7. Budgetary Reports and Explanations of Major Variances
7.1 Budgetary Reports
The following tables provide a comparison between the 2019-20 Portfolio Budget Statements (PBS) budget and the final financial outcome in the 2019-20 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 2020
Actual | Budget estimate | |||
Original1 | Variance2 | |||
2020 | 2020 | 2020 | ||
Notes | $'000 | $'000 | $'000 | |
NET COST OF SERVICES | ||||
Expenses | ||||
Employee benefits | 7.2(vi) | 143,168 | 138,766 | 4,402 |
Suppliers | 7.2(i) | 168,977 | 182,891 | (13,914) |
Depreciation and Amortisation | 7.2(i) | 27,952 | 12,018 | 15,934 |
Program inventory amortisation | 64,340 | 62,682 | 1,658 | |
Finance costs | 7.2(i) | 1,061 | - | 1,061 |
Impairment loss on financial instruments | 2 | - | 2 | |
Write-down and impairment of other assets | 199 | - | 199 | |
Foreign exchange losses | 37 | - | 37 | |
Total expenses | 405,736 | 396,357 | 9,379 | |
Less: | ||||
Own-source revenue | ||||
Revenue from contracts with customers | 7.2(ii) | 115,362 | 101,932 | 13,430 |
Term deposit interest income | 1,680 | 2,600 | (920) | |
Rental income | 1,342 | 1,370 | (28) | |
Royalties from program rights | 1,686 | 800 | 886 | |
Other revenue | 328 | 94 | 234 | |
Total Own-Source Income | 120,398 | 106,796 | 13,602 | |
Net cost of services | 285,338 | 289,561 | (4,223) | |
Revenue from Government | 290,054 | 290,054 | - | |
Surplus on continuing operations | 4,716 | 493 | 4,223 | |
OTHER COMPREHENSIVE INCOME | ||||
Items not subject to subsequent reclassification to net cost of services | ||||
Changes in asset revaluation reserve | (64) | - | (64) | |
Items subject to subsequent reclassification to net cost of services | ||||
(Loss) / gain on cash flow hedging instruments | (240) | - | (240) | |
Total other comprehensive income | (304) | - | (304) | |
Total comprehensive income | 4,412 | 493 | 3,919 | |
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 2019-20 PBS).
2. Between the actual and original budgeted amounts for 2020. Explanations of major variances are provided further below.
7.1B Statement of Financial Position as at 30 June 2020
Actual | Budget estimate | |||
|---|---|---|---|---|
Original1 | Variance2 | |||
2020 | 2020 | 2020 | ||
$'000 | $'000 | $'000 | ||
ASSETS | ||||
Financial assets | ||||
Cash and cash equivalents | 7.2 (ii), 7.2 (iv) | 18,926 | 8,129 | 10,797 |
Trade and other receivables | 7.2 (vii) | 20,145 | 25,250 | (5,105) |
Term investments | 7.2 (ii), 7.2 (iv) | 28,586 | 7,003 | 21,583 |
Total financial assets | 67,657 | 40,382 | 27,275 | |
Non-financial asset | ||||
Land | 7.2 (i),7.2 (iii) | 48,500 | 42,725 | 5,775 |
Buildings | 7.2 (i),7.2 (iii) | 53,472 | 43,577 | 9,895 |
Plant and equipment | 7.2 (i) | 85,833 | 20,412 | 65,421 |
Computer software | 11,825 | 16,399 | (4,574) | |
Other intangibles | 9,319 | 9,319 | - | |
Inventories | 7.2 (iv) | 72,526 | 81,564 | (9,038) |
Other non-financial assets | 7.2 (i) | 17,180 | 25,110 | (7,930) |
Total non-financial assets | 298,655 | 239,106 | 59,549 | |
Total assets | 366,312 | 279,488 | 86,824 | |
LIABILITIES | ||||
Payables | ||||
Trade creditors and accruals | 7.2 (v) | 17,804 | 22,874 | (5,070) |
Other payables | 7.2 (v) | 17,064 | 12,352 | 4,712 |
Total Payables | 34,868 | 35,226 | (358) | |
Interest bearing liabilities | ||||
Lease liabilities | 7.2 (i) | 73,958 | - | 73,958 |
Total interest bearing liabilities | 73,958 | - | 73,958 | |
Provision | ||||
Employee provision | 7.2 (vi) | 30,803 | 27,050 | 3,753 |
Other provision | 1,031 | 703 | 328 | |
Total provisions | 31,834 | 27,753 | 4,081 | |
Total liabilities | 140,660 | 62,979 | 77,681 | |
Net assets | 225,652 | 216,509 | 9,143 | |
Equity | ||||
Contributed equity | 110,403 | 110,403 | - | |
Reserves | 7.2 (i), 7.2 (iii) | 81,450 | 75,639 | 5,811 |
Retained surplus | 33,799 | 30,467 | 3,332 | |
Total equity | 225,652 | 216,509 | 9,143 | |
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 2019-20 PBS).
2. Between the actual and original budgeted amounts for 2020. Explanations of major variances are provided further below.
7.1C Statement of Changes in Equity for the year ended 30 June 2020
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 | ||||||||
2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | 2020 | |||
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 | - | 81,373 | 75,215 | 6,158 | 653 | 424 | 229 | 30,197 | 29,974 | 223 | 222,626 | 216,016 | 6,610 | ||
Adjustment on initial application of AASB 16 | 7.2 (i) | - | - | - | - | - | - | - | - | - | (1,386) | - | (1,386) | (1,386) | - | (1,386) | |
Adjusted opening balance | 110,403 | 110,403 | - | 81,373 | 75,215 | 6,158 | 653 | 424 | 229 | 28,811 | 29,974 | (1,163) | 221,240 | 216,016 | 5,224 | ||
Comprehensive income | |||||||||||||||||
Surplus for the year | - | - | - | - | - | - | - | - | - | 4,716 | 493 | 4,223 | 4,716 | 493 | 4,223 | ||
Other comprehensive income | |||||||||||||||||
Asset revaluation | 7.2 (iii) | - | - | - | (64) | - | (64) | - | - | - | - | - | - | (64) | - | (64) | |
(Loss) on cash flow hedging instrument | - | - | - | - | - | - | (240) | - | (240) | - | - | - | (240) | - | (240) | ||
Total comprehensive income | - | - | - | (64) | - | (64) | (240) | - | (240) | 4,716 | 493 | 4,223 | 4,412 | 493 | 3,919 | ||
Transfers between equity components | |||||||||||||||||
Transfer of revaluation gain in relation to assets written off during the year | - | - | - | (272) | - | (272) | - | - | - | 272 | - | 272 | - | - | - | ||
Total transfers between equity components | - | - | - | (272) | - | (272) | - | - | - | 272 | - | 272 | - | - | - | ||
Closing balance as at 30 June | 110,403 | 110,403 | - | 81,037 | 75,215 | 5,822 | 413 | 424 | (11) | 33,799 | 30,467 | 3,332 | 225,652 | 216,509 | 9,143 | ||
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 2019-20 PBS).
2. Between the actual and original budgeted amounts for 2020. Explanations of major variances are provided further below.
7.1D Cash Flow Statement for the year ending 30 June 2020
Actual | Budget estimate | |||
|---|---|---|---|---|
Original1 | Variance1 | |||
2020 | 2020 | 2020 | ||
Notes | $'000 | $'000 | ||
OPERATING ACTIVITIES | ||||
Cash received | ||||
Receipts from Government | 290,054 | 290,054 | - | |
Sale of goods and rendering of service | 7.2 (ii) | 134,893 | 101,195 | 33,698 |
Interest | 1,711 | 2,600 | (889) | |
Net GST received | 9,527 | 11,500 | (1,973) | |
Total cash received | 436,185 | 405,349 | 30,836 | |
Cash used | ||||
Employees | (141,914) | (138,067) | (3,847) | |
Suppliers | 7.2 (i),7.2 (iv) | (243,100) | (257,577) | 14,477 |
Interest payments on lease liabilities | 7.2 (i) | (1,051) | - | (1,051) |
Total cash used | (386,065) | (395,644) | 9,579 | |
Net cash from operating activities | 50,120 | 9,705 | 40,415 | |
INVESTING ACTIVITIES | ||||
Cash received | ||||
Investments | 203,152 | 160,000 | 43,152 | |
Total cash received | 203,152 | 160,000 | 43,152 | |
Cash used | ||||
Purchase of plant and equipment | (11,668) | (12,000) | 332 | |
Investments | (211,714) | (155,000) | (56,714) | |
Total cash used | (223,382) | (167,000) | (56,382) | |
Net cash used by investing activities | (20,230) | (7,000) | (13,230) | |
FINANCING ACTIVITIES | ||||
Cash used | ||||
Principal payments of lease liabilities | 7.2 (i) | (16,587) | - | (16,587) |
Total cash used | (16,587) | - | (16,587) | |
Net cash by financing activities | (16,587) | - | (16,587) | |
Net increase in cash held | 13,303 | 2,705 | 10,598 | |
Cash and cash equivalents at the beginning of the reporting | 5,623 | 5,424 | 199 | |
Cash and cash equivalents at the end of the reporting period | 18,926 | 8,129 | 10,797 | |
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 2019-20 PBS).
2. Between the actual and original budgeted amounts for 2020. Explanations of major variances are provided further below.
7.2 Major Budget Variances for 2020
Explanations of major variances | Affected line items (and statement) | |
(i) | Adoption of Lease accounting standard | |
The adoption of the new leasing standard (AASB16) by the whole of government occurred during the 2019-20 financial year. This included the recognition of Right-of-Use asset and liability in the Statement of Financial Position. The change also included the recognition of transitional lease incentives, provisions and straight-lining balances adjusted against opening retained earnings. (Consistent with the whole of government approach, the implementation of AASB16 was not included in the original budget). | Suppliers (Statement of Comprehensive Income); Depreciation (Statement of Comprehensive Income); Finance costs (Statement of Comprehensive Income); Land and Buildings, Plant and equipment (Statement of Financial Position); Other non-financial assets (Statement of Financial Position); Lease liabilities (Statement of Financial Position); Reserves in Equity (Statement of Financial Position); Suppliers, Borrowing costs and Finance lease payments (Cash Flow Statement) | |
(ii) | Revenue from contracts with customers | |
Advertising sales were higher than budget largely due to increased activity and better than budgeted advertising sales revenue. The launch of the SBS World Movies channel in July 2019 and a strong digital performance have contributed to the overall outcome. | Revenue from contracts with customers (Statement of Comprehensive Income); Cash and cash equivalents (Statement of Financial Position); Term investments (Statement of Financial Position); Sale of goods and rendering of services (Cash Flow Statement); Term investments (Statement of Financial Position) | |
(iii) | Land and Buildings | |
Increased value of Land and Buildings due to revaluation conducted in June 2019 (This was not included in the original budget, as the budget was prepared prior to the finalisation of the revaluation). | Land and Buildings (Statement of Financial Position); Reserves in Equity (Statement of Financial Position); Asset revaluation reserve (Statement of Changes in Equity) | |
(iv) | Inventory | |
Due to COVID-19, overall production activities have been impacted, resulting in a lower level of program inventory. | Cash and cash equivalents (Statement of Financial Position); Term investments (Statement of Financial Position); Inventory (Statement of Financial Position); Suppliers (Cash Flow Statement) | |
(v) | Payables | |
Overall Payables reflect a lower level of spend due to COVID-19 and the timing of payments. | Trade creditors and accruals (Statement of Financial Position); Other payables (Statement of Financial Position); Term investments (Statement of Financial Position) | |
(vi) | 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 as at 30 June 2019. (The increase in provision was not included in the original budget, as the budget was prepared prior to the finalisation of the adjustments to the bond rate in June 2019). | Employee benefits (Statement of Comprehensive Income); Provisions (Statement of Financial Position) | |
(vii) | Trade and other receivables | |
This was due to lower than budgeted revenue at year end. | Trade and other receivables (Statement of Financial Position) |
Visit
https://www.transparency.gov.au/annual-reports/special-broadcasting-service-corporation/reporting-year/2019-20-77