ANNUAL2020 REPORT CONTENTS NOTICE OF MEETING

Notice of Meeting ...... 1 Notice is hereby given that the twenty-seventh (27th) Annual General Meeting of Cowboys Leagues Club Limited will be held at the Club Premises, 335 Flinders Message from the Board of Directors...... 2 Street Townsville QLD 4810 at 5.30PM, 31st March 2021. Directors’ Report ...... 4 AGENDA Auditors Independence Declaration under

Section 307C of the Corporations Act 2001...... 11 1. Apologies. Statement of Profit or Loss and 2. To confirm minutes of the twenty-sixth (26th) Annual General Meeting held on 25th March 2020. Other Comprehensive Income...... 12 3. Chairman’s Report. Statement of Financial Position...... 13 4. To receive and confirm the Directors’ Report, Financial Reports and Auditors’ Statement of Changes in Equity...... 14 Report for the year ended 31 October 2020.

Statement of Cash Flows...... 15 5. Appointment of Auditors.

Notes for the Financial Statements...... 16 6. Declaration of Ballot for election of Directors as per Article 8.6(f) of the Constitution. Directors’ Declaration...... 27 7. To consider, and if thought fit pass, the Special Resolution that the combined Independent Audit Report...... 28 Directors annual remuneration be no greater than $60,000 for the year ending 31 October 2021. Discussion and Analysis of the Financial Statements...... 30 8. General Business. 2019 - 2020 Club Snapshot...... 32 By Order of the Board | Jade Astorquia – Company Secretary

PROXY INFORMATION

Members have a right to appoint a proxy. The proxy must be a member of the Club. A member is not permitted to hold a proxy for more than 1 member. An instrument appointing a proxy must be deposited with the Company Secretary not less than 24 hours before the time for the meeting.

PROPOSED FIRST SPECIAL RESOLUTION

The members resolve, by way of special resolution that the combined Directors’ Annual Remuneration be in total no greater than $60,000 for the year ending 31 October 2021.

1 MESSAGE FROM THE BOARD OF DIRECTORS

On behalf of my fellow Directors, it is my great pleasure to present the 2020 Whilst these awards are great achievements, I can assure you that we are Cowboys Leagues Club Limited Annual Report committed to making your Club even better. The first 2 projects we have already completed this year are an upgrade to the Sports Bar amenities, along with a full It goes without saying that 2020 was a very tough year for all of us, with the refurbishment of the Match Restaurant and Grill Kitchen. Over the coming months, COVID-19 pandemic having a major impact on our way of life. you will also see upgrades occur to the Main Bar, Restaurant and Gaming areas When we received the news in late March that the Club would be forced to close, as we continue to strive to always provide our members with the absolute best our team adapted quickly, rolling out a takeaway operation that helped keep staff facilities, service and offers. actively involved and our members connected with our Club. I would like to take this Despite the challenges of 2020, the Club remained committed to supporting our opportunity to thank our amazing staff members who worked through the COVID local community as much as possible. I am pleased to report that in 2020, your shutdown to run our takeaway operation and complete the many administrative Club contributed a total of $503,591 in cash and in kind to many worthy community requirements associated with operating our Club. Their effort and commitment to groups, charitable groups, sporting organisations and schools throughout the the Club cannot be underestimated. region. In such a challenging year, we are very proud to have still been able to do The Club re-opened for dining as soon as we were permitted to do so in June, before this, and we hope you are as proud that your membership and support of our Club reopening all facilities under strict COVID guidelines in July. Since re-opening, the allows these contributions to be made to the community. Club has been very mindful of trading responsibly to ensure we are providing a safe 2020 was also a very different year for our Football Club, and we congratulate our environment for both staff and members. This has included removing some gaming Club, the NRL and all teams on successfully navigating the pandemic to ensure machines and other furniture to ensure adequate social distancing, whilst also a season was held. I would also like to thank the players and staff of the North delaying the reintroduction of many in-Club promotions in order to keep numbers Queensland Toyota Cowboys for their support of the Cowboys Leagues Club. I of people in the Club at responsible levels. These decisions were made to ensure encourage all members to support Our Team and region by becoming a member of we put the safety of our staff and members before profits. We thank you for your the Cowboys Football Club, in addition to the Cowboys Leagues Club, if you have not patience and understanding during these very challenging times. already done so. With 2021 now upon us, it’s important to also acknowledge some of the highlights Finally, on behalf of the Board of Directors, I would like to sincerely thank all from 2020. Below are just a few from the 2020 Clubs QLD Awards: members who have supported the Club during the shutdown and since we re-opened 1. Star Graze Café won the award for Best Dining in Queensland. in June. No-one knows what 2021 may hold, but we do know that we have wonderful and supportive members, and we will get through these extraordinary times by 2. The Club was recognised for its outstanding commitment to compliance by continuing to support each other. Let’s all hope for a great and safe 2021. receiving the awards for best Responsible Service of Alcohol and Responsible Gaming Practices. Daryl Holmes OBE, Chairman

2 3 DIRECTORS’ The principal activities of Cowboys Charity Ltd during the financial year consisted of: • Provision of accommodation for indigenous secondary school students from REPORT remote communities and the education, care and development of those children; and • Delivery of programs for primary school attendance across North Queensland. The directors present their report, together with the consolidated concise financial statements of the Group, being the Company and its controlled entities, for the No significant change in the nature of these activities occurred during the year. financial year ended 31 October 2020. SHORT TERM OBJECTIVES

1. GENERAL INFORMATION The parent’s short-term objectives are to:

INFORMATION ON DIRECTORS • Grow its membership base

The names of each person who has been a director during the year and to the date of • Continually look to improve its business, facilities and service to members this report are: • Continually look at cost saving initiatives to reduce overheads and increase profit • Improve market share in all departments Name Term Special Responsibilities D Holmes 23/03/2002 Chairman Appointed 08/05/2014 • Capitalise on the new Stadium and all economic and social opportunities J Carey 28/08/2002 Deputy Chairman Appointed 08/05/2014 it presents 23/02/2011 Chairman - Finance & Audit Risk Committee Cowboys Holdings’ short-term objectives are to secure tenants for all available Appointed 23/02/2011 leasable space and optimise the income and profitability. S Titmus 23/03/2002 L Ramsay 03/03/2007 LONG TERM OBJECTIVES M Price 31/03/2009 D Gardiner 06/05/2015 The parent's long-term objectives are to: A Newman 23/03/2016 • Increase its offerings to members and the broader community A Greaney 29/03/2017 • Support the region’s community L Shepherd 21/05/2019 • Commence construction of premises at Mount Louisa Directors have been in office since the start of the financial year to the date of this • Continue to strengthen the Balance Sheet of the Club to deliver Club objectives report unless otherwise stated. PRINCIPAL ACTIVITIES STRATEGY FOR ACHIEVING THE OBJECTIVES

The principal activities of the Cowboys Leagues Club Ltd (parent) during the To achieve these objectives, the parent has adopted the following strategies: financial year were to provide support, fund and encourage the aims and objectives • Invest in our people of the Cowboys Rugby League Football Ltd by operation of a licensed club (‘the club’). The club facilities include bar, restaurant, cafe, poker machines, merchandise • Continuously improve the standard of current services shop, Keno and TAB. • Continual improvement of the club’s property to ensure long-term viability of the facility The principal activity of Cowboys Holdings Pty Ltd during the financial year was to acquire, control and lease property, plant and equipment on behalf of the Cowboys • Identify and introduce additional revenue streams to its core business Leagues Club Ltd and controlled entities. • Be aware of trends and make adjustments to ensure the Club’s offering is up to date with the wants and needs of its members The principal activities of Cowboys Rugby League Football Ltd during the financial year were fostering, encouragement, promotion, development and playing of Rugby • Review the Cowboys Leagues Club Ltd footprint across the NQ Region League in North Queensland.

4 5 OPERATING RESULTS Cowboys Rugby League Football Limited

The consolidated profit of the Group amounted to $19,990,930 (2019: $1,409,277), an The NRL season was suspended in March 2020 as a matter of public safety due to increase of 1,318%. the COVID-19 pandemic. With the very real prospect of the 2020 NRL season being cancelled altogether, the club had to make a number of difficult business decisions to The profit of Cowboys Leagues Club Limited (parent) for the year amounted to ensure it could survive such a worst-case scenario. Most staff were stood down and $1,648,763 (2019: $966,154), an increase of 70.7%. The primary items include: those that remained were retained on reduced pay. • reduction in trading revenue of 18% for the year. This was directly related to the Many sponsors, corporates and members of the club made selfless financial pledges closure of all non-essential businesses due to the COVID-19 pandemic, announced despite their own challenges. by the Federal Government, on 22 March 2020; • reduction in expenditure of 9%, in comparison to the prior year, including Payroll Government support packages were secured to assist staff and the business during (5%), Marketing (30%) and Cost of Goods Sold (16%). This reduction was also due shutdown. ARL Commission Chairman Peter V’landys and the ARL Commission were to the aforementioned closure; and able to reinstate the 2020 NRL season and renegotiate a sustainable pay deal with the players. The club’s players and football staff sacrificed their livelihood in going to • Federal and State Government stimulus packages totalling $2,027,203. extreme lengths of COVID – 19 isolation whilst living in a ‘bubble’ away from family Cowboys Rugby League Football Limited profit for the 2020 year amounted to and friends for most of the year whilst taking pay cuts to continue in their jobs. $16,800,000 (2019: $400,000). The increase in profit includes: OPERATING RESULTS • building grants of $11,300,000 for construction of Cowboys Community Training and High-Performance Centre; Cowboys Holdings Pty Limited • Federal and State Government stimulus packages, relating to the Covid-19 Cowboys Holdings Pty Limited secured its third tenant in November 2019, with the pandemic, totalling $2,000,500; and Flinders Street frontage to its building now fully tenanted. • renegotiated NRL player payments, totalling $2,215,018. Cowboys Holdings agreed to rent relief to the Flinders Street businesses impacted Cowboys Charity Limited profit for the 2020 year was $1,589,771 (2019: $530,547). during the COVID-19 pandemic. Cowboys Holdings also delayed previously agreed This increase includes: increases to rent and other charges until after December 2020. • $818,500 in Federal and State Government stimulus packages. Cowboys Charity Limited SIGNIFICANT ACHIEVEMENTS AND CHANGES Cowboys Charity Limited entered into a lease with the Queensland Government’s Cowboys Leagues Club Limited Department of Housing & Public Works for facilities and land at 272 Hugh Street, Gulliver and 12 Desailly Street, Gulliver. This agreement supersedes a previous Cowboys Leagues Club Ltd replaced a 20-year-old air-conditioning system with a lease on facilities and land at 272 Hugh Street, Gulliver, the address at which it new chilled-water unit, in December 2019, at a cost of $686,000. This new unit will operates NRL Cowboys House (a boarding facility initially housing and educating assist in reducing the electricity costs for the Club. 25 indigenous boys in 2017, growing to 50 indigenous boys in 2018 and thereafter). Following the Federal Government’s announcement of the closure of all non- The facilities and land at 12 Desailly Street, Gulliver have added a second wing at essential businesses, in March 2020, the Cowboys Leagues Club moved to a NRL Cowboys House to house and educate 25 indigenous girls in 2019, growing to 50 takeaway-only operation, for food & beverages, and online merchandise sales, so indigenous girls in 2020. that it could continue to service the community and its members. All gaming and in- In March 2020, all students of NRL Cowboys House returned to their home house trading had to cease and management had to stand down the majority of staff communities as a matter of safety due to the COVID-19 pandemic and were and reduce the pays for any retained staff. supported through their studies remotely until it was safe for them to return to Federal and State Government packages were secured and these were able to assist Townsville. The Company had to make a number of difficult business decisions to the staff and business during the shutdown. prepare for a number of scenarios. Most staff were stood down while the business navigated through this period. The Club was able to resume in-house dining in early June, followed by the return of Gaming at the beginning of July.

Prior to the closure, the Cowboys Leagues Club had commenced a major refurbishment of the main kitchen and scullery areas. The works were able to continue during this period and complete on time without any disruptions. The total cost of the refurbishment was $330,000. 6 7 REVIEW OF OPERATIONS 2. OTHER ITEMS

The 2020 year marked the Cowboys Leagues Club's 19th full year of trading FUTURE DEVELOPMENTS AND RESULTS operations at the Flinders Street site. The club's main source of income is gaming revenue which is driven by 237 poker machines. The club is currently approved The club has previously announced that it intends to eventually build and operate an to operate 298 poker machines and has acquired entitlements for 261. To adhere additional Club facility. To date, a controlled entity has settled on a parcel of land on to Health Regulations and for the comfort of its patrons, the Club has reduced the the corner of Dalrymple Road and Thuringowa Drive, Mt Louisa. The Townsville City number of machines on floor to 165. Council has granted the Cowboys Leagues Club approval to pursue its development plans at the site. The Office of Liquor, Gaming and Racing has granted Liquor and Cowboys Leagues Club Ltd contributed benefits totalling $503,591 (2019: $790,022) Gaming licenses. to charitable, sporting, recreational and other community initiatives. The profit of Cowboys Leagues Club Ltd excluding those contributions amounted to $2,152,354 It is unlikely that the new club premises will be built and operational before 2022. (2019: $1,756,176). Whilst the Club still has long-term plans to build an additional premises at the Mount Louisa site, the current focus is to improve the Flinders Street facilities to ensure the Year Ending Parent Entity Net Parent Entity Consolidated Group Club provides members with a first class venue. Over the next 12 months, the Club Assets Profit/(loss) After Profit/(loss) After will capitalise on the return of Tax Tax Game-Day crowds at the Queensland Country Bank Stadium as well as the easing of 31-October-02 (1,124,367) 196,967 - health restrictions. The Club is also undertaking a number of capital improvements 31-October-03 (784,068) 340,299 - aiming to make the Cowboys Leagues Club the premier entertainment venue 31-October-04 (325,760) 458,307 - in Townsville. 31-October-05 1,512,384 1,838,144 - 31-October-06 2,400,855 888,472 - Cowboys Rugby League Football Limited have secured government funding and 31-October-07 2,939,045 538,192 118,021 loans sufficient to build a new Community, Training and High-Performance facility 31-October-08 7,641,025 260,943 319,716 (including training field) in the Townsville CBD, adjacent to the new Queensland 31-October-09 8,307,534 666,510 742,801 Country Bank Stadium. The facility will be located on land subject to a long-term 31-October-10 4,621,694 ( 9,881) 130,963 lease with Townsville City Council as lessor. To date the club has entered into an 31-October-11 5,087,384 465,690 (352,264) 31-October-12 5,153,952 574,338 221,671 Agreement for Lease for the site. The facility will cost between $35m and $40m. 31-October-13 5,884,485 730,533 457,973 The club will lease part of the facilities to medical and educational organisations 31-October-14 7,019,708 1,135,223 994,192 which will deliver additional diversified income streams that will be used to offset 31-October-15 8,543,063 1,523,350 1,035,040 expected increased costs and strengthen the long-term sustainability of the Club. 31-October-16 9,717,892 1,174,829 1,980,761 31-October-17 10,112,398 394,506 (674,299) 31-October-18 10,427,232 314,834 1,036,768 31-October-19 11,393,386 966,154 1,409,277 31-October-20 13,042,149 1,648,763 * 19,990,930 * Refer to breakdown on page 12.

MEMBERS’ GUARANTEE

Cowboys Leagues Club Ltd is a company limited by guarantee. In the event of, and for the purpose of winding up of the company, the amount capable of being called up from each member and any person or association who ceased to be a member in the year prior to the winding up, is limited to $ 10 for members that are corporations and $ 10 for all other members, subject to the provisions of the company’s constitution.

At 31 October 2020 the collective liability of members was $ 397,790 (2019: $453,960).

8 9 MEETINGS OF DIRECTORS INDEPENDENCE During the financial year, 7 meetings of directors and 10 meetings of the FAR committee were held. Attendances by each director during the year were as follows DECLARATION (L Shepherd did not attend some meetings due to an approved Leave of Absence):

Directors’ Meetings FAR Committee Meetings TO THE DIRECTORS OF COWBOYS LEAGUES CLUB Number eligible Number Number eligible Number LTD AND ITS CONTROLLED ENTITIES to attend attended to attend attended D Holmes 7 7 - - FOR THE YEAR ENDED 31 OCTOBER 2020 J Carey 7 7 10 10 In accordance with section 307C of the Corporations Act 2001, we declare that, to the S Titmus 7 7 10 9 best of our knowledge and belief, in relation to the audit of Cowboys Leagues Club L Ramsay 7 6 - - Ltd and its controlled entities for the year ended 31 October 2020, there have been M Price 7 6 - - no contraventions of: D Gardiner 7 6 - - • the auditor independence requirements as set out in the Corporations Act 2001 in A Newman 7 6 - - relation to the audit; and A Greaney 7 7 - - • any applicable code of professional conduct in relation to the audit. L Shepherd 7 5 10 9

AUDITOR’S INDEPENDENCE DECLARATION Jessups Paul Sapelli, Partner The lead auditor’s independence declaration in accordance with section 307C of the Level 1, 211 Sturt Street, Townsville, QLD 4810 Corporations Act 2001, for the year ended 31 October 2020 has been received and can be found on page 11 of the financial report. Dated: 10 February 2021

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

D Holmes – Chairman 10 February 2021

J Carey – Deputy Chairman 10 February 2021

10 11 FINANCIALS Statement of Financial Position As At 31 October 2020

The accompanying notes form part of these financial statements. Consolidated Parent 2020 2019 2020 2019 Statement of Profit or Loss and Other Comprehensive Income Note $ $ $ $ For the Year Ended 31 October 2020 ASSETS CURRENT ASSETS Consolidated Parent Cash and cash equivalents 3,871,973 1,556,476 1,562,425 511,427 2020 2019 2020 2019 Trade and other receivables 1,484,103 2,413,405 373,703 214,942 Note $ $ $ $ Inventories 514,883 589,459 514,883 589,459 Other financial assets - - 2,702,500 1,105,500 Revenue 3 49,605,327 58,607,286 19,002,630 23,314,770 Other assets 6 2,430,447 1,412,628 285,843 332,244 Finance income 1,906 17,927 90 130 TOTAL CURRENT ASSETS 8,301,406 5,971,968 5,439,354 2,753,572 Other income 3 289,995 323,233 346,485 321,648 NON-CURRENT ASSETS Cost of sales – retail (899,967) (852,419) (900,803) (855,571) Deferred tax assets 83,718 83,718 83,718 83,718 Cost of sales – food and beverage (1,978,919) (2,611,097) (1,911,205) (2,518,669) Other financial assets - - 6,452,960 6,452,960 Employee benefits expense (24,563,763) (27,437,174) (5,570,436) (5,885,836) Property, plant and equipment 4 48,820,228 28,935,881 6,905,489 6,220,511 Depreciation expense (2,809,550) (2,504,843) (2,298,918) (1,562,168) Intangible assets 5 2,238,721 2,238,721 2,217,218 2,217,218 Gaming tax (3,591,356) (4,229,833) (3,591,356) (4,229,833) Right-of-use assets 7 106,563 - 9,195,578 - Insurance (646,539) (751,519) (226,454) (193,297) TOTAL NON-CURRENT ASSETS 51,249,230 31,258,320 24,854,963 14,974,407 Game Day expense (903,685) (2,353,208) - - TOTAL ASSETS 59,550,636 37,230,288 30,294,317 17,727,979 Rental expenses (368,755) (546,708) (27,040) (886,703) NRL and QCUP expenses (1,269,803) (2,535,161) - - LIABILITIES Marketing expenses (2,276,361) (3,469,937) (2,028,734) (2,926,922) CURRENT LIABILITIES Sponsorship and corporate expenses (897,105) (1,573,027) (334,724) (442,991) Trade and other payables 5,394,814 3,748,334 2,134,018 1,704,087 Membership expenses (464,382) (549,267) (32,534) (25,939) Borrowings 8 2,614,702 2,458,938 1,354,702 1,159,132 Other expenses (5,720,961) (7,236,039) (2,191,970) (2,950,832) Lease liabilities 7 90,115 - 435,082 - Finance expenses (576,777) (888,943) (580,768) (191,636) Employee benefits 1,508,042 1,416,901 638,089 457,537

Profit/(Loss) before income tax, Other liabilities 3,615,850 1,893,717 180,139 143,724 capital grants and COVID-19 2,929,305 1,409,277 (345,737) 966,154 TOTAL CURRENT LIABILITIES 13,223,524 9,517,892 4,742,031 3,464,479 assistance NON-CURRENT LIABILITIES Building grant 11,300,000 - - - Borrowings 8 14,336,893 16,297,768 3,506,848 2,777,768 JobKeeper and Lease liabilities 7 16,650 - 8,933,369 - 4,813,500 - 1,994,500 - CashFlow Boost Employee benefits 138,811 232,296 69,922 92,345 Covid-19 assistance from NRL 948,125 - - - Other liabilities 661,496 - - - Profit before income tax 19,990,930 1,409,277 1,648,763 966,154 Income tax expense - - - - TOTAL NON-CURRENT LIABILITIES 15,153,852 16,530,065 12,510,137 2,870,114 TOTAL LIABILITIES 28,377,376 26,047,957 17,252,168 6,334,593 Profit after income tax 19,990,930 1,409,277 1,648,763 966,154 NET ASSETS 31,173,260 11,182,331 13,042,149 11,393,386 Other comprehensive income for the year, - - - - net of tax EQUITY Business combination reserve 10 443,127 443,127 - - Total comprehensive 19,990,930 1,409,277 1,648,763 966,154 income for the year Retained earnings 30,730,133 10,739,204 13,042,149 11,393,386 TOTAL EQUITY 31,173,260 11,182,331 13,042,149 11,393,386

12 13 Statement of Changes in Equity Statement of Cash Flows For the Year Ended 31 October 2020 For the Year Ended 31 October 2020

Consolidated Consolidated Parent Business 2020 2019 2020 2019 Retained Combination $ $ $ $ Earnings Reserve Total $ $ $ CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers 68,709,827 59,280,638 20,975,857 23,397,393 2020 Payments to suppliers (42,268,565) (54,927,794) (18,146,883) (17,200,203) Balance at 1 November 2019 10,739,204 443,127 11,182,331 Interest received 1,905 17,927 90 130 19,990,930 - 19,990,930 Interest Paid (460,020) (888,943) (122,849) (184,133) Balance at 31 October 2020 30,730,133 443,127 31,173,260 Net cash provided by/(used in) operating activities 25,983,147 3,481,828 2,706,215 6,013,187 2019 Balance at 1 November 2018 9,329,927 443,127 9,773,054 CASH FLOWS FROM INVESTING ACTIVITIES: 1,409,277 - 1,409,277 Proceeds from disposal of property, Balance at 31 October 2019 10,739,204 443,127 11,182,331 plant and equipment 267,127 458,526 267,127 441,687 Payments to acquire property, plant and equipment (22,590,686) (3,901,373) (2,429,777) (1,619,474) Net cash provided by/(used in) Parent investing activities (22,323,559) (3,442,847) (2,162,650) (1,177,787) Retained Earnings Total $ $ CASH FLOWS FROM FINANCING ACTIVITIES: 2020 Proceeds from borrowings 9,979,229 6,114,271 1,734,184 514,580 Balance at 1 November 2019 11,393,386 11,393,386 Repayments of borrowings (11,323,320) (7,198,936) (1,226,751) (5,352,980) 1,648,763 1,648,763 Net cash provided by/(used in) Balance at 31 October 2020 13,042,149 13,042,149 financing activities (1,344,091) (1,084,665) 507,433 (4,838,400)

2019 Net increase/(decrease) in cash and Balance at 1 November 2018 10,427,232 10,427,232 cash equivalents held 2,315,497 (1,045,684) 1,050,998 (3,000) 966,154 966,154 Cash and cash equivalents at beginning of year 1,556,476 2,602,160 511,427 514,427 Balance at 31 October 2019 11,393,386 11,393,386 Cash and cash equivalents at end of financial year 3,871,973 1,556,476 1,562,425 511,427

14 15 Notes to the Financial Statements Notes to the Financial Statements For the Year Ended 31 October 2020 For the Year Ended 31 October 2020

The consolidated concise financial report covers Cowboys Leagues Club Ltd and GRANTS – CAPITAL its controlled entities ('the Group'). Cowboys Leagues Club Ltd is a not-for-profit Under AASB 1004, most grant monies were recorded as revenue on receipt. Company limited by guarantee, incorporated and domiciled in Australia. Under AASB 1058 and AASB 15, where an agreement is enforceable and contains Each of the entities within the Group prepare their financial statements based on sufficiently specific performance obligations, the revenue is either recognised over the currency of the primary economic environment in which the entity operates time as the work is performed or recognised at the point in time that control of the (functional currency). The consolidated financial statements are presented in services pass to the customer. Australian dollars which is the parent entity’s functional and presentation currency. For construction projects, this is generally as the construction progresses in Comparatives are consistent with prior years, unless otherwise stated. accordance with costs incurred since this is deemed to be the most appropriate measure of the completeness of the construction project. This has resulted in a 1. BASIS OF PREPARATION deferral of revenue and recognition of a contract liability for funds which have not been spent at reporting date. The concise financial statements have been prepared in accordance with Australian Accounting Standard AASB 1039: Concise Financial Reports and the Corporations REVENUE FROM CONTRACTS WITH CUSTOMERS – ADOPTION OF AASB 15 Act 2001. The accounting policies adopted have been consistently applied to all financial periods unless otherwise stated. For acquisitions of assets, the revenue is recognised when the asset is acquired and controlled by the Group. 2. CHANGE IN ACCOUNTING POLICY LEASES – ADOPTION OF AASB 16 REVENUE FROM CONTRACTS WITH CUSTOMERS – ADOPTION OF AASB 15 The Group has adopted AASB 16 Leases using the modified retrospective (cumulative The Group has adopted AASB 15 Revenue from Contracts with Customers and AASB catch-up) method from 1 November 2019 and therefore the comparative information 1058 Income of Not-for-Profit Entities for the first time in the current year with a date for the year ended 31 October 2019 has not been restated and has been prepared in of initial application of 1 November 2019. accordance with AASB 117 Leases and associated Accounting Interpretations.

The Group has applied AASB 15 and AASB 1058 using the cumulative effect method The impact of adopting AASB 16 is described below: which means the comparative information has not been restated and continues to be reported under AASB 111, AASB 118, AASB 1004 and related interpretations. All THE GROUP AS A LESSEE adjustments on adoption of AASB 15 and AASB 1058 have been taken to retained Under AASB 117, the Group assessed whether leases were operating or finance earnings at 1 November 2019. leases based on its assessment of whether the significant risks and rewards of The key changes to the Group’s accounting policies and the impact on these financial ownership had been transferred to the Group or remained with the lessor. Under statements from applying AASB 15 and AASB 1058 are described below. AASB 16, there is no differentiation between finance and operating leases for the lessee and therefore all leases which meet the definition of a lease are recognised on GRANTS – OPERATING the consolidated concise statement of financial position (except for short-term leases and leases of low value assets). Under AASB 1004, most grant income was recognised as revenue on receipt. Under AASB 1058 and AASB 15, where an agreement is enforceable and contains The Group has elected to use the exception to lease accounting for short-term leases sufficiently specific performance obligations, the revenue is either recognised over and leases of low value assets, and the lease expense relating to these leases are time as the work is performed or recognised at the point in time that the control of recognised in the consolidated concise statement of profit or loss on a straight-line the services pass to the customer. basis.

Having reviewed the terms and conditions of grants received by the Group, some of them are within the scope of AASB 1058 and others within AASB 15 which has resulted in deferral of revenue for these monies.

This has resulted in a deferral of revenue and recognition of a contract liability for funds which have not been spent at reporting date.

16 17 Notes to the Financial Statements Notes to the Financial Statements For the Year Ended 31 October 2020 For the Year Ended 31 October 2020

3. REVENUE AND OTHER INCOME 4. PROPERTY, PLANT AND EQUIPMENT

Consolidated Parent Consolidated Parent 2020 2019 2020 2019 2020 2019 2020 2019 $ $ $ $ $ $ $ $

Grants and subsidies 17,703,772 16,259,381 - - FREEHOLD LAND Gaming income 12,143,512 14,696,802 12,143,512 14,696,802 At cost 4,738,815 4,738,815 - - Sponsorship income 6,451,208 9,382,117 - - Total Land 4,738,815 4,738,815 - - Food and beverage sales 4,870,825 6,620,501 4,872,272 6,637,573 Parental contributions and Abstudy 2,536,004 2,115,160 - - BUILDINGS AND IMPROVEMENTS AT COST Rental income 394,220 289,768 - - At cost 23,787,354 22,745,726 4,718,131 3,779,600 Merchandise sales 1,500,557 1,425,291 1,557,909 1,470,473 Accumulated depreciation (4,349,219) (3,417,911) (1,536,192) (1,250,883) Membership income 1,400,178 2,399,615 196,326 231,075 Total buildings 19,438,135 19,327,815 3,181,939 2,528,717 Gameday and event income 1,788,487 4,278,375 3,836 15,547 Fundraising and donation income 443,045 232,239 31,213 71,607 CAPITAL WORKS IN PROGRESS Commission income 234,223 723,647 139,993 167,056 At cost 20,799,981 952,731 535,861 534,476 Other revenue 139,296 184,390 57,568 24,636 Total capital works in progress 20,799,981 952,731 535,861 534,476 49,605,327 58,607,286 19,002,630 23,314,770 PLANT AND EQUIPMENT OTHER INCOME At cost 12,662,079 12,216,002 11,134,093 10,808,255 Rebates received 58,841 79,132 58,841 79,132 Accumulated depreciation (9,576,286) (9,030,086) (8,365,958) (7,983,105) Property management income - 48,801 56,490 48,801 Total plant and equipment 3,085,793 3,185,916 2,768,135 2,825,150 Net gain on disposal of property, plant and equipment 231,154 195,300 231,154 193,715 FURNITURE, FIXTURES AND FITTINGS 289,995 323,233 346,485 321,648 At cost 378,285 379,580 365,980 379,580 Accumulated depreciation (234,254) (304,890) (233,985) (304,890) Total furniture, fixtures and fittings 144,031 74,690 131,995 74,690

MOTOR VEHICLES At cost 55,127 55,127 55,127 55,127 Accumulated depreciation (33,550) (30,687) (33,550) (30,687) Total motor vehicles 21,577 24,440 21,577 24,440

OFFICE EQUIPMENT At cost 404,544 277,319 152,441 142,852 Accumulated depreciation (157,363) (16,450) (51,647) (30,451) Total office equipment 247,181 260,869 100,794 112,401

COMPUTER EQUIPMENT At cost 991,721 861,815 529,003 440,612 Accumulated depreciation (647,006) (491,210) (363,815) (319,975) Total computer equipment 344,715 370,605 165,188 120,637

TOTAL PROPERTY, PLANT AND EQUIPMENT 48,820,228 28,935,881 6,905,489 6,220,511

18 19 Notes to the Financial Statements Notes to the Financial Statements For the Year Ended 31 October 2020 For the Year Ended 31 October 2020

5. INTANGIBLE ASSETS IMPAIRMENT ASSESSMENT OF INTANGIBLES WITH INDEFINITE USEFUL LIVES Consolidated Parent Intangible assets with indefinite useful lives are tested for impairment annually 2020 2019 2020 2019 either individually or at the cash generating unit level. Cowboys Leagues Club $ $ $ $ Ltd performs its impairment testing as at 31 October each year for indefinite life intangible assets (Poker Machine Authorities and Rights). The Group’s intangible Copyright – Cowboys Song (at cost) 21,503 21,503 - - asset Right to Control Cowboys Rugby League Football Ltd is used in the operation Net carrying value 21,503 21,503 - - and management of the North Queensland Cowboys Rugby League Football Team

Purchased right to control and all revenue streams are dependent and reliant upon these operations i.e. gate Cowboys Rugby League Football takings, season tickets, corporate sponsorships, corporate sales and National Rugby Club Ltd (at cost) 1,508,501 1,508,501 1,508,501 1,508,501 League grant monies. It is therefore considered that the cash generating unit to Net carrying value 1,508,501 1,508,501 1,508,501 1,508,501 which the right belongs is Cowboys Rugby League Football Ltd (as a cash generating unit) and its operations, and as such, the future maintainable earnings of the cash Poker machine authorities (at cost) 708,717 708,717 708,717 708,717 generating unit, excluding interest income, has been used to support the recoverable Net carrying value 708,717 708,717 708,717 708,717 amount of the intangible asset. 2,238,721 2,238,721 2,217,218 2,217,218 For the purpose of determining whether the carrying amount of the Right is DESCRIPTION OF THE GROUP’S INTANGIBLE ASSETS impaired, management has considered the future maintainable earnings of the company based on financial budgets and forecasts. Factors considered in the Cowboys Leagues Club Ltd has the authority to operate 298 (2019: 298) poker calculation of future maintainable earnings were: machines at its venue for the purpose of generating revenue for the group. The Australian Government restricts the number of poker machine authorities available • the success of the North Queensland Cowboys Rugby League team since in each state. As such the authorities purchased by Cowboys Leagues Club Ltd have its inception; been purchased over time and carried at cost. There is no foreseeable limit to the • the success of government funded projects; period over which the asset is expected to generate net cash inflows for the Group. • the level of current sponsorship and corporate memberships; In 2014, Cowboys Rugby League Football Ltd purchased the copyright to the team • the growth trend of crowd attendance, gate takings and season song. This asset has been recognised with an indefinite useful life. memberships; and On 27th August 2007, the Group purchased 100% of the share capital in Reef League • the grant of the National Rugby League licence (NRL) to participate in the National Pty Ltd. At the time of the acquisition Reef League Pty Ltd was the controlling entity Rugby League competition up to and including 2023, and receive grants under of Cowboys Rugby League Football Ltd. As such, consideration was exchanged this licence. for 100% share capital of Reef League Pty Ltd, and with this, the right to control Cowboys Rugby League Football Ltd. Each year, upon consolidation, an intangible 6. OTHER ASSETS asset is recognised (Right to Control Cowboys Rugby League Football Ltd). Consolidated Parent On 4th May 2012, a change was made to the Cowboys Rugby League Football 2020 2019 2020 2019 Ltd constitution to provide control by Cowboys Leagues Club Ltd, through their $ $ $ $ subscribing members, over Cowboys Rugby League Football Ltd, with Reef League Pty Ltd no longer holding a controlling interest. As a result, the initial investment in CURRENT Reef League Pty Ltd of $2,719,921 in the Cowboys Leagues Club Ltd balance sheet Accrued income 1,918,666 755,173 - - has been split between $1,211,420 representing the net assets of Reef League Pty Prepayments 511,781 657,455 285,843 332,244 Ltd (and therefore the fair value of the investment), and recognition of the intangible 2,430,447 1,412,628 285,843 332,244 asset (Right to Control Cowboys Rugby League Football Ltd) of $1,508,501, following the direct line of control.

20 21 Notes to the Financial Statements Notes to the Financial Statements For the Year Ended 31 October 2020 For the Year Ended 31 October 2020

7. LEASES EXTENSION OPTIONS

The building lease contains extension options which allow the Group to extend the RIGHT-OF-USE ASSETS Motor Buildings Vehicles Total lease term by up to twice the original non-cancellable period of the lease. $ $ $ The Group includes options in the leases to provide flexibility and certainty to the Group operations and reduce costs of moving premises and the extension options PARENT are at the Group’s discretion. Year ended 31 October 2020 Recognition of asset 9,785,669 - 9,785,669 At commencement date and each subsequent reporting date, the Group assesses Depreciation charge (590,091) - (590,091) where it is reasonably certain that the extension options will be exercised. Balance at end of year 9,195,578 - 9,195,578 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONSOLIDATED The amounts recognised in the statement of profit or loss and other comprehensive Year ended 31 October 2020 income relating to leases where the Group is a lessee are shown below: Recognition of asset - 245,746 245,746 Depreciation charge - (139,183) (139,183) Consolidated Parent Balance at end of year - 106,563 106,563 2020 2019 2020 2019 $ $ $ $

LEASE LIABILITIES INTEREST EXPENSE ON LEASE Liabilities (6,006) - (400,167) - Lease liabilities Depreciation of right-of-use assets (139,183) - (590,091) - Total lease in Statement of (145,189) - (990,258) - < 1 year 1-5 years > 5 years liabilities Financial Position $ $ $ $ $

CONSOLIDATED 2020 Lease Liabilities 90,115 16,650 - 106,765 106,765

PARENT 2020 Lease Liabilities 435,082 1,934,772 6,998,597 9,368,451 9,368,451

22 23 Notes to the Financial Statements Notes to the Financial Statements For the Year Ended 31 October 2020 For the Year Ended 31 October 2020

8. BORROWINGS NAIF LOAN SECURITY

General Security Agreement from Cowboys Rugby League Football Ltd in favour of Consolidated Parent The State of Queensland over all present and after acquired property. 2020 2019 2020 2019 $ $ $ $ General Security Agreement from Cowboys Leagues Club Ltd in favour of The State of Queensland over all present and after acquired property. CURRENT NAB corporate markets loan 660,000 660,000 - - General Security Agreement from Cowboys Holdings Pty Ltd in favour of The State Insurance funding 163,923 200,190 163,923 200,190 of Queensland over all present and after acquired property. NRL loan 600,000 600,000 - - Registered Mortgage given by Cowboys Rugby League Football Ltd in favour of The News Ltd loan 200,000 200,000 200,000 200,000 State of Queensland over the Project Lease. Equipment loans 990,779 798,748 990,779 758,942 2,614,702 2,458,938 1,354,702 1,159,132 Registered Mortgage given by Cowboys Rugby League Football Ltd in favour of The State of Queensland over 465 – 477 Dalrymple Road, Mt Louisa, more particularly NON-CURRENT described in Title Reference 50812144. NAB corporate markets loan 1,985,000 12,320,000 - - Registered Mortgage given by Cowboys Holdings Pty Ltd in favour of The State of NRL loan 600,000 1,200,000 - - Queensland over 305-335 Flinders Street, Townsville, more particularly described in News Ltd loan 1,000,000 1,150,000 1,000,000 1,150,000 Title References 21343248, 51107048 and 50433834. NAIF loan 8,245,045 - - - Equipment loans 2,506,848 1,627,768 2,506,848 1,627,768 NAB LOAN SECURITY 14,336,893 16,297,768 3,506,848 2,777,768 TOTAL BORROWINGS 16,951,595 18,756,706 4,861,550 3,936,900 Security Interest and Charge over all present and future rights, property and undertaking of Cowboys Rugby League Football Ltd in favour of NAB. NAB CORPORATE MARKETS LOAN Security Interest and Charge over all present and future rights, property and At 31 October 2020, the Group had placed surplus funds in excess of $12,000,000 in undertaking of Cowboys Leagues Club Ltd in favour of NAB. its NAB corporate markets loan facility. This facility has a limit of $15,356,000 and the ability to redraw surplus funds at any time. The repayments on this facility are Security Interest and Charge over all present and future rights, property and currently $660,000 per year. The facility expires on 31 December 2024. undertaking of Cowboys Holdings Pty Ltd in favour of NAB. Registered Mortgage given by Cowboys Rugby League Football Ltd in favour of NAB over 465-477 Dalrymple Road, Mt Louisa, (mortgage no.719215651).

Registered Mortgages given by Cowboys Holdings Pty Ltd in favour of NAB over 305-335 Flinders Street, Townsville, more particularly described in Title References 21343248 (mortgage no. 714891878), 51107048 (mortgage no. 718188003) and 50433834 (mortgage no. 714891878).

9. CAPITAL COMMITMENTS At 31 October 2020, Cowboys Rugby League Football Club Ltd was committed to the completing the construction of the Cowboys Community Training and High Performance Centre. The Capital Works in Progress in Note 4 represents the expenditure to date, with further costs to complete the project expected to be $17.2m.

24 25 Notes to the Financial Statements DIRECTORS’ For the Year Ended 31 October 2020 DECLARATION 10. INTERESTS IN SUBSIDIARIES

Principal place In accordance with a resolution of the directors of Cowboys Leagues Club Ltd, the of business Percentage Percentage directors of the Company declare that the consolidated concise financial statements / Country of Owned (%)* Owned (%)* and notes, for the financial year ended 31 October 2020, as set out on pages 12 to 26: Incorporation 2020 2019 a. comply with Australian Accounting Standard AASB 1039: Concise Financial Subsidiaries: Reports; and Cowboys Holdings Pty Ltd Australia 100 100 b. is an extract from the full financial statements for the year ended 31 October 2020 Cowboys Rugby League Football Ltd Australia 100 100 and has been derived from and is consistent with the full financial statements of Cowboys Charity Ltd Australia 100 100 Cowboys Leagues Club Ltd and controlled entities.

*The percentage of ownership interest held is equivalent to the percentage voting This declaration is made in accordance with a resolution of the Board of Directors. rights for all subsidiaries.

On 26 May 2017, Cowboys Rugby League Football Ltd became the sole member of Cowboys Charity Ltd and gained control over that entity on the same date. The fair D Holmes – Chairman values of the identifiable assets acquired and liabilities assumed on the date that 10 February 2021 control was gained over Cowboys Charity Ltd were as follows: J Carey – Deputy Chairman 10 February 2021 $ Cash and cash equivalents 1,118,765 Receivables 75,860 Plant and equipment 263,859 Payables ( 1,015,357) Fair value of identifiable assets acquired and liabilities assumed 443,127

The above assets and liabilities have been consolidated into this financial report with a corresponding entry to the Business Combination Reserve within equity.

11. EVENTS AFTER THE END OF THE REPORTING PERIOD No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years.

12. STATUTORY INFORMATION The registered office and principal place of business of the parent company is:

Cowboys Leagues Club Ltd, 313-335 Flinders Street, Townsville QLD 4810

26 27 INDEPENDENT AUDIT REPORT

To the members of Cowboys Leagues Club Ltd and its controlled entities for the year Concise Financial Report ended 31 October 2020. The concise financial report does not contain all the disclosures required by the Australian Accounting Standards in the preparation of the financial report. REPORT ON THE CONCISE FINANCIAL REPORT Therefore, reading the concise financial report and the auditor’s report thereon is not a substitute for reading the financial report and the auditor’s report thereon. Opinion

We have audited the accompanying concise financial report of Cowboys Leagues The Financial Report and Our Report Thereon Club Ltd, which comprises the statements of financial position as at 31 October 2020, We expressed an unmodified audit opinion on the financial report in our report dated the statements of profit or loss and other comprehensive income, statements of 10 February 2021. changes in equity and statements of cash flows for the year then ended, and related notes, derived from the financial report of Cowboys Leagues Club Ltd for the year ended 31 October 2020. Responsibilities of the Directors for the Concise Financial Report

In our opinion, the accompanying concise financial report of Cowboys Leagues Club The directors are responsible for the preparation of the concise financial report in Ltd complies with AASB 1039:Concise Financial Reports. accordance with Accounting Standard AASB 1039: Concise Financial Reports and the Corporations Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of the concise financial report. Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our Auditor’s Responsibilities for the Audit of the Concise Financial Report responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Concise Financial Report section of our report. Our responsibility is to express an opinion on whether the concise financial report We are independent of the group in accordance with the auditor independence complies in all material respects with AASB 1039: Concise Financial Reports based requirements of the Corporations Act 2001 and the ethical requirements of the on our procedures, which were conducted in accordance with Auditing Standard ASA Accounting Professional and Ethical Standards Board’s APES 110: Code of Ethics 810: Engagements to Report on Summary Financial Statements. for Professional Accountants (the Code) that are relevant to our audit of the concise Jessups financial report in Australia. We have also fulfilled our other ethical responsibilities Paul Sapelli, Partner in accordance with the Code. Level 1, 211 Sturt Street, Townsville, QLD 4810

We believe that the audit evidence we have obtained is sufficient and appropriate to Dated: 10 February 2021 provide a basis for our opinion.

28 29 DISCUSSION AND ANALYSIS OF THE FINANCIAL STATEMENTS 31 OCTOBER 2020

Information on Cowboys Leagues Club Ltd’s Concise Financial Statements Cowboys Rugby League Football Ltd profit for the 2020 year amounted to $16,800,000, (2019: $400,000). The increase in profit includes: This discussion and analysis is provided to assist members in understanding the concise financial statements. The discussion and analysis is based on Cowboys • building grants of $11,300,000 for construction of Cowboys Community Training Leagues Club Ltd and controlled entities (the Group) consolidated financial and High-Performance Centre; statements and the information contained in the concise financial statement has • Federal and State Government stimulus packages, relating to the Covid-19 been derived from the full 2020 financial statements of Cowboys Leagues Club Ltd pandemic, totalling $2,000,500; and and controlled entities (the Group). • renegotiated NRL player payments, totalling $2,215,018.

Statement of Profit or Loss and Other Comprehensive Income Cowboys Charity Limited profit for the 2020 year was $1,589,771, (2019: $530,547). This increase includes: The consolidated profit of the Group amounted to $19,990,930, (2019: $1,409,277), an increase of 1,318%. - $818,500 in Federal and State Government stimulus packages.

The profit of Cowboys Leagues Club Ltd (parent) for the year amounted to Statement of Financial Position $1,648,763, (2019: $966,154), an increase of 70.7%. The primary items include: Assets – total assets have increased to $59,550,636 (2019:$37,230,288). The increase • reduction in trading revenue of 18% for the year. This was directly related to the includes construction of the Cowboys Community Training and High Performance closure of all non-essential businesses, announced by the Federal Government, Centre as well as the replacement of the 20-year-old air-conditioning system in the on 22 March 2020; Cowboys Leagues Club with a new chilled-water unit, in December 2019, at a cost of • reduction in expenditure of 9%, in comparison to the prior year, including Payroll $686,000. (5%), Marketing (30%) and Costs of Goods Sold (16%). This reduction was also due to the aforementioned closure; and Liabilities – total liabilities increased by 8% to $28,377,376 (2019:$26,047,957). The increase can be mainly attributed to the additional construction loan. • Federal and State Government stimulus packages totalling $2,027,203.

The 2020 year marked the Cowboys Leagues Club's 19th full year of trading Statement of Changes in Equity operations at the Flinders Street site. The club's main source of income is gaming Equity – equity represents the carried forward results of the company since its revenue which is driven by 237 poker machines. The club is currently approved inception on 24 August 1994. Total equity has increased by 178% from the 2019 year to operate 298 poker machines and has acquired entitlements for 261. To adhere due to the profits achieved by the Cowboys Rugby League Football Ltd of to Health Regulations and for the comfort of its patrons, the Club has reduced the number of machines on floor to 165. $16,800,000, the Cowboys Leagues Club Ltd of $1,648,763 and Cowboys Charity Ltd of $1,589,771. Cowboys Leagues Club Ltd contributed benefits totalling $503,591 (2019: $790,022) to charitable, sporting, recreational and other community initiatives. The profit of Statement of Cash Flows Cowboys Leagues Club Ltd excluding those contributions amounted to $2,152,354, (2019: $1,756,176). The group utilised surplus cash through the year to offset the borrowings as well as utilising the deferment of payments due to the impact of COVID-19.

30 31 COMMUNITY DONATIONS

2004 $59,348 2014 $659,768 2005 $465,924 2015 $647,681 2006 $588,748 2016 $775,332 2007 $741,660 2017 $693,052 2008 $824,095 2018 $590,103 2009 $618,787 2019 $790,022 2010 $364,068 2020 $503,591 2011 $372,136 2012 $405,501 Total $9,607,538 2013 $507,722

32 33 305-335 Flinders Street, Townsville, QLD 4810

PO Box 2266 Townsville, QLD 4810

Phone (07) 4724 8000 [email protected] www.cowboysleagues.com.au

Bank National Australia Bank Solicitor Keir Steele Lawyers Auditor Jessups

ABN 51 066 187 157