7. Budgetary Reports and Explanations of Major Variances
7.1 Budgetary Reports
The following tables provide a comparison between the 2018–19 Portfolio Budget Statements (PBS) budget and the final financial outcome in the 2018–19 financial statements. The Budget is not audited.
Variances are considered to be ‘major’ based on the following criteria:
- the variance between budget and actual is greater than 10%; and
- the variance between budget and actual is greater than 2% of the relevant category (Income, Expenses and Equity totals); or
- an item below this threshold but is considered important for the reader’s understanding or is relevant to an assessment of the discharge of accountability and to an analysis of performance of the Corporation.
7.1A Statement of Comprehensive Income for the year ended 30 June 2019
Actual |
Budget estimate |
|||
Original1 |
Variance2 |
|||
NET COST OF SERVICES |
2019 |
2019 |
2019 |
|
Expenses |
Notes |
$'000 |
$'000 |
$'000 |
Employee benefits |
7.2(v) |
141,941 |
132,543 |
9,398 |
Suppliers |
7.2(ii) |
192,107 |
182,053 |
10,054 |
Depreciation and amortisation |
11,959 |
11,918 |
41 |
|
Program inventory amortisation |
59,972 |
59,514 |
458 |
|
Finance costs |
26 |
- |
26 |
|
Impairment loss allowance on financial instruments |
94 |
- |
94 |
|
Write-down and impairment of other assets |
133 |
- |
133 |
|
Foreign exchange losses |
61 |
- |
61 |
|
Total expenses |
406,293 |
386,028 |
20,265 |
|
Less: |
||||
Own-source income |
||||
Own-source revenue |
||||
Sale of goods and rendering of services |
7.2(i) |
118,923 |
99,504 |
19,419 |
Deposit interest income |
3,277 |
2,300 |
977 |
|
Rental income |
1,354 |
1,161 |
193 |
|
Royalties from program rights |
1,461 |
1,400 |
61 |
|
Other revenue |
225 |
412 |
(187) |
|
Total own-source revenue |
125,240 |
104,777 |
20,463 |
|
Gains |
||||
Gains from sale of assets |
- |
- |
- |
|
Foreign exchange gains |
- |
- |
- |
|
Reversal of impairment losses |
- |
- |
- |
|
Total gains |
- |
- |
- |
|
Total own-source income |
125,240 |
104,777 |
20,463 |
|
Net cost of services |
281,053 |
281,251 |
(198) |
|
Revenue from Government |
281,726 |
281,726 |
- |
|
Surplus on continuing operations |
673 |
475 |
198 |
|
OTHER COMPREHENSIVE INCOME |
||||
Items not subject to subsequent reclassification to net cost of services |
||||
Changes in asset revaluation reserve |
6,180 |
- |
6,180 |
|
Items subject to subsequent reclassification to net cost of services |
||||
Profit on cash flow hedging instruments |
229 |
- |
229 |
|
Total other comprehensive income |
6,409 |
- |
6,409 |
|
Total comprehensive income |
7,082 |
475 |
6,607 |
- The Corporation's original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Corporation's 2018-19 PBS).
- Between the actual and original budgeted amounts for 2019. Explanations of major variances are provided further below.
7.1B Statement of Financial Position as at 30 June 2019
Actual |
Budget estimate |
|||
Original1 |
Variance2 |
|||
2019 |
2019 |
2019 |
||
Notes |
$’000 |
$’000 |
$’000 |
|
ASSETS |
||||
Financial assets |
||||
Cash and cash equivalents |
5,623 |
5,195 |
428 |
|
Trade and other receivables |
23,951 |
24,680 |
(729) |
|
Term investments |
7.2(i), 7.2(iv) |
20,035 |
9,513 |
10,522 |
Total financial assets |
49,609 |
39,388 |
10,221 |
|
Non-financial assets |
||||
Land |
7.2(iii) |
45,550 |
39,860 |
5,690 |
Buildings |
7.2(iii) |
46,184 |
34,854 |
11,330 |
Plant and equipment |
21,061 |
25,620 |
(4,559) |
|
Computer software |
12,537 |
17,096 |
(4,559) |
|
Other intangibles |
9,319 |
9,319 |
- |
|
Inventories |
84,225 |
90,312 |
(6,087) |
|
Other non-financial assets |
13,511 |
15,286 |
(1,775) |
|
Total non-financial assets |
232,387 |
232,347 |
40 |
|
TOTAL ASSETS |
281,996 |
271,735 |
10,261 |
|
LIABILITIES |
||||
Payables |
||||
Trade creditors and accruals |
7.2(iv) |
14,095 |
29,996 |
(15,901) |
Other payables |
7.2(iv) |
14,530 |
6,534 |
7,996 |
Total payables |
28,625 |
36,530 |
(7,905) |
|
Provisions |
||||
Employee provisions |
7.2(v) |
30,000 |
25,769 |
4,231 |
Other provisions |
745 |
1,193 |
(448) |
|
Total provisions |
30,745 |
26,962 |
3,783 |
|
TOTAL LIABILITIES |
59,370 |
63,492 |
(4,122) |
|
NET ASSETS |
222,626 |
208,243 |
14,383 |
|
EQUITY |
||||
Contributed equity |
110,403 |
110,403 |
- |
|
Reserves |
7.2(iii) |
82,026 |
68,555 |
13,471 |
Retained surplus |
30,197 |
29,285 |
912 |
|
TOTAL EQUITY |
222,626 |
208,243 |
14,383 |
- The Corporation's original budgeted financial statement that was first presented to Parliament in respect of the reporting period (i.e. from the Corporation's 2018-19 PBS).
- Between the actual and original budgeted amounts for 2019. Explanations of major variances are provided further below.
7.1C Statement of Changes in Equity for the year ended 30 June 2019
Contributed equity |
Asset revaluation reserve |
Hedge reserve |
Retained surplus |
Total equity |
||||||||||||
Actual |
Budget estimate |
Actual |
Budget estimate |
Actual Budget estimate |
Actual |
Budget estimate |
Actual |
Budget estimate |
||||||||
Original1 |
Variance2 |
Original1 |
Variance2 |
Original1 |
Variance2 |
Original1 |
Variance2 |
Original1 |
Variance2 |
|||||||
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
2019 |
||
Notes |
$’000 |
$'000 |
$'000 |
$’000 |
$'000 |
$'000 |
$’000 |
$’000 |
$’000 |
$'000 |
$'000 |
$'000 |
$’000 |
$'000 |
$'000 |
|
Opening balance |
||||||||||||||||
Balance carried forward from previous year |
110,403 |
110,403 |
- |
75,215 |
68,555 |
6,660 |
424 |
- |
424 |
29,502 |
28,810 |
692 |
215,544 |
207,768 |
7,776 |
|
Comprehensive income |
||||||||||||||||
Surplus for the year |
- |
- |
- |
- |
- |
- |
- |
- |
- |
673 |
475 |
198 |
673 |
475 |
198 |
|
Other comprehensive income |
||||||||||||||||
Asset revaluation |
7.2(iii) |
- |
- |
- |
6,180 |
- |
6,180 |
- |
- |
- |
- |
- |
- |
6,180 |
- |
6,180 |
Gain on cash flow hedging instrument |
- |
- |
- |
- |
- |
- |
229 |
- |
229 |
- |
- |
- |
229 |
- |
229 |
|
Total comprehensive income |
- |
- |
- |
6,180 |
- |
6,180 |
229 |
- |
229 |
673 |
475 |
198 |
7,082 |
475 |
6,607 |
|
Transfers between equity components |
||||||||||||||||
Transfer of revaluation gain/(loss) in relation to assets written off during the year |
- |
- |
- |
(22) |
- |
(22) |
- |
- |
- |
22 |
- |
22 |
- |
- |
- |
|
Total transfers between equity components |
- |
- |
- |
(22) |
- |
(22) |
- |
- |
- |
22 |
- |
22 |
- |
- |
- |
|
Closing balance as at 30 June 2019 |
110,403 |
110,403 |
- |
81,373 |
68,555 |
12,818 |
653 |
- |
653 |
30,197 |
29,285 |
912 |
222,626 |
208,243 |
14,383 |
- The Corporation's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e. from the Corporation's 2018-19 PBS).
- Between the actual and original budgeted amounts for 2019. Explanations of major variances are provided further below.
7.1D Cash Flow Statement for not-for-profit Reporting Entities for the year ending 30 June 2019
Actual |
Budget estimate |
|||
Original1 |
Variance2 |
|||
2019 |
2019 |
2019 |
||
Notes |
$’000 |
$’000 |
$’000 |
|
OPERATING ACTIVITIES |
||||
Cash received |
||||
Receipts from Government |
281,726 |
281,726 |
- |
|
Sale of goods and rendering of services |
7.2(i) |
143,635 |
108,377 |
35,258 |
Interest |
3,120 |
2,300 |
820 |
|
Net GST received |
6,734 |
11,500 |
(4,766) |
|
Total cash received |
435,215 |
403,903 |
31,312 |
|
Cash used |
||||
Employees |
(138,211) |
(131,843) |
(6,368) |
|
Suppliers |
7.2(ii) |
(276,023) |
(254,164) |
(21,859) |
Total cash used |
(414,234) |
(386,007) |
(28,227) |
|
Net cash from operating activities |
20,981 |
17,896 |
3,085 |
|
INVESTING ACTIVITIES |
||||
Cash received |
||||
Investments |
187,546 |
195,000 |
(7,454) |
|
Total cash received |
187,546 |
195,000 |
(7,454) |
|
Cash used |
||||
Purchase of property and equipment |
(12,698) |
(12,000) |
(698) |
|
Investments |
(197,546) |
(202,000) |
4,454 |
|
Total cash used |
(210,244) |
(214,000) |
3,756 |
|
Net cash used from investing activities |
(22,698) |
(19,000) |
(3,698) |
|
FINANCING ACTIVITIES |
||||
Cash used |
||||
Finance lease payments |
- |
- |
- |
|
Total cash used |
- |
- |
- |
|
Net cash from financing activities |
- |
- |
- |
|
Net decrease in cash held |
(1,717) |
(1,104) |
(613) |
|
Cash and cash equivalents at the beginning of the reporting period |
7,340 |
6,299 |
1,041 |
|
Cash and cash equivalents at the end of the reporting period |
5,623 |
5,195 |
428 |
- The Corporation's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e. from the Corporation's 2018-19 PBS).
- Between the actual and original budgeted amounts for 2019. Explanations of major variances are provided further below.
7.2 Major Budget Variances for 2019
Explanations of major variances |
Affected line items (and statement) |
(i) Sale of goods and rendering of services |
|
Advertising sales were higher than budget largely due to increased activity and better than budgeted advertising sales revenue. Revenue generated from key sporting events has also contributed to a better than budgeted revenue position. Within uncertain market conditions, linear channels across the board including the SBS Food channel performed more strongly than anticipated. |
Sale of goods and rendering of services (Statement of Comprehensive Income); Sale of goods and rendering of services (Cash Flow Statement); Term investments (Statement of Financial Position) |
(ii) Suppliers |
|
Suppliers were higher than budgeted due to the increase in advertising revenue, which impacted the cost of sales including higher sales commissions associated with additional revenue. In addition SBS increased investment in content and related activities. |
Suppliers (Statement of Comprehensive Income); Suppliers (Cash Flow Statement) |
(iii) Land and Buildings |
|
Increased value of Land and Buildings due to revaluations conducted in June 2018 and 2019 (The revaluation of Land and Buildings in June 2018 was not included in the original budget, as the budget was prepared prior to the finalisation of the revaluation). The building work carried out on the SBS Melbourne Office at Federation Square has also contributed to an increase in Buildings. This is partly offset by lower than budgeted Plant and equipment expenditure with components of the work originally anticipated as Plant and equipment. |
Land and Buildings (Statement of Financial Position); Reserves in Equity (Statement of Financial Position); Asset revaluation reserve (Statement of Changes in Equity) |
(iv) Payables |
|
Lower Trade creditors and accruals balance primarily due to the timing of payments and a change to a content acquisition arrangement which had been budgeted as an accrual in June 2019. Other payables were higher than budgeted largely due to receipts in advance. |
Trade creditors and accruals (Statement of Financial Position); Other payables (Statement of Financial Position); Term investments (Statement of Financial Position) |
(v) Employee provisions |
|
Employee provisions were higher than budget mainly due to adjustments to the discounting of employee provisions associated with reductions in the government bond rate. The ten year government bond rate was reduced from 2.6% at June 2018 to 1.3% at June 2019. |
Provisions (Statement of Financial Position); Employee benefits (Statement of Comprehensive Income) |
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https://www.transparency.gov.au/annual-reports/special-broadcasting-service-corporation/reporting-year/2018-2019-87