3. Income
(a) COST RECOVERIESVarious costs were on-charged to customers with an appropriate margin during the period 1/7/96 to 28/11/96. This figure represents the gross cost recovery.
(b) INCOME FROM PROPERTY
This item relates to houses on the Raceway property and from Telstra for the area leased to them for a `Mobile Net’ tower, during the period 1/7/96 to 28/11/96.
(c) ROYALTIES
The Raceway received Royalties from clean land fill which is being used to construct Noise/Spectator Mounds. (d) GRANTS
Grants were made from NSW Treasury to fund track maintenance, leasing costs and insurance expenses. (e) RACEWAY LEASE INCOME
The following receipts were controlled directly by the Crown Transactions Entity during the periods:
30/6/1997 29/11/1996
to to
30/6/1998 30/6/1997
$ $
Lease monthly payments 0 291,669
Lease yearly payments 0 50,000
(f) ABNORMAL CONTRIBUTION BY LESSEE
During the financial year a Karting track was built on the raceway by a sublessee. The fair value of the Karting track was bought to account as income.
4. Expenditure
(a) ADVERTISING, PROMOTION AND MARKETING 1998 1997
$ $
Advertising 0 93,125
Promotion 0 7,230
Prize Money to Competitors 0 134,000
0 234,355
(b) SALARIES AND PERSONNEL COSTS
Salaries and Wages 0 407,381
Superannuation 0 16,327
Other Personnel Costs 0 33,916
0 457,624
(c) CATERING COSTS
These costs relate to the provision of corporate catering and the public restaurant. (d) AUDIT FEES
Fees associated with the audit of the Raceway for the year are $4,900, ($10,000 in 1997) payable to the Audit Office of New South Wales. (e) ADMINISTRATION SUPPORT
Administration support was supplied by the NSW Department of Sport and Recreation in the form of payroll preparation and legal assistance and management support prior to the Raceway being leased out.Eastern Creek Raceway was not charged for this administration support and as such no allowance was made in the accounts for these services. It is estimated that for 1996/97 these costs total approximately $100,000.
7 4
Financial Reports
EASTERN CREEK RACEWAY5. Balance Sheet
1998 1997
$ $
(a) CASH
Cash at Bank 401,626 283,665
Cash comprises bank balances within the Treasury Banking System. Interest is earned on daily bank balances at the monthly average NSW Treasury Corporation (Tcorp) 11am unofficial cash rate adjusted for a management fee to Tr e a s u r y. The weighted average interest rate was 4%. (b) RECEIVABLES
Trade Debtors 50,000 62,625
Provision for Doubtful Debts 0 (36,503)
50,000 26,122
All debtors are rocognised as amounts receivable at balance date. Collectability of debtors is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off. A provision for doubtful debts is raised when some doubt as to collection exists. The maximum credit risk is the carrying amount (net of any provision for doubtful debts).No interest is earned on debtors. The carrying amount approximates net fair value.
(c) PROPERTY, PLANT AND EQUIPMENT
Freehold Land 5,920,425 5,920,425
Buildings and Improvements 7,908,059 7,197,810
Less Accumulated Depreciation (473,972) (283,669)
7,434,087 6,914,141
Track 2,675,706 1,100,000
Less Accumulated Depreciation (223,999) (102,849)
2,451,707 997,151
TOTAL WRITTEN DOWN VALUE 15,806,219 13,831,717
The lease agreement provided for the sale of all Plant, Equipment and Motor Vehicles to the A R D C . Assets are revalued on a 5 yearly cyclical basis. Where carrying values exceed recoverable amounts, assets are written down. In determining recoverable amount the expected net cash flows have been discounted to their present va l u e.
Freehold land was transferred at cost from the Department of Planning to the NSW Department of Sport and Recreation as at 30 June, 1 9 9 2 .H o w e v e r, title remains with the Minister for Planning. The Racewa y, consisting the Freehold land, Buildings and improvements and the track, was va l u e d as at December 1995. The valuation was prepared on the basis of market value as defined by the Australian Institute of Valuers and Land Economists. The valuation was supplied by Colliers Ja r d i n e (NSW) Pty Ltd and prepared by Mr S. C . Bembrick FVLE Registered Valuer No. 4 0 3 .
(d) CREDITORS
Trade Creditors 6,650 99,956
The liabilities are recognised for amounts due to be paid in the future for goods or services received,whether or not invoiced.Amounts owing to suppliers (which are unsecured) are settled in accordance with the policy set out in Treasurer’s Direction 219.01. If trade terms are not specified,payment is made no later than the end of the month following the month in which an invoice or a statement is received.Treasurer’s Direction 219.01 allows the Minister to award interest for late payment.
7 5
Eastern Creek Raceway - Annual Report 1997/98
Financial Reports
EASTERN CREEK RACEWAY
6. Contingent Liabilities
Claims totaling $20,000 have been made against the Raceway ($100,000 in 1997). No material losses are anticipated in respect of these contingent liabilities.
The entity is responsible for the cost of rectifying any contamination or pollution caused by the noise attenuation mounds at Eastern Creek Raceway. During the financial year combustion of matter in the mounds was noted as taking place. Estimated costs of rectification range from $202,000 to $1,256,000. The entity may be able to recover these costs from the company responsible for constructing the mounds.
7. Expenditure Commitments
As at balance date there were no expenditure commitments, (nil in 1997).
8. Segment Reporting
Eastern Creek Raceway operates entirely in New South Wales and within the Motor Racing industry.
9. Tax Status
The activities of the Raceway are exempt from Income Tax, Council Rates and Sales Tax.
10. Cash Flow Reconciliations
(a) RECONCILIATION OF CASH
For the purposes of the statement of cash flows cash is considered to be cash on hand and cash at the bank.Cash at the end of the reporting period as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:
1998 1997
$ $
Cash at Bank 401,626 283,665
401,626 283,665
(b) RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO OPERATING RESULT
Operating Result 2,484,650 8,218
Depreciation 311,453 280,073
Provision for doubtful debts (36,503) (392)
Surplus on disposed assets 0 (2,658)
Movement in trade debtors 12,625 123,508
Movement in prepayments/other income 0 9,487
Movement in Creditors (93,306) (306,984)
Movement in Provisions 0 (41,673)
Movement in other current liabilities 0 (54,776)
Capitalised value of lessee improvements (2,285,955) 0
Distribution to NSW Treasury (275,003) (58,496)
Net cash provided by (used in) operating activities 117,961 (43,693)
NON CASH OPERATING AND INVESTING ACTIVITIES
Under the lease agreement for the Eastern Creek Raceway facility, the operator is required to make capital improvements, ownership of which remain with the Government.
In 1998 $2.3 million (1997 $nil) was provided in capital improvements. Due to the non cash nature of these activities they have not been included in the Cash Flows as either Receipts from Operating Activities, or, Purchases of Property, Plant and Equipment in Investing Activities.