Go to top of page

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

  1. 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).
  2. 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

  1. 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).
  2. 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

  1. 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).
  2. 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

  1. 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).
  2. 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)