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2020 Rocket Foods NZ Championship Results
Notes to the accounts
For the year ended 31 December 2020
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Reporting Entity
New Zealand Rowing Association Incorporated (“Rowing New Zealand”) is an incorporated society under the Incorporated Societies Act 1908. The financial statements of Rowing New Zealand for t he year ended 31 December 2020 comprise Rowing New Zealand, and the consolidated financial statements of the Group. “The Group” comprises of Rowing New Zealand and its controlled entity New Zealand Rowing Foundation Inc (“the Foundation”). The principal aim of Rowing New Zealand and the Group is to provide leadership that enhances performance and participation in rowing.
Statement of Compliance
The financial statements are prepared in accordance with generally accepted accounting practice in New Zealand (NZ GAAP). In the case of Rowing New Zealand and the Group, NZ GAAP is International Public Sector Accounting Standards as appropriate for Tier 2 Not-for-profit, Public Benefit Entities applying the Reduced Disclosure Regime (PBE St andards RDR). Rowing New Zealand and the Group have taken all disclosure concessions available. Rowing New Zealand and the Group are eligible to apply PBE Standards RDR as they have less than $30 million annual expenditure.
Basis of preparation
The accounting policies detailed in the following notes have been applied consistently to all periods presented in these financial statements and have been applied consistently by the Group. The Group controls an entity when it has the power to govern the financial and operating policies of the entity so as to benefit from its activities. Under PBE IPSAS 6 Rowing New Zealand is considered to have control over the Foundation as Rowing New Zealand receives the majority of the benefits of the Foundation and appoints the majority of the governing body. The financial statements of Rowing New Zealand and the Group have been prepared using the going concern assumption. The measurement basis adopted is that of historical cost, other than the revaluation of foreign exchange contracts and equity and debt instruments.
Covid-19
In March 2020, the World Health Organisation declared an outbreak of the coronavirus (Covid-19) pandemic resulting in the New Zealand Government declaring a State of National Emergency and governments around the world implementing varying degrees of lockdowns in an attempt to contain the outbreak. The New Zealand Government implemented lockdowns, border closures and international travel restrictions in response to the pandemic. As a result, local and international regattas, including the 2020 Tokyo Olympics, were cancelled or postponed. The cancellation of the international tours resulted in a significant decrease in high performance costs for the year as a result of no international travel. The cancellation of local regattas resulted in a significant reduction in sponsorship income and regatta delivery costs. All other domestic expenses were reduced as a result of the decreased income and activity for the year. A further significant decision made at t he 2020 AGM was to rebate 50% of competit ion license fees in 2021 to support local rowing communities financially impacted by the pandemic.
Significant Accounting Policies
The following specific policies have been applied to all aspects of these financial statements:
(a) Presentation Currency
The presentation currency and functional currency is the New Zealand Dollar. All amounts have been presented in New Zealand Dollars (rounded to the nearest dollar).
(b) GST
Except for trade receivables and trade payables which are stated inclusive of GST, all amounts have been reported exclusive of GST.
(c) Taxation
Rowing New Zealand has an exemption from income tax under section CW46 of the Income Tax Act 2007 as a body promoting amateur games or sports. As such no income tax is payable. The Foundation has charitable status and is exempt from income tax.
Notes to the accounts
For the year ended 31 December 2020
1 Revenue by Operating Unit
Year to 31 December 2020 Revenue Expenses Depreciation allocation Net surplus / (deficit)
High Performance
Domestic & Admin Foundation Total Group
5,858,617 1,147,183 37,646 7,043,446 4,194,260 1,086,677 5,864 5,286,801
215,594 215,162
- 430,756 1,448,763 (154,656) 31,782 1,325,889
Year to 31 December 2019 Revenue Expenses Depreciation allocation Net surplus / (deficit)
High Performance
Domestic & Admin Foundation Total Group
6,541,947 1,691,417 77,967 8,311,331 6,455,176 1,680,975 79,657 8,215,808 237,371 229,273 - 466,644 (150,600) (218,831) (1,690) (371,121)
2 Revenue Recognition
Revenue from exchange transactions
Exchange transactions are those where the Group receives value (cash or other assets) and gives something (usually goods or services) of approximately equal value in return.
The Group receives exchange revenue from a number of sources. This revenue relates largely to services provided by Rowing New Zealand. These services include international tours for selected athletes, sponsorship benefits to commercial partners, member benefits for licensed rowers and coach development programs for athletes, schools, clubs and universities.
The Group recognises revenue from providing these services in proportion to the stage of completion of the transaction at the reporting date..
Revenue from non-exchange transactions
Non-exchange transactions are those where the Group receives value (cash or other assets) without giving approximately equal value in return. The
Group receives non-exchange revenue in the form of government funding, grants, philanthropic funding and donations.
Cash or other assets received from non-exchange transactions are recognised as either revenue or a liability at the reporting date. The specific recognition criteria in relation to the Group’s non-exchange transactions are: - Government Funding and Grants The recognition of government funding and grants depends on whether the revenue comes with any ‘conditions’ or ‘restrictions’. If the revenue comes with ‘conditions’ that specifically require the Group to return the grant if the grant is not used in the way stipulated it is initially recognised as a liability. It is subsequently recognised as non-exchange revenue when the ‘conditions’ are satisfied. ‘Restrictions’ that do not specifically require the Group to return the cash or asset if it is not utilised in the way stipulated do not result in the recognition of a non-exchange liability. Such funding or grants are immediately recognised as nonexchange revenue. - Philanthropic Funding and Donations Philanthropic funding and donations are voluntary transfers of cash, other monetary assets, goods or services that the Group receives which are free from conditions or restrictions. Philanthropic funding and donations are recognised as revenue at their fair value at the date the funding is received.
Notes to the accounts
For the year ended 31 December 2020
Exchange and Non-exchange Revenue Exchange revenues Non-exchange revenues Total Revenue
Non-exchange Revenue with Future Obligations Sport New Zealand funding Gaming trust funding Other Revenue in Advance Total Grants with Future Obligations
3 Debtors and Receivables
Debtors and receivables are stated at their estimated net realisable value. Receivables from exchange transactions GST Total Debtors and Receivables 2020 2019 2020 2019
GROUP PARENT
1,138,949 1,701,321 1,112,578 1,686,404 5,904,498 6,610,010 5,893,223 6,546,960 7,043,446 8,311,331 7,005,800 8,233,364
70,028 24,076 70,028 24,076 31,769 65,138 31,769 65,138 50,000 - 50,000 -
151,797 89,214 151,797 89,214
59,428 51,547 56,479 50,246 66,153 21,774 66,153 21,774 125,581 73,321 122,632 72,020
4 Cash and Short Term Deposits
Cash and bank equivalents comprise cash and call accounts and other deposits held with financial institutions with maturity dates less than 3 months.
Short term deposits include all cash investments with maturities between 3 and 12 months. The average interest rate prevailing on cash and short term deposits at 31 December 2020 was 0.05% (2019: 0.10%).
The philanthropic funding account is used for the purpose of receiving donations from philanthropists. Donated funds are used in accordance with the wishes of the donor. Board approval is required to allocate funds from this account. There is no obligation to repay the funds.
The liquidity account is used to ensure that Rowing New Zealand has ready access to liquid assets to sustain operations in the event of significant unanticipated increases in operating expenses or decreases in revenue to enable the organisation to preserve its capacity to deliver the domestic rowing programme and support the high performance programme. Funds can only be transferred out of this account in particular circumstances and with Board approval.
4a Cash and Cash Equivalents
Cash and bank balances 1,481,406 411,227 1,432,985 326,204
Philanthropic funding account 541,828 340,787 541,828 340,787
Total Cash and Cash Equivalents 2,023,234 752,014 1,974,813 666,991
Notes to the accounts
For the year ended 31 December 2020
4b Short Term Deposits
Short term deposits (liquidity account) Short term deposits Total Short Term Deposits 2020 2019 2020 2019
GROUP PARENT
340,000 340,000 340,000 340,000 100,000 100,000 - 440,000 440,000 340,000 340,000
5 Property, Plant and Equipment
Items of property, plant and equipment are initially recognised at cost and depreciated as outlined below. Initial cost includes the purchase consideration, or fair value in the case of a donated asset and those costs directly attributable to bringing the asset to the location and condition necessary for its intended use. Costs cease to be capitalised when substantially all the activities necessary to bring an asset to the location and condition for its intended use are complete.
Depreciation is provided on a straight line basis. The depreciation rates of the major classes of assets reflecting their estimated economic life are as follows:
Boats and oars 20% - 33%
Coaching and gym equipment 10% - 20%
Vehicles 10% - 20%
Computers and furniture 5% - 33%
High performance centre 3% - 4%
PARENT AND GROUP
Cost Boats & Oars Coaching & Gym Equipment
$
Vehicles High Performance Building
$
Computers & Furniture Total
Balance 1 January 2020 1,832,913 432,915 118,674 5,498,821 254,936 8,138,259
Additions 252,385 49,491 11,574 -
40,158 353,608 Disposals (417,423) (1,971) - - (4,279) (423,673) Balance 31 December 2020 1,667,875 480,435 130,248 5,498,821 290,815 8,068,194
Accumulated depreciation
Balance 1 January 2020 Depreciation expense Disposals Balance 31 December 2020
Carrying value
Balance 1 January 2019 Balance 31 December 2019
Balance 31 December 2020
951,225 343,911 87,666 1,640,452 167,108 3,190,362 172,246 37,273 6,074 181,934 (399,962) (99) - 33,229 430,756 (4,279) (404,340) 723,509 381,085 93,740 1,822,386 196,058 3,216,778
990,986 119,703 37,010 4,040,302 107,784 5,295,785 881,688 89,005 31,008 3,858,369 88,336 4,948,405 944,366 99,350 36,508 3,676,435 94,757 4,851,416
Notes to the accounts
For the year ended 31 December 2020
6 Intangible Assets
The intangible asset owned by Rowing New Zealand is the website and member management system. Intangible assets are measured at cost less accumulated amortisation and accumulated impairment losses. Costs for intangible assets are capitalised if the criteria for capitalising development costs are met.
Amortisation is recognised in the net surplus/deficit on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful life for the website and member management system is 5 years.
PARENT AND GROUP Cost
Balance 1 January 2020 Additions
Disposals Balance 31 December 2020
Website & Member Management System
158,976
158,976
Accumulated Amortisation
Balance 1 January 2020 Amortisation Expense Balance 31 December 2020 158,976
158,976
Carrying Value
As at 1 January 2019 As at 31 December 2019 As at 31 December 2020 11,280
7 Investments
Available for Sale Financial Assets
Investments are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, investments are measured at fair value. Changes in fair value, other than impairment losses, are recognised in other comprehensive revenue and expense and accumulated in the revaluation reserve. When these investments are sold or mature, the gain or loss accumulated in the fair value reserve is reclassified to surplus or deficit.
For the year ended 31 December 2020 2020 2019 2020 2019
Available for sale investments Shares in listed companies Bonds Total Investments GROUP PARENT
173,626 183,830 - 80,509 37,939 - 254,135 221,769 - -
Notes to the accounts
8 Accounts Payable
Accounts Payable are stated at the estimated amounts payable.
Short-term employee benefits are amounts owing to employees where the Group has a legal or constructive obligation to pay this amount as a result of past service provided by the employee. This liability is created (and the expense recorded) as the related service is provided. The employee benefit liability relates to accumulated annual leave and days in lieu owing to employees. These amounts are only recognised as a liability if the obligation can be reliably estimated.
Trade creditors Expenses accrued Employee benefits Total Accounts Payable GROUP PARENT
177,207 281,757 176,461 229,222 92,886 88,502 92,886 88,502 152,776 229,082 152,776 229,082 422,869 599,341 422,123 546,806
9 Loans and Borrowings
Non-Current Loans
Non-current loans are initially recognised at fair value plus transaction costs and subsequently measured at amortised cost using the effective interest rate method. Fair value is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. The market rate of interest used is determined by looking at assets of a similar maturity and credit risk. Movements in fair value, including those arising from impairment, are recognised in the Statement of Comprehensive Revenue and Expense.
GROUP PARENT
Sport New Zealand Loan Loan drawn down Previous loan repayments Previous fair value movements Balance 1 January
1,300,000 1,300,000 1,300,000 1,300,000 (174,500) (174,500) (174,500) (174,500) (1,125,500) (1,054,965) (1,125,500) (1,054,965) - 70,535 - 70,535
Loan repayments Fair Value movement Balance 31 December Total Non-Current Loans - (70,535) - (70,535)
At each balance date the carrying value of the Sport New Zealand loan is determined based on the discounted cash flows of the expected repayments for the loan. Rowing New Zealand must exercise judgement to determine both the expected future cash flows and the appropriate discount rate to apply to each loan. When doing this Rowing New Zealand takes into account the expected repayment term. During 2020 Rowing New Zealand was not required to make a loan repayment under the agreed repayment calculation formula. Based on the formula, Rowing New Zealand also does not expect to make a repayment during 2021. As at 31 December 2020 the balance of the loan has been written down to nil based on forecast future cashflows.
Notes to the accounts
For the year ended 31 December 2020
10 Foreign Currency Transactions and Financial Instruments
Rowing New Zealand is subject to foreign currency risk when purchasing equipment and attending regattas outside New Zealand. Where exposure to foreign currency is certain, it is Rowing New Zealand’s policy to reduce the uncertainty around exchange rates using forward exchange contracts and foreign currency bank accounts.
The Group holds derivative financial instruments to hedge its foreign currency. Derivatives are initially measured at fair value; any directly attributable transaction costs are recognised in surplus or deficit as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognised in surplus or deficit.
As at 31 December 2020 commitments on forward exchange contracts totalled $18,331 (2019: $744,110).
11 Commitments and Contingencies
There were no capital commitments or contingent liabilities at balance date.
At 31 December 2020 an amount of $87,932 was due in respect of future operating lease payment for vehicles (2019: $78,946).
12 Related Party Disclosures
The controlling entity of the group is Rowing New Zealand.
Rowing New Zealand Board Members
From time to time, Board Members or their related entities may transact with the group. Rowing New Zealand Board Members have interests in related entities as follows:
Gerald Dwyer Life Member, Canterbury Rowing Association Life Member, Avon Rowing Club Jock Mackintosh Coach, Hawkes Bay Rowing Club Annabel Ritchie Life Member, Wakatipu Rowing Club Director, Wellington Rowing Association Raechel Cummins Coach, Wellington Rowing Club Subcommittee member and consultant, Wellington Rowing Association Genevieve Macky Life Member, Waihopai Rowing Club Thornton Williams Member, West End Rowing Club
Related Party Transactions
Rowing New Zealand paid $4,000 to Findex NZ Limited for the provision of accounting services for the four regional performance centres. Hayden Dillon is a Rowing New Zealand board member and a managing principal/shareholder of Findex NZ Limited. Rowing New Zealand paid $207 to Canterbury Rowing Association for vehicle hire. Gerald Dwyer is a Rowing New Zealand board member and a life member of Canterbury Rowing Association. Rowing New Zealand paid $43,442 to Karapiro Rowing Incorporated for regatta entry fees, course costs, entry system fees and regatta sponsorship. Raechel Cummins is a Rowing New Zealand board member and a Karapiro Rowing Incorporated board member.
Notes to the accounts
For the year ended 31 December 2020
Key Management Personnel
Compensation of the Group’s key management personnel includes salaries and non-cash benefits. The Group has recognised an expense of $571,912 relating to compensation of key management personnel (2019: $643,681).
Controlled Entity
NZ Rowing Foundation Incorporated As at 31 December 2020, Gerry Dwyer and Jock Mackintosh were Rowing New Zealand Board Members in addition to being trustees of the Foundation.
During 2020 Rowing New Zealand re-appointed Ivan Sutherland and Murdoch Dryden to be trustees of the Foundation. Rowing New Zealand provides administrative services to the Foundation. Rowing New Zealand does not charge for these services or for other goods and services purchased on behalf of the Foundation.
Independent Auditor’s Report
To the members of New Zealand Rowing Association Incorporated
Report on the audit of the incorporated society and group financial statements
Opinion
In our opinion, the accompanying incorporated society and group financial statements of New Zealand Rowing Association Incorporated (the ’incorporated society’) and its subsidiary (the 'group') on pages 29 to 40:
i. present fairly in all material respects the incorporated society's and group’s financial position as at 31 December 2020 and its financial performance and cash flows for the year ended on that date; and
ii. comply with Public Benefit Entity Standards Reduced Disclosure Regime (Not For Profit). We have audited the accompanying incorporated society and group financial statements which comprise: — the incorporated society and group statement of financial position as at 31 December 2020; — the incorporated society and group statements of comprehensive revenue and expense, movements in members’ funds and cash flows for the year then ended; and — notes, including a summary of significant accounting policies and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We are independent of the incorporated society and group in accordance with Professional and Ethical Standard 1 International Code of Ethics for Assurance Practitioners (Including International Independence Standards) (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (‘IESBA Code’), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. Our responsibilities under ISAs (NZ) are further described in the auditor’s responsibilities for the audit of the incorporated society and group financial statements section of our report. Other than in our capacity as auditor we have no relationship with, or interests in, the incorporated society and group.
Use of this independent auditor’s report
This independent auditor’s report is made solely to the members as a body. Our audit work has been undertaken so that we might state to the members those matters we are required to state to them in the independent auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the members as a body for our audit work, this independent auditor’s report, or any of the opinions we have formed.
The Directors, on behalf of the incorporated society, are responsible for: — the preparation and fair presentation of the incorporated society and group financial statements in accordance with generally accepted accounting practice in New Zealand (being Public Benefit Entity
Standards Reduced Disclosure Regime (Not For Profit)); — implementing necessary internal control to enable the preparation of a incorporated society and group set of financial statements that is fairly presented and free from material misstatement, whether due to fraud or error; and
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate or to cease operations, or have no realistic alternative but to do so.
Our objective is: — to obtain reasonable assurance about whether the incorporated society and group financial statements as a whole are free from material misstatement, whether due to fraud or error; and
— to issue an independent auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs NZ will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these incorporated society and group financial statements. A further description of our responsibilities for the audit of these incorporated society and group financial statements is located at the External Reporting Board (XRB) website at: http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-7/ This description forms part of our independent auditor’s report.
Hamilton
26 March 2021
