MOREE GOLF CLUB LIMITED ABN FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2015

Transcription

1 MOREE GOLF CLUB LIMITED FINANCIAL STATEMENTS

2 MOREE GOLF CLUB LIMITED DIRECTORS REPORT Your directors present their report on the company for the financial year ended 31 July Principal Activities The company's principal activities of the company is to provide sporting facilities and licensed club premises to its members and guests for the playing, encouragement and promotion of golf within the Moree and district community. These principal activities assist in achieving the short term and long term objectives of the company by: providing sporting facilities for the members and the community providing entertainment, dining, gaming and social facilities for members and the community providing turnover, cash flow and profit to meet the financial objectives of the company Directors Information Directors The names of the directors in office at any time during, or since the end of, the year and the period that each director has been in office: Directors Name Special Responsibilities Period as Director D Amos President 11 years D Chomley Treasurer 7 years L Goodman Director 5 years D Cox Director 7 years G Taunton Director 5 years S Brooker Director 5 years K Wharton Director 3 years S Antees Director 3 years D Newnham Director 5 years P Burey Director 6 months Appointed 27/10/2004 Appointed 30/10/2008 Appointed 30/11/2010 Appointed 30/10/2008 Resigned 21/8/2015 Appointed 26/2/2010 Appointed 30/11/2010 Appointed 17/12/2012 Appointed 17/12/2012 Resigned 24/11/2014 Appointed 21/3/2011 Appointed 24/11/2014 Date Appointed Meetings of Directors During the financial year, 12 meetings of directors (including committees of directors) were held and the attendances by each director during the year were as follows: Directors' Meetings Eligible to attend Number attended D Amos D Chomley L Goodman D Cox 12 7 G Taunton 12 8 S Brooker K Wharton S Antees 3 1 D Newnham P Burey 9 7 Page 1

3 MOREE GOLF CLUB LIMITED DIRECTORS REPORT Short Term Objectives of the Company The company has identified the following short term objectives: to provide services to members commensurate with industry needs and regulatory requirements. to repay the funds borrowed for the 2007 club refurbishment within the next few years to encourage more members to use club sporting and social facilities to meet financial viability and accountability requirements to provide a workplace that is compliant with industry standards and the Fair Work Act The company has adopted the followings strategies in order to achieve these short term objectives: the preparation of a business and strategic plan that identifies the future for the club and the initiatives that will need to be implemented to promote the club the preparation of an annual budget for financial performance and the regular review of the company performance against the budget by management and directors the review of the company compliance with workplace health and safety and compliance with employment law including the Fair Work Act Long Term Objectives of the Company The company has identified the following long term objectives: to ensure a sustainable club to become financially secure to grow the company operations in accordance with member interests The company has adopted the followings strategies in order to achieve these long term objectives: the preparation of a business and strategic plan to identify the opportunities and strengths of the company to provide a sustainable industry the preparation of long term budgets that consider the member service needs infrastructure needs, service delivery, employment costs and maintaining prudent levels of working capital and liquidity in investment of funds surplus to current needs Performance Measurement The company uses the following key performance indicators to measure performance: Deficit, after income tax expense, for the financial year was $76,035 Cash flow from operating activities for the financial year was $165,936 Membership for the financial year was 1,732. the company has complied with all Workplace, Health and Safety, Employment and Environmental reviews conducted by external regulatory bodies. Page 2

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5 Crowe Horwath Central North ABN Member Crowe Horwath International 3 Glen Innes Road Inverell NSW 2360 Australia PO Box 164 Inverell NSW 2360 Australia Tel Fax AUDITORS' INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATION ACT 2001 TO THE DIRECTORS OF MOREE GOLF CLUB LIMITED I declare that, to the best of my knowledge and belief, during the financial year to 31 July 2015 there have been: (i) (ii) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. Crowe Horwath Central North Jessica Galvin Partner - Audit & Assurance Registered Company Auditor 149 Otho Street Inverell NSW 2360 Dated: 10 November 2015 Crowe Horwath Central North is a member of Crowe Horwath International, a Swiss verein. Each member of Crowe Horwath is a separate and independent legal entity. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees.

6 MOREE GOLF CLUB LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Note $ $ Sales revenue 2 930, ,213 Cost of goods sold (437,740) (434,974) Gross profit 492, ,239 Other revenue 2 1,433,517 1,547,396 Administration expenses (184,169) (278,732) Advertising and promotional expenses (160,953) (146,156) Depreciation expense 3 (247,197) (235,808) Employee benefits expense (704,668) (727,317) Finance costs 3 (31,746) (26,256) Occupancy expenses (584,317) (497,363) Other expenses (89,027) (91,939) (Deficit)/surplus before income tax expense (76,035) 60,064 Income tax expense 1(a) - - (Deficit)/surplus after income tax expense (76,035) 60,064 Other comprehensive income for the year, net of tax - - Total comprehensive (deficit)/surplus for the year $ (76,035) $ 60,064 Total comprehensive (deficit)/surplus attributable to members of the entity $ (76,035) $ 60,064 The accompanying notes form part of these financial statements. Page 5

7 MOREE GOLF CLUB LIMITED STATEMENT OF FINANCIAL POSITION Note $ $ ASSETS CURRENT ASSETS Cash and cash equivalents 4 133, ,189 Trade and other receivables 5 15,820 11,340 Inventories 6 38,722 30,352 Other current assets 7 44,159 45,318 TOTAL CURRENT ASSETS 231, ,199 NON CURRENT ASSETS Property, plant and equipment 8 3,677,450 3,790,554 Investment properties 9 166, ,102 Intangible assets , ,441 TOTAL NON CURRENT ASSETS 4,274,593 4,390,097 TOTAL ASSETS 4,506,294 4,613,296 LIABILITIES CURRENT LIABILITIES Trade and other payables ,821 89,540 Borrowings , ,790 Employee benefits 13 42,203 73,150 Other liabilities 14 96,727 75,524 TOTAL CURRENT LIABILITIES 485, ,004 NON CURRENT LIABILITIES Borrowings , ,725 Employee benefits 13 9,124 17,256 Other liabilities 14 98, ,940 TOTAL NON CURRENT LIABILITIES 249, ,921 TOTAL LIABILITIES 735, ,925 NET ASSETS $ 3,770,336 $ 3,846,371 EQUITY Retained earnings 3,770,336 3,846,371 TOTAL EQUITY $ 3,770,336 $ 3,846,371 The accompanying notes form part of these financial statements. Page 6

8 MOREE GOLF CLUB LIMITED STATEMENT OF CHANGES IN EQUITY Retained Total Earnings $ $ Balance at 1 August ,786,307 3,786,307 Total comprehensive surplus 60,064 60,064 Balance at 31 July 2014 $ 3,846,371 $ 3,846,371 Total comprehensive deficit (76,035) (76,035) Balance at 31 July 2015 $ 3,770,336 $ 3,770,336 The accompanying notes form part of these financial statements. Page 7

9 CASH FLOWS FROM OPERATING ACTIVITIES Note $ $ Receipts from customers 2,563,051 2,751,447 Payments to suppliers and employees (2,365,369) (2,497,537) Interest received - 28 Finance costs (31,746) (26,256) Net cash provided by operating activities 165, ,682 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment 11,900 - Purchase of property, plant and equipment (143,593) (280,706) Net cash (used in) investing activities (131,693) (280,706) CASH FLOWS FROM FINANCING ACTIVITIES MOREE GOLF CLUB LIMITED STATEMENT OF CASH FLOWS Repayment of borrowings (37,432) 11,841 Net cash (used in) provided by financing activities (37,432) 11,841 Net (decrease) in cash held (3,189) (41,183) Cash at the beginning of the financial year 136, ,372 Cash at the end of the financial year 4 (a) $ 133,000 $ 136,189 The accompanying notes form part of these financial statements. Page 8

10 Note 1: Statement of Significant Accounting Policies Basis of Preparation The financial statements cover Moree Golf Club Limited as an individual entity. Moree Golf Club Limited is a public company limited by guarantee, incorporated and domiciled in Australia. The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The following significant accounting policies have been adopted in the preparation and presentation of the financial report: (a) Income Tax No provision for income tax has been raised as the entity is exempt from paying income tax under Div 50 of the Income Tax Assessment Act (c) Property, Plant and Equipment Property Freehold land and buildings are shown at cost less depreciation and impairment losses. Plant and Equipment MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS These general purpose financial statements have been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for not-for-profit oriented entities. The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs 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 principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements were authorised for issue on 10 November 2015 by the directors of the company. Accounting Policies (b) Inventories Inventory is recorded on a first in first out (FIFO) basis. Inventories are measured at the lower of cost and net realisable value. Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment are measured on the cost basis less depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of expected net cash flows which will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining the recoverable amounts. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred. Page 9

11 Note 1: Statement of Significant Accounting Policies (c) Property, Plant and Equipment continued Depreciation Class of Fixed Asset MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS The depreciable amount of all fixed assets including building and capitalised leased assets, but excluding freehold land, is depreciated on a diminishing value basis over their useful lives to the company commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable asset are: (d) Financial Instruments Depreciation Rate Buildings and Improvements 2-5% Plant & Equipment, Furniture & Fittings 5-40% The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An assets' carrying amount is written down immediately to its recoverable amount if the assets' carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the statement of comprehensive income. Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either purchase or sell the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified as 'fair value through profit and loss' in which case transactions costs are expensed to the statement of comprehensive income immediately. Classification and subsequent measurement Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method. The effective interest rate method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contract terms) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in the statement of profit or loss and other comprehensive income. Page 10

12 Note 1: Statement of Significant Accounting Policies Financial Instruments Continued (i) Loans and receivables MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised. (ii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the company's intention to held these investment to maturity. They are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised. (iii) Financial liabilities Non-derivative financial liabilities, other than financial guarantees are subsequently measured at amortised cost. Gains or losses are recognised through the statement of comprehensive income through the amortisation process and when the financial liability is recognised. Impairment At the end of each reporting period, the company assesses whether there is objective evidence that a financial instrument has been impaired. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in the statement of profit or loss and other comprehensive income. (e) Impairment of Assets At the end of each reporting period, the company assesses whether there is any indication that an asset may be impaired. The assessment will include considering external sources of information and internal sources of information. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use to the asset's carrying value. Any excess of the asset's carrying value of its recoverable amount is expensed to the statement of profit or loss and other comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the receivable amount of the cash-generating unit to which the asset belongs. Impairment testing is performed annually for intangible assets with indefinite lives. Page 11

13 Note 1: Statement of Significant Accounting Policies (f) Employee Benefits Short-term employee benefits (h) Cash and Cash Equivalents (i) Revenue MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Other long-term employee benefits The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Defined contribution superannuation expense Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred. (g) Provisions Provisions are recognised when the company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period. Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvements in those goods. Interest revenue is recognised using the effective interest rate method, which for floating rate financial assets is the rate inherent in the instrument. All revenue is stated net of the amount of goods and services tax (GST). (j) Trade and Other Payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the company during the reporting period, which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. (k) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. Page 12

14 Note 1: Statement of Significant Accounting Policies (l) Comparative Figures MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (m) Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred. (n) Leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to the company are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for that period. Leased assets are depreciated on a straight line basis over their estimated useful lives where it is likely that the company will obtain ownership of the asset or over the term of the lease. Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses on a straight line basis over the life of the lease term. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term. (o) Membership Subscriptions The accrual method of accounting has been adopted whereby subscriptions received in advance are brought into account as a liability of the Club. (p) Intangibles Water Licences The water licences held by the club are recorded at cost. The water licences are subject to annual impairment testing to the higher of fair value less related costs to sell and value in use. (q) New, revised or amending Accounting Standards and Interpretations adopted The company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Page 13

15 Note 1: Statement of Significant Accounting Policies MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS (r) Accounting Policies, Changes in Accounting Estimates and Errors During the 2015 financial year it was identified that suspected fraudulent activities had occurred in prior financial years which resulted in an overstatement of the Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income. As a result the comparative figures have been restated. Additionally, some amendments have also been made to the allocation of income and expenses to ensure more accurate classification by nature. STATEMENT OF FINANCIAL POSITION CURRENT ASSETS Original Effect of Restated 2014 Restatement 2014 $ $ $ Cash and cash equivalents 277,292 (141,103) 136,189 TOTAL CURRENT ASSETS 364,302 (141,103) 223,199 TOTAL ASSETS 4,754,399 (141,103) 4,613,296 CURRENT LIABILITIES Borrowings 286,553 (78,763) 207,790 TOTAL CURRENT LIABILITIES 524,767 (78,763) 446,004 NON CURRENT LIABILITIES Borrowings 113,962 78, ,725 TOTAL NON CURRENT LIABILITIES 242,158 78, ,921 NET ASSETS $ 3,987,474 $ (141,103) $ 3,846,371 EQUITY Retained earnings 3,987,474 (141,103) 3,846,371 TOTAL EQUITY $ 3,987,474 $ (141,103) $ 3,846,371 STATEMENT OF COMPREHENSIVE INCOME Sales Revenue 2,398,169 (1,446,956) 951,213 Gross profit 1,963,195 (1,446,956) 516,239 Other Revenue 100,444 1,446,952 1,547,396 Administration expenses (143,398) (135,334) (278,732) Depreciation expense (237,026) 1,218 (235,808) Occupancy expenses (567,438) 70,075 (497,363) Other expenses (78,663) (13,276) (91,939) Profit before income tax expense 137,645 (77,581) 60,064 Income tax expense Profit after income tax expense $ 137,645 $ (77,581) $ 60,064 Other comprehensive income for the year, net of tax Total comprehensive income for the year $ 137,645 $ (77,581) $ 60,064 Total comprehensive income attributable to members of the entity $ 137,645 $ (77,581) $ 60,064 Page 14

16 Note 2: Revenue Operating activities: Note $ $ Sale of goods 930, ,213 Total revenue from operating activities 930, ,213 Non-operating activities: Other revenue 98, ,231 Membership subscriptions 26,403 27,406 Sponsorship and donations 38,073 57,055 Gaming income 823, ,884 Rental operations 16,684 16,240 Green fees 73,212 84,167 Golf course income 332, ,625 Water sales 24,440 32,760 Interest received from other persons - 28 Total revenue from non-operating activities 1,433,517 1,547,396 Total revenue $ 2,363,782 $ 2,498,609 Note 3: Expenses Depreciation expense $ 247,197 $ 235,808 Unders and overs $ 26,780 $ 77,581 Finance costs $ 31,746 $ 26,256 Note 4: Cash and Cash Equivalents Cash on hand 49,612 87,235 Cash at bank 83,388 48,954 (a) Reconciliation of cash and cash equivalents MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS $ 133,000 $ 136,189 Cash and cash equivalents at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents 133, ,189 Note 5: Trade and Other Receivables CURRENT $ 133,000 $ 136,189 Trade receivables 13,123 5,873 Less: Provision for impairment (406) (406) 12,717 5,467 Other receivables 3,103 5,873 $ 15,820 $ 11,340 Page 15

17 Note 6: Inventories CURRENT Stock on Hand, at cost: MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS Note $ $ Bar 38,722 30,352 Note 7: Other Assets CURRENT $ 38,722 $ 30,352 Other current assets Prepayments 43,989 45,148 Note 8: Property, Plant & Equipment Land and Buildings (at cost) $ 44,159 $ 45,318 Freehold land 240, ,000 Buildings 2,881,919 2,881,919 Less: Accumulated depreciation (527,046) (459,934) 2,354,873 2,421,985 Course Improvements 599, ,578 Less: Accumulated depreciation (112,109) (103,493) 487, ,085 Total Land and Buildings 3,082,342 3,158,070 Plant and Equipment (at cost) Plant and equipment 2,328,671 2,236,895 Less: Accumulated depreciation (1,733,563) (1,604,411) 595, ,484 Total Plant and Equipment 595, ,484 (a) Movements in carrying amounts $ 3,677,450 $ 3,790,554 Land and Buildings Plant and Equipment Total Balance at the beginning of the year 3,158, ,484 3,790,554 Additions - 143, ,593 Disposals - (11,900) (11,900) Depreciation expense (75,728) (169,069) (244,797) Carrying amount at the end of the year $ 3,082,342 $ 595,108 $ 3,677,450 Page 16

18 Note 9: Investment Property MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS Note $ $ 158 Heber Street 191, ,114 Less: Accumulated depreciation (24,412) (22,012) $ 166,702 $ 169,102 Note 10: Intangible Assets Water licence 430, ,441 Water Licence Note 11: Trade and Other Payables CURRENT Unsecured liabilities; $ 430,441 $ 430,441 The water licence is assessed as having an indefinite useful life. The measurement and recognition criteria is outlined in note 1 to the financial statements The directors believe that the carrying amount of the water licence is not impaired and annual impairment testing will be conducted at each reporting date. Trade payables 60,876 50,250 Sundry payables and accrued expenses 65,945 39,290 Note 12: Borrowings CURRENT Secured liabilities: $ 126,821 $ 89,540 Credit card 2,545 3,913 Bank loan 62,928 62,928 Hire purchase liability 154, ,949 NON-CURRENT Secured liabilities: 220, ,790 Bank loan 42,870 78,763 Hire purchase liability 99, , , ,725 Total Borrowings $ 363,083 $ 400,515 Page 17

19 MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS Note 12: Borrowings continued Note $ $ The Westpac Bank holds a mortgage over 2 Greenbah Rd Moree and 158 Heber St Moree, plus a General Security Agreement (FFC) over all current and future assets of the Club. The amount recorded as expected to be repaid in next 12 months is the actual payments required between 1 August July 2016 per the loan contract. The unused portion of approved finance facilities are: Bank loan 40,281 60,276 Bank overdraft 50,000 17,628 Credit card 13,455 3,087 $ 103,736 $ 80,991 Note 13: Provisions Current 42,203 73,150 Non-current 9,124 17,256 $ 51,327 $ 90,406 Provision for employee benefits A provision has been recognised for employee entitlements relating to annual and long service leave. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits has been included in note 1 to this report. Note 14: Other Liabilities CURRENT Subscriptions received in advance 71,954 54,349 Sponsorship in advance 7,000 5,936 Lease income in advance 17,773 15,239 NON-CURRENT $ 96,727 $ 75,524 Lease income in advance 98, ,940 98, ,940 Total other liabilities $ 194,727 $ 186,464 During the year 18 golf cart sheds continued to be leased to members. The lease income was received up front by the leasees and the term of the lease is for ten years. The income will be recorded in the statement of profit and loss and comprehensive income over the term of the lease, and the balance is recorded as lease income in advance. Page 18

20 MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS Note $ $ Note 15: Leasing Commitments Finance Lease Commitments Payable - minimum lease payments: - not later than 12 months 154, ,949 - between 12 months and five years 99, ,962 Minimum lease payments 12 $ 254,740 $ 254,911 Note 16: Related Party Transactions Key Management Personnel The totals of remuneration paid to key management personnel (KMP) during the year are as follows: Key management personnel compensation $ 171,259 $ 166,617 Other Related Parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Transactions with related parties were: KG & D Amos of which Director D Amos is associated with $ 1,793 $ - Taroma Farming of which Director G Taunton is associated with $ 24,440 $ 32,760 D Chomley who works for Westpac Bank which provided the club with banking facilities. Note 17: Events After the End of the Reporting Period Since the end of the reporting period the Club has purchased a Kubota Tractor for $20,000. This purchase was funded by a finance facility with Westpac Banking Corporation. No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the company, the results of those operations, or the state of affairs of the company in future financial years. Note 18: Going Concern The financial statements have been prepared on a going concern basis, which assumes that the company will be able to continue their trading activities. The company has recognised a loss after income tax of $76,035 and a positive net operating cash flows of $165,936 for the year ended 31 July 2015 and as at that date, current liabilities exceed current assets by $254,268. In considering the current liability and asset deficiency it is noted that the company has ready access to preapproved finance facilities of $103,736 and that a contingent asset of up to a limit of $100,000 is available (refer note 19). Furthermore an amount of $96,727 of other liabilities exists which is being amortised over a number of years and therefore does not represent a liability requiring physical payment. In the unlikely event that the above results in a negative outcome, then the going concern basis may not be appropriate. No allowance for such circumstances has been made in the financial report. Page 19

21 MOREE GOLF CLUB LIMITED NOTES TO THE FINANCIAL STATEMENTS Note 19: Contingent Asset Note $ $ Following some anomalies in cash handling procedures and shortfalls in cash holdings being identified during 2014 the Board engaged the services of Barrington Group to carry out an independent investigation and audit of cash transactions and procedures, specifically in relation to ATM reconciliation and replenishment procedures. Following two visits to the Club Barringtons have provided the Club with a detailed report that confirms a number of anomalies where cash appeared to be missing and resulted in an identified loss to the Club of $43,320 for the period between 1 August 2013 and 31 July The matter has since been lodged with NSW Police for further investigation. At this time the Club is awaiting the outcome of this investigation and cannot comment further at this point in time whilst matter remains under investigation. The Club holds an insurance policy covering fraud and misappropriation for amounts up to a limit of $100,000. At this stage notification of an intended claim has been advised to club s insurer Calliden and this will be progressed further once the outcome of the police investigation has been determined. At this time the Board believes it has sound claims to recover the identified losses plus associated investigation costs under this policy. Page 20

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23 Crowe Horwath Central North ABN Member Crowe Horwath International 3 Glen Innes Road Inverell NSW 2360 Australia PO Box 164 Inverell NSW 2360 Australia INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MOREE GOLF CLUB LIMITED Tel Fax Report on the financial report We were engaged to audit the accompanying financial report of Moree Golf Club Limited, which comprises the statement of financial position as at 31 July 2015, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration. Directors responsibility for the financial report The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. Because of the matter described in the Basis for Disclaimer of Opinion paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Crowe Horwath Central North is a member of Crowe Horwath International, a Swiss verein. Each member of Crowe Horwath is a separate and independent legal entity. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees.

24 Crowe Horwath Central North ABN Member Crowe Horwath International 3 Glen Innes Road Inverell NSW 2360 Australia PO Box 164 Inverell NSW 2360 Australia Basis for Disclaimer of Opinion Tel Fax As described in notes 1(r) and 19 of the financial statements, the directors identified certain suspected fraudulent activities arising from anomalies in cash handling procedures and shortfalls in cash holdings. This resulted in a restatement to the comparative information as detailed in note 1(r). The investigation described in note 19 was restricted in its scope and we were not able to satisfy ourselves as to the effectiveness of controls over transactions related to cash, revenue and payroll in the current year. As a result, we were unable to obtain sufficient appropriate audit evidence about the totals of income and expenses for the year ended 30 June 2015 and we were unable to determine whether any adjustments might have been found necessary in respect of those elements making up the Statement of Profit or Loss and Other Comprehensive Income and Statement of Cash Flow. Disclaimer of Opinion Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial report. Crowe Horwath Central North Jessica Galvin Partner - Audit & Assurance Registered Company Auditor 149 Otho Street Dated: 13 November 2015 Crowe Horwath Central North is a member of Crowe Horwath International, a Swiss verein. Each member of Crowe Horwath is a separate and independent legal entity. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees.