NEWCASTLE LEAGUES CLUB LIMITED Summary Financial Statements For the Year Ended 30 June 2013 The financial statements and other specific disclosures have been derived from Newcastle Leagues Club Limited's (the Club s) full financial statements for the financial year. Other information included in the Summary Financial Statements is consistent with the Club s full financial statements. The Summary Financial Statements do not, and cannot be expected to, provide as full an understanding of the financial performance, financial position and financing and investing activities of the Club as the full financial statements. A copy of the Club s 2013 full financial statements, including the independent audit report, is available to all members and will be sent to members without charge upon request.
Contents DIRECTOR S REPORT...1 AUDITOR S INDEPENDENCE DECLARATION...4 AUDITOR S REPORT...5 DIRECTOR S DECLARATION...6 SUMMARY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME...7 SUMMARY STATEMENT OF FINANCIAL POSITION...8 SUMMARY STATEMENT OF RECOGNISED INCOME AND EXPENDITURE...9 SUMMARY STATEMENT OF CASH FLOWS...10 NOTES TO THE SUMMARY FINANCIAL STATEMENTS...11 DISCUSSION AND ANALYSIS OF THE SUMMARY FINANCIAL STATEMENTS...13
Directors' Report 30 June 2013 Your directors present their report on Newcastle Leagues Club Limited for the financial year ended 30 June 2013. Directors The names of the directors in office at any time during, or since the end of, the year are: Name Position Occupation Years Service D. Gall President Retired 4 C. Condon Vice President Retired 19 E. Long Director Retired 20 E. Condon Director Retired 26 S. Doran Director Architect 1 M. Graham Director High School PD/PE Teacher Appointed 10/2012 H. Billings Director Customer Service Appointed Advisor 10/2012 M. Hanlon Director Solicitor Appointed 11/2012 M. Harris Director Business Development Manager Appointed 11/2012 J. Crooks - - Appointed 10/2012, resigned 11/2012 G. Hickey - - Resigned 10/2012 D. Turrell - - Resigned 11/2012 Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Club secretary The following person held the position of club secretary at the end of the financial year: John Fahey has been the club secretary since 1 February 2013. Prior to this, Nicole Rollason had held the position since 9 August 2011. Principal activities The principal activity of Newcastle Leagues Club Limited during the financial year was the conduct of a Licensed Club. No significant changes in the nature of the Club's activity occurred during the financial year. 1
Directors' Report 30 June 2013 Operating results The loss of the club after providing for income tax amounted to 84,731 (2012: loss of 158,921) Review of operations Profit from bar trading amounted to 116,970 and gross profit percentage of 58% was obtained from sales of 557,466. Net gaming revenue amounted to 885,939 and compares with 958,984 in 2012. Meetings of directors During the financial year, 12 meetings of directors were held. Attendances by each director during the year were as follows: Directors' Meetings Number eligible to attend Number attended D. Gall 12 12 C. Condon 12 12 E. Long 12 10 E. Condon 12 11 S. Doran 12 12 M. Graham 9 9 H. Billings 9 8 M. Hanlon 8 7 M. Harris 8 6 J. Crooks 1 1 G. Hickey 3 2 D. Turrell 4 3 Member guarantee Newcastle Leagues Club Limited is a company limited by guarantee. In the event of, and for the purpose of winding up of the company, the constitution states that each member is required to contribute a maximum of 20 each towards meeting any outstandings and obligations of the club. At 30 June 2013, the number of members was 1,504 (2012: 2,057). Significant changes in state of affairs There have been no significant changes in the state of affairs of the club during the year. 2
Directors' Report 30 June 2013 After balance date events No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the club, the results of those operations or the state of affairs of the club in future financial years. Environmental issues The club's operations are subject to environmental regulations under the laws of the Commonwealth and State of Australia. The Directors are not aware of any breaches of the legislation during the financial year which are material in nature. Short and long term objectives The club has established short and long term objectives as outlined in the club's business plan which is reviewed on an annual basis. These objectives are both financial and non financial and are aimed towards providing a comfortable and secure environment to its members that continues to meet their needs. These objectives are measured through both financial and non financial key performance indicators that have been determined relevant to the club industry. No information is included on the likely developments in the operations of the club and the expected results of those operations. Auditors independence declaration The lead auditors independence declaration for the year ended 30 June 2013 has been received and can be found on page 4 of the financial report. Indemnification and insurance of officers and auditors The club has paid premiums to insure each of the Directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the club, other than conduct involving a wilful breach of duty in relation to the club. Directors emoluments No Director has received or become entitled to receive, during or since the financial year, a benefit because of a contract made by the club, with a Director, a firm of which the Director is a member or an entity in which the Director has a substantial financial interest. Signed in accordance with a resolution of the Board of Directors: Director:... Director:... Dated 30 July 2013 3
Auditor's Independence Declaration under Section 307C of the Corporations Act 2001 to the Directors of Newcastle Leagues Club Limited I declare that, to the best of my knowledge and belief, during the year ended 30 June 2013, 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. Cutcher & Neale Chartered Accountants M.J. O'Connor Partner 29 July 2013 NEWCASTLE 4
Independent Audit Report to the members of Newcastle Leagues Club Limited Report on the Financial Report The summary financial statements of Newcastle Leagues Club Limited comprise the summary statement of profit or loss and other comprehensive income, summary statement of financial position, summary statement of cash flows, summary statement of recognised income and expenditure, discussion and analysis of the financial statements, and the Directors declaration derived from the audited financial statements of Newcastle Leagues Club Limited for the year ended 30 June 2013 as set out on pages 6 to 13. The summary financial statements do not contain all the disclosures required by Australian Accounting Standards Reduced Disclosure Requirements. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial report of Newcastle Leagues Club Limited. Directors responsibility for the summary financial statements The Directors are responsible for the preparation of a summary of the audited financial statements on the basis described in Note 1. Auditor's Responsibility Our responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with Auditing Standard ASA 810: Engagements to Report on Summary Financial Statements. Auditor's Opinion In our opinion, the summary financial statements derived from the audited financial statements of Newcastle Leagues Club Limited for the year ended 30 June 2013, are consistent, in all material respects with those audited financial statements, on the basis described in Note 1. Emphasis of Matter Without qualifying our audit opinion, we draw attention to Note 1(s) to the financials statements which indicates that the Club incurred a net loss of 84,731 during the year ending 30 June 2013 and, as of that date, the Club's current liabilities exceeded it's current assets by 103,775. These conditions, along with other matters disclosed in Note 1(s), indicate the existence of material uncertainty which may cast doubt about the Club's ability to continue as a going concern. Our opinion is not qualified in respect of this matter. Cutcher & Neale Chartered Accountants M.J. O'Connor Partner 31 July 2013 NEWCASTLE 5
Directors' Declaration The Directors of Newcastle Leagues Club Limited declare that the summary financial statements of Newcastle Leagues Club Limited for the financial year ended 30 June 2013, as set out on pages 7 to 13: (a) comply with Accounting policies as described in Note 1; and (b) (c) have been derived from and are consistent with the full financial statements of Newcastle Leagues Club Limited. In the directors' opinion, there is some uncertainty that the Club will be able to pay its debts as and when they become due and payable. Refer to Note 1(a). This declaration is made in accordance with a resolution of the Board of Directors. Director... Director... Dated 30 July 2013 6
Summary Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2013 Note 2013 2012 Bar sales 557,466 526,188 Less: Bar cost of goods sold (233,300) (229,739) Catering sales 363,644 326,247 Less: Catering cost of goods sold (129,543) (129,096) Gross profit 558,267 493,600 Poker machine net clearances 885,939 958,984 Gaming commissions 55,525 83,684 Raffles and bingo income 66,069 68,387 Other revenue from ordinary activities 2 55,071 61,304 Borrowing cost expense (20,592) (20,496) Bar trading expenses (207,196) (147,589) Catering trading expenses (214,873) (199,621) Function trading expenses - (739) Poker machine trading expenses (86,705) (98,313) Gaming commission expenses (144,263) (139,268) Raffle and bingo expenses (103,316) (111,081) Occupancy expenses (264,525) (242,483) Club promotion and entertainment expenses (95,584) (119,805) Depreciation of property, plant and equipment (144,381) (346,988) Administrative expenses (426,534) (408,321) Profit / (loss) before income tax (87,098) (168,745) Income tax expense/(benefit) 2,367 9,824 Profit / (loss) after income tax (84,731) (158,921) Other comprehensive income for the year - - Total comprehensive income / (loss) for the year (84,731) (158,921) 7
Summary Statement of Financial Position As At 30 June 2013 ASSETS CURRENT ASSETS Cash and cash equivalents 92,961 134,307 Trade and other receivables 4,064 5,051 Inventories 22,112 22,032 Other assets 57,716 2,461 TOTAL CURRENT ASSETS 176,853 163,851 NON-CURRENT ASSETS Property, plant and equipment 1,632,724 1,654,258 Deferred tax assets 3,241 1,108 TOTAL NON-CURRENT ASSETS TOTAL ASSETS 2013 2012 1,635,965 1,655,366 1,812,818 1,819,217 LIABILITIES CURRENT LIABILITIES Trade and other payables 162,301 139,533 Short-term borrowings 80,090 8,267 Short-term provisions 38,237 37,037 TOTAL CURRENT LIABILITIES 280,628 184,837 NON-CURRENT LIABILITIES Trade and other payables - 38,239 Long-term borrowings 159,104 153,581 Deferred tax liabilities 783 1,017 Long-term provisions 15,491 - TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES 175,378 192,837 456,006 377,674 EQUITY Retained Earnings 1,356,812 1,441,543 TOTAL EQUITY 1,356,812 1,441,543 8
Summary Statement of Recognised Income and Expenditure For the Year Ended 30 June 2013 2013 Retained Earnings Balance at 1 July 2012 1,441,543 Profit / (loss) attributable to members (84,731) Balance at 30 June 2013 1,356,812 2012 Retained Earnings Balance at 1 July 2011 1,600,464 Profit / (loss) attributable to members (158,921) Balance at 30 June 2012 1,441,543 9
Summary Statement of Cash Flows For the Year Ended 30 June 2013 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers 2,164,148 2,206,507 Payments to suppliers and employees (2,138,107) (2,065,119) Interest received 816 205 Interest paid (20,592) (20,496) Net cash provided by / (used in) operating activities 6,265 121,097 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (124,957) (3,995) Net cash used by investing activities (124,957) (3,995) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 95,235 - Repayment of borrowings (17,889) (6,322) Net cash used by financing activities 77,346 (6,322) Net increase (decrease) in cash and cash equivalents held (41,346) 110,780 Cash and cash equivalents at beginning of year 134,307 23,527 Cash and cash equivalents at end of financial year 92,961 134,307 10
Notes to the Financial Statements 30 June 2013 1 Accounting Policies The summary financial statements have been prepared from the audited financial statements of Newcastle Leagues Club Limited for the year ended 30 June 2013. The audited report for the year ended 30 June 2013 is available at request from Newcastle Leagues Club Limited. The financial statements, specific disclosures and the other information included in the summary financial statements are derived from and are consistent with the full financial statements of Newcastle Leagues Club Limited. The summary financial statements cannot be expected to provide as detailed an understanding of the financial performance, financial position and financing and investing activities of Newcastle Leagues Club Limited as the full financial statements. The accounting policies have been consistently applied to Newcastle Leagues Club Limited and are consistent with those of the previous financial year in their entirety. The presentation currency used in the financial statements is Australian dollars. (a) Going Concern The statement of profit or loss and other comprehensive income for the year ending 30 June 2013 reports a net loss of 84,731 (2012 - a loss of 158,921) and the statement of financial position reflects that current liabilities exceed current assets by 103,775 (2012 - current liabilities exceeded current assets by 20,986). Continued operating losses will create significant uncertainty as to whether the Club will continue to meet its financial obligations as they fall due and therefore whether the Club realise its assets in the normal course of business. The directors have resolved that the going concern basis of accounting is appropriate. In making their assessment, the Directors have considered strategies to increase trading and reduce operating costs as well as ensuring the Club has access to sufficient cashflows to meet its obligations. The Directors also note that the Club has additional assets being the 44 poker machine licences that are not recorded as assets in the financial statements. If the Club was not considered a going concern, the value of the leasehold improvements may be overstated. Leasehold improvements are currently recorded at cost less accumulated depreciation. 11
Notes to the Financial Statements 30 June 2013 2 Revenue - Revenue - trading 1,928,643 1,963,491 Other Revenue from Ordinary Activities - Interest received 816 205 - Membership subscriptions 7,389 8,266 - Rebate for GST on poker machine duty 17,180 17,180 - Sundry income 367 6,382 - Room hire 4,533 5,315 - Commissions received 18,936 6,727 - Concert income 5,850 9,221 - Function income - 8,008 2013 2012 55,071 61,304 Total Revenue 1,983,714 2,024,795 12
Discussion and Analysis of the Summary Financial Statements 30 June 2013 Information on Newcastle Leagues Club Limited Summary Financial Statements The financial statements, disclosures and discussion and analysis in the summary financial statements have been derived from the 2013 financial statements of Newcastle Leagues Club Limited. A copy of the full financial statements and auditors report will be sent to any member, free of charge, upon request. The summary financial statements cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the entity as the full financial statements. The discussion and analysis is provided to assist members in understanding the summary financial statements. Summary Statement of Profit or Loss and Other Comprehensive Income The reported loss for the year decreased to 84,731. The increase in operating result is mainly due to a decrease in depreciation of 202,607. Revenue Total revenue for the year was 1,983,714, a decrease of 41,081 or 2.0% on the prior year. Notable changes to ordinary revenue include a 7.6% decrease in poker machine net clearances, a 33.7% decrease in gaming commissions, a 5.9% increase in bar revenue and an 11.5% increase in catering revenue. Expenditure Operating Expenses decreased by 5.2% over the previous year. Major changes from the previous year are: 40.3% increase in bar trading expenses 7.6% increase in catering trading expenses 9.1% increase in occupancy expenses 4.5% increase in administrative expenses 11.8% decrease in poker machine expenses 20.2% decrease in club promotional expenses 58.4% decrease in depreciation and amortisation expenses 13
Discussion and Analysis of the Summary Financial Statements 30 June 2013 Summary Statement of Financial Position Assets Total assets decreased by 6,399 to 1,812,818 representing a decrease of 0.4%. This decrease is mainly reflected in the following balances: Other assets increased by 55,255 as a result of the Clubs insurance premium being invoiced in advance in 2013. Cash assets have decreased by 41,346 or 30.8% as a result of repayments of long term debt and purchases of plant and equipment. All other assets have remained relatively comparable to the previous year balances. Liabilities Current liabilities increased by 95,791 or 51.8% and this is due to the Clubs insurance premium being financed and Plant and equipment purchases being financed. Non Current Liabilities decreased by 17,346 or 9.0% and this was due to principal repayments of the Club s commercial debt as well as long term creditor payments. This was offset partly by the accrual of long service leave entitlements for staff who reached 5 years service during the year. Summary Statement of Recognised Income and Expenditure The equity of the Club has decreased entirely due to the reported loss amount of 84,731 in 2013. Summary Statement of Cashflows Operating Activities Cash inflows from operating activities were 6,265, a decrease of 114,832. A decrease in receipts from customers of 42,359 along with an increase in payments to suppliers and employees of 72,988 resulted in the variance. Investing Activities Cash invested by the Club in the premises and on plant and equipment during the year totalled 124,957. Financing Activities Net cash inflows from financing activities were 77,346. The Club financed the insurance premium and the purchase of several poker machines during the year. The Club has also made principle repayments on borrowings in accordance with contract terms. 14