 9,232,283 8,304,144 AFL sourced revenue 6,973,252 7,085,752 Corporate boxes and reserved seating 823,046 865,186 Membership income 1,153,823 1,309,430 Total football operations revenue 24,963,994 24,426,095 Grant revenue Player facility development grants 6,812,672 - SANFL player facility grant 350,000 - Total grant revenue 7,162,672 - Other revenue from operations Interest income 243,634 816,142 Sundry income 860,737 694,673 Total other revenue from operations 1,104,371 1,510,815
NOTE 3 - NET MERCHANDISE REVENUE Revenue from sale of merchandise 973,099 991,062 Cost of goods sold (644,467) (679,232)) Net merchandise revenue 328,632 311,830 NOTE 4 - PROFIT FOR THE YEAR The following expense items are relevant in explaining the financial performance of the company. SANFL licence fee 583,495 588,063 Football levies 593,018 623,258 Total football charges 1,176,513 1,211,321
Write down of player facility demolished a - 1,586,971 (a) Prior to the end of the financial year the existing player facility with a written down value of $1,586,971 was demolished to make way for the new player facility which is now under construction. As a consequence the company has written off the capitalised cost of the old facility.
(a) Discontinued operations On 31 March 2009, the Company and the SANFL mutually agreed to terminate the operation of the business trading as the Crows Tavern. The financial performance of the discontinued operations to the date of terimination, which is included in Profit/(loss) from discontinued operations in the income statement and cash flow statement is as follows:
Revenue Crows Tavern distribution - 171,687 Expenses Depreciation (64,348) (216,850) Loss on termination of Crows Tavern operations (819,642) (6,095) Profit/(loss) of discontinued operation (883,990) (51,258)
NOTE 5 - AUDITORS REMUNERATION Remuneration of the auditor of the company for: Audit of the financial report 20,000 18,000 Other services 4,000 3,500 24,000 21,500 NOTE 6 - CASH AND CASH EQUIVALENTS Cash on hand 10,000 10,000 Cash at bank 203,566 5,518,058 Short-term bank deposits - 8,000,000 213,566 13,528,058 The effective interest rate on short-term bank deposits was 7.5% (2007: 5.9%). These deposits have an average maturity of less than three months.
(a) Reconciliation of cash: Cash at the end of the financial year as shown in the Cash Flow Statement is reconciled to items in the Balance Sheet as follows:
Cash and cash equivalents 213,566 13,528,058 Bank overdraft (31,278) - 182,288 13,528,058
08 | ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au ADELAIDE FOOTBALL CLUB LIMITED | NOTES TO THE FINANCIAL STATEMENTS | FOR THE YEAR ENDED 31 OCTOBER 2009
Note 2009 2008 $ $ NOTE 7 - TRADE AND OTHER RECEIVABLES Current Trade receivables 856,874 477,548 Provision for impairment of debtors (20,000) (20,000) 836,874 457,548 GST receivable 199,129 211,798 Total trade and other receivables 1,036,003 669,346 Current trade receivables are generally on 30 day terms. These receivables are assessed for recoverability and a provision for impairment is recognised where and when there is objective evidence that an individual trade receivable is impaired. The company does not have any material credit risk exposure to any single receivable or group of receivables.
NOTE 8 - OTHER ASSETS Current Prepayments 55,107 37,342
NOTE 9 - PROPERTY, PLANT AND EQUIPMENT Buildings on leasehold land - at cost 2,510,442 3,878,844 Less accumulated depreciation (1,050,128) (1,362,660) 1,460,314 2,516,184 Buildings - at cost 429,562 429,562 Less accumulated depreciation (53,695) (32,217) 375,867 397,345 Player facility - at cost 20,021,505 - Less accumulated depreciation - - 20,021,505 - Plant and equipment - at cost 1,593,117 1,391,032 Less accumulated depreciation (758,483) (1,174,796) 834,634 216,236 Motor vehicles - at cost 56,479 56,479 Less accumulated depreciation (39,200) (34,882) 17,279 21,597 Gaming machines - at cost - 382,912 Less accumulated depreciation - (241,909) - 141,003 Capital work in progress - Player Facility - 3,722,622 22,709,599 7,014,987
The Company leases the land on which the Administration Building and Player Facility are situated from the SANFL (Ultimate Parent Entity). This lease is due to expire in 2020. (a) Movement in Carrying Amounts Movement in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Capital Gaming Motor Buildings Buildings Player Plant & WIP machines vehicles at cost leasehold land Facility equipment Total $ $ $ $ $ $ $ $ Opening balance 3,722,622 141,003 21,597 397,345 2,516,184 - 216,236 7,014,987 Additions - - - - - 16,298,883 819,796 17,118,679 Transfer (3,722,622) - - - - 3,722,622 - - Disposals - (101,116) - - (883,994) - (84,531) (1,069,641) Depreciation - (39,887) (4,318) (21,478) (171,876) - (116,867) (354,426) Carrying amount at the end of the year - - 17,279 375,867 1,460,314 20,021,505 834,634 22,709,599
Note 2009 2008 $ $ NOTE 10 - OTHER ASSETS CURRENT Trade payables 1,091,362 1,859,016
NOTE 11 - UNEARNED INCOME Revenue received in advance 72,280 16,482 Grants received in advance - 5,643,744 72,280 5,660,226 NOTE 12 - BORROWINGS Bank overdraft 31,278 - Commercial bills (Westpac Bank) 16(b) 2,500,000 - 2,531,278 - The effective interest rate on short term borrowings was 4.5% (2008: nil).
ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au | 09 ADELAIDE FOOTBALL CLUB LIMITED | NOTES TO THE FINANCIAL STATEMENTS | FOR THE YEAR ENDED 31 OCTOBER 2009
Note 2009 2008 $ $ NOTE 13 - PROVISIONS Current Provision for annual leave 283,491 254,481 Provision for long service leave 456,407 427,050 739,898 681,531 NON-CURRENT Provision for long service leave 126,527 80,813
NOTE 14 - CONTRIBUTED EQUITY 2 fully paid ordinary shares (2008: 2) 2 2
Ordinary shares do not have any voting rights.
The company is limited by guarantee. If the company is wound up, the Articles of Association state that each member is required to contribute any sums unpaid on shares held towards meeting any outstanding obligations of the company. At 31 October 2009 there are two members.
NOTE 15 - RESERVES 1991 establishment costs reserve 200,000 200,000 1992 establishment costs reserve 171,615 171,615 371,615 371,615
The establishment cost reserves were used in prior years to record amounts incurred in setting up the Adelaide Football Club Limited.
NOTE 16 - CASH FLOW INFORMATION (a) Reconciliation of Cash flow from operations with Profit/(Loss) Net profit 6,377,334 88,405 Non-cash flows in profit Depreciation 354,426 576,013 Write off of player facility - 1,586,971 Loss on discontinued operations 819,642 6,095 Changes in assets and liabilities: Decrease/(Increase) in inventories 107,449 136,216 Decrease/(Increase) in receivables (366,657) (365,301) Decrease/(Increase) in other current assets (17,767) 34,272 Increase/(Decrease) in payables (767,654) 1,082,194 Increase/(Decrease) in unearned income (5,587,946) 5,651,906 Increase/(Decrease) in provisions 104,081 97,553 Cash flows from operations 1,022,908 8,894,324
(b) Loan facilities Loan facility 3,500,000 - Amounts utilised 2,500,000 - total compensation 1,000,000 -
The major facilities are summarised as follows: At 31 October 2009 the Club had a commercial bill facility from Westpac Bank of $3,500,000 for working capital, secured by a fixed and floating charge over the Club’s assets and uncalled capital. The commercial bill facility is for a period of two years and expires on 31 October 2011. The commercial bills outstanding as at 31 October 2009 are due for repayment or rollover on 31 January 2010.
NOTE 17 - KEY MANAGEMENT PERSONNEL COMPENSATION The key management personnel compensation included in ‘employee benefits expense’ in the income statement is as follows: Short-term benefits 955,000 865,000 Superannuation 85,950 77,850 Total compensation 1,040,950 942,850
No director, directly or indirectly, received any remuneration from the Company for services as a director during the year.
10 | ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au ADELAIDE FOOTBALL CLUB LIMITED | NOTES TO THE FINANCIAL STATEMENTS | FOR THE YEAR ENDED 31 OCTOBER 2009
Note 2009 2008 $ $ NOTE 18 - RELATED PARTY TRANSACTIONS Transactions between the Company and related parties are on normal commercial terms no more favourable than those available to other external parties. Transactions with related parties: (a) Directors: Mr R I Chapman, the Chairman of the Company received an allowance for the reimbursement of expenses. This allowance is in line with allowances paid to persons holding similar positions to that of the Chairman. During the year the directors purchased club membership and coterie packages, finals tickets, attended Club functions, made donations and contributed towards fundraising auctions. The terms and conditions of the transactions with the directors and their director related entities were no more favourable than those available, or which might be reasonably expected to be available, on similar transactions to non-director related entities on an arm’s length basis. 2009 2008 Director Related Entities: $ $ Hurleys Arkaba Hotel Pty Ltd 2,010 290 Port Lincoln Hotel 2,520 2,200 Alma Hotel 2,019 2,000 PKF Chartered Accountants & Business Advisors - 89 BankSA 697 -
(b) Ultimate Parent Entity - South Australian National Football League Inc (SANFL): The Company has entered into the following transactions with the SANFL Net goods and services 1,509,487 1,114,510 Sub-Licence fee 583,495 583,495 Northern Grandstand Contribution 600,000 600,000
(c) net Amounts Receivable From / (Payable to) Related Entities: Ultimate Parent Company SANFL Inc 332,693 (28,313) net receivable / (payable) 332,693 (28,313)
NOTE 19 - FINANCIAL RISK MANAGEMENT The Company’s financial instruments consist mainly of deposits with banks, local money market instruments, accounts receivable and accounts payable and short term borrowings. The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows: Financial assets Cash and cash equivalents 6 213,566 13,528,058 Trade Receivables 7 856,874 477,548 1,070,440 14,005,606
Financial liabilities Financial liabilities amortised at cost Trade and other payables 10 1,091,362 1,859,016 Borrowings 13 2,531,278 - 3,622,640 1,859,016 (a) Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. At 31 October 2009 approximately 99% of the Company’s debt is at a fixed rate. (b) Liquidity risk Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The company manages this risk by monitoring forecast cash flows. The Company has a commercial bill facility of $3,500,000 for working capital which is available to help meet the Company’s expenditures. The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates. Financial liability and financial asset maturity analysis
Within 6 months 6-12 months Total 2009 2008 2009 2008 2009 2008 2009 2008 $ $ $ $ $ $ $ $ FINANCIAL ASSETS Cash & cash equivalents 203,566 13,518,058 - - - - 213,566 13,518,058 Receivables 856,874 477,548 - - - - 856,874 477,548 TOTAL FINANCIAL ASSETS 1,060,440 13,995,606 - - - - 1,070,440 13,995,606
FINANCIAL LIABILITIES
Payables 1,091,362 1,859,016 - - - - 1,091,362 1,859,016 Bank overdraft 31,278 - - - - - 31,278 - Commercial bills 2,500,000 - - - - - 2,500,000 -
TOTAL FINANCIAL LIABILITIES 3,622,640 1,859,016 - - - - 3,622,640 1,859,016
ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au | 11 ADELAIDE FOOTBALL CLUB LIMITED | NOTES TO THE FINANCIAL STATEMENTS | FOR THE YEAR ENDED 31 OCTOBER 2009
NOTE 20 - FINANCIAL INSTRUMENTS (CONT) (c) Credit risk Credit risks arises from cash and cash equivalents and deposits with banks and financial institutions, as well as as credit exposure to customers, including outstanding receivables. Management monitors credit risk on an ongoing basis. Other than the Australian Football League, the Company does not have any material credit exposure to a single receivable or group of receivables. (d) net fair values For assets and liabilities the net fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form. Financial assets where the carrying amount exceeds the net fair values have not been written down as the Company intends to hold these assets to maturity. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the balance sheet and the notes to the financial statements. NOTE 21 - CAPITAL AND LEASING COMMITMENTS (a) Player and Coaching Remuneration Contracts The Company negotiates individual contracts of varying length and terms for each of the football players and coaching staff. Certain players are entitled to receive base payments regardless of their level of performance or number of games played, as well as entitlements should player employment contracts be terminated before expiry. Selected coaching staff are also entitled to performance related payments. As contract terms in this regard vary considerably, with some future payments dependent upon number of matches played, level of performance, whether players remain on approved lists and early termination, it is not practical to estimate the total future commitments or contingencies under playing and coaching contracts. However, base contractual commitments are as follows: N note 2009 2008 Payable $ $ - not later than 12 months 6,096,300 5,392,500 - between 12 months and 5 years 3,194,300 3,019,000 9,290,600 8,411,500 (b) SANFL Sub-Licence Fee The Company has a sub-licence agreement with the SANFL, which effectively leases the AFL licence to the Company. This lease also covers the land on which the Administration Building and Player Facility are situated. Note 2009 2008 Payable $ $ - not later than 12 months 601,000 583,495 - between 12 months and 5 years 619,029 1,220,029 1,220,029 1,803,524 (c) AAMI Stadium Grandstand Contribution The Company has entered into an agreement with the SANFL which requires the Company to make funding contributions for the construction of the Northern Grandstand at AAMI Stadium. Note 2009 2008 Payable $ $ - not later than 12 months 600,000 600,000 - between 12 months and 5 years 600,000 1,200,000 1,200,000 1,800,000
(d) Capital Commitment player facility
Note 2009 2008 $ $ Capital commitments as per construction contract - 20,250,000 Less progress claims to 31 October - (3,722,622) - 16,527,378 NOTE 22 - CONTINGENT ASSETS AND LIABILITIES There were no contingencies facing the Company as at the 31 October 2009 that have not been brought to account in the financial report.
NOTE 23 - SEGMENT REPORTING The Company operates solely as a constituent of the Australian Football League.
NOTE 24 - EVENTS AFTER BALANCE SHEET 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 Company, the results of those operations, or the state of affairs of the Company in future financial years.
NOTE 25 - COMPANY DETAILS The registered office and principal place of business of the company is: Adelaide Football Club Ltd West Lakes Boulevard, West Lakes SA 5021 ACN 008 101 568
12 | ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au ADELAIDE FOOTBALL CLUB LIMITED | DIRECTORS’ DECLARATION | FOR THE YEAR ENDED 31 OCTOBER 2009
The directors of the company declare that: 1. The financial statements and notes, as set out on pages 2 to 13 in accordance with the Corporations Act 2001 and: a. comply with Accounting Standards as described in Note 1 to the financial statements and the Corporations Regulations 2001; and b. give a true and fair view of the company’s financial position as at 31 October 2009 and of its performance for the year ended on that date in accordance with the accounting policies described in Note 1 to the financial statements. 2. In the directors’ opinion there are reasonable grounds to believe that the company 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.
CHAIRMAN R I Chapman
DIRECTOR J S Sutton
Signed at Adelaide this 4th day of December 2009
ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au | 13 ADELAIDE FOOTBALL CLUB LIMITED | INDEPENDENT AUDIT REPORT | FOR THE YEAR ENDED 31 OCTOBER 2009
14 | ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au ADELAIDE FOOTBALL CLUB LIMITED | INDEPENDENT AUDIT REPORT | FOR THE YEAR ENDED 31 OCTOBER 2009
ADELAIDE FOOTBALL CLUB 2009 FINANCIALS | afc.com.au | 15