1 WARNERS BAY BOWLING CLUB CO-OPERATIVE LIMITED FINANCIAL REPORT CONTENTS Directors' Report 2-3 Auditor's Independence Declaration 4 Audit Report to Members 5-6 Directors' Declaration 7 Statement of Financial Position 8 Statement of Profit or Loss and other Comprehensive Income 9 Statement of Cashflows 10 Statement of Changes in Equity 11 Notes to and Forming Part of the Financial Statements 12-18 Detailed Profit and Loss Statement 19-20 The financial report was authorised for issue by the Directors on 16 August 2018. The Co-operative has the power to amend and re-issue the financial report
2 1. Directors The names of the Directors in office as at the date of this report are: Name Occupation/ Qualifications Position No. of years service as a Director of the Cooperative Phillip Stone Retired President 8 Col Douglas Retired Vice President 5 Keith Taylor Retired Director 20 Robert Cass Retired Director 8 Wilhelm Shaeffer Retired Director 4 John Cupples Retired Director 4 Stehen Mullins Retired Director 3 * Refer to page 3 for details of Directors' meeting attendances. DIRECTORS' REPORT Your Directors present their report for the financial year ended 30 June 2018. 2. Results of Operations The net result of operations after income tax was a loss of $137,268 (2017 loss of $13,391). The increase in the operating loss reflects decreases in bar sales and poker machine revenue as well as increased operating expenses, despite $107,708 in revenue recognised for assets contributed to the Club during the year. 3. Activities The principal activities of the Co-operative during the financial year ended 30 June 2018 were the running of the Club in accordance with its objectives for the benefit of its members. No significant change in the nature of these activities occurred during the year. 4. Significant Changes There have been no significant changes in the activities conducted by the Club in the year under review. 5. Events Subsequent to the End of the Reporting Period No matter or circumstances have arisen since the end of the financial year which significantly affect the operations of the Club, the results of those operations, or the state of affairs of the Club in future financial years. 6. Likely Developments and Expected Results of Operations No new developments are anticipated in the operations of the Club. The expected results for future years are of growth in revenue whilst the Club will control costs wherever possible. 7. Indemnifying Officer or Auditor The Co-operative has, not during or since the end of the financial year, in respect of any person who is or has been an officer or auditor of the Cooperative indemnified or made any relevant agreements for indemnifying against a liability incurred as an officer, including costs or expenses in successfully defending legal proceedings During the financial year, the Co-operative has paid a premium in respect of a contract of insurance insuring Directors and Officers (including former and future Directors and Officers) against certain liabilities incurred in that capacity. Disclosure of the total amount of premiums and the nature of the liabilities in respect of such insurance is prohibited by the contract of the insurance. 8. Directors Benefits Since the end of the previous financial year no Director has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received or due to be received by Directors shown in the accounts or received as the fixed salary of a full time employee of the Club) by reason of a contract made by the Club or by a related corporation with the Director or with a firm of which they are a member, or with a Company in which they have a substantial financial interest in.
3 DIRECTORS' REPORT (Cont.) 9. Auditor's Independence Declaration The auditor's independence declaration for the year ended 30 June 2018 has been received and is set out on page 4 of the financial report. 10. Environmental Regulations The Club's operations are subject to various environmental regulations under both Commonwealth and State Legislations. The Directors are not aware of any breaches of the legislation during the financial year, which are material in nature. 11. Dividends The Club is prohibited from paying dividends under its constitution. 12. Meeting Attendances The number of ordinary Board meetings held during the financial year ended 30 June 2018 was 11. The details of each Directors' attendances at those meetings is given below: Director Normal Eligible to Attend Phillip Stone 11 11 Keith Taylor 11 11 Robert Cass 11 11 John Cupples 11 11 Stephen Mullins 11 11 Col Douglas 9 11 Wilhelm Schaeffer 9 11 The Club's Annual General Meeting was held 24 September 2017. 13. Property Report The Directors have determined that property of the Club shall be classified as follows in accordance with section 41J of the Registered Clubs Act 1976 :- Core Property - Property located at 7 Charles Street Warners Bay (leased from Lake Macquarie City Council) Non Core Property - Land located at 2 John Street Warners Bay Signed in accordance with a resolution of the Board of Directors Phill Stone - President Date: 16 August 2018 Col Douglas - Director
4 AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF WARNERS BAY BOWLING CLUB CO-OPERATIVE LIMITED I declare that, to the best of my knowledge and belief, during the year ended 30 June 2018 there have been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and (ii) no contraventions of any applicable code of professional conduct in relation to the audit. Brent Perkins - Partner DFK Crosbie Partners Chartered Accountants Date: 16 August 2018 Warabook, NSW
5 WARNERS BAY BOWLING CLUB CO-OPERATIVE LIMITED INDEPENDENT AUDITOR'S REPORT To the Members of Warners Bay Bowling Club Co-operative Limited. Report on the Financial Report We have audited the financial report of Warners Bay Bowling Club Co-operative Limited (the Co-Operative), which comprises the Statement of Financial Position as at 30 June 2018 and the Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cashflows for the year ended and notes to the financial statements, including a summary of significant accounting policies and the Directors declaration. In our opinion, the acommpanying financial report of Warners Bay Bowling Club Co-operative Limited is in accordance with the Co-operatives National Law (NSW) 2014, including: (i) (ii) giving a true and fair view of the Co-operative's financial position as at 30 June 2018 and of its performance for the year ended; and complying with Australian Accounting Standards - Reduced Disclosure Requirements and the Co-operatives Regulations (NSW). Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Co-operative in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Information Other than the Financial Report and Auditor's Report Thereon The Directors are responsible for the other information. The other information comprises the information included in the Co-operative's annual report for the year ended 30 June 2018, but does not include the financial report and our auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion theron. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
6 WARNERS BAY BOWLING CLUB CO-OPERATIVE LIMITED INDEPENDENT AUDITOR'S REPORT (CONT.) Directors' Responsibility for the Financial Report The Directors of the Co-operative are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Co-operatives National Law 2014 (NSW) and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Co-operative s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Cooperative or to cease operations, or have no realistic alternative but to do so. Matters relating to the electronic presentation of the audited financial report The auditor's report relates to the financial report of Warners Bay Bowling Co-operative Limited (the Club) for the year ended 30 June 2018 is included on the Club's web site. The Club's Directors are responsible for the integrity of the Club's web site. We have not been engaged to report on the integrity of this web site. The auditor's report refers only to the statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site. Auditor's Responsibility Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an 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 the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and 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 this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at http://www.auasb.gov.au/auditors_files/ar3.pdf. This description forms part of our auditor's report. Brent Perkins - Partner Date: 16 August 2018 Warabrook, NSW DFK Crosbie Partners Chartered Accountants
7 DIRECTORS' DECLARATION The Directors of the Co-operative declare that: 1 The financial statements and notes, as set out on pages 8 to 18: (a) (b) comply with Australian Accounting Standards - Reduced Disclosure Requirements, the Co-operatives National Law (NSW) 2014 and other mandatory reporting requirements; and give a true and fair view of the financial position as at 30 June 2018 and of its performance, as represented by the results of its operations and cash flows for the year ended on that date. 2 At the date of this declaration there are reasonable grounds to believe that the Co-operative will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors and signed for on behalf of the Directors by: Phill Stone - President Date: 16 August 2018 Col Douglas - Director
8 WARNERS BAY BOWLING CLUB CO-OPERATIVE LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018 Note Restated 2018 2017 $ $ CURRENT ASSETS Cash and Cash Equivalents Trade & Other Receivables Inventories Other Assets Assets Held for Sale 7 8 4,9 10 11 66,041 13,700 18,866 64,487 121,506 130,527 51,148 20,751 26,906 - TOTAL CURRENT ASSETS 284,600 229,332 NON-CURRENT ASSETS Property, Plant and Equipment Intangible Assets TOTAL NON-CURRENT ASSETS 12 13 1,294,853 93,468 1,388,321 1,235,642 93,468 1,329,110 TOTAL ASSETS 1,672,921 1,558,442 CURRENT LIABILITIES Trade and Other Payables Borrowings Provisions Other Liabilities 4,14 15 16 17 150,612 580,486 16,105 112,119 163,492 509,586 19,326 17,950 TOTAL CURRENT LIABILITIES 859,322 710,354 NON-CURRENT LIABILITIES Borrowings Provisions Other Liabilities 15 16 17 104,437 12,399-5,258 8,799 - TOTAL NON-CURRENT LIABILITIES 116,836 14,057 TOTAL LIABILITIES 976,158 724,411 NET ASSETS 696,763 834,031 MEMBERS' FUNDS General Reserve 1,948 1,948 Accumulated Profit 694,815 832,083 TOTAL MEMBERS' FUNDS 696,763 834,031 To be read in conjunction with the attached notes to the Financial Statements
9 STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME Note 2018 Restated 2017 $ $ Bar Sales Cost of Goods Sold Bar Gross Profit ($) Bar Gross Profit (%) 828,059 343,045 485,014 58.6% 882,495 369,706 512,789 58.1% Poker Machine Net Revenue Members' Subscriptions Green Fees Interest Received Keno Commission Tab Commission Profit on Sale of Assets Other Income Total Trading and Other Income 446,185 531,790 22,209 26,207 44,449 37,429 70 344 16,681 17,319 2,295 10,661 20,000 6,820 330,432 313,125 1,367,335 1,456,484 Expenses Bar Direct Expenses Poker Machine Direct expenses (excluding Finance Costs) Members Amenities Bowls & Greens Expenses Clubhouse Expenses Administration and Other Expenses (excluding Finance Costs) Finance Costs Total Expenses 226,805 49,444 316,343 142,667 374,318 358,787 36,239 1,504,603 227,725 28,799 318,067 141,805 347,270 376,579 29,630 1,469,875 Net Profit/(Loss) Before Income Tax 6 (137,268) (13,391) Income Tax Expense 1 - - Net Profit/(Loss) After Income Tax (137,268) (13,391) Other Comprehensive Income - - Total Comprehensive Income/(Loss) (137,268) (13,391) To be read in conjunction with the attached notes to the Financial Statements
10 STATEMENT OF CASHFLOWS Note 2018 Restated 2017 $ $ Cash Flows from Operating Activities Receipts from Members and Guests 1,744,825 1,957,479 Payments to Suppliers and Employees Interest Received (1,723,731) 70 (1,715,255) - Interest Paid (36,239) (29,630) Net Cash Flows provided by (used in) Operating Activities (15,075) 212,594 Cash Flows from Investing Activities Proceeds from Sale of Land 82,000 - Proceeds from Plant and Equipment 20,000 6,820 Payments for Renovations, Plant and Equipment (321,490) (93,935) Net Cash Flows provided by (used in) Investing Activities (219,490) (87,115) Cash Flows from Financing Activities Lease Payments (13,211) - Hire Purchase Payments (19,419) (19,878) Proceeds from Borrowings 193,947 91,360 Repayment of Borrowings (62,467) (115,859) Net Cash Flows provided by (used in) Financing Activities 98,850 (44,377) Net Increase/(Decrease) in Cash Held (135,715) 81,102 Cash and Cash Equivalents at the Beginning of the Financial Year 130,527 49,425 Cash and Cash Equivalents at the End of the Financial Year 7 (5,188) 130,527 To be read in conjunction with the attached notes to the Financial Statements
11 STATEMENT OF CHANGES IN EQUITY General Reserve Retained Earnings Note $ $ Total $ Balance at 1 July 2016 1,948 845,474 847,422 Restated Comprehensive Profit/(Loss) for Year - (13,391) (13,391) Restated Balance at 30 June 2017 1,948 832,083 834,031 Comprehensive Profit/(Loss) for Year - (137,268) (137,268) Closing Balance 30 June 2018 1,948 694,815 696,763 To be read in conjunction with the attached notes to the Financial Statements
12 NOTES TO THE FINANCIAL STATEMENTS 1 Statement of Significant Accounting Policies Basis of Preparation This financial report is a general purpose financial report that has been prepared in accordance with applicable Australian Accounting Standards (including Australian Accounting Interpretations) of the Australian Accounting Standards Board (AASB), other mandatory professional requirements and other authoritative pronouncements and the Co-operatives National Law (NSW) 2014. The Co-operative is a not for profit entity for financial reporting purposes under Australian Accounting Standards. The financial report, except for cash flow information, has been prepared on an accruals basis and is 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 report are in Australian Dollars and have been rounded to the nearest dollar. Statement of Compliance The financial report complies with Australian Accounting Standards - Reduced Disclosure Standards as issued by the Australian Accounting Board (AASB), being AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. Income Tax The Co-operative was granted exemption from income tax under Section 50-45 of the Income Tax Assessment Act (1997), such that the exemption will apply so long as the Club's activities and objectives do not change. Inventories Inventories are measured at the lower of cost and current replacement value. Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Plant and Equipment, Poker Machines and Buildings are measured on the cost basis and are therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event that the carrying amount is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(d) for details of impairment). Depreciation Plant and Equipment and Poker Machines are depreciated so as to write-off the assets over their estimated economic life to the Club. Buildings are being depreciated over the term of the Club's lease with Lake Macquarie City Council. This lease is expected to be renewed and will expire in 2026. Rates used are as follows:- Plant and Equipment 7 to 40 % Poker Machines 25% Buildings 5.88 to 20% The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's 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. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings. Impairment of Assets The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not generate largely independent cash in flows, the recoverable amount is determined for the cash generated unit in which the asset belongs. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash generated units are written down to their recoverable amount. The recoverable amount of plant and equipment is the greater of fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the future economic benefits of an asset are not dependant on the asset's ability to generate net cash inflows and if deprived of the asset the Co-operative would replace its remaining future economic benefit, value in use is determined as the depreciated replacement cost of the asset. Impairment losses are recognised in the Statement of Profit or Loss and Other Comprehensive Income in the administration expense line item.
NOTES TO THE FINANCIAL STATEMENTS 13 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 when incurred. Trade Debtors and Other Receivables Trade debtors and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less any provision for impairment. Trade receivables are due within 30 days from the date of recognition. The recoverability of trade debtors is reviewed regularly, with any uncollectible debts written off. Cash and Cash Equivalents 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. For the purpose of the Statement of Cashflows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Intangible Assets Other than Goodwill Intangible assets acquired separately are capitalised at cost, the useful lives of these intangible assets are assessed to be either finite or infinite. Those with finite lives are amortised over that period on a straight line basis. Intangible assets are tested for impairment where an indicator for impairment exists. Assets Held for Sale When the Company intends to sell a non-current asset or a group of assets (a disposal group), and if sale within twelve (12) months is highly probable, the asset or disposal group is classified as held for sale and presented separately in the statement of financial position. Assets classified as held for sale are measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. However, some held for sale assets such as financial assets, continue to be measured in accordance with the Company's accounting policy for those assets. Once classified as held for sale, the assets are not subject to depreciation or amortisation. Any profit or loss arising from the sale or re-measurement of discontinued operations is presented as part of a single line item, profit or loss from discontinued operations. Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Co-operative and the revenue can be reliably measured. Sales revenue comprises the revenue earned from the provision of products or services to entities outside the Co-operative. Interest income is recognised as it accrues. The profit or loss on disposal of assets is brought to account at the date an unconditional contract is signed. Other revenue is recognised as it accrues. Employee Benefits Short Term Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' service up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. Other Long Term The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period. Consideration is given to expected future wage levels and period of service. Discount rates of the Australian bond rates matching the estimated future cash outflows have been used. The obligations are presented as current liabilities in the statement of financial position if the entity does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur. Hire Purchases Assets acquired under hire purchase agreements are brought to account at cost together with a corresponding hire purchase liability. Terms charges are written off over the period of the agreements. Accounts Payable Trade and other payables represent the liabilities for goods and services received by the Co-operative that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.
14 Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of an asset or as part of an item of expense. Receivables and payables are stated with the amount of GST included. The amount of GST recoverable or payable to the ATO is included as a current asset or current liability in the statement of financial position. Cash flows are included in the statement of cashflows on a gross basis. The GST component of cash flows arising from investing and financing activities which are recoverable from or payable to the ATO are classified as operating cash flows. Comparatives Comparative information has been adjusted to reflect current year disclosures. Other Information The Club, being incorporated in New South Wales, Australia under the Co-operatives National Law (NSW) 2014 has its registered office and principle place of business at Charles Street, Warners Bay. 2 Deficiency in Working Capital NOTES TO THE FINANCIAL STATEMENTS Contributions Where the Club receives non-reciprocal contributions of assets from the government and other parties for zero or a nominal value, these assets are recognised at fair value on the date of acquisition in the statement of financial position. The corresponding income amount is recognised as income in the statement of profit or loss and comprehensive income in the year it is deemed to be acquired. As at 30 June 2018 current assets of the Club were $284,600 compared to current liabilities of $859,322 representing a deficiency in working capital of $574, 722. Current liabilities includes: a) the entire balance of the NAB loan being $427,505 which has been stated as a current liability due to the agreement with the Bank containing a clause which limits the Club from having an unconditional right to defer settlement of the loan, despite the Club having fulfilled all its obligations to the Bank to date; and b) the deposit received for the sale of land of $90,200. The Directors have formed the opinion that the going concern basis is appropriate, given the following: a) The sale of the land will be completed and settled within the next 12 months. b) The Club has access for an overdraft facility of $100,000 which is available to meet short term cash requirements. c) The Club has access to an asset financing facility of $50,000 of which approximately $44,731 is unused at year end. d) The Directors are in the process of developing a strategy to build the Club in order to improve its results. e) The Club expects to continue to receive support from its financiers and suppliers. 3 Significant Accounting Judgements, Estimates and Assumptions The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Significant Accounting Estimates and Assumptions The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: Useful Lives of Non-Current Assets The useful life of Property, Plant and Equipment is initially assessed at the date the asset is ready for use and reassessed at each reporting date based on the use of the assets and the period over which economic benefits will be derived from the asset. There is uncertainty in relation to the assessment of the life of the asset including factors such as the rate of wear and tear and technical obsolescence. The useful life of Poker Machine Entitlements classified as an intangible asset has been assessed as indefinite. There is uncertainty in relation to this assumption as it is based on current legislation and conditions attached to the entitlements. The estimates and judgements involved may impact the carrying value of the non-current assets and the depreciation and amortisation charges recorded in the Statement of Profit or Loss and Other Comprehensive Income should they change. Impairment of Non-Current Assets Impairment testing of non-current assets is performed where indicators of impairment exist. In assessing impairment, estimates are made of the recoverable amount of each asset or cash generating unit based on discounted expected future cash flows discounted or estimated replacement cost. Estimation uncertainty exists in relation to assumptions regarding future operating results and cash flows, determination of an appropriate discount rate and estimated current replacement cost of the asset.
15 NOTES TO THE FINANCIAL STATEMENTS 4 Prior Period Errors The following items were identified during the current year audit and review by management and have been corrected by restating each of the affected financial statement line items in the comparatives to this report. a) Stock invoices that relate to 2017 have been written back at a total value of $11,132. b) Council rates outstanding at 30 June 2017 have been adjusted for $6,395. c) Audit fees to be taken up as an accrued expense in the prior year at a total value of $9,750. d) Bowls stock at 30 June 2017 was understated to the extent of 1,447. (Restated) 30 30 June 2017 Restatements June 2017 $ $ $ Bowls Stock Accrued Expenses Council rates expense Audit Fees Badges, hats and uniforms d 3,876 1,447 5,323 a,b,c (9,595) (27,277) (36,872) b,c 11,285 6,395 17,680 c 11,537 9,750 21,287 a,d 3,568 9,685 13,253 2018 Restated 2017 $ $ 5 Operating Revenue and Other Income Operating Revenue: Bar Sales Poker Machine Net Revenue Members Subscriptions Keno Commission Interest Received Profit on Sale of Fixed Assets Raffles Income TAB Commission Contribution of Assets 828,059 446,185 22,209 16,681 70 20,000 124,231 2,295 107,708 882,495 531,790 26,207 17,319 344 6,820 142,560 10,661 - Other Income 142,942 207,994 1,710,380 1,826,190 6 Operating Profit/(Loss) Operating profit/(loss) before income tax is arrived at after crediting and charging the following specific items:- Credits Interest Received / Receivable 70 344 Profit on Sale of Fixed Assets 20,000 6,820 Charges Depreciation Amortisation Poker Machines Plant & Equipment Buildings 41,173 21,614 78,215 69,819 119,388 91,433 112,003 110,375 Total Depreciation and Amortisation Interest and Finance Costs 231,391 201,808 36,239 29,630 7 Employee Benefits - Wages 415,090 436,366 - Superannuation 38,194 42,485 - Leave Provisions 379 (1,618) 453,663 477,233 Cash and Cash Equivalents Cash & Cash Equivalents 66,041 130,527 66,041 130,527 Less Bank Overdraft (71,229) - Cash & Cash Equivalents per Cashflow Statement (5,188) 130,527
16 NOTES TO THE FINANCIAL STATEMENTS 8 9 10 11 Trade & Other Receivables Current Other Debtors 13,055 46,751 Deposits Refundable 645 4,397 13,700 51,148 Inventories At cost: Stock on Hand - Liquor 13,274 15,428 Stock on Hand - Bowls 5,592 5,323 Other Assets Current Prepayments 59,338 26,906 Other 5,149-64,487 26,906 Asset Held for Sale The Club entered a sale agreement on 9 April 2018 to sell the carpark at 2 John Street. The sale is expected to be settled within the the next 12 months and thus the original cost of the land has been allocated to Assets Held for Sale. 2018 $ Restated 2017 $ 18,866 20,751 Land 121,506-121,506-12 Property, Plant and Equipment. Buildings, Carparks & Greens Plant & Equipment Poker Machines Work in Progress Total $ $ $ $ $ Year ended 30 June 2018 At 1 July 2017, Net of Accumulated Depreciation/Amortisation 999,056 161,293 75,293-1,235,642 Additions 17,086 188,151 164,597 42,274 412,108 Less: Disposals - - - - - Less: Depreciation/Amortisation (112,003) (78,215) (41,173) - (231,391) Assets moved to held for sale (121,506) - - - (121,506) At 30 June 2018 Net of Accumulated Depreciation/Amortisation 782,633 271,229 198,717 42,274 1,294,853 At 1 July 2017 Cost or Fair Value 2,254,642 1,043,523 694,485-3,992,650 Accumulated Deprecation/Amortisation 1,255,586 882,230 619,192-2,757,008 Net Carrying Amount 999,056 161,293 75,293-1,235,642 At 30 June 2018 Cost or Fair Value 2,150,222 1,231,674 859,082 42,274 4,283,252 Accumulated Deprecation/Amortisation 1,367,589 960,445 660,365-2,988,399 Net Carrying Amount 782,633 271,229 198,717 42,274 1,294,853 13 14 Intangibles 2018 Restated 2017 $ $ Non-Current Poker Machine Entitlements 93,468 93,468 Trade and Other Payables 93,468 93,468 Current Creditors & Accruals 139,300 150,498 GST Payable 11,312 12,994 150,612 163,492
17 NOTES TO THE FINANCIAL STATEMENTS 15 Borrowings 2018 Restated 2017 $ $ Current Hire Purchase Liabilities 29,973 19,419 Insurance Funding 38,842 - Lease Liabilities 12,937 - Loan - National Australia Bank (secured) 427,505 490,000 Credit Card - 167 Trading Account -NAB 71,229-580,486 509,586 Non-Current Hire Purchase Liabilities 85,140 5,258 Lease Liabilities 19,297-104,437 5,258 The NAB loan and bank overdraft facility are secured by a fixed and floating Charge over the whole of the assets of the Club including goodwill and uncalled capital and called but unpaid capital together with relative insurance policy assigned to the NAB, registered mortgage over the property situated at 2 John Street, Warners Bay and mortgage over lease of premises situated at 7 Charles Street, Warners Bay. The loan has been disclosed as a current liability as the NAB has the ability to reduce the facility limit or change the repayment terms at any time. There have been no breaches of the loan agreement to date and the Directors believe that the loan will be repaid in accordance with the Bank loan agreement. Hire purchase liabilities held with the National Australia Bank are part of a Master Asset Finance Facility with a limit of $50,000. The unused amount of this facility at 30 June 2018 is $44,731. This facility is secured by fixed and floating charge over the whole of the assets of the Club including goodwill and uncalled capital and called but unpaid capital together with relative insurance policy assigned to the NAB. Other hire purchase and lease liabilities are secured by the goods to which the finance agreement relates. The bank overdraft facility has a limit of $100,000. The unused amount of this facility at 30 June 2018 is $28,771. 16 Provisions Current Provision for Poker Machine Jackpots - 8,152 Provision for Annual Leave 16,105 11,174 16,105 19,326 Non-Current Provision for Long Service Leave 12,399 8,799 12,399 8,799 17 Other Liabilities Current Income In Advance - 5,100 Subscriptions in Advance 21,919 12,850 Desposit held for Sale of Land 90,200-112,119 17,950 Non-Current Subscriptions in Advance - - - -
18 NOTES TO THE FINANCIAL STATEMENTS 18 Capital & Leasing Commitments a) Hire Purchase Commitments Commitments in relation to Hire Purchase Agreements are payable as follows:- Not later than one year Later than one year and not later than five Later than five years Total Minimum Payment Less: Amounts Representing Finance Charges Present Value of Minimum Payment 2018 Restated 2017 $ $ 35,570 85,140-120,710 5,597 115,113 21,296 4,456-25,752 1,075 24,677 b) Finance Lease Commitments Commitments in relation to Finance Lease Agreements are as follows:- Not later than one year Later than one year and not later than five Later than five years Total Minimum Payment 15,704 20,957-36,661 14,103 27,719-41,822 Less: Amounts Representing Finance Charges 4,427 - Present Value of Minimum Payment 32,234 41,822 c) Rental Agreements Commitments in relation to non-cancellable Rental Agreements are as follows:- Not later than one year Later than one year and not later than five Later than five years 11,448 14,103 8,970 27,719 - - 20,418 41,822 d) Other Capital Commitments The Club has the following capital commitments as at balance date. Plant and Equipment 20,240 49,620 19 Key Management Personnel/Related Parties Transactions The names of persons who were Directors of the Co-operative at any time during the year are as they appear in the attached Directors' Report. Key Management Personnel The totals of remuneration paid to Key Management personnel of the Club Short-term employee benefits 43,957 80,068 Long-term employee benefits (4,313) 585 Post-employment benefits 2,675 6,706 42,319 87,359 20 Contingent Liabilities The Club has a bank guarantee for $5,000 in connection with its TAB facilities installed in favour of TABCORP LTD. This guarantee is secured by a fixed and floating charge over the whole of the assets of the Club including goodwill and uncalled capital and called but unpaid capital together with relative insurance policy assigned to the NAB, registered mortgage over the property situated at 2 John Street, Warners Bay and mortgage over lease of premises situated at 7 Charles Street, Warners Bay.
19 DETAILED PROFIT AND LOSS STATEMENT TRADING ACCOUNT 2018 Restated 2017 $ $ STATEMENT OF BAR TRADING Sales 828,059 882,495 LESS COST OF SALES Opening Stock 15,428 19,855 Purchases 340,891 365,279 356,319 385,134 Closing Stock 13,274 15,428 343,045 369,706 GROSS PROFIT 485,014 512,789 DIRECT EXPENSES Bar Repairs & Maintenance 3,012 3,225 Freight & Cartage 20 - Sundry Bar Expenses 4,353 4,845 Wages 219,420 219,655 DIRECT EXPENSES 226,805 227,725 NET PROFIT 258,209 285,064 STATEMENT OF POKER MACHINE OPERATIONS Net Revenue 446,185 531,790 446,185 531,790 DIRECT EXPENSES Data Monitoring System 15,478 13,189 Depreciation 41,173 21,614 Licence Fees 430 - Provision for PM Jackpot - 2,824 Repairs & Maintenance 9,543 8,352 Less: Gaming Tax Rebate (17,180) (17,180) DIRECT EXPENSES 49,444 28,799 NET PROFIT 396,741 502,991 INCOME Total Trading Profit 654,950 788,055 Advertising Income & Promotion 3,886 6,422 Members Subscriptions 22,209 26,207 ATM Rebates 9,151 10,212 Catering & Function Income 28,695 46,422 Commission 12,735 9,216 Courtesy Bus Income 3,203 3,506 Donations 8,297 6,768 Green Fees, Galas & Entry Fees 44,449 37,429 Insurance income 4,159 55,955 Interest Received 70 344 Keno Commission 16,681 17,319 Raffles 124,231 142,560 Rental Income 5,200 17,125 Room Hire Fees 4,255 4,071 TAB Commission 2,295 10,661 Profit on Sale of Assets 20,000 6,820 Contribution of Assets 107,708 - Sponsorship 2,191 8,000 Sundry Income 5,300 2,868 Sky Channel 11,421 - TOTAL INCOME 1,091,086 1,199,960 Detailed Profit and Loss Statement Not Covered by Audit Report on Pages 5-6 Prepared for the information of Members in the Annual Report
20 DETAILED PROFIT AND LOSS STATEMENT LESS EXPENSES 2018 Restated 2017 $ $ MEMBERS AMENITIES Club Promotions 80,624 76,268 Courtesy Bus 5,146 4,624 Courtesy Bus - Wages 14,771 15,344 Entertainment 38,426 41,342 Friday Raffle 29,835 26,951 General Raffle Expenses 72,394 76,556 Keno and TAB Expenses (1,859) 12,895 Members Amenities 7,071 5,664 Rental of Plant 22,962 18,348 Fox Sports 35,061 21,804 Sky Channel 11,912 18,271 316,343 318,067 BOWLING ACTIVITIES Badges 6,906 17,927 Catering 5,804 7,573 Entry Fees 11,282 2,093 N.B.D.A 2,300 11,632 Sponsorship 4,602 4,814 Pennant Player Expense 245 - Trophies & Prizes 3,502 13,830 Wages 33,186 17,044 67,827 74,913 GREENS Repairs & Maintenance 12,173 9,748 Wages & Salaries 62,667 57,144 74,840 66,892 CLUBHOUSE Amortisation of Buildings 112,003 110,375 Cleaning - Contractors 37,457 36,940 Cleaning Supplies 4,243 4,033 Depreciation 78,215 69,819 Electricity, Gas, Heating 57,357 58,589 Land Lease 14,143 14,102 Rates 39,394 35,008 Repairs & Maintenance 21,967 18,404 Waste Removal 9,539-374,318 347,270 ADMINISTRATION Advertising 19,700 16,293 AGM Expenses - - Bad Debt 21,229 - Bank Charges 5,475 6,850 Cash Shortages 357 466 Computer Maintenance 13,102 13,249 Consultants 17,484 5,450 Donations 2,140 7,126 General Expenses - 1,331 Insurance 32,245 33,958 Interest 34,014 27,305 Interest Insurance Loan 2,225 2,325 Out of Pocket Expenses 9,801 9,043 Postage, Printing & Stationery 20,948 15,506 Professional Fees 22,712 34,787 Employee Leave Entitlements 33,771 31,402 Security 3,140 5,163 Sponsorship 8,546 7,945 Staff Amenities 1,609 1,583 Staff Training 4,281 2,951 Subscriptions 12,407 12,649 Superannuation 38,194 42,485 Telephone 6,600 6,856 Wages - Admin 85,046 121,486 395,026 406,209 TOTAL EXPENSES 1,228,354 1,213,351 OPERATING PROFIT/(LOSS) (137,268) (13,391) Detailed Profit and Loss Statement Not Covered by Audit Report on Pages 5-6 Prepared for the information of Members in the Annual Report