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Mittagong RSL Club Limited ABN 69 001 069 674
Financial Statements For the Year Ended 31 December 2014
Mittagong RSL Club Limited ABN 69 001 069 674
Contents For the Year Ended 31 December 2014
Page
Financial Statements
Notice of Annual General Meeting 1
President’s Report 2
General Manager’s Report 3
Sub Branch President’s Report 5
Declaration of Core and Non-Core Property 6
Ordinary Resolution 7
Directors' Report 8
Auditors Independence Declaration under Section 307C of the Corporations Act 2001 13
Statement of Profit or Loss 14
Statement of Comprehensive Income 15
Statement of Financial Position 16
Statement of Changes in Equity 17
Statement of Cash Flows 18
Notes to the Financial Statements 19
Directors' Declaration 39
Independent Audit Report 40
Compilation Report and Trading Statements 42
Detailed Profit and Loss 46
Mittagong RSL Club Limited ABN 69 001 069 674
Notice of Annual General Meeting
1
Notice is hereby given that the 43rd Annual General Meeting of Members of the Mittagong RSL Club Limited will be held in the
Clubhouse on Sunday 22nd March, 2015 at 10.00 am.
BUSINESS
1. Apologies.
2. To confirm the Minutes of the previous General Meeting on Sunday 23rd March 2014.
3. To receive, consider and adopt the reports of the President and the General Manager.
4. To receive, consider and adopt the Financial Statement of the Company for the year ended 31st December, 2014 together
with the Reports therein of the Directors and Auditors.
5. Notice of Ordinary Resolutions.
6. Declaration of the Ballot for the Board of Directors.
7. Appointment of Patron or Patrons.
8. Deal with any business of which due notice has been given.
9. General Business: to transact any other business that may be lawfully brought forward.
BY THE ORDER OF THE BOARD CRAIG MADSEN
Dated this 4th
February 2015 General Manager
Mittagong RSL Club Limited ABN 69 001 069 674
President’s Report For the Year Ended 31 December 2014
2
After 4 years of strategic, corporate and building planning the much anticipated stage one of the clubs building Masterplan
commenced during August 2014. An immense amount of time and effort has gone into this project from the Club Directors,
Management and general staff members and I would like to recognise the efforts of those involved. The end result will be a
tremendous asset to the members and the community, with significantly upgraded food, beverage and function facilities.
During the building phase trading sales performance had contracted somewhat but this was expected and it follows previous
trends that we have encountered during our other major renovation projects. There is no doubt that when the building work is
completed we will see trading conditions improve as has also happened following previous occasions.
In May 2014 at the ClubsNSW Clubs in the Community Awards, the Mittagong RSL Club was formally recognised for its
contribution to the community through our support of the Rural Bush Fire Brigade during the Hall Road bush fire crisis. It was a
very gratifying moment for the Club to be recognised in this way. This award also recognises the achievement of our amazing
staff who gave up their personal time and volunteered to assist during the bushfires. I defy anyone to think they have better
staff than the Mittagong RSL Club. Thank you for your outstanding efforts.
As approved with other changes to the Club’s Constitution at the AGM in 2014, this year will see changes introduced for the
term of election of Directors. This year is the introduction of 2 year terms for Directors. This change in term is in line with
preferred corporate government practice recommendations of ClubsNSW and the NSW Government which will give newly
elected Directors time to settle in and become accustomed to board practices and operation.
Myself, Ross Cowley and Roger Cole attended the ClubsNSW Annual Conference and professional development seminars
this year. The conference content included masterclass and seminar sessions with content such as:
• Risk Appetite vs Risk Capacity
• Renovators Guide to Workplace Culture
• Turbocharge your Board Performance
• Finance for Club Boards
There were also presentations from guest speakers such as Mark Bouris, the Chairman of Yellow Brick Road regarding
leadership and Luke Bowen GM of Northern Australian Development, with the theme of his presentation being the
co-ordination of alignment and solidarity. These conferences prove invaluable as a source of education, professional
development and discussion for the directors.
As always our staff members continue to excel under trying conditions and given that the building work still has some time to go
it would be remiss of me not to recognise the efforts of all of the catering staff. They are doing a great job in not ideal conditions.
Keep up the great work, you will be in a great new facility soon.
To the General Manager and his management team thank you for your efforts during the year to keep the club operating as well
as what it does. Everything just seems to fall into place, but I know the amount of work that you and the team does. It does not
go unnoticed and is greatly appreciated.
To our loyal members, the building work will soon be completed and we look forward to you enjoying some of the best club
facilities on offer anywhere in the State. Thank you for you loyalty during this period of building. We know at times the
conditions have been a little difficult the short term pain will be worth the long term gain.
As always the Ladies Auxiliary have been very active on various projects and the Sub Branch Committee and Members are to
be commended for their continued service and support of Veteran’s Services.
In closing my report, I would like to pass on my condolences to all of our members who lost loved ones during the course of the
year.
Graham Millbank
President
Mittagong RSL Club Limited
Mittagong RSL Club Limited ABN 69 001 069 674
General Manager's Report For the Year Ended 31 December 2014
3
I am pleased to present to the members my synopsis of the 2014 Annual Report, highlighting our activities for what proved to
be another successful and exciting year.
From the beginning of the year through to July 2014 the business experienced favourable trading conditions, with all key areas
in revenue generation such food, beverage, gaming and wagering all performing to or better than budget expectation. Crunch
time for trade arrived in early August 2014 when the Club commenced demolition and building work associated with Stage 1 of
the building Masterplan. Trade compacted in all revenue areas due to the perceived inconvenience of the building work, which
was expected and budgeted for. The fact that the Club recorded a bottom line profit of $439,922 given the difficult trading
conditions of the last four months of the year should be positively recognised by all members. I will discuss different aspects of
the building work later in this report.
In reviewing the 2014 year from a financial perspective, as mentioned above we believe that the Club has traded quite well.
The Club recorded a Net Profit of $439,922 and after adding back depreciation of $1,095,146 recorded an Operating Profit of
$1,530,990 a solid result, but down by $238,684 on the operating profit of 2013. Again, this drop in operating profit was
recorded from the start of the building program in August 2014.
Total revenue of $14,068,496 was 3.9% down on the previous year, with the major revenue decreases being recorded in
Beverages -10.3% and Catering -9.8%. It must be remembered in assessing these reductions that the drop in beverages
includes the closing of the bottleshop and the drop in catering includes a substantial reduction in function revenue, again due to
the start of the building works. We have no doubt that once the building work is finalised, these particular revenue streams will
increase accordingly. Gaming & Wagering revenue for the reporting period basically replicated that of 2013. Again there was a
substantive drop in this area when building work began.
Gross profit from sales of $12,195,177 was down by 2.9% in comparison to the previous year and again this is attributable to
the reasons mentioned above.
Overall expenditure of $11,755,439 was 4.3%% down on the previous year with significant cost departments such as wages
held below the level of annual CPI increases. Power costs decreased significantly due to equipment and building facilities
being decommissioned during the building work.
The first 6 months of the past year had seen the Club’s Board, Management and Architects, Abeo Architects focus on putting
the finishing touches on all pre-planning for the much anticipated Stage 1 Building Project and sent this project to tender in
May/June 2014.
In late June 2014 Meridian Constructions were successful in winning the competitive tender process from three other
companies and were awarded the tender for building and delivering Stage 1 of the Masterplan Building Project, with a
contracted value of $7,414,734 plus GST. When work began on this project in August 2014, it was anticipated that work would
take 48 weeks to complete, which included allowances for inclement weather conditions. This would have seen a July 2015
completion of the building project. At the time of writing this report to the members it must be noted that the time for completion
has been extended by at least 4 weeks due to poor weather over the first 5 months of the project. At this stage an August 2015
completion date is anticipated.
The Club has had a strategic business and finance relationship with the Commonwealth Bank of Australia for a number of
years. This relationship has been expanded to assist with the financial delivery of the Masterplan Project. The Club has
available via the CBA a line of finance to the value of $7,000,000 to assist with the payment of the project. It was a requirement
of the CBA that the club utilise its own cash reserves initially to pay for the project prior to calling on approved funds from the
bank. This form of financing has been adopted and followed by the Club.
During the first five months of the building project there have been some significant challenges to overcome to ensure that we
deliver quality products and services to our members. It would be remiss of me not to formally recognise the efforts of every
person associated with the catering department. This area has been impacted like no other during the demolition and building
process and our staff have shone through in trying circumstances. Keep going everyone we are only half way there but the end
result will be worth the battle.
Mittagong RSL Club Limited ABN 69 001 069 674
General Manager's Report For the Year Ended 31 December 2014
4
Equally we need to also recognise the efforts of the people who work in the Reception and Podium area of the Club. This area
has been impacted during the building program, particularly when the heavens opened up during the first two weeks of
December. The guys and girls who work in this area are the face of the Club, the first point of contact a lot of our members and
visitors see and I thank them for keeping up a great personal disposition when times may not have been so great.
Our architects, ABEO are doing a fantastic job supervising and co-ordinating the builders Meridian and thanks should also go
to Site Supervisor of Meridian, Graeme Dawson who works very seamlessly with the Club, to try to keep disruption to services
to a minimum.
When reflecting on the past year we have had, my thoughts continually go back to the people at the club. We are a people
business and it is our responsibility to ensure that we provide goods and service to our members and visitors. This cannot be
done without an effective team of staff at the club and I must say I think we have a brilliant team. We consistently receive
correspondence at the club congratulating us on the quality of our products and service from our people. I would like to thank
each and every one of our staff members for your commitment to the Club and our members, as you are all a prime reason as
to why this club is so successful.
I would like to pass on my thanks to the management and supervisory team of Alan, Dan, Ross and Trish for the past year as
their commitment and input to the club has been invaluable. Equally, I would also like to recognise the commitment and efforts
of the front of house management and supervisory team of Ray, Donna, Di, Leanne & Robert who all do a fantastic job of
organising and leading our staff on the floor in the food, function, gaming and bar areas. Well done everyone.
I would like to commend to the members the contribution of our Board of Directors over the last 12 months. They have again
contributed significantly to the operations of the Club with solid policy direction and fulfil the role of key decision makers with the
best interests of the members in mind. As General Manager of the Club, they have shown faith in my ability to carry out Board
policy to manage the Club and I thank them for being entrusted with that responsibility.
The continued success of the Club is always dependent upon the support of our wonderful members. Our member’s dedication
to the club is our inspiration for us to offer you the best possible service, products and facilities that we can. We would like to
extend a thank you to all of our members for contributing to the amenity of Mittagong RSL and trust that we can catch up with
you here at the Club in the very near future.
Craig Madsen
General Manager
Mittagong RSL Club Limited
Mittagong RSL Club Limited ABN 69 001 069 674
Sub Branch President’s Report For the Year Ended 31 December 2014
5
I would like to begin my 2014 report by paying our respects and sad farewells to our following members; Ron Little, Ross James, William Cunynghame, Frank Wilmont, Robert Shelley, Ron Sharpe, Steve Dickman, K. Henderson and Raymond Peters. To the families who experienced bereavement through the loss of loved ones during the year, we express our deepest sympathy. I would also like to thank the Board and staff of the RSL Club for the tremendous support they continue to provide to the Sub-Branch, particularly in the form of a significant amount of staff support, the use of Club facilities and financial considerations. This support is a major reason why the Sub-Branch continues to maintain a healthy financial position and is able to provide such high quality Services to our members and the members of the general Mittagong community. The year began with the President chairing the AGM of the RSL Women’s Auxiliary with the election of office bearers. During the year the Women’s Auxiliary held 4 Coffee Mornings as well as running a trading table at the CWA Rooms in Mittagong. All these were well attended by members of the Sub-Branch and friends. The money raised by the Auxiliary is donated to RSL Life Care and the Welfare and Benevolent Institution. The Sub-Branch AGM was held in February and resulted in the electing of a number of new members to the Executive. I would like to take this opportunity to thank Ross Spirou for the huge amount of work he has put into the Sub-Branch over the years and particularly during the period when he was President. He ensured the Sub-Branch remained dynamic and healthy and he has left very large shoes to fill. The Anzac Day church service was held at the Mittagong Baptist Church and was well attended by our members. The Anzac Day Dawn and Main Services were also well supported by the local population and once again there was a formation fly-past by aircraft from the Berrima District Aero Club. A special aspect of the fly-past was the ‘missing man’ formation which paid a very visual respect to all the fallen members of the ADF. The secretary Steve Spence and Robert Brown attended an Anzac Day Service at Kangaloon School. Steve Spence and Ray Kuschert attended the Mittagong Public School Anzac Day service A cheque for $4,900 was presented to Berrima Legacy, the proceeds coming from Anzac Day collections. The State Congress this year was held at Coffs Harbour but unfortunately no one was able to attend from the Sub-Branch due to the distance and costs involved. Many Sub-Branch members went on a very informative trip to RAAF Base Richmond. Bob Gilroy, Stephen Spence and I attended the Southern District Council Meetings at Braidwood and Warilla. VP Day and Remembrance Day Services were held at the RSL Memorial. Students from Frensham, Mittagong Public School and Kangaloon Schools attended and gave impressive presentations on the importance of each day. Flag Marshals on the day were from the Southern Highlands Squadron of the Air League. In December Ross Spirou attended the local Air League Presentation Dinner where the Sub-Branch presented the League with a cheque for $200. Our Christmas BBQ was held at the RSL Club and was reasonably well attended and appreciated by all members. The work of the Pension Officer, Stephen Spence, is greatly appreciated by all members for his dedication and efficiency. Welfare Officers Brian Hicks and Ray Kuschert with the help of Jim Bunce and Norm Mallard were kept busy visiting members in hospitals and nursing homes. To the Treasurer, Bob Gilroy, Secretary, Stephen Spence, Vice Presidents, Jeff Thyer and Craig Larkin and editors of the “Lion Review”, Phill Moscatt, Jim Reynolds and Max Bulluss, I would like to particularly extend my thanks for the tremendous work they have done during the past year – the Sub-Branch could not work without their tireless efforts. I would like to thank the Women’s Auxiliary for the wonderful work they have done in selling Anzac Day and Remembrance Day Badges and for the great help they have given to us leading up to, and during, Anzac Day, Remembrance Day, VP Day and at the Christmas BBQ. To the Sub-Branch members, I would also like to express my thanks for your support during the year and wish you all a happy and healthy 2015. Jim Cole President
Mittagong RSL Club Limited ABN 69 001 069 674
Declaration of Core and Non-Core Property For the Year Ended 31 December 2014
6
Pursuant to Section 41J(2) of the Registered Clubs Act for the financial year ended 31 December, 2014:
(a) The following properties are core property of the Club;
(i) The land upon which the Club’s licensed premises are located;
(ii) The land upon which the Club’s car parking areas are located other than the 10 car parking spaces adjacent
to the northern wall of the Springs Resorts Mittagong RSL Motel.
(b) The following properties are non-core property of the Club;
(i) The land upon which the Mineral Springs Motel behind the Club’s licensed premises is located;
(ii) The land in lot 3 DP 365917 on Old Hume Highway containing the residential property on the corner of the
Old Hume Highway and Bessemer Street Mittagong;
(iii) The land in Lot 1 DP 1086496 upon which the Springs Resorts Mittagong RSL Motel is located including the
ten car parking spaces which are adjacent to the northern wall of the motel; and
(iv) The land in Lot 1 DP 237330 on Henderson Avenue containing the residential property situated at 26
Henderson Avenue, Mittagong.
Notes to Members
1. Section 41J(2) of the registered Clubs Act requires the annual report to specify the core and non-core property of the
Club as at the end of the financial year to which the report relates.
2. Core property is any real property owned or occupied by the Club that comprises:
(a) The defined premises of the Club; or
(b) Any facility provided by the Club for use of its members and their guests; or
(c) Any other property declared by a resolution passed by a majority of the members present at a general meeting of
Ordinary members of the Club to be core property of the Club.
3. Non-core property is any other property other than that referred to above as core property and any property which is
declared by the members at a general meeting of Ordinary members of the Club not to be core property.
4. The significance of the distinction between core property and non-core property is that the Club cannot dispose of any
core property unless:
(a) The property has been valued by a registered valuer within the meaning of the Valuers Act 2003; and
(b) The disposal has been approved at a general meeting of the Ordinary members of the Club at which the majority
of votes cast support the approval; and
(c) Any sale is by way of public auction or open tender conducted by an independent real estate agent or auctioneer.
5. These disposal provisions and what constitutes a disposal for the purposes of section 41J are to some extent
modified by regulations made under the Registered Clubs Act and by Section 41J itself. For example, the
requirements in paragraph 4 above do not apply to:
• Core property that is being leased or licensed for a period not exceeding 10 years on terms that have been
subject of a valuation by a registered valuer;
• Core property that is leased or licensed to a telecommunications provider for the purposes of a
telecommunications tower.
Mittagong RSL Club Limited ABN 69 001 069 674
Ordinary Resolution
7
“That pursuant to the Registered Clubs Act, the members hereby approve and agree to the members of the Board during the twelve (12) months preceding the 2015 Annual General Meeting receiving the following benefits, and the members further acknowledge that the benefits outlined in the sub-paragraphs (1) to (10) are not available to members generally but only to those members who are elected Directors of the Club”. 1. A reasonable meal if required and refreshments to be associated with each Board meeting of the Club.
2. Provision for seven car parking spaces to be reserved for the exclusive use of Directors.
3. The reasonable cost of Directors, and their spouses, attending the Registered Clubs Association Annual General
Meeting.
4. The reasonable cost of Directors and their spouses attending seminars, lectures, trade displays and other similar events as may be determined by the Board from time to time.
5. The reasonable cost of Directors and their spouses attending other registered clubs for the purpose of viewing and assessing their facilities and the method of such operation provided that such attendances are approved by the Board as being necessary for the benefit of the Club.
6. The provision of blazers and associated apparel for the use of Club Directors when representing the Club.
7. The reasonable cost of an annual dinner for Directors and their spouses.
8. The reasonable cost of refreshments whilst a Director is on duty at the Club.
9. The reasonable cost of welcoming and entertaining industry representatives, VIPs and other invited guests.
10. The reasonable cost of membership of Clubs NSW Directors Institute and related training seminars and workshops.
By direction of the Board CRAIG MADSEN
General Manager
Mittagong RSL Club Limited ABN 69 001 069 674
Directors' Report For the Year Ended 31 December 2014
8
The directors present their report on Mittagong RSL Club Limited for the financial year ended 31 December 2014.
1. General information
Directors
The names of the directors in office at any time during, or since the end of, the year are:
Names Position Appointed/Resigned
Graham J Millbank President
Roger F Cole Vice President
Ross J Cowley Vice President
Robert S Jones Director Resigned: 18th August 2014
Phillip G Moscatt Director
Brian F Smith Director
Stephen Spence Director
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
Company secretary
The following person held the position of Company secretary at the end of the financial year:
Mr Craig Madsen. Mr Madsen has worked for Mittagong RSL Club Limited for the past nine years, performing management roles. Mr Madsen was appointed company secretary on 5 March 2005.
Principal activities
The principal activity of Mittagong RSL Club Limited during the financial year was that of a registered club.
No significant changes in the nature of the Company's activities occurred during the financial year.
2. Operating results and review of operations for the year
Operating results
The profit of the Company after providing for income tax amounted to $ 439,922 (2013: $ 434,274).
2014
$
2013
$
Operating profit 1,530,990 1,769,684
Depreciation (1,095,146) (1,336,622)
Profit/(loss) on disposal of assets 4,078 1,212
Total 439,922 434,274
Dividends paid or recommended
In accordance with the Constitution, no dividend is payable.
Mittagong RSL Club Limited ABN 69 001 069 674
Directors' Report For the Year Ended 31 December 2014
2. Operating results and review of operations for the year continued
9
Review of operations
During the course of the year the Board of Directors engaged Meridian Constructions as the builders responsible for delivering the Club's Masterplan refurbishment and expansion to the food and function areas of the Club. Work on this project commenced during the first week of August 2014, with a contract projected cost for the building work being $7,414,734 plus GST. At the time of executing the contract with the builders, the expected time for completion of the project was 48 weeks, taking the date to July 2015.
The Club has had a strategic business and finance relationship with the Commonwealth Bank of Australia for a number of years. This relationship has been expanded to assist with the financial delivery of the Masterplan project. The Club has available via the CBA a line of finance to the value of $7,000,000 to assist with the payment of the project. It was a requirement of the CBA that the Club utilise its own cash reserves initially to pay for the project prior to calling on approved funds from the bank. This form of financing has been adopted and followed by the Club.
During the course of the year, the Club continued to operate in a profitable manner to the benefit of its Members, with the main sales sectors being beverage, food, gaming and functions. To ensure the continued profitability of the business there has been a constant review of costs and where deemed necessary our charges to members and visitors have increased.
The Club's main sources of revenue came from food, beverage, gaming and wagering operations which serviced the social requirements of our members and visitors. Most revenue lines trade to expectation. Expenditures through the various departments were considered to be within budget expectation.
Staff development has continued and the Board of Directors has also undertaken the necessary training to maintain compliance with the legislation that covers our business activities.
The maintenance of profitability of the Club in our core business activities has enabled us to maintain our contributions to the local community and junior sports organisations to a greater degree than our responsibilities are required under the Community Development Support Expenditure Scheme.
Further details of the Club's operations are noted in the various Directors and Management Reports which accompany this Annual Report.
3. Other items
Significant changes in state of affairs
There have been no significant changes in the state of affairs of the Company during the year.
Events after the reporting date
No 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.
Mittagong RSL Club Limited ABN 69 001 069 674
Directors' Report For the Year Ended 31 December 2014
3. Other items continued
10
Likely developments
The provision and improvements of services for our Members is the prime objective of the Club in all of its activities. It is the intention of the Board to continue to maintain the profitability of the business through the growth in its service and social activities as well as the development of its asset base for the Members.
Within the next 12 months the Club will complete the major development and masterplan improvements and have these facilities available to our members and community for their use. It is anticipated that the Club will consolidate its debt obligation with the CBA and begin principle and interest payback of our loans with them.
It is not envisaged that there will be any major legislative impacts on the business from either the Federal or State Governments during 2015.
The Directors and Management are continuously planning the strategic development of the business to ensure its future viability for the members. It is envisaged once building work has been completed, that robust trading conditions will continue into the next reporting period and will have a positive impact on revenue generation for the foreseeable future.
Indemnification and insurance of officers and auditors
No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of Mittagong RSL Club Limited, with the exception of a directors and officers company reimbursement insurance policy.
Auditor's independence declaration
The lead auditor's independence declaration in accordance with section 307C of the Corporations Act 2001, for the year ended 31 December 2014 has been received and can be found on page 13 of the financial report.
Mittagong RSL Club Limited ABN 69 001 069 674
Directors' Report For the Year Ended 31 December 2014
11
4. Director Information
Information on directors
Graham J Millbank President
Qualifications Self Employed
Experience 33 years
Roger F Cole Vice President
Qualifications Retired School Teacher
Experience 30 years
Ross J Cowley Vice President
Qualifications Bachelor of Business, Certified Practicing Accountant
Experience 10 years
Robert S Jones Director
Qualifications Company Director
Experience 9 years 8 months (resigned: 18th August 2014)
Phillip G Moscatt Director
Qualifications Retired Sales and Marketing Manager
Experience 6 years
Brian F Smith Director
Qualifications Company Director
Experience 16 years (non-continuous)
Stephen Spence Director
Qualifications Retired Manager - Electrical Industry
Experience 2 years
Mittagong RSL Club Limited ABN 69 001 069 674
Directors' Report For the Year Ended 31 December 2014
4. Director Information continued
12
Meetings of directors
During the financial year, 22 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:
Directors' Meetings
Audit Committee Meetings
Special Board Meeting
Strategic Planning Meeting
Remuneration Committee Meetings
Number eligible to
attend Number attended
Number eligible to
attend Number attended
Number eligible to
attend Number attended
Number eligible to
attend Number attended
Number eligible to
attend Number attended
Graham J Millbank 13 13 - - 2 2 2 2 2 2
Roger F Cole 13 12 3 3 2 2 2 2 2 2
Ross J Cowley 13 11 3 3 2 2 2 2 2 2
Robert S Jones 8 8 - - 2 1 2 2 - -
Phillip G Moscatt 13 10 - - 2 2 2 1 - -
Brian F Smith 13 12 3 3 2 2 2 1 - -
Stephen Spence 13 13 - - 2 2 2 2 - -
Signed in accordance with a resolution of the Board of Directors:
Director: ...............................................................
Graham J Millbank
Director: ................................................................
Roger F Cole
Dated this 4th day of February 2015
Mittagong RSL Club Limited ABN 69 001 069 674
Auditors Independence Declaration under Section 307C of the Corporations Act 2001 To the Board of Directors Mittagong RSL Club Limited
13
I declare that, to the best of my knowledge and belief, during the year ended 31 December 2014, 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.
Gillespies
Chartered Accountants
David M Duff Partner 4 February 2015
BOWRAL
Mittagong RSL Club Limited ABN 69 001 069 674
Statement of Profit or Loss For the Year Ended 31 December 2014
14
Note
2014
$
2013
$
Sales revenue 5,460,191 6,065,092
Cost of sales (1,853,182) (2,054,930)
Gross profit 3,607,009 4,010,162
Gaming machine revenue 8,066,833 8,057,450
Other income 4 556,921 501,567
Profit on sale of non-current assets 4,078 1,212
Marketing expenses (95,511) (87,757)
Occupancy costs (177,035) (153,248)
Administrative expenses (2,858,396) (3,011,937)
Finance costs (38,484) (65,215)
Bar expenses (834,282) (777,707)
Catering expenses (2,663,246) (2,636,601)
Promotions expenses (775,765) (876,926)
Gaming machine expenses (3,019,469) (2,957,683)
Other expenses (237,585) (232,421)
Income before depreciation and income tax 1,535,068 1,770,896
Income tax expense - -
Depreciation (1,095,146) (1,336,622)
Profit attributable to members 439,922 434,274
Mittagong RSL Club Limited ABN 69 001 069 674
Statement of Comprehensive Income For the Year Ended 31 December 2014
15
2014
$
2013
$
Profit for the year 439,922 434,274
Other comprehensive income for the year, net of tax - -
Total comprehensive income for the year 439,922 434,274
Mittagong RSL Club Limited ABN 69 001 069 674
Statement of Financial Position 31 December 2014
16
Note
2014
$
2013
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents 8 255,970 1,415,650
Trade and other receivables 9 43,511 63,855
Inventories 10 169,018 225,627
Other assets 14 209,045 704,677
TOTAL CURRENT ASSETS 677,544 2,409,809
NON-CURRENT ASSETS
Financial assets 760 760
Property, plant and equipment 12 25,904,139 22,899,141
Investment property 13 313,396 315,771
Intangible assets 15 833,588 833,588
TOTAL NON-CURRENT ASSETS 27,051,883 24,049,260
TOTAL ASSETS 27,729,427 26,459,069
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 16 1,183,760 1,316,204
Borrowings 18 1,819,683 1,150,058
Short-term provisions 19 594,336 572,047
Other liabilities 17 94,886 99,361
TOTAL CURRENT LIABILITIES 3,692,665 3,137,670
NON-CURRENT LIABILITIES
Borrowings 18 274,759 25,065
Long-term provisions 19 404,016 378,269
TOTAL NON-CURRENT LIABILITIES 678,775 403,334
TOTAL LIABILITIES 4,371,440 3,541,004
NET ASSETS 23,357,987 22,918,065
EQUITY
Reserves 7,821,107 7,821,107
Retained earnings 15,536,880 15,096,958
23,357,987 22,918,065
TOTAL EQUITY 23,357,987 22,918,065
Mittagong RSL Club Limited ABN 69 001 069 674
Statement of Changes in Equity For the Year Ended 31 December 2014
17
2014
Retained Earnings
$
Asset Revaluation
Surplus
$
Total
$
Balance at 1 January 2014 15,096,958 7,821,107 22,918,065
Profit attributable to members of the entity 439,922 - 439,922
Balance at 31 December 2014 15,536,880 7,821,107 23,357,987
2013
Retained Earnings
$
Asset Revaluation
Surplus
$
Total
$
Balance at 1 January 2013 14,662,684 7,821,107 22,483,791
Profit attributable to members of the entity 434,274 - 434,274
Balance at 31 December 2013 15,096,958 7,821,107 22,918,065
Mittagong RSL Club Limited ABN 69 001 069 674
Statement of Cash Flows For the Year Ended 31 December 2014
18
Note
2014
$
2013
$
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers 15,385,163 16,005,962
Payments to suppliers and employees (13,366,376) (14,224,800)
Interest received 34,389 26,803
Interest paid (38,484) (65,215)
Net cash provided by/(used in) operating activities 24(b) 2,014,692 1,742,750
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of plant and equipment 4,078 1,212
Purchase of property, plant and equipment (4,097,769) (560,435)
Net cash used by investing activities (4,093,691) (559,223)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds/(repayments) of borrowings 663,992 (310,404)
Net Hire purchase proceeds/(repayments) 255,327 (59,787)
Net cash used by financing activities 919,319 (370,191)
Net increase/(decrease) in cash and cash equivalents held (1,159,680) 813,336
Cash and cash equivalents at beginning of year 1,415,650 602,314
Cash and cash equivalents at end of financial year 24(a) 255,970 1,415,650
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
19
The financial report covers Mittagong RSL Club Limited as an individual entity. Mittagong RSL Club Limited is a not-for-for profit Company limited by guarantee, incorporated and domiciled in Australia.
The functional and presentation currency of Mittagong RSL Club Limited is Australian dollars.
1 Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with the Australian Accounting Standards - Reduced Disclosure Requirements, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
2 Summary of Significant Accounting Policies
(a) Revenue and other income
Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the Company and specific criteria relating to the type of revenue as noted below, has been satisfied.
Revenue is measured at the fair value of the consideration received or receivable and is presented net of returns, discounts and rebates.
Sale of goods
Revenue is recognised on transfer of goods to the customer as this is deemed to be the point in time when risks and rewards are transferred and there is no longer any ownership or effective control over the goods.
Rendering of services
Revenue in relation to rendering of services is recognised depending on whether the outcome of the services can be estimated reliably. If the outcome can be estimated reliably then the stage of completion of the services is used to determine the appropriate level of revenue to be recognised in the period.
If the outcome cannot be reliably estimated then revenue is recognised to the extent of expenses recognised that are recoverable.
Interest revenue
Interest is recognised using the effective interest method.
Rental income
Investment property revenue is recognised on a straight-line basis over a period of the lease term so as to reflect a constant periodic rate of return on the net investment.
Subscriptions
Revenue from the provision of membership subscriptions is recognised on a straight line basis over the financial year.
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
2 Summary of Significant Accounting Policies continued
(a) Revenue and other income continued
20
Other income
Other income is recognised on an accruals basis when the Company is entitled to it.
All revenue is stated net of the amount of goods and services tax (GST).
(b) Income Tax
The principle of mutuality has been applied in calculating the taxable income of the company. Subscriptions and other amounts received from members are excluded from the assessable income of the company. The company is assessed for income tax purposes on income from non-members (including other investment income such as interest and rent.) Operating expenses are apportioned between member and non-member income. Accordingly, taxable income is not directly related to the operating result and can vary substantially from year to year.
(c) Inventories
Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined using the first-in-first-out basis and is net of any rebates and discounts received.
(d) Property, Plant and Equipment
Where the cost model is used, the asset is carried at its cost less any accumulated depreciation and any impairment losses. Costs include purchase price, other directly attributable costs and the initial estimate of the costs of dismantling and restoring the asset, where applicable.
Assets measured using the revaluation model are carried at fair value at the revaluation date less any subsequent accumulated depreciation and impairment losses. Revaluations are performed whenever there is a material movement in the value of an asset under the revaluation model.
Land and buildings
Land and buildings are measured using the revaluation model.
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment of losses.
Items of property, plant and equipment acquired for nil or nominal consideration have been recorded at the acquisition date fair value.
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
2 Summary of Significant Accounting Policies continued
(d) Property, Plant and Equipment continued
21
Plant and equipment
Plant and equipment are measured using the cost model.
Depreciation
Property, plant and equipment, excluding freehold land, is depreciated on a straight-line basis over the assets useful life to the Company, commencing when the asset is ready for use.
Leased assets and leasehold improvements are amortised over the shorter of either the unexpired period of the lease or their estimated useful life.
The depreciation rates used for each class of depreciable asset are shown below:
Fixed asset class Depreciation rate
Buildings 2.5%
Plant and Equipment 13 - 33.33%
Motor Vehicles 18.75 - 22.5%
Poker machines 25 - 50%
At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.
(e) Investment property
Investment property is held at cost which includes expenditure that is directly attributable to the acquisition of the investment property. The investment properties are depreciated on a straight line basis.
(f) Intangible Assets
Poker Machine Entitlements
Poker machine entitlements are considered as intangible assets as per AASB 138 and have been brought to account at cost. They are considered to have an indefinite life and as such are not amortised.
Social impact assessment study costs incurred in order to obtain additional entitlements have been accounted for as prepayments until the entitlements are acquired. The prepayment is then capitalised together with the cost of the entitlements.
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
2 Summary of Significant Accounting Policies continued
22
(g) Impairment of non-financial assets
At the end of each reporting period the Company determines whether there is an evidence of an impairment indicator for non-financial assets.
Where this indicator exists and regardless of goodwill, indefinite life intangible assets and intangible assets not yet available for use, the recoverable amount of the asset is estimated.
Where assets do not operate independently of other assets, the recoverable amount of the relevant cash-generating unit (CGU) is estimated.
The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.
Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.
Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.
(h) 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 the period.
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.
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
2 Summary of Significant Accounting Policies continued
23
(i) Employee benefits
Provision is made for the Company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled.
Employee benefits expected to be settled more than twelve months after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss.
Employee benefits are presented as current liabilities in the statement of financial position if the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date regardless of the classification of the liability for measurement purposes under AASB 119.
(j) 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 recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period.
(k) Goods and Services Tax (GST)
Revenue, 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 Taxation Office (ATO).
Receivables and payable are stated inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position.
Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
24
3 Fundamental Error - Revaluation of Land and Buildings as disclosed December 2012
The company obtained a valuation of land and buildings on 12 September 2012 for the purposes of determining any adjustment required to the amounts disclosed at valuation in accordance with the accounting policy note 2 (d) as at 31 December 2012. This resulted in an upward revaluation adjustment of $530,000 to land and $2,012,611 to buildings.
Subsequent to this the directors obtained additional evidence and valuations which did not corroborate the valuation obtained on 12 September 2012.
The revised revaluation resulted in fair value of land effective 31 December 2012 $5,230,000 (Previous: $5,880,000).
The revised revaluation resulted in fair value of buildings effective 31 December 2012 $16,020,000 (Previous: $21,870,000).
The above has resulted in a correction to the comparative figures (2013) as follows:
$
Land and buildings previously stated at 31 December 2012 27,750,000
Land and buildings subsequent valuation 21,250,000
Downward adjustment
6,500,000
Revaluation reserve previously reported at 31 December 2012 14,321,107
Revaluation reserve restated 7,821,107
Downward adjustment
6,500,000
Depreciation previously reported 1,496,817
Depreciation restated 1,336,622
Downward adjustment
160,195
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
25
4 Revenue and Other Income
Revenue from continuing operations
Finance income includes all interest-related income, other than those arising from financial assets at fair value through profit or loss. The following amounts have been included in the finance income line in the statement of comprehensive income for the reporting periods presented:
2014
$
2013
$
Sales revenue
- Beverage sales 1,724,732 1,922,767
- Catering sales 3,735,459 4,142,324
5,460,191 6,065,091
Other revenue
- Gaming machine revenue 8,066,833 8,057,450
Total Revenue 13,527,024 14,122,541
Other Income
Other Income
Interest received 34,389 26,803
Rent received 27,984 27,613
Commission 192,484 169,612
Lease receipts 159,659 167,238
Sundry revenue 27,931 14,902
Member subscriptions 91,106 80,941
Utilities reimbursements - Springs Motel 30,131 25,621
Sports and Recreation (6,763) (11,163)
Total other income 556,921 501,567
5 Profit from Ordinary Activities
2014
$
2013
$
Depreciation and Amortisation
Depreciation of non-current assets 1,095,146 1,336,622
Interest expense 38,484 65,215
Borrowing charges 3,487 3,329
Employees' leave entitlements 48,036 40,277
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
26
6 Remuneration of Auditors
2014
$
2013
$
Remuneration of the auditor, GILLESPIES, for:
- auditing or reviewing the financial statements 35,900 34,900
- taxation services 1,850 1,800
- taxation services provided by related practice or auditor 7,000 6,800
- other services 3,920 3,805
48,670 47,305
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
27
7 Income Tax Expense
Reconciliation of income tax expense to profit from ordinary activities before income tax is as follows:
2014
$
2013
$
Profit from ordinary activities before income tax 439,922 274,079
Adjustments due to the mutuality principle:
Exempt income from members (276,358) (271,567)
Wholly assessable income (465,399) (416,887)
Exempt expenditure 400,762 527,203
Wholly deductible expenditure 689,644 622,478
788,571 735,306
Portion applicable to non-members 4.46% (2013: 4.86%) 35,203 35,724
Prima facie income tax expense @ 30% (2013: 30%) 10,561 10,717
Increase in income tax expense due to wholly assessable income:
Donations adjustment - prior years 8,467 -
Interest 10,317 8,041
Rent 56,293 58,455
Commission 58,817 50,884
Utilities Reimbursements - Mineral Springs 9,039 7,686
GST Rebate 5,154 -
GST rebate adjustment - prior years 19,835 -
Decrease in income tax expense due to wholly deductible expenditure:
Other expenses (556) (2,767)
Superannuation (129,408) (123,433)
Rates and taxes (21,789) (15,751)
Commission expenditure (51,561) (44,793)
(24,831) (50,961)
Amount transferred (from)/to future income tax benefit not brought to account 24,831 50,961
Tax losses carried forward 2,987,411 2,904,641
Income tax expense attributable to profit from ordinary activities - -
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
28
8 Cash and cash equivalents
2014
$
2013
$
Cash on hand 118,600 141,378
Cash at bank 137,370 1,274,272
255,970 1,415,650
9 Trade and other receivables
2014
$
2013
$
CURRENT
Trade receivables 43,511 63,855
10 Inventories
2014
$
2013
$
CURRENT
At cost:
Stock on hand 169,018 225,627
11 Other financial assets
Available-for-sale financial assets
2014
$
2013
$
- shares in other corporations 760 760
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
29
12 Property, plant and equipment
2014
$
2013
$
LAND AND BUILDINGS
Freehold land
At independent valuation 5,230,000 5,230,000
Total Land 5,230,000 5,230,000
Buildings
At independent valuation 16,020,000 16,020,000
At cost 109,590 -
Accumulated depreciation (997,697) (498,154)
Total buildings 15,131,893 15,521,846
Total land and buildings 20,361,893 20,751,846
PLANT AND EQUIPMENT
Capital works in progress
At cost 3,472,688 -
Plant and equipment
At cost 3,494,047 3,312,982
Accumulated depreciation (2,631,256) (2,397,231)
Total plant and equipment 862,791 915,751
Motor vehicles
At cost 52,960 52,960
Accumulated depreciation (38,411) (33,588)
Total motor vehicles 14,549 19,372
Poker machines
At cost 5,441,310 5,329,210
Accumulated depreciation (4,249,092) (4,117,038)
Total poker machines 1,192,218 1,212,172
Total plant and equipment 5,542,246 2,147,295
Total property, plant and equipment 25,904,139 22,899,141
The fair value of freehold land and buildings is determined at least every three years based on valuations by an independent valuer. Generally at each intervening preiod, the directors review the independent valuation and, where appropriate, update the fair value measurement to reflect current market conditions using a range of valuation techniques, including recent observable market data and discounted cash flow methodologies. Where necessary, the use of independent valuers are used to assist in this process. The Company's land and buildings were revalued at 23 January 2014 by independent valuers. This valuation was obtained to assist the directors in correcting a previous over-estimation of the value of land and buildings at 31 December 2012. Valuations were made using the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date.
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
12 Property, plant and equipment continued
30
(a) Movements in Carrying Amounts
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year:
Capital Works in Progress
$
Land
$
Buildings
$
Plant and Equipment
$
Motor Vehicles
$
Poker machines
$
Total
$
Year ended 31 December 2014
Balance at the beginning of year - 5,230,000 15,521,846 915,751 19,372 1,212,172 22,899,141
Additions 3,472,688 - 109,590 185,245 - 330,246 4,097,769
Depreciation expense - - (499,543) (238,204) (4,823) (350,201) (1,092,771)
Balance at the end of the year 3,472,688 5,230,000 15,131,893 862,792 14,549 1,192,217 25,904,139
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
31
13 Investment Property
2014
$
2013
$
Balance at beginning of the period 315,771 318,146
Depreciation (2,375) (2,375)
Balance at end of the period 313,396 315,771
14 Other assets
2014
$
2013
$
CURRENT
Prepayments 184,509 157,396
Other assets 2,170 15,549
Borrowing costs 22,366 8,872
Masterplan - 522,860
209,045 704,677
15 Intangible Assets
Poker machine licences
Cost 833,588 833,588
Accumulated amortisation and impairment - -
Net carrying value 833,588 833,588
Total Intangibles 833,588 833,588
16 Trade and other payables
2014
$
2013
$
CURRENT
Trade payables 694,622 824,091
Accrued expenses 245,914 242,421
American express 12,301 -
Other payables 230,923 249,692
1,183,760 1,316,204
17 Other liabilities
2014
$
2013
$
CURRENT
Subscriptions in advance 94,886 99,361
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
32
18 Borrowings
2014
$
2013
$
CURRENT
Unsecured liabilities:
Hire purchase liabilities 369,432 363,799
Secured liabilities:
Bills of exchange and promissory notes 1,450,251 750,000
Bank loans - 36,259
1,450,251 786,259
Total current borrowings 1,819,683 1,150,058
2014
$
2013
$
NON-CURRENT
Unsecured liabilities:
Hire purchase liabilities 274,759 25,065
Secured liabilities:
Total non-current borrowings 274,759 25,065
(a) Total current and non-current secured liabilities
2014
$
2013
$
Bank loans - 36,259
Commercial bills 1,450,251 750,000
1,450,251 786,259
(b) Commercial bill facilities
The Company has a fixed term interest rate rolling commercial bill facility which expires on 30 November 2019. This facility has an interest rate of 3.70% and requires capital payments of $87,500 per quarter. Current balance is $1,450,251.
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
18 Borrowings continued
33
(c) Financing Facilities
2014
$
2013
$
The company has access to the following lines of credit:
Total facilities available:
Corporate credit card 50,000 50,000
Bill facilities 7,000,000 1,750,000
Bank overdraft 250,000 -
Facilities used at balance date:
Corporate credit card - -
Bill facilities 1,450,251 750,000
Bank overdraft - -
Facilities not utilised at balance date:
Corporate credit card 50,000 50,000
Bill facilities 5,549,749 1,000,000
Bank overdraft 250,000 -
(d) Securities pledged
The credit facilities are secured by:
i) a registered first mortgage over non-residential property located at Cnr Bessemer Street and Old Hume Highway Mittagong NSW 2575.
ii) a registered equitable mortgage over the whole of its assets and undertakings of the company.
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
34
19 Provisions
Employee entitlements
$
Total
$
Current
Opening balance at 1 January 2014 572,047 572,047
Additional provisions 22,289 22,289
Balance at 31 December 2014 594,336 594,336
Employee entitlements
$
Total
$
Non-current
Opening balance at 1 January 2014 378,269 378,269
Additional provisions 25,747 25,747
Balance at 31 December 2014 404,016 404,016
Analysis of total provisions
2014
$
2013
$
Current 594,336 572,047
Non-current 404,016 378,269
998,352 950,316
The present value of employee benefits not expected to be settled within 12 months of reporting date have been calculated using the following weighted averages.
Inflation rate: 2.30%
Discount rate: 2.50%
20 Reserves and retained surplus
(a) Asset revaluation reserve
The asset revaluation reserve records fair value movements on property, plant and equipment held under the revaluation model.
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
35
21 Directors' Remuneration
2014
$
2013
$
The number of directors of the company whose income falls within the following bands:
$0 - $9,999 7 8
Total benefits received or due and receivable by all directors of the company:
Payment to directors - -
Benefits to directors in kind in attending seminars, functions, club business and the like 6,906 9,843
22 Key Management Personnel Disclosures
Directors:
G Millbank (President) R Cole (Vice President) R Cowley (Vice President)
R Jones P Moscatt B Smith
S Spence
Other Key Management Personnel
C Madsen (General Manager)
A Cunynghame (Catering Manager)
D Marmont (Operations Manager)
The totals of remuneration paid to the key management personnel of Mittagong RSL Club Limited during the year are as follows:
2014
$
2013
$
Short-term employee benefits 390,596 405,033
Post-employment benefits 26,110 6,188
416,706 411,221
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
36
23 Capital and Leasing Commitments
Finance lease commitments
2014
$
2013
$
Minimum lease payments:
- not later than one year 236,769 227,740
- between one year and five years 293,764 25,819
Minimum lease payments 530,533 253,559
- less finance charges (40,304) (8,755)
Present value of minimum lease payments 490,229 244,804
24 Cash Flow Information
(a) Reconciliation of cash
2014
$
2013
$
Cash 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 255,970 1,415,650
Bank overdrafts - -
255,970 1,415,650
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
24 Cash Flow Information continued
37
(b) Reconciliation of result for the year to cashflows from operating activities
Reconciliation of net income to net cash provided by operating activities:
2014
$
2013
$
Profit for the year 439,922 434,274
Cash flows excluded from profit attributable to operating activities
Non-cash flows in profit:
Depreciation 1,095,146 1,336,622
(Profit) on sale of non-current assets (4,078) (1,212)
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:
- decrease in trade and other receivables 20,344 49,238
- (increase) in other assets 495,451 (250,160)
- (increase) in inventories 56,609 (27,910)
- increase/(decrease) in trade and other payables (132,263) 140,661
- increase/(decrease) in other liabilities (4,475) 20,960
- increase in provisions 48,036 40,277
Cashflows from operations 2,014,692 1,742,750
25 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.
There were no related party transactions during the course of the financial year. The company did not trade with any of its directors or director related entities.
26 Bank Guarantee
At the request of the company, the company's bank is holding bank guarantees in favour of the Totalisator Agency Board of NSW to the value of $5,000.
27 Members' Guarantee
The Company is incorporated under the Corporations Act 2001 and is a Company limited by guarantee. If the Company is wound up, the constitution states that each member is required to contribute a maximum of $ 1 each towards meeting any outstandings and obligations of the Company. At 31 December 2014 the number of members was 12,959 (2013: 12,846).
Mittagong RSL Club Limited ABN 69 001 069 674
Notes to the Financial Statements For the Year Ended 31 December 2014
38
28 Company Details
The registered office of and principal place of business of the company is:
Mittagong RSL Club Limited
Corner Hume Highway and Bessemer Street
Mittagong NSW 2575
Mittagong RSL Club Limited ABN 69 001 069 674
Directors' Declaration
39
The directors of the Company declare that: 1. The financial statements and notes, as set out on pages 14 to 38, are in accordance with the Corporations Act 2001 and:
a. comply with Accounting Standards - Reduced Disclosure Requirements; and
b. give a true and fair view of the financial position as at 31 December 2014 and of the performance for the year ended on that date of the Company.
2. In the directors' opinion, there are reasonable grounds to believe that the Company 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.
Director ..................................................................
Graham J Millbank
Director ..................................................................
Roger F Cole
Dated this 4th day of February 2015
Mittagong RSL Club Limited ABN 69 001 069 674
Independent Audit Report to the members of Mittagong RSL Club Limited
40
Matters relating to the electronic presentation of the audited financial report
This audit report relates to the financial report of Mittagong RSL Club Limited for the year ended 31 December 2014 included on Mittagong RSL Club Limited’s web site. The Mittagong RSL Club Limited’s directors are responsible for the integrity of the Mittagong RSL Club Limited’s web site. We have not been engaged to report on the integrity of the Mittagong RSL Club Limited’s web site. The audit report refers only to the statements named below. 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.
Report on the Financial Report
We have audited the accompanying financial report of Mittagong RSL Club Limited, which comprises the statement of financial position as at 31 December 2014, the statement of profit or loss and statement of 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 of the financial report that gives a true and fair view in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001 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.
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 judgment, including the assessment of the 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 Company’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 Company’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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Mittagong RSL Club Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.
Mittagong RSL Club Limited ABN 69 001 069 674
Independent Audit Report to the members of Mittagong RSL Club Limited
41
Opinion
In our opinion the financial report of Mittagong RSL Club Limited is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Company’s financial position as at 31 December 2014 and of its performance for the year ended on that date; and
(b) complying with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Regulations 2001.
Gillespies Chartered Accountants
David M Duff Partner
BOWRAL Dated this4th day of February 2015
Mittagong RSL Club Limited ABN 69 001 069 674
For the Year Ended 31 December 2014
42
Compilation Report
The additional financial data presented on pages 42 - 47 is in accordance with the books and records of the Company which have been subjected to the auditing procedures applied in our statutory audit of the Company for the year ended 31 December 2014. It will be appreciated that our statutory audit did not cover all details of the additional financial data. Accordingly, we do not express an opinion on such financial data and we give no warranty of accuracy or reliability in respect of the data provided. Neither the firm nor any member or employee of the firm undertakes responsibility in any way whatsoever to any person (other than Mittagong RSL Club Limited) in respect of such data, including any errors of omissions therein however caused.
Gillespies
....................................................................
BOWRAL
4 February 2015
Mittagong RSL Club Limited ABN 69 001 069 674
For the Year Ended 31 December 2014
43
Detailed trading account
2014
$
2013
$
Bar and Bottleshop
Sales revenue
Bar sales 1,430,115 1,520,024
Bottleshop sales 227,810 327,108
Recoups - discounts and specials 66,807 75,635
1,724,732 1,922,767
Cost of sales
Opening stock 131,163 112,493
Purchases 678,686 865,657
Closing stock (79,338) (131,163)
Cost of goods sold 730,511 846,987
Gross profit 994,221 1,075,780
Less: Direct expenses
Beer gas 3,963 4,081
Rental of equipment 5,276 5,181
Electricity 38,400 38,400
Payroll tax 33,300 30,525
Repairs and maintenance 7,878 8,574
Requisites (3,005) (2,231)
Salaries and wages 687,638 634,387
Staff training (39) 2,573
Superannuation 60,871 56,217
834,282 777,707
Net profit / (loss) 159,939 298,073
Mittagong RSL Club Limited ABN 69 001 069 674
For the Year Ended 31 December 2014
44
Detailed trading account
2014
$
2013
$
Gaming Machines
Income
Net clearances 8,066,833 8,057,450
Less: Direct expenses
Central monitoring system 81,799 79,481
Community sponsorships, donations and support 296,927 280,149
Duty tax 1,634,256 1,631,893
Electricity 109,200 109,200
Equipment rental 41,047 31,290
Links fees 145,807 152,645
Payroll tax 14,824 13,322
Promotions - Bush Bounty 208,220 177,478
Quickchange 3,977 6,129
Repairs and maintenance and requisites 150,687 171,899
Salaries and wages 306,290 279,731
Superannuation 26,435 24,466
3,019,469 2,957,683
Net profit / (loss) 5,047,364 5,099,767
Mittagong RSL Club Limited ABN 69 001 069 674
For the Year Ended 31 December 2014
45
Detailed trading account
2014
$
2013
$
Catering
Sales revenue
Sales 3,231,741 3,614,716
Recoups - discounts and specials 503,718 527,609
3,735,459 4,142,325
Cost of sales
Opening stock 53,960 51,173
Purchases 1,121,809 1,210,730
Closing stock (53,098) (53,960)
Cost of goods sold 1,122,671 1,207,943
Gross profit 2,612,788 2,934,382
Less: Direct expenses
Advertising 252 -
Electricity 48,000 48,000
Gas 22,913 24,000
Laundry 27,799 30,454
Payroll tax 107,406 101,641
Repairs and maintenance 27,540 40,376
Requisites 70,059 78,086
Salaries and wages 2,173,609 2,127,169
Staff training (10,596) 274
Superannuation 196,265 186,601
2,663,247 2,636,601
Net profit / (loss) (50,459) 297,781
Mittagong RSL Club Limited ABN 69 001 069 674
Detailed Profit and Loss For the Year Ended 31 December 2014
46
2014
$
2013
$
Net contribution from bar and bottleshop 159,939 298,073
Net contribution from gaming machines 5,047,364 5,099,767
Net contribution from catering (50,459) 297,781
Net profit from trading 5,156,844 5,695,621
Other income
Interest received 34,389 26,803
Rent received 27,984 27,613
Commission 192,484 169,612
Sundry revenue 27,932 14,904
Lease receipts 159,659 167,238
Member subscriptions 91,106 80,941
Sports and Recreation (6,763) (11,163)
Utilities reimbursements - Springs Motel 30,131 25,621
Total other income 556,922 501,569
Total operating income 5,713,766 6,197,190
Expenditure
Advertising 95,511 87,757
Annual leave paid 260,181 294,998
Auditors remuneration 48,670 47,305
Bank charges 58,442 75,760
Borrowing charges 3,487 3,329
Cash discrepancy 878 1,619
Cleaning material and waste disposal 70,939 68,981
Club promotions - general 247,458 264,703
Club promotions - members only 528,307 612,223
Commission - motel 4,889 6,280
Consultants 42,425 23,333
Directors expenses 6,906 9,843
Directors professional development 10,595 11,797
Donations and sponsorships 1,350 3,650
Electricity and gas 116,366 153,406
Employees' leave entitlements 48,036 40,277
Entertainment 58,935 56,567
Fringe benefits tax 24,653 13,808
General expenses 7,254 10,670
Hire of plant and equipment 4,668 10,076
Insurance 199,141 231,420
Interest paid 38,484 65,215
Long service leave paid 47,307 36,233
Magazines, journals and periodicals 736 691
Management expenses 14,238 15,144
Management professional development 14,516 9,559
Motor vehicle expenses 27,304 33,640
Payroll tax 80,437 87,926
Printing, postage and stationery 46,194 58,900
Rates and taxes 72,630 52,502
Repairs and maintenance 200,035 184,147
Salaries and wages 1,282,235 1,338,272
Mittagong RSL Club Limited ABN 69 001 069 674
Detailed Profit and Loss For the Year Ended 31 December 2014
47
2014
$
2013
$
Security 104,404 100,746
Sick leave paid 68,748 76,118
Sky Channel and Fox Sports 65,939 65,998
Staff expenses 86,884 85,143
Subscriptions 23,205 19,899
Superannuation contributions 141,532 143,990
Telephone 28,857 25,581
Total expenditure 4,182,776 4,427,506
Operating profit for the year before depreciation and income tax 1,530,990 1,769,684
Depreciation 1,095,146 1,336,622
Profit on sale of non-current assets 4,078 1,212
Profit for the year attributable to members 439,922 434,274