FINANCIAL REPORT


2016/17 SLSA FINANCIAL REPORT

SUMMARISED FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

The summarised financial report is an extract from the full financial report for the year ended 30 June 2017. The financial statements and specific disclosures included in the summarised financial report have been derived from the 2017 financial report of Surf Life Saving Australia Limited and its subsidiaries.

The summarised financial report cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of Surf Life Saving Australia Limited and its subsidiaries as the full financial report.

The full financial report and the auditor’s report will be sent to SLSA’s voting members on request, free of charge.

DISCUSSION AND ANALYSIS OF THE SUMMARY FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

1. STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

The 2017 consolidated surplus was $2,887,048 (2016: $2,204,253). This included a $2,494,745 surplus (2016: $156,244 deficit) in helicopter activities and a $1,185,384 surplus (2016: $2,084,873) from The Surf Life Saving Foundation (‘The Foundation’).

Consolidated revenue for 2017 was $70,972,587 (2016: $72,944,242). Sponsorship decreased to $10,928,525 (2016: $12,154,177), Government Grants decreased slightly to $8,644,059 (2016: $9,011,187). The Foundation’s lottery and trade promotion activities contributed $24,596,279 (2016: $25,036,066) to group revenue.

Consolidated expenditure decreased from the prior year at $68,085,539 (2016: $70,739,989). This is reflected in expenditure on Lifesaving development and education at $13,688,979 (2016: $13,973,051), while expenditure on competitions increased slightly to $5,030,584 (2016: $4,547,007). Overall expenditure for helicopter administration and operations decreased to $9,376,504 (2016: $12,197,015). Foundation commercial expenditure, which includes the cost of prizes for lotteries and trade promotions, decreased slightly to $18,520,349 (2016: $18,541,257).

2. STATEMENTS OF FINANCIAL POSITION

The net assets of the consolidated group have increased to $40,202,060 (2016: $37,315,012). The current ratio (current assets: current liabilities) of the group 3.87 (2016: 3.07) continues to be well above the international benchmark of one.

Property, plant and equipment decreased by $10,927,899 to $6,105,657 while asset classified as held for sale and liabilities associated with assets classified as held for sale increased to $9,629,582 (2016: nil) and $257,328 (2016: nil) respectively.

Cash increased to $30,039,186 (2016: $24,266,185) while the borrowings increased to $2,049,248 (2016: nil).

Over the twelve-month period, total group assets increased by $7,180,565 while group liabilities increased by $4,293,517. The resulting increase in group equity was $2,887,048 representing the surplus for the year.

The debt/equity ratio (total liabilities: total equity) of 0.40 (2016: 0.32) of the group continues to show a conservative approach to leveraging the business.

3. STATEMENTS OF CASH FLOWS

For the consolidated group, cash increased by $5,773,001 (2016: $417,576 decrease). Net cash inflow from operating activities was $1,652,619 (2016: $1,606,411). Net cash inflow from investment activities was $4,120,382 (2016: $2,023,987 outflow) which comprised payments of $651,645 (2016: $2,185,694) for property, plant and equipment. This was offset by proceeds of $2,757,932 (2016: $161,707) from the sale of property, plant and equipment, refund of bonds paid of $14,095 (2016: nil) and proceeds of loans of $2,000,000 (2016: nil) from the Foundation Perpetuity Trust.

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017

NoteConsolidatedEntityParentEntity
2017 ($)2016 ($)2017 ($)2016 ($)
Revenue270,972,58772,944,24226,883,22128,891,891
Expenses3(68,085,539)(70,739,989)(27,746,438)(28,663,758)
Surplus before income tax expense2,887,0482,204,253(863,217)228,133
Income tax expense - - - -
Surplus after income tax expense for the year attributable to the members of Surf Life Saving Australia Limited2,887,0482,204,253(863,217)228,133
Other comprehensive income for the year, net of tax - - - -
Total comprehensive income for the year attributable to the members of Surf Life Saving Australia Limited2,887,0482,204,253(863,217)228,133

The above statements of profit or loss and other comprehensive income are to be read in conjunction with the attached notes.

STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2017

NoteConsolidatedEntityParentEntity
CURRENT ASSETS2017 ($)2016 ($)2017 ($)2016 ($)
Cash and cash equivalents30,039,18624,266,1856,026,0805,148,136
Trade and other receivables42,529,9261,693,7522,307,7251,015,799
Inventories323,511665,083309,948400,688
Property, plant and equipment8-1,126,145--
Other Assets57,495,7185,294,439447,591152,431
Assets classified as held for sale69,629,582-5,014,582-
Total current assets50,017,92333,045,60414,105,9266,717,054
NON-CURRENT ASSETS
Other financial assets7--3,300,8823,300,882
Trade and other receivables4246,240236,2402,049,248-
Property, plant and equipment6,105,65715,907,4111,634,3376,813,248
Total non-current assets6,351,89716,143,6516,984,46710,114,130
Total assets56,369,82049,189,25521,090,39316,831,184
CURRENT LIABILITIES
Trade and other payables911,846,6709,446,3818,168,2085,196,089
Employee benefits10812,9731,325,147332,811337,630
Liabilities associated with assets classified as held for sale6257,328---
Total current liabilities12,916,97110,771,5288,501,0195,533,719
NON-CURRENT LIABILITIES
Trade and other payables91,014,396936,8121,014,396936,812
Employee benefits10187,145165,90383,66055,366
Borrowings112,049,248-2,049,248-
Total non-current liabilities3,250,7891,102,7153,147,304992,178
Total liabilities16,167,76011,874,24311,648,3236,525,897
NET ASSETS40,202,06037,315,0129,442,07010,305,287
EQUITY
Retained earnings37,101,28234,214,2346,341,2927,204,509
Other Reserves153,100,7783,100,7783,100,7783,100,778
TOTAL EQUITY40,202,06037,315,0129,442,07010,305,287

The above statements of profit or loss and other comprehensive income are to be read in conjunction with the attached notes.

STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017

ConsolidatedEntityParentEntity
RETAINED SURPLUSES ($)SPECIAL FUNDS ($)OTHER RESERVES ($)TOTAL EQUITY ($)RETAINED SURPLUSES ($)SPECIAL FUNDS ($)OTHER RESERVES ($)TOTAL EQUITY ($)
Balance at 30 June 201532,009,981-3,100,77835,110,7596,976,376-3,100,77810,077,154
Surplus after income tax expense for the year2,204,253--2,204,253228,133-- 228,133
Other comprehensive income for the year, net of tax - -- - - -- -
Total comprehensive income for the year2,204,253--2,204,253228,133--228,133
Balance at 30 June 201634,214,234-3,100,77837,315,0127,204,509-3,100,778 10,305,287
Surplus/(deficit) after income tax expense for the year2,887,048--2,887,048(863,217)--(863,217)
Other comprehensive income for the year, net of tax--------
Total comprehensive income for the year2,887,048--2,887,048(863,217)--(863,217)
Balance at 30 June 201737,101,282-3,100,77840,202,0606,341,292-3,100,7789,442,070

The above statements of profit or loss and other comprehensive income are to be read in conjunction with the attached notes.

STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017

NoteConsolidatedEntityParentEntity
CASH FLOWS FROM OPERATING ACTIVITIES2017 ($)2016 ($)2017 ($)2016 ($)
Receipts from sponsors, donors and customers (inclusive of GST)73,748,42576,221,06830,118,16831,558,909
Payments to suppliers and employees (inclusive of GST)(72,714,070)(75,195,478)(29,165,365)(30,486,826)
Interest received618,264580,82153,904106,366
Net cash from operating activities1,652,6191,606,4111,006,7071,178,449
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment(651,645)(2,185,694)(144,380)(1,618,496)
Proceeds from sale of property, plant and equipment2,757,932161,70715,61776,314
Refund of bonds paid14,095---
Loans advanced to related parties11---2,000,000-
Proceeds of loans from related parties112,000,000-2,000,000-
Net cash from / (used in) investing activities4,120,382(2,023,987)(128,763)(1,542,182)


Net cash from financing activities


-


-


-


-
Net increase / (decrease) in cash and cash equivalents5,773,001(417,576)877,944(363,733)
Cash and cash equivalents at the beginning of the financial year24,266,18524,683,7615,148,1365,511,869
Cash and cash equivalents at the end of the financial year30,039,18624,266,1856,026,0805,148,136

The above statements of profit or loss and other comprehensive income are to be read in conjunction with the attached notes.

NOTES TO AND FORMING PART OF THE SUMMARY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Summary Financial Statements have been prepared from the audited financial report for Surf Life Saving Australia Limited and the entities that it controlled during and at the end of the year ended 30 June 2017. The audited financial report for the year ended 30 June 2017 is available to Surf Life Saving Australia Limited’s voting members on request from Surf Life Saving Australia Limited and its subsidiaries.

The financial statements are presented in Australian Dollars which is Surf Life Saving Australia Limited’s functional and presentation currency.

The financial statements, specific disclosures and other information included in the summary financial statements are derived from and are consistent with the full financial statements of Surf Life Saving Australia Limited and its subsidiaries. The summary financial statements cannot be expected to provide as detailed an understanding of the financial performance, financial position and financing and investing activities of Surf Life Saving Australia Limited and its subsidiaries as the full financial report.

The Summary Financial Statements have been prepared in accordance with Australian Accounting Standard AASB 1039: Concise Financial Reports and the Australian Charities and Not-for-profits Commission Act 2012. The accounting policies adopted have been consistently applied to all financial periods unless otherwise stated.

ConsolidatedEntityParentEntity
2. REVENUE2017 ($)2016 ($)2017 ($)2016 ($)
Government grants8,644,0599,011,1877,350,8807,719,842
Sponsorship10,928,52512,154,1779,875,07010,883,983
Fundraising and donations16,636,77317,908,0246,091,4626,531,440
Commercial revenue24,596,27925,036,066 - -
Contract revenue3,773,5044,135,971 - -
Other revenue1,696,9741,563,6581,398,5641,335,899
Interest518,246582,03053,904106,366
Sale of goods1,201,4681,342,5451,205,3391,355,727
Hire of helicopter142,856251,950 - -
Royalty and trademark revenue173,319212,383173,320212,383
Competition entry fees719,065746,251719,065746,251
Net profit on disposal of property, plant and equipment1,941,519-15,617-
70,972,58772,944,24226,883,22128,891,891
ConsolidatedEntityParentEntity
3. EXPENSES2017 ($)2016 ($)2017 ($)2016 ($)
Lifesaving development and education13,688,97913,973,05115,120,11915,265,420
Competitions costs5,030,5844,547,0075,030,5844,547,007
Administration of lifesaving and competitions3,159,3355,026,6213,128,5974,616,815
Cost of sales1,028,2671,070,9661,029,3341,080,932
Fundraising distribution to states5,722,1095,216,9173,437,8043,027,900
Philanthropic expense7,316,8795,700,880 - -
Expenses relating to commercial activities18,520,34918,541,257 - -
Administration of Foundation activities2,510,8142,580,723 - -
Helicopter administration and finance1,941,7291,689,432 - -
Helicopter operations7,434,77510,507,583 - -
Helicopter fundraising1,677,0631,757,570 - -
Foreign exchange loss 54,656404 - -
Net loss on disposal of property, plant and equipment - 127,578 - 125,684
68,085,53970,739,98927,746,43828,663,758








ConsolidatedEntityParentEntity
4. TRADE AND OTHER RECEIVABLES2017 ($)2016 ($)2017 ($)2016 ($)
CURRENT
Trade receivables2,058,3371,161,6741,398,086462,370
Other receivables471,589532,078909,639553,429
2,529,9261,693,7522,307,7251,015,799
NON-CURRENT
Security deposit246,240236,240 --
Loans to related parties (note 11)--2,049,248-
246,240236,2402,049,248-








ConsolidatedEntityParentEntity
5. OTHER ASSETS2017 ($)2016 ($)2017 ($)2016 ($)
Prepayments642,201432,862447,591152,431
Fundraising Prize bank6,853,5174,861,577--
7,495,7185,294,439447,591 152,431

The Fundraising Prize Bank consists of property purchases, and other prizes to be offered in future lotteries. Other costs, that are not associated with prizes, which relate to future lotteries, are expensed when incurred.

6. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

Aircraft and associated equipment
In March 2017, Southern Region SLSA Helicopter Rescue Service Pty Limited (Southern) entered into an agreement with SAR Helicopters Australia Pty Limited (SAR), a subsidiary company of Nautilus Aviation Pty Limited, to carry out Southern’s aviation operations.  This agreement came into effect from 1 August 2017.  The operations remained unchanged to 30 June 2017, and the contract with SAR covers the same level of operational service as previously operated directly by Southern.

SAR also entered into an agreement with the Group to purchase the Subsidiary’s aircraft and other operational assets for $4.6m. These were transferred from the Group to SAR on 1 August 2017, but as the sale contract was signed in March 2017, these assets are shown on the Statement of Financial Position at 30 June 2017 as held for sale.

Consolidated Entity
2017 ($)2016 ($)
Aircraft and Operational Equipment4,519,139-
Spare parts at cost95,861-
4,615,000-
Liabilities associated with assets classified as held for sale
Annual leave employee entitlements for aviation staff144,316-
Long service leave employee entitlements for aviation staff68,853-
Sick leave 44,159-
257,328-

Under a separate deed of understanding between the Company and SAR, by 6 August 2017, SAR must ensure that offers of employment are made to transferring employees from the company’s aviation operation. These offers will be made on similar terms and condition for comparable positions in the aviation operations of SAR. Additionally, the prior service of all transferred employees of the company will be recognised, including leave benefits or any redundancy or termination benefits payable after completion and transfer of the employees.

By the 6 August, the Company has agreed to pay the contractor amount equivalent to the aggregated value of the following employee entitlements:

  • Sick leave to the extent it is not accrued beyond 12 months;
  • Annual leave; and
  • Long service leave.

The expected proceeds on the sale of aviation assets less the payment of employee entitlement obligations will amount to $4,342,672.

Office Building
On 13 April 2017, the Group entered into an agreement with Formidable Pty Limited for the sale of the office building and property at Rosebery for consideration of $8,500,000. The Rosebery site was made available for sale after the SLSA Board opted to relocate the head office operations to Surf House Bondi. The relocation of the office was completed in August 2017 with the sale of the Rosebery property and building expected to settle in during October 2017.

As at 30 June 2017, the carrying value of the property and building was as follows:

Consolidated and Parent Entity
2017 ($)2016 ($)
Property and building carrying value5,014,582-

Expected consideration8,500,000-
Less: carrying value of property and building(5,014,582)-
Less: estimated costs to sell the asset held for sale(380,000)-
Estimated gain on sale of non-current asset 3,105,418-
ConsolidatedEntityParentEntity
2017 ($)2016 ($)2017 ($)2016 ($)
Non-current assets classified as held for sale9,629,582-5,014,582 -
Liabilities associated with assets classified as held for sale257,328 - - -
ConsolidatedEntityParentEntity
7. OTHER FINANCIAL ASSETS2017 ($)2016 ($)2017 ($)2016 ($)
Unlisted investments in subsidiaries at cost (note 13)--3,300,8823,300,882
--3,300,8823,300,882

8. PROPERTY, PLANT, AND EQUIPMENT

In the prior year, of the total Property, Plant and Equipment for the consolidated entity, $15,907,240 was classified as non-current assets and $1,126,145 was classified as current assets. The current asset value represented the Property, Plant and Equipment belonging to Northern Region SLSA Rescue Helicopter Service disposed of in the current financial year.

ConsolidatedEntityParentEntity
9. TRADE AND OTHER PAYABLES2017 ($)2016 ($)2017 ($)2016 ($)
CURRENT
Trade payables1,732,0892,063,901658,457699,281
Other payables3,024,8891,818,3221,914,7411,263,450
Income in advance6,098,0474,613,9034,603,3652,283,103
Public liability claims pool (see below)991,645950,255991,645950,255
11,846,6709,446,3818,168,2085,196,089
NON-CURRENT
Public liability claims pool (see below)1,014,396936,8121,014,396936,812
1,014,396936,8121,014,396936,812

The public liability claims pool is administered by the parent entity on behalf of the parent entity and all its State Centres to manage part of the public liability risk for all of Surf Life Saving Australia’s entities covered by the parent entity’s public liability insurance. Current estimates by insurance broker (Jardine Lloyd Thompson) calculated a potential liability of $991,645 (2016: $950,255). This amount makes up the current liability portion shown above.

ConsolidatedEntityParentEntity
10. EMPLOYEE BENEFITS2017 ($)2016 ($)2017 ($)2016 ($)
CURRENT
Employee benefits812,9731,325,147332,811337,630
NON-CURRENT
Employee benefits187,145165,90383,66055,366
Aggregate employee benefits1,000,1181,491,050416,471392,996
ConsolidatedEntityParentEntity
11. BORROWINGS (NON-CURRENT)2017 ($)2016 ($)2017 ($)2016 ($)
BORROWINGS2,049,248-2,049,248-

The borrowings relate to a loan of $2,000,000 which was drawn down by the Parent entity during the year from the Foundation Perpetuity Trust and immediately transferred to the Foundation. The outstanding balance includes interest payable to the Foundation Perpetuity Trust of $49,248. The principal sum and interest is due to be repaid by 30 June 2020 unless otherwise agreed between the parties.

12. CONTINGENCIES
Public liability claims pool

The parent entity manages a public liability claims pool on behalf of the parent entity and all Surf Life Saving Australia’s State Centres. A review has indicated that the funds held in the pool will be sufficient to cover the cost of all expected claims.

Northern Region SLSA Helicopter Rescue Service Pty Ltd (NRHRS / Northern Region)
As previously reported, the NSW Government announced on 17 July 2013 a Reform Plan in which NSW Health proposed to restructure helicopter contracts. Northern Region SLSA Helicopter Rescue Service Pty Ltd (NRHRS) assisted Hunter Region SLSA Helicopter Rescue Service (Hunter Region) to tender for the Helicopter Emergency Medical Service (HEMS) in the Northern Region which Hunter Region was subsequently successful in securing. Effective 27 April 2017, NRHRS cease operating as a helicopter search and rescue service. The Board of SLSA authorized the distribution of assets and deregistration of NRHRS in accordance with NRHRS’s constitution which states that on dissolution, 50% of the net assets of the company be distributed to charitable organisations within the local flight path area and 50% to SLSA with a preference that there be some on distribution to surf life saving clubs in the flight area.

Subsequent to the initial decision to cease operation and deregistration NRHRS, there has been a major development effecting the deregistration of the company and the disposition of its assets according to the company’s constitution. This development includes a claim against the net assets of NRHRS by a third party with proceedings commenced against NRHRS in the Supreme Court of New South Wales. The effect of the claim will delay any distribution of the company’s net assets. For the year ended 30 June 2017, as the total amount to be distributed is uncertain and not yet quantifiable, no provision (for distribution of funds outside the consolidated entity) has been recognised by the consolidated entity at the year end. Details of the assets and liabilities of NRHRS as at 30 June 2017 are as follows:

STATEMENT OF FINANCIAL POSITION
Assets 2017 ($)
Cash and cash equivalents16,949,768
Total Assets16,949,768
LIABILITIES
Trade and other payables382,110
Provisions236,561
Total Liabilities618,671
Net Assets16,331,097

13. MEMBERS’ EQUITY ISSUED CAPITAL

The parent entity is a company limited by guarantee and as such does not have any issued capital. If the company is wound up, the Constitution states that each member is required to contribute a maximum of $10 each towards meeting any outstanding obligations of the company. As at 30 June 2017 the number of members was 168,824 (2016: 169,250).

PER CENT OF SHARES HELD
14. DETAILS OF SUBSIDIARIESCountry of Incorporation2017 (%)2016 (%)
Southern Region SLSA Helicopter Rescue Service Pty Ltd(1)Australia100100
Northern Region SLSA Helicopter Rescue Service Pty Ltd(1) (2)Australia100100
SLSA Helicopters Pty LtdAustralia100100
Surf Sports Australia Pty LtdAustralia100100
The Surf Life Saving Foundation Limited(3)Australia--

(1) Compliance with the financial disclosure requirements of the Charitable Fundraising Act 1991 (NSW) has been disclosed in the financial statements of these entities.
(2) Not Audited by BDO East Coast Partnership.
(3) The Surf Life Saving Foundation is a company limited by guarantee and therefore does not have issued capital. The parent entity acquired control over The Surf Life Saving Foundation Limited on 1 July 2013 by board resolution of The Surf Life Saving Foundation Limited.

ConsolidatedEntityParentEntity
15. OTHER RESERVES2017 ($)2016 ($)2017 ($)2016 ($)
Acquisition / Disposition Reserve3,100,7783,100,7783,100,7783,100,778
3,100,7783,100,7783,100,7783,100,778

The acquisition / disposition reserve represents the net assets of The Surf Life Saving Foundation acquired by the parent entity on 1 July 2013 for nil consideration.

16. FOUNDATION PERPETUITY TRUST (FORMERLY KNOWN AS SURF LIFE SAVING RESCUE TRUST FUND)

The parent entity is a beneficiary of the Foundation Perpetuity Trust. Funds held on behalf of the parent as at 30 June 2017 were $3,486,095 (2016: $5,011,707). Funds held in the Trust can only be withdrawn at the sole discretion of the Trustee, provided such withdrawal meets the criteria as noted in the Trust Deed.

17. EVENTS OCCURRING AFTER THE REPORTING PERIOD

Other than the matters disclosed in Note 6 and Note 12, no other matter or circumstance has arisen since 30 June 2017 that has significantly affected, or may significantly affect the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in future financial years.

18. COMPANY DETAILS

The registered office and principal place of business of the consolidated entity is 1 Notts Avenue, Bondi Beach NSW 2026.

DIRECTORS’ DECLARATION


In accordance with a resolution of the directors of Surf Life Saving Australia Limited, the directors of the company declare that the summary financial statements of Surf Life Saving Australia Limited and Controlled Entities for the financial year ended 30 June 2017, as set out above:

  1. Complies with Accounting Standard AASB 1039: Concise Financial Reports and
  2. Is an extract from the full financial report for the year ended 30 June 2017 and has been derived from and is consistent with the full financial report of Surf Life Saving Australia Limited and Controlled Entities.

On behalf of the Directors by

Graham Ford AM
Director
Sydney, 30 September 2017

Martin Walsh
Director
Sydney, 30 September 2017

INDEPENDENT AUDITOR’S REPORT ON THE SUMMARY FINANCIAL REPORT


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