Gateway Baptist Church

31 December 2020

ABN 68 607 195 522

Annual Financial Report

Contents

Directors' report 2

Lead auditor's independence declaration 7

Statement of profit or loss and other comprehensive income 8

Statement of financial position 9

Statement of changes in equity 10

Statement of cash flows 11

Notes to the financial statements 12

Directors' declaration 25

Independent audit report 26

1

Directors' report

For the year ended 31 December 2020

1 Directors

The directors of the Company at the end of the financial year are:

Matthew Gray FCA, B.Com

Director

Megan Cocker Director

Andrea Eames B.Ed, B. Mus, AMusA Director

Jenny Huntington B. Teach, B. Ed Director

Matthew is a Fellow of the Institute of Chartered Accountants in Australia and New Zealand and holds a Bachelor of Commerce from the University of Queensland. Matthew is the Chief Financial Officer of the St Philip's Christian Education Foundation and was an audit partner with KPMG Australia (having retired in 2019 after 29 years).

Andrea is a registered teacher and music specialist. She previously worked in administration for SU Qld, and also as a volunteer in fundraising and

promotions for other charities. Andrea has had volunteer executive roles on various charity and community group committees. She has experience in risk management, particularly with regards to working with children, in both school and ministry contexts.

Name, qualifications and special

responsibilities Experience

The directors present their report together with the financial statements of Gateway Baptist Church ('the Church' or 'the Company') for the financial year ended 31 December 2020 and the auditor’s report thereon.

Megan currently runs a building construction company, managing all the legal and administrative aspects. Her skills in governance have been gain through being self employed for many years and also from her role in setting up and managing early childhood centres under the New Zealand Education Department. Megan has served on a national executive board for Christian Early Childhood. She has a heart for international mission and and has been part of Gateway's Mission team for over eight years.

Jenny is a teacher with extensive educational experience and is currently Associate Director of two high performance training organisations. As an experienced teacher and coach, she has in a wide range of educational and leadership roles. As a professional leader, she has trained and coached teams, managed projects, implemented improvement programs and learning management systems and worked in change management roles. She brings to the board a strategic mindset and experience in supporting organisations through change and implementation of improvement programs. Jenny has served in church ministries over the last 20 years.

Chairman

Directors' report

For the year ended 31 December 2020 1 Directors (continued)

Nathan Manning FCA, B.Com

Director

Rod Pietila

Andrew Ross Director

Trevor Shinners Director

Jason Elsmore B.Th., Grad Dip Min Director

Derek Peters

Director

Member of Finance and Risk Committee

Trevor is now retired but his employment history includes senior management roles with large organisations such as Nylex, Black and Decker, and John Deere. In these roles Trevor has developed his strategic and administrative skills which are well suited to his role on the Board of Elders. Trevor also has experience in large church governance with his board roles in previous churches.

Andrew has professional studies in mechanical engineering but has spent a large part of his working life in real estate, initially as an agent then setting up and managing an association for real estate employees. Andrew is currently working as a software developer and brings Information Technology skills to the Board of Elders.

Nathan is a Fellow of the Chartered Accountants Australia and New Zealand, a Chartered Tax Adviser with the Tax Institute and a Registered Tax Agent.

Nathan is a director of Cooper Reeves Pty Ltd.

Jason is currently the Senior Pastor of Gateway Baptist Church overseeing the strategic direction and growth of the church. Jason is an ordained pastor registered with the Queensland Baptists. He has been a part the Gateway Baptist Church Board of Elders since becoming Senior Pastor in 2008 (including the previous unincorporated Gateway Baptist Church). Jason bring leadership and strategic visionary skills to the Board of Elders.

Derek is currently the Executive Pastor of Gateway Baptist Church overseeing the tactical and operational implementation of strategy in the church. Derek is an ordained pastor registered with the Queensland Baptists. Derek has been a part the Gateway Baptist Church Board of Elders since becoming Executive Pastor in 2013 (including the previous unincorporated Gateway Baptist Church). He brings to the Board of Elders a history of governance and leadership in church and large organisations such as Scipture Union (Qld).

Rod leads the consulting practices for IBM's Build-on and Move-to cloud business for Australia and New Zealand. His clients include big four banks and insurers, telecommunications, distribution and energy & utilities

companies. He has previously held senior account management roles across Brisbane, Sydney, Melbourne and Auckland. He holds a degree in

Information Technology with Honours in Electronic Systems from Griffith University, is a certified Project Manager Professional with the Project

Management Institute and is an IBM Certified Consultant. Rod has previously held a Board/Director position on another church prior to joining Gateway Baptist.

Director

B. Inf., BSc (Hons), PMP(PMI)

Assoc Dip (Rec Studies), M.A.

(Leadership)

Chair of Finance and Risk Committee

3

Directors' report

For the year ended 31 December 2020

1 Directors (continued)

Paul Bakes Megan Cocker Jason Elsmore Andrea Eames Matthew Gray Jenny Huntington Nathan Manning Derek Peters Rod Pietila Andrew Ross Trevor Shinners

Unless otherwise stated, the directors held office for the entire year.

2 Directors' meetings

A B A B

Paul Bakes 3 4 - -

Megan Cocker 11 12 3 4

Jason Elsmore 10 12 - -

Andrea Eames 12 12 - -

Matthew Gray 12 12 3 3

Jenny Huntington 12 12 - -

Nathan Manning 7 8 5 5

Derek Peters 11 12 - -

Rod Pietila 11 12 2 2

Andrew Ross 11 12 - -

Trevor Shinners 11 12 - -

A – Number of meetings attended

B – Number of meetings held during the time the director held office during the year 17 May 2020

10 May 2017

17 May 2020 11 August 2015

10 May 2017

Director

18 April 2018

Board Meetings

Finance & Risk Committee Meetings

11 August 2015

1 May 2019 27 April 2016 27 April 2016 Director

The directors of the Company at any time during or since the end of the financial year are:

Resigned Appointed

11 August 2015 18 April 2018

The number of directors’ meetings (including meetings of committees of directors) and number of

meetings attended by each of the directors of the Company during the financial year are:

Directors' report

For the year ended 31 December 2020

3 Objectives, strategies and principal activities

Key performance measures

Attendances

Service Total Average /

week

Services Average / service

Morning services 31,884 614

Evening services 7,396 142

Special events 3,799 73 8 475

Morning services 4,821 93

Special events 489 9 3 163

Morning services 6,049 116

Special events 508 10 4 127

Morning services 4,753 91

Special events 349 7 4 87

Morning services 3,850 74

Evening services 693 13

Special events 318 6 4 80

64,909 1,248 Morning services 25,642 493

Morning Kids 6,704 129

Evening services 3,031 58

Special events 2,264 44 10 226

37,641 724

Baptisms 58

Number of volunteers 1,227

Location

The Church’s short and long term objectives are to undertake ministries and activities that promote religious education and provides physical, mental and spiritual healing to local, national and international communities.

The church’s strategies to achieve its short and long term objectives are;

• Operation of multiple campus local church communities in south east Queensland

• Operation of care centres in local communities connected to each campus

• Support overseas organisations to provide physical, mental and spiritual healing

The church’s principal activities are;

• Weekly worship services

• Youth and children’s programs

• Pastoral care

• Community care including: opportunity shop, professional counselling, emergency food hampers and life coaching

• Biblical training and teaching

Redlands

Logan

Campus Attendnace Online Church

Online Church City

Ormeau Mackenzie

5

Directors' report

For the year ended 31 December 2020 4 Operating and financial review

Overview of the Church

5 Significant changes in the state of affairs

6 Events subsequent to reporting date

7 Members' guarantee

8 Lead auditor’s independence declaration

This report is made in accordance with a resolution of the directors:

Matthew Gray Director

Dated at Mackenzie this 25th day of March 2021.

______________________________

___

The company is incorporated under the Corporations Act 2001 and is a company limited by guarantee. lf the company is wound up, the constitution states that each member is required to contribute a maximum of $10 each towards meeting any outstandings and obligations of the company. At 31 December 2020 the number of members was 806 (2019: 833). The total amount that members of the Company are liable to contribute if the Company is wound up is $8,060 (2019: $8,330).

The Lead auditor’s independence declaration is set out on page 7 and forms part of the directors’ report for the financial period ended 31 December 2020.

The profit for the year ending 31 December 2020 was $406,409 (profit for the year ending 31 December 2019: $-710,634).

In the opinion of the directors there were no significant changes in the state of affairs of the church that occurred during the financial year under review.

There has not arisen in the interval between the end of the financial and the date of this report any other

item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect

significantly the operations of the church, the results of those operations, or the state of affairs of the

church, in future financial years.

insert indepence Declaration here …

(i)

(ii)

Pilot Partners

Daniel Gill Partner Brisbane

7

Statement of profit or loss and other comprehensive income

For the year ended 31 December 2020

In AUD Note

2020 2019

Revenue 4 6,522,216 5,316,278

Employee benefits expenses 5 (3,702,810) (3,444,841)

Ministry expenses (384,664) (492,406)

Missions support expenses (190,152) (308,478) Depreciation and amortisation expense 9,10,11 (789,302) (741,604)

Operating expenses (531,729) (577,064)

Repairs and maintenance expenses (272,039) (193,904) Utilities and property expenses (227,109) (254,557) Results from operating activities 424,411 (696,576)

Net Finance income (18,002) (14,058)

Net finance income 6 (18,002) (14,058)

Profit / (loss) for the year 406,409 (710,634)

Other comprehensive income - - Total comprehensive income for the year 406,409 (710,634)

The notes on pages 12 to 24 are an integral part of these financial statements.

Statement of financial position

As at 31 December 2020

In AUD Note

2020 2019

Assets

Cash and cash equivalents 7 1,475,992 596,342 Trade and other receivables 8 182,319 106,937

Prepayments 89,761 78,336

Total current assets 1,748,072 781,615

Trade and other receivables 8 135,000 60,000 Property, plant and equipment 9 20,770,176 21,349,761 Right-of-use assets 10 223,836 286,536 Intangible assets 11 6,209 10,842 Total non-current assets 21,135,221 21,707,139

Total assets 22,883,293 22,488,754

Liabilities

Trade and other payables 12 384,019 384,902 Employee benefits 15 321,153 299,434 Loans and borrowings 13 7,307 188,194 Lease Liability 14 44,814 50,561 Total current liabilities 757,293 923,091

Loans and borrowings 13 172,617 - Lease Liability 14 237,853 282,666 Employee benefits 15 129,092 102,968 Total non-current liabilities 539,562 385,634 Total liabilities 1,296,855 1,308,725

Net assets 21,586,438 21,180,029

Equity

Retained earnings 21,586,438 21,180,029

Total equity 21,586,438 21,180,029

The notes on pages 12 to 24 are an integral part of these financial statements.

9

Statement of changes in equity

For the year ended 31 December 2020

In AUD

Retained

Earnings Total

Opening Balance as at 1 January 2019 21,890,663 21,890,663

Total comprehensive income for the period

Profit for the period (710,634) (710,634)

Other comprehensive income for the period - - Total other comprehensive income - - Total comprehensive income for the period (710,634) (710,634)

Balance at 31 December 2019 21,180,029 21,180,029

Total comprehensive income for the period

Profit / (loss) for the period 406,409 406,409

Other comprehensive income for the period - - Total other comprehensive income - - Total comprehensive income for the period 406,409 406,409

Balance at 31 December 2020 21,586,438 21,586,438

The notes on pages 12 to 24 are an integral part of these financial statements.

For the year ended 31 December 2020

In AUD Note

2020 2019

Cash flows from operating activities

Receipts from offerings, donations and customers 6,411,151 5,198,059 Cash paid to suppliers and employees (5,322,968) (5,042,866)

Interest received 637 1,111

Interest paid (18,639) (15,169)

Net cash from operating activities 7 1,070,181 141,135

Cash flows from investing activities

Acquisition of property, plant and equipment 7(i) (131,700) (281,412) Net cash used in investing activities (131,700) (281,412)

Cash flows from financing activities

Proceeds from borrowings - 179,924 Repayment of borrowings (8,270) (11,927) Repayment of lease liabilities (50,561) (20,803) Net cash from/(used in) financing activities (58,831) 147,194

Net increase/(decrease) in cash and cash equivalents 879,650 6,917 Cash and cash equivalents at beginning of period 596,342 589,425 Cash and cash equivalents at end of period 7 1,475,992 596,342

The notes on pages 12 to 24 are an integral part of these financial statements.

Statement of cash flows

11

Notes to the financial statements

For the year ended 31 December 2020

1

2

(a)

• AASB 101 Presentation of Financial Statements

• AASB 107 Statement of Cash Flows

• AASB 108 Accounting Policies, Changes in Accounting Estimates or Errors

• AASB 1048 Interpretation and Application of Standards

• AASB 1054 Australian Additional Disclosures

(b)

(c)

(d)

Reporting entity

Basis of measurement

The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical cost modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar.

The special purpose financial statements have been prepared in accordance with the requirements of the Australian Charities and Not-for-profits Commission Act 2012 and the recognition, measurement and classification aspects of all applicable Australian Accounting Standards (AASBs) adopted by the Australian Accounting

Standards Board (AASB).

The Church is a not-for-profit entity and undertakes ministries and activities that promote religious education and provides physical, mental and spiritual healing to local, national and international communities.

Basis of preparation

Statement of compliance

The special purpose financial statements include only the disclosure requirements of the following AASBs and those disclosures considered necessary by the directors to meet the needs of members:

Gateway Baptist Church (the Church) is a company limited by guarantee, incorporated and domiciled in Australia.

The address of the Church's registered office is 1052 Mt Gravatt-Capalaba Road, Mackenzie QLD 4156. The financial statements are as at and for the year ended 31 December 2020.

The financial statements for the year ended 31 December 2020 do not comply with International Financial Reporting Standards (IFRS).

Functional and presentation currency

These financial statements are presented in Australian dollars, which is the Church's functional currency.

Use of estimates and judgements

The preparation of the financial statements in conformity with Australian Accounting Standards requires

management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

There are no judgements made by management in the application of Australian Accounting Standards that have a significant effect on the financial report or estimates with a significant risk of material adjustment in the next year.

Notes to the financial statements

For the year ended 31 December 2020

(e)

•

•

• 3

(a)

(i)

(ii) Classification and subsequent measurement

•

•

On initial recognition, a financial asset is classified as measured at: amortised cost; fair value though other comprehensive income (FVOCI) - debt investment; FVOCI - equity investment; or FVTPL.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Going concern basis of accounting (in relation to the impacts of COVID-19)

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

Financial assets are not reclassified subsequent to their initial recognition unless the Church changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Church becomes a party to the contractual provisions of the instrument.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by the Church.

Financial instruments

Significant accounting policies

Recognition and initial measurement

Management continues to have a reasonable expectation that the Group has adequate resources to continue in operation for at least the next 12 months and that the going concern basis of accounting remains appropriate. The outbreak of the COVID-19 pandemic and the measures adopted by the Australian government to mitigate its spread have impacted the church. These measures required the church to shut down its sunday services and mid week ministy activities for a period of four months during 2020. The church transitioned to online church services to minimise the impacts on the church during this time. This closure has negatively impacted the church's revenues during the year, but, due to measures put in place, it has not impacted its liquidity position.

For the year ended 31 December 2020, the church recognised a net surplus of $406,409. The church's net current assets as at 31 December 2020 were $990,779. The church has $1,475,992 of resources comprising cash and cash equivalents available at the 31 December 2020.

There is still uncertainty over how the future development of the outbreak will impact the church. The

appropriateness of the going concern basis of accounting is dependent on the continued receiving of donations, tithes and offerings from its congregation. As at the date of authorisation of the financial statements, the church had sufficient headroom in its cash reserves to cover debts as and when they are due.

Also, to respond to a severe downside scenario, management has the ability to take the following mitigating actions to reduce costs, optimise the church’s cash flow and preserve liquidity:

reducing non-essential capital expenditure freezing non-essential recruitment deferring or cancelling discretionary spend

13

Notes to the financial statements

For the year ended 31 December 2020

•

•

Financial assets at FVTPL

Financial assets at amortised cost

Debt investments at FVOCI

Equity investments at FVOCI

Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Church in the management of its short-term commitments.

These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are

recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.

Cash and cash equivalents

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Church may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Church considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.

For the purposes of this assessment 'principal' is defined as the fair value of the financial asset on initial

recognition, 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g.

liquidity risk and administrative costs), as well as a profit margin.

Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest

Notes to the financial statements

For the year ended 31 December 2020

(b)

(i)

(ii)

(iv)

• 2.5% - 5%

• 4% - 33%

• 15% - 33%

(c)

(i) Derecognition

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Plant and equipment Motor vehicles

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Impairment

Property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Items of property, plant and equipment are depreciated from the date that they are installed and ready for use.

The depreciation rates used for the current and comparative periods for significant items of property, plant and equipment as follows:

Depreciation is recognised in profit or loss on a diminishing value or straight-line basis over the estimated useful lives of each component, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Church will obtain ownership by the end of the lease term.

Land is not depreciated.

Depreciation

Financial assets

The Church enters into transactions whereby it transfers assets recognised in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the

transferred assets are not derecognised. Financial assets at fair value through profit or loss.

The Church derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Church neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

Buildings and improvements

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within other income in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings.

Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Church and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

15

Notes to the financial statements

For the year ended 31 December 2020

(ii)

(iii)

(d)

(i)

(ii)

(iii) Other long-term employee benefits

The Church's net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss in the period in which they arise.

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Church has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Employee benefits Non-financial assets

The carrying amounts of the Church’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit (CGU) exceeds its estimated recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amounts of the other assets in the CGU (or group of CGUs) on a pro rata basis.

Financial liabilities

The Church derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Church also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the

consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Church currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Notes to the financial statements

For the year ended 31 December 2020

(e)

(i)

General offerings and donations are recognised as revenue when received.

(ii)

(iii)

(iii)

(f)

At inception of a contract, the Church assesses whether a contracts, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identifies asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Church uses the definition of a lease in AASB 16.

Revenue

General offerings and donations

Interest income

Interest revenue is recognised using the effective interest rate method.

Sale of goods

Rendering Services

Revenue from services rendered is recognised in profit or loss upon the delivery of the service to the customer.

Leases

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the

consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when the goods are delivered and have been accepted by customers.

This policy is applied to contacts entered into, on or after 1 January 2019.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, less the lease transfers ownership of the underlying asset to the Church by the end of the lease term or the cost of the right-of-use asset reflects that the Church will excercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

At commencement or on modification of a contract that contains a lease, the Church allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices.

The Church recognises a right-of-use asset and lease liability at the commencement date. The right-of-use asset is initially measured at cost, which comprises of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted usung the interest rate implicit in the lease or, if that cannot be readily determined, the Church's incremental borrowing rate as the discount rate.

The Church determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of asset leased.

(i) As a leasee

17

Notes to the financial statements

For the year ended 31 December 2020

•

•

•

•

•

(g)

(h)

(i)

When the lease liability is remeasured in this way, a corresponding adjustment to the carrying amount of the right- of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Church presents the right-of-use assets that do not meet the definition of investment property in "right-of-use assets" and the lease liability in "lease liabilities" in the statement of financial position.

The Church has elected not to recognise right-of-use assets and lease liabilities for low-value assets (under

$7,000) and short-term (less than 12 months) leases, including IT equipment. The Church recognises the lease payments associated with thease leases as an expense on a straight-line basis over the lease term.

Short-term leases and low-value assets

At inception or on modification of a contract that contains a lease component, the Church allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

Finance income comprises interest income on funds invested.

Tax

No provision for income tax is raised as the Church is exempt from income tax under Division 50 of the Income Tax Assessment Act 1997.

Goods and services tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Finance income and finance costs

Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Church's estimate of the amount expected to be payable under a residual value guarantee, or the Church changes its assesment of whether it will excercise a purchase, extension or termination option or there is a revised in- substance fixed lease payment.

Lease payments included in the measurement of the lease liability comprise the following:

Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

The amount expected to be payable by the lessee under residual value guarantees;

The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the Australian Taxation Office (ATO) is included as a current asset or liability in the statement of financial position.

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 are recoverable from, or payable to, the ATO are classified as operating cash flows.

Notes to the financial statements (continued)

For the year ended 31 December 2020 4 Revenue

In AUD 2020 2019

General offerings 3,375,244 3,188,608

Donations 1,162,668 1,220,306

Sales 430,311 503,732

Ministry income 126,104 273,787

Other revenue 1,427,889 129,845

6,522,216

5,316,278

5 Employee benefits expenses

In AUD 2020 2019

Salaries and wages 3,283,372 2,999,233

Contributions to defined contribution plans 298,855 278,301

Other employment expenses 120,583 167,307

3,702,810

3,444,841

6 Net finance income

Recognised in profit or loss

In AUD 2020 2019

Interest income 637 1,111

Interest expense (18,639) (15,169)

Net finance income recognised in profit or loss (18,002) (14,058)

19

Notes to the financial statements (continued)

For the year ended 31 December 2020 7 Cash and cash equivalents

In AUD 2020 2019

Bank balances 1,471,019 591,992

Petty cash 4,973 4,350

Cash and cash equivalents in the statement of cash flows 1,475,992 596,342

Reconciliation of cash flows from operating activities

In AUD 2020 2019*

Cash flows from operating activities

Profit / (loss) for the year 406,409 (710,634)

Adjustments for:

Depreciation and amortisation 789,302 741,604

Profit / (Loss) on disposal of property, plant and equipment 6,603 -

Donations in kind (i) (17,287) (47,486)

Changes in assets and liabilities 1,185,027 (16,516) Change in trade and other receivables (150,382) (120,733) Change in trade and other payables (882) 259,525

Change in employee benefits 47,844 35,558

Change in prepayments (11,426) (16,699)

Net cash from operating activities 1,070,181 141,135

(i) Non-cash transactions

8 Trade and other receivables

In AUD 2020 2019

Current assets

Trade debtors 2,596 19,351

Other receivables 156,827 11,128

Loan to Bloom Asia Ltd - 60,000

GST receivable 22,896 16,458

182,319

106,937

Non-current assets

Loan to Bloom Asia Ltd 135,000 60,000

135,000

60,000 The church received donations in kind during the year ended 31 December 2020 totalling $17,287 (2019:

$47,486) which relate to the cost of certain assets acquired during the year. This has been excluded from the

acquisition of property, plant and equipment in the statement of cash flows as a non-cash transaction.

Notes to the financial statements (continued)

For the year ended 31 December 2020 9 Property, plant and equipment

In AUD 2020 2019

Freehold land - at cost 11,360,000 11,360,000

11,360,000

11,360,000

Buildings and improvements

At cost 10,655,128 10,655,128

Accumulated depreciation and impairment (2,136,628) (1,647,846) 8,518,500

9,007,282

Plant and equipment

At cost 1,682,112 1,562,890

Accumulated depreciation and impairment (805,347) (580,411) 876,765

982,479

Motor vehicles

At cost 31,990 14,990

Accumulated depreciation and impairment (17,079) (14,990) 14,911

-

Total property, plant and equipment 20,770,176 21,349,761

Movement in carrying amounts

Movement in carrying amounts for each class of property, plant and equipment.

For the year ending: 31 December 2019

In AUD Land

Buildings &

improve'ts

Plant &

equipment Motor vehicles Total Carrying amounts

Balance at 31 December 2018

11,360,000 9,477,663 885,014 1,957 21,724,634

Additions

- 17,382 300,057 - 317,439

11,360,000

9,495,045 1,185,071 1,957 22,042,073

Depreciation expense

- (487,763) (202,592) (1,957) (692,312)

Balance at 31 December 2019

11,360,000 9,007,282 982,479 - 21,349,761

For the year ending: 31 December 2020

In AUD Land

Buildings &

improve'ts

Plant &

equipment Motor vehicles Total Carrying amounts

Balance at 31 December 2019

11,360,000 9,007,282 982,479 - 21,349,761

Additions

- - 131,986 17,000 148,986

11,360,000

9,007,282 1,114,465 17,000 21,498,747

Disposals Cost

- - (12,764) - (12,764)

Accumulated Dep'n

- - 6,162 - 6,162

Depreciation expense

- (488,782) (231,098) (2,089) (721,969)

Balance at 31 December 2020

11,360,000 8,518,500 876,765 14,911 20,770,176

21

Notes to the financial statements (continued)

For the year ended 31 December 2020 10 Right-of-use assets

In AUD 2020 2019

Buildings

At cost 288,059 288,059

Accumulated depreciation and impairment (93,957) (39,960) 194,102

248,099

Plant and equipment

At cost 43,514 43,514

Accumulated depreciation and impairment (13,780) (5,077) 29,734

38,437

Total right-of-use assets 223,836 286,536

Movement in carrying amounts

Movement in carrying amounts for each class of property, plant and equipment.

For the year ending: 31 December 2019

In AUD

Buildings &

improve'ts

Plant &

equipment Motor vehicles Total Carrying amounts

Balance at 1 January 2019

288,059 43,514 - 331,573 288,059

43,514 - 331,573

Depreciation expense

(39,960) (5,077) - (45,037)

Balance at 31 December 2019

248,099 38,437 - 286,536

For the year ending: 31 December 2020

In AUD

Buildings &

improve'ts

Plant &

equipment Motor vehicles Total Carrying amounts

Balance at 31 December 2019

248,099 38,437 - 286,536

Additions

- - - -

248,099

38,437 - 286,536

Depreciation expense

(53,997) (8,703) - (62,700)

Balance at 31 December 2020

194,102 29,734 - 223,836

11 Intangible assets

In AUD 2020 2019

Software development

Cost (gross carrying amount) 43,876 43,876

Accumulated amortisation and impairment (37,667) (33,034) 6,209

10,842

Notes to the financial statements (continued)

For the year ended 31 December 2020 12 Trade and other payables

In AUD 2020 2019

Current

Trade payables 127,405 218,866

Other payables and accruals 256,614 166,036

384,019

384,902

13 Loans and borrowings

In AUD 2020 2019

Current liabilities

Current portion of secured bank loans 7,307 188,194 7,307

188,194

Non-current liabilities

Secured bank loans 172,617 -

172,617

-

14 Lease Liabilities

In AUD 2020 2019

Current liabilities

Current portion of lease liabilities 44,814 50,561 44,814

50,561

Non-current liabilities

Lease liabilities 237,853 282,666

237,853

282,666

Maturity analysis

Less than one year 44,814 50,561

Between one and five years 152,718 160,935

More than five years 85,135 121,731

282,667

333,227

15 Employee benefits

In AUD 2020 2019

Current

Annual leave 260,242 236,472

Long service leave

Expected to be settled within 12 months 19,000 16,593 Expected to be settled in more than 12 months 41,911 46,369

321,153

299,434

Non-current

Long service leave 129,092 102,968

129,092

102,968

23

Notes to the financial statements (continued)

For the year ended 31 December 2020 16 Subsequent events

17 Members' guarantee

18 Auditors' remuneration

In AUD 2020 2019

Audit of financial statements 11,850 11,300

11,850

11,300 There have been no events subsequent to balance date which would have a material effect on the Church's financial statements at 31 December 2020.

The entity is incorporated under the Corporations Act 2001 and is an entity limited by guarantee. lf the entity is

wound up, the constitution states that each member is required to contribute a maximum of $10 each towards

meeting any outstandings and obligations of the entity. At 31 December 2020 the number of members was 806

(2019: 833).

Directors' declaration

In the opinion of the directors of Gateway Baptist Church (The Church):

(a) the Church is not publicly accountable nor a reporting entity;

(b)

(i)

(ii)

(c)

Signed in accordance with a resolution of the directors.

Matthew Gray Director

Dated at Mackenzie this 25th day of March 2021 _________________________________

there are reasonable grounds to believe that the Church will be able to pay its debts as and when they become due and payable.

the financial statements and notes that are set out on pages 8 to 24, are in accordance with the Australian Charities and Not-for-profits Commission Act 2012, including:

giving a true and fair view of the Church's financial position as at 31 December 2020, and of its performance, for the financial year ended on that date in accordance with the statement of compliance and basis of preparation described in notes 2 and 3; and

complying with Australian Accounting Standards (including the Australian Accounting Interpretations) to the extent described in Notes 2 and 3, and the Australian Charities and Not-for-profits Regulation 2013;

and

25