laurieton united services club limited fi… · laurieton united services club limited abn 44 000...

Laurieton United Services Club Limited ABN 44000969522

Financial Statements

For the Year Ended 30 June 2018

Laurieton United Services Club LimitedABN 44 000 969 522

FINANCIAL STATEMENTS

For the Year Ended 30 June 2018

CONTENTS

Page

Financial StatementsDIRECTORS' REPORT 1AUDITOR'S INDEPENDENCE DECLARATION 6STATEMENT OF COMPREHENSIVE INCOME 7STATEMENT OF FINANCIAL POSITION 8STATEMENT OF CHANGES IN EQUITY 9STATEMENT OF CASH FLOWS 10NOTES TO THE FINANCIAL STATEMENTS 11DIRECTORS' DECLARATION 30INDEPENDENT AUDITOR'S REPORT 31

Laurieton United Services Club Limited ABN 44 000 969 522

DIRECTORS' REPORT30 June 2018

Your Directors present their report on the Company, for the financial year ended 30 June 2018.

Directors

The names of the Directors in office at any time during, or since the end of, the year are:

Greg ARMSTRONGJames (Jim) HENRYKenneth (Ken) WHYTEIan JACKSONBarry LANGAnne BURTONIngo MODEL

Directors have been in office since the start of the financial year to the date of this report unless otherwisestated.

Short Term Objectives The short-term objectives of the Company are to:

• Service all debts as and when they fall due.• Provide benefits to members in a financially viable manner.• Operate bar, gaming, catering, bowls and golf operations for the benefit of our members and their

guests.• Provide entertainment for the benefit of our members and their guests.• Utilise funds derived from the Club's operations for the support and development of our community.• Provide a high standard of customer service when dealing with members and their guests.• Ensure the Governing Body is educated and informed appropriately in order to be able to provide the

Club with the necessary guidance to achieve its objectives.

Long Term Objectives The long term objectives of the Company are to:

• Provide, maintain or change offerings in order to continually meet the needs of our members andtheir guests.

• Create sustainable financial viability while maintaining our position as the focus of social andcommunity activities.

1



Strategies To achieve the objectives of the Company the following strategies have been adopted:

Planning

• The Club's strategic plan is reviewed by the Governing Body on an annual basis to ensure that thestrategies implemented to meet the Club's objectives are appropriate.

Marketing

• The Club regularly researches its members through surveys to assist in satisfying their needs andwants. Through this research the Club continues to market its food, beverage, gaming, bowls andgolf activities for its members and their guests.

• The Club trains and monitors staff with a view to providing great experiences for its members andtheir guests.

Principal Activities The principal activity of the Company during the financial year was the conduct of a Registered Club.

No significant change in the nature of this principal activity occurred during the year.

Means by which Principal Activities Assisted in Achieving the Company's Objectives The principal activities of a Registered Club are multifaceted. Many activities assisted the Club in achievingits objectives including the marketing of the key trading areas of the business being:• Bar operations;• Bowls operations;• Catering operations;• Course operations;• Gaming operations; and• Entertainment.

The conduct of these activities, and the effective utilisation of cashflow surpluses, enabled the Club toachieve its objectives.

Key Performance Measures The Club’s trading results are compared to last year's results and the Club's budget and the Club preparescash flow forecasts to ensure the efficient utilisation of future cash flows. The results of these planning andcontrol activities are presented to the Governing Body on a monthly basis. Variations are analysed andexplanations for variances are provided to the Governing Body for their deliberation.

To assist the Governing Body in ensuring that the Club has the capacity to both repay its debt as well asinvest in facilities and equipment, the Club’s earnings before interest, tax and depreciation are reviewed bi-annually.

To assist in the monitoring of Club performance, market research is conducted on an on going basis.

2



Members' Guarantee The Laurieton United Services Club Limited is incorporated under the Corporations Act 2001 and is aCompany limited by guarantee. If the Company is wound up, the Constitution states that each member isrequired to contribute a maximum of $1 towards meeting any outstanding obligations of the Company. At 30June 2018 collective liability of members was $10,014 (2017: $9,039).

Core and Non-Core Property Core property is defined as any real property owned by the Club that comprises the defined premises of theClub or any facility provided by the Club for the use of its members and their guests. Core property of theClub consists of land occupied by the Clubhouse and carpark at Seymour Street, Laurieton, New SouthWales, and land occupied by the Clubhouse, golf course, bowling greens and carpark at Kendall Road,Kew, New South Wales.

Non-core property of the Club means any real property owned by the Club that is not core property. Non-core property consists of 3, 5 and 7 Lake Street, and Lot 4 McLennan Street, Laurieton, New SouthWales.

Auditor's Independence Declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act2001 has been received and is included in these financial statements.

Meetings of Directors

During the financial year, 16 meetings of Directors (including committees of Directors) were held.Attendances by each Director during the year were as follows:

Directors' MeetingsEligible

to attendNumberattended

Greg ARMSTRONG 16 14

James (Jim) HENRY 16 16

Kenneth (Ken) WHYTE 16 16

Ian JACKSON 16 14

Barry LANG 16 14

Anne BURTON 16 16

Ingo MODEL 16 15

Throughout the year an additional 28 sub-committee meetings were held to attend to business pertaining tothe club.

3



Information on Current Directors

Greg ARMSTRONGQualifications Retired Practising AccountantExperience Board Experience 26 yearsSpecial Responsibilities President

Chairman of Finance CommitteeChairman of Kew Country Club Course Beautification CommitteeChairman of Executive CommitteeLake Street Committee

James (Jim) HENRYQualifications Retired NRMA ManagerExperience Board Experience 11 yearsSpecial Responsibilities Senior Vice President

Executive CommitteeFinance CommitteeClub Grants CommitteeBoard Representative of WHS CommitteeLake Street Committee

Kenneth (Ken) WHYTEQualifications Retired Boiler MakerExperience Board Experience 17 yearsSpecial Responsibilities Citation Committee

House and Building CommitteeKew Country Club Advisory CommitteeChairman of Club Grants CommitteeLake Street Committee

Ian JACKSONQualifications Licenced Real Estate Agent, NSW Department of Education and Training

Audit Investigator, Retired Army Lieutenant ColonelExperience Board Experience 24 yearsSpecial Responsibilities Chairman of Citation Committee

Kew Country Club Advisory Committee

Barry LANGQualifications Australian Regular Army Returned from Active Service

Retired NSW Distribution and Operations Manager for Big WExperience Board Experience 13 yearsSpecial Responsibilities Vice President

Executive CommitteeFinance CommitteeChairman of House and Building CommitteeCitation Committee

4


STATEMENT OF COMPREHENSIVE INCOMEFor the Year Ended 30 June 2018

Note2018

$2017

$Revenue 2 10,548,057 10,560,638

Inventories purchased 3 (1,663,997) (1,766,140)Changes in inventories 3 (4,697) (627)Administration expenses (745,908) (724,606)Depreciation, amortisation and impairment 3 (949,437) (881,551)Electricity, gas and diesel costs (245,610) (237,674)Employee benefits expense (2,930,469) (2,956,056)Entertainment expenses (excluding trading areas) (1,377,162) (1,352,241)Finance costs 3 (99,137) (98,374)Insurance expenses (177,921) (131,900)Other golf and bowls expenses (232,599) (215,949)Other poker machine expenses (1,015,051) (1,071,093)Repairs, maintenance and cleaning expenses (753,967) (758,284)Other expenses (214,362) (251,146)

(10,410,317) (10,445,641)

Profit / (loss) before income tax 137,740 114,997Income tax benefit / (expense) 4 43,701 22,953

Profit / (loss) for the year 181,441 137,950

Other comprehensive income for the year - -

Total comprehensive income for the year 181,441 137,950Profit / (loss) attributable to members 181,441 137,950Total comprehensive income attributable to

members 181,441 137,950

The accompanying notes form part of these financial statements.7


STATEMENT OF FINANCIAL POSITIONAs at 30 June 2018

Note2018

$2017

$

ASSETSCurrent assetsCash and cash equivalents 5 338,053 445,198Trade and other receivables 6 59,235 74,419Inventories 7 105,647 110,344Other financial assets 8 157 157Other assets 9 113,811 115,601

Total current assets 616,903 745,719

Non-current assetsInvestment property 10 996,091 1,000,530Property, plant and equipment 11 11,149,029 10,879,817Intangible assets 12 401,855 401,855Deferred tax assets 14 472,665 427,745

Total non-current assets 13,019,640 12,709,947

TOTAL ASSETS 13,636,543 13,455,666

LIABILITIESCurrent liabilitiesTrade and other payables 13 692,879 606,571Borrowings 15 525,454 532,679Short-term provisions 16 403,613 386,316Other liabilities 17 239,449 208,797

Total current liabilities 1,861,395 1,734,363

Non-current liabilitiesDeferred tax liabilities 14 10,569 9,350Borrowings 15 1,266,443 1,412,175Long-term provisions 16 56,994 40,077

Total non-current liabilities 1,334,006 1,461,602

TOTAL LIABILITIES 3,195,401 3,195,965

NET ASSETS 10,441,142 10,259,701

EQUITYRetained earnings 10,441,142 10,259,701

TOTAL EQUITY 10,441,142 10,259,701



STATEMENT OF CHANGES IN EQUITYFor the Year Ended 30 June 2018

2018RetainedEarnings

$Total

$Balance at 1 July 2017 10,259,701 10,259,701Profit / (loss) attributable to members of the Company 181,441 181,441Other comprehensive income - -

Total comprehensive income for the year 181,441 181,441

Balance at 30 June 2018 10,441,142 10,441,142

2017RetainedEarnings

$Total

$Balance at 1 July 2016 10,121,751 10,121,751Profit / (loss) attributable to members of the Company 137,950 137,950Other comprehensive income - -

Total comprehensive income for the year 137,950 137,950

Balance at 30 June 2017 10,259,701 10,259,701



STATEMENT OF CASH FLOWSFor the Year Ended 30 June 2018

Note2018

$2017

$

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 11,620,003 11,688,039Payments to suppliers and employees (10,305,106) (10,429,050)Interest received 1,298 1,290Finance costs (99,137) (98,374)

Net cash provided by (used in) operating activities 1,217,058 1,161,905

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of plant and equipment 14,000 -Purchase of property, plant and equipment (1,185,246) (1,761,765)

Net cash provided by (used in) investing activities (1,171,246) (1,761,765)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from borrowings 475,489 1,222,405Repayment of borrowings (617,127) (493,289)

Net cash provided by (used in) financing activities (141,638) 729,116

Net increase (decrease) in cash and cash equivalents (95,826) 129,256Cash and cash equivalents at beginning of financial year 433,879 304,623

Cash and cash equivalents at end of financial year 5 338,053 433,879



NOTES TO THE FINANCIAL STATEMENTSFor the Year Ended 30 June 2018

The financial report is for Laurieton United Services Club Limited as an individual entity, incorporated anddomiciled in Australia. Laurieton United Services Club Limited is a Company limited by guarantee.

Note 1 Summary of Significant Accounting Policies

Basis of Preparation

The financial statements are general purpose financial statements that have been prepared in accordancewith Australian Accounting Standards - Reduced Disclosure Requirements of the Australian AccountingStandards Board (AASB) and the Corporations Act 2001.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result infinancial statements containing relevant and reliable information about transactions, events and conditions.Material accounting policies adopted in the preparation of these financial statements are presented belowand have been consistently applied unless otherwise stated.

The financial statements, except for the cash flow information, have been prepared on an accruals basisand are based on historical costs modified, where applicable, by the measurement at fair value of selectednon-current assets, financial assets and financial liabilities.

The financial statements were approved and authorised for issue on 29 August 2018 by the Directors of theCompany.

Accounting Policies

(a) Income Tax

The income tax expense / (income) for the year comprises current income tax expense / (income) anddeferred tax expense / (income).

Current income tax expense charged to the profit or loss is the tax payable on taxable income. Current taxliabilities / (assets) are therefore measured at the amounts expected to be paid to / (recovered from) therelevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balancesduring the year as well as unused tax losses.

Current and deferred income tax expense / (income) is charged or credited outside profit or loss when thetax relates to items that are recognised outside profit or loss.

No deferred income tax is recognised from the initial recognition of an asset or liability where there is noeffect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the periodwhen the asset is realised or the liability is settled, and their measurement also reflects the manner in whichmanagement expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to theextent that it is probable that future taxable profit will be available against which the benefits of the deferredtax asset can be utilised.

11




(b) Inventories

Inventories are measured at the lower of cost and net realisable value.

(c) Investment Property

Investment property, comprising freehold residential property, is held to generate long-term rental yields. Alltenant leases are on an arm's length basis. Investment property is carried at cost less, where applicable,any accumulated depreciation and impairment losses.

Investment property, excluding freehold land, is depreciated on a straight line basis over the life of the assetat a depreciation rate of 2.5%.

(d) Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value as indicated less, whereapplicable, any accumulated depreciation and impairment losses.

Property

Freehold land and buildings are measured on the cost basis.

Plant and equipment

Plant and equipment are measured on the cost basis less accumulated depreciation and impairment losses.In the event the carrying amount of plant and equipment is greater than its estimated recoverable amount,the carrying amount is written down immediately to its estimated recoverable amount and impairment lossesare recognised in the statement of comprehensive income. An assessment of recoverable amount is madewhen impairment indicators are present (refer to Note 1(i) for details of impairment).

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item will flow to theCompany and the cost of the item can be measured reliably. All other repairs and maintenance are chargedto the statement of comprehensive income during the financial period in which they are incurred.

Depreciation

The depreciable amount of all fixed assets, including buildings and capitalised leased assets but excludingfreehold land, is depreciated on a straight-line basis over the asset's useful life to the Companycommencing from the time the asset is held ready for use.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate

Buildings and freehold improvements 2.5 to 10%Plant and equipment 10 to 36%

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of eachreporting period.

12




(d) Property, Plant and Equipment

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carryingamount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. Thesegains or losses are recognised in the statement of comprehensive income in the period in which they arise.

(e) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset(but not the legal ownership) are transferred to the Company are classified as finance leases.

Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal tothe fair value of the leased property or the present value of the minimum lease payments, including anyguaranteed residual values. Lease payments are allocated between the reduction of the lease liability andthe lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives whereit is likely that the Company will obtain ownership of the asset or the term of the lease.

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor,are charged as expenses in the periods in which they are incurred.

(f) Intangible Assets

(i) Poker Machine Licences

Poker machine licences are recognised at cost of acquisition. Poker machine licences are tested annuallyfor impairment and carried at cost less accumulated impairment losses.

(g) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks and other financialinstitutions, other short-term highly liquid investments with original maturities of three months or less, andbank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on thestatement of financial position.

(h) Financial Instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the Company becomes a party to thecontractual provisions to the instrument. For financial assets, this is equivalent to the date that the Companycommits itself to either purchase or sell the asset.Financial instruments are initially measured at fair value plus transaction costs except where theinstrument is classified at "fair value through profit or loss" in which case transaction costs are recognisedimmediately as expenses in profit or loss.

13





Classification and subsequent measurement

Financial instruments are subsequently measured at either fair value, amortised cost using the effectiveinterest method or cost. Fair value represents the amount for which an asset could be exchanged or aliability settled, between knowledgeable, willing parties. Where available, quoted prices in an active marketare used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

• the amount at which the financial asset or financial liability is measured at initial recognition;

• less principal repayments;

• plus or minus the cumulative amortisation of the difference, if any, between the amount initiallyrecognised and the maturity amount calculated using the effective interest method; and

• less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant periodand is equivalent to the rate that exactly discounts estimated future cash payments or receipts (includingfees, transaction costs and other premiums or discounts) through the expected life (or when this cannot bereliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financialasset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to thecarrying value with a consequential recognition of an income or expense in profit or loss.

(i) Financial assets at fair value through profit or loss

Financial assets are classified at "fair value through profit or loss" when they are held for trading for thepurpose of short-term profit taking. Such assets are subsequently measured at fair value with changes incarrying value being included in profit or loss.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are classified as current assets, except for those which are not expected to maturewithin 12 months after the end of the reporting period, which will be classified as non-current assets.

(iii) Held-to-maturity investments

Held-to-maturity financial assets are non-derivative financial assets that have fixed maturities andfixed or determinable payments, and it is the Company's intention to hold these investments tomaturity. They are subsequently measured at amortised cost.

Held-to-maturity financial assets are classified as non-current assets, except for those which are expectedto mature within 12 months after the end of the reporting period.

14





(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not capable of beingclassified into other categories of financial assets due to their nature, or they are designated as such bymanagement. They comprise investments in the equity of other entities where there is neither a fixedmaturity nor fixed or determinable payments. They are subsequently measured at fair value.

Available-for-sale financial assets are classified as non-current assets, except for those which are expectedto be disposed of within 12 months after the end of the reporting period.

(v) Financial liabilities

Non-derivative financial liabilities are subsequently measured at amortised cost.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques areapplied to determine the fair value for all unlisted securities, including recent arm's length transactions andreference to similar instruments.

Impairment

At the end of each reporting period, the Company assesses whether there is objective evidence that afinancial asset has been impaired. In the case of available-for-sale financial assets, a prolonged decline inthe market value of the instrument is considered to determine whether an impairment has arisen.Impairment losses are recognised immediately in the statement of comprehensive income.

(i) Impairment of Assets

At the end of each reporting period, the Company reviews the carrying values of its tangible and intangibleassets to determine whether there is any indication that those assets have been impaired. If such anindication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs tosell and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying valueover its recoverable amount is expensed to the statement of comprehensive income.

Where it is not possible to estimate the recoverable amount of an individual asset, the Companyestimates the recoverable amount of the cash-generating unit to which the asset belongs.

Impairment testing is performed annually for intangible assets with indefinite useful lives.

15




(j) Employee Benefits

Provision is made for the Company's liability for employee benefits arising from services rendered byemployees to the end of the reporting period. Employee benefits that are expected to be settled within oneyear have been measured at the amounts expected to be paid when the liability is settled. Employeebenefits payable later than one year have been measured at the present value of the estimated future cashoutflows to be made for those benefits. In determining the liability, consideration is given to employee wageincreases and the probability that the employee may not satisfy vesting requirements.

Contributions are made by the Company to an employee superannuation fund and are charged asexpenses when incurred.

(k) Provisions

Provisions are recognised when the Company has a legal or constructive obligation, as a result of pastevents, for which it is probable that an outflow of economic benefits will result and that outflow can bereliably measured. Provisions recognised represent the best estimate of the amounts required to settle theobligation at the end of the reporting period.

(l) Revenue

Revenue is measured at the fair value of the consideration received or receivable.

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to thefinancial assets.

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

All revenue is stated net of the amount of goods and services tax (GST).

(m) Trade and other payables Trade and other payables are carried at amortised cost and represent the liabilities for goods and servicesreceived by the Company during the reporting period that remain unpaid at the end of the reporting period.The balance is recognised as a current liability with the amounts normally paid within 30 days of recognitionof the liability.

(n) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarilytake a substantial period of time to prepare for their intended use or sale, are added to the cost of thoseassets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

16




(o) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount ofGST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances the GSTis recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amountof GST recoverable from, or payable to, the ATO is included with other receivables or payables in thestatement of financial position.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component ofinvesting and financing activities, which are disclosed as operating cash flows.

(p) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes inpresentation for the current financial year.

(q) Critical Accounting Estimates and Judgements

The Directors evaluate estimates and judgements incorporated into the financial statements based onhistorical knowledge and best available current information. Estimates assume a reasonable expectation offuture events and are based on current trends and economic data, obtained both externally and within theCompany.

Key estimates - Impairment

The Company assesses impairment at the end of each reporting period by evaluating conditions specific tothe Company that may be indicative of impairment triggers. Recoverable amounts of relevant assets arereassessed using value-in-use calculations which incorporate various key assumptions. The recoverableamount of the poker machine licences was estimated based on their value in use using a pre-tax discountrate of 9% and a growth rate of 1% from 2018. The recoverable amount was estimated to be higher than thecarrying amount of the poker machine licences, and no impairment was required.

17



Note 2 Revenue and Other Income

(a) Revenue 2018

$2017

$ Sale of goods: Bar sales 1,906,829 1,925,067 Bistro and cafe sales 1,963,573 1,968,686

3,870,402 3,893,753 Other revenue: Commissions received - club keno 163,955 159,926 Commissions received - other 66,758 65,689 Commissions received - TAB 25,906 16,581 Competitions and meat draws 464,266 449,659 Entertainment 126,680 92,732 Golf and bowls fees and hire income 550,265 509,812 Insurance recoveries 80,960 142,172 Interest received - other persons 1,298 1,290 Membership subscriptions 310,022 286,045 Poker machine takings (net of payouts) 4,721,347 4,841,089 Poker machine GST rebate - LAB 36,394 33,681 Rent received 43,312 47,662 Other income 86,492 20,547

6,677,655 6,666,885

Total Revenue 10,548,057 10,560,638

Note 3 Profit for the Year

(a) Expenses Cost of Sales: Bar trading 814,894 806,717 Bistro and cafe trading 853,800 960,050

1,668,694 1,766,767

Finance Costs: Interest expense 99,137 98,374

Depreciation:Buildings 362,878 352,905Plant and equipment 582,120 524,207Investment property 4,439 4,439

949,437 881,551

18



Note 4 Income Tax Expense

(a) The components of tax expense/(benefit) comprise: 2018

$2017

$Current tax (9,522) (17,860)Deferred tax (34,179) (5,093)

14 (43,701) (22,953)

(b) The prima facie tax on profit / (loss) from ordinary activities before income tax is reconciledto income tax as follows:

Prima facie tax payable on profit / (loss) from ordinaryactivities before income tax at 27.5% (2017: 30%) 37,878 34,499

Add:

Tax effect of:- other non-allowable items 187,323 200,345

225,201 234,844

Less:

Tax effect of:- net non-assessable income from principle of

mutuality 35,406 50,142- member only income not taxable 190,368 192,707- deferred tax expense relating to origination and

reversal of temporary differences 34,179 5,093- other deductible items 8,949 9,855

Income tax expense /(benefit) attributable to theentity (43,701) (22,953)

Note 5 Cash and Cash Equivalents

Current Cash at bank and in hand 338,053 445,198

Reconciliation of Cash Cash and cash equivalents at the end of the financial year

as shown in the statement of cash flows are reconciled toitems in the statement of financial position as follows:

Cash and cash equivalents 338,053 445,198Bank overdraft 15 - (11,319)

338,053 433,879

19



Note 6 Trade and Other Receivables 2018

$2017

$

CurrentTrade and other receivables 59,235 74,419

Note 7 Inventories CurrentFinished goods - at cost: Bar stock 82,740 86,562 Bistro and cafe stock 22,907 23,782

105,647 110,344

Note 8 Other Financial Assets Current

Unlisted investments, at fair value:- Shares in other corporations 157 157

157 157

Note 9 Other Assets CurrentPrepayments 110,311 112,101Security deposits 3,500 3,500

113,811 115,601

Note 10 Investment Property

Investment property at cost 1,039,121 1,039,121Less accumulated depreciation (43,030) (38,591)

996,091 1,000,530

(a) Movement in Carrying Amount Balance at beginning of year 1,000,530 1,004,969Additions - -Disposals - -Depreciation (4,439) (4,439)

Balance at end of year 996,091 1,000,530

20



Note 11 Property, Plant and Equipment 2018

$2017

$

Land and buildingsFreehold landFreehold land at cost 1,374,875 1,374,875

BuildingsAt cost 12,656,134 12,409,703Accumulated depreciation (5,143,264) (4,783,075)

Total buildings 7,512,870 7,626,628Total land and buildings 8,887,745 9,001,503

Plant and equipmentAt cost 7,562,214 6,839,966Accumulated depreciation (5,300,930) (4,961,652)

Total plant and equipment 2,261,284 1,878,314

Total property, plant and equipment 11,149,029 10,879,817

(a) Movements in Carrying Amounts

Movements in the carrying amounts for each class of property, plant and equipment between thebeginning and the end of the current financial year:

2018

Freehold Land$

Buildings andFreehold

Improvements $

Plant andEquipment

$Total

$Balance at 1 July 2017 1,374,875 7,626,628 1,878,314 10,879,817Additions - 249,796 981,772 1,231,568Disposals - (676) (16,682) (17,358)Depreciation expense - (362,878) (582,120) (944,998)

Balance at 30 June 2018 1,374,875 7,512,870 2,261,284 11,149,029

21



Note 12 Intangible Assets 2018

$2017

$

Poker machine licencesPoker machine licences at cost 401,855 401,855

Poker machine licences have been determined to have indefinite useful lives as the licences have notbeen cancelled by legislation and the Company has no intention to sell poker machine licences.

(a) Movements in carrying amounts Poker Machine

Licences$

Total$

30 June 2017

2018 30 June 2018

Balance at 1 July 2017 401,855 401,855Disposals - -Impairment losses - -

Balance at 30 June 2018 401,855 401,855

Note 13 Trade and Other Payables 2018

$2017

$

Current Unsecured liabilitiesTrade payables 423,957 292,299Sundry creditors and accrued expenses 268,922 314,272

692,879 606,571

22



Note 14 Income Tax

(a) Deferred Tax Liabilities OpeningBalance

Charged (Credited )to Statement ofComprehensive

Income

Changes inTax Rate

ClosingBalance

$ $ $ $

2017

Tax allowances relating to property,plant and equipment 8,253 - (688) 7,565

Other 2,176 (229) (162) 1,785

Balance at 30 June 2017 10,429 (229) (850) 9,350

2018

Tax allowances relating to property,plant and equipment 7,565 - - 7,565

Other 1,785 1,219 - 3,004

Balance at 30 June 2018 9,350 1,219 - 10,569

(b) Deferred Tax Assets

2017

Tax allowances relating to property,plant and equipment 24,527 42,281 (5,567) 61,241

Future income tax benefits attributableto tax losses 352,360 17,860 (30,848) 339,372

Provisions 28,984 615 (2,467) 27,132

Balance at 30 June 2017 405,871 60,756 (38,882) 427,745

2018

Tax allowances relating to property,plant and equipment 61,241 33,006 - 94,247

Future income tax benefits attributableto tax losses 339,372 9,522 - 348,894

Provisions 27,132 2,392 - 29,524

Balance at 30 June 2018 427,745 44,920 - 472,665

23



Note 15 Borrowings

Note2018

$2017

$

CurrentUnsecured liabilitiesOther borrowings 15(d) 152,144 169,391

Secured liabilitiesBank overdraft 15(a)(c) - 11,319Chattel mortgage loans 15(a)(c) 52,818 49,876Bank loans 15(a)(c) 320,492 302,093

373,310 363,288

Total current borrowings 525,454 532,679

Non-CurrentUnsecured liabilitiesOther borrowings 15(d) 98,566 20,680

Secured liabilitiesChattel mortgage loans 15(a)(c) 63,222 118,572Bank loans 15(a)(c) 1,104,655 1,272,923

1,167,877 1,391,495

Total non-current borrowings 1,266,443 1,412,175

Total borrowings 1,791,897 1,944,854

(a) Total current and non-current secured liabilities Bank overdraft - 11,319Chattel mortgage loans 116,040 168,448Bank loans 1,425,147 1,575,016

1,541,187 1,754,783

(b) The carrying amounts of non-current assetspledged as security are:

Investment property 996,091 1,000,530Land and buildings 8,887,745 9,001,503Plant and equipment 2,261,284 1,878,314

12,145,120 11,880,347

24



Note 15 Borrowings (continued)

(c) Collateral Provided

Bank Loans and Bank Overdraft

The bank loan and bank overdraft are secured by registered first mortgage over the freehold land andbuildings of the Company and a registered first equitable mortgage over the assets of the Company.

Financial assets that have been pledged as part of the total collateral in relation to the bank loan andbank overdraft are as follows:

2018$

2017$

Cash and cash equivalents 338,053 445,198Trade and other receivables 59,235 74,419Other financial assets 157 157

397,445 519,774

Chattel Mortgage Loans

Chattel mortgage loans are secured by registered first mortgage over certain plant and equipment ofthe Company.

(d) Other Loans

Other borrowings are unsecured and comprise of finance contracts for the purchase of pokermachines and equipment with terms ranging from 1 to 3 years. The loans are interest free.

Note 16 Provisions

EmployeeBenefits

$Total

$Opening balance at 1 July 2017 426,393 426,393Additional provision 34,214 34,214

Balance at 30 June 2018 460,607 460,607

25



Note 16 Provisions

Analysis of Total Provisions

Employee Benefits2018

$2017

$Current 403,613 386,316Non-current 56,994 40,077

460,607 426,393

Provision for Employee Benefits

Provision for employee benefits represents amounts accrued for annual leave and long service leave.

The current portion for the provision includes the total amount accrued for annual leave entitlements andamounts accrued for long service leave entitlements that have vested due to employees havingcompleted the required period of service.

These amounts are classified as current liabilities since the Company does not have an unconditionalright to defer settlement of these amounts in the event employees wish to use their leave entitlement.

The non-current portion of the provision includes amounts accrued for long service leave entitlementsthat have not yet vested in relation to those employees who have not yet completed the required periodof service.

Note 17 Other Liabilities 2018

$2017

$

CurrentMembers' subscriptions and other income in

advance 239,449 208,797

26



Note 18 Capital and Leasing Commitments

(a) Operating Lease Commitments

Non-cancellable operating leases contracted for but not recognised in the financial statements.

2018$

2017$

Payable - minimum lease payments:- not later than 12 months 11,255 13,505- between 12 months and 5 years - 11,255- later than 5 years - -

11,255 24,760

The operating lease commitment relates to the acquisition of a tractor. The operating leasecommenced at the end of 2014 and is for a term of 5 years.

Note 19 Contingent Liabilities

Estimates of the potential financial effect of contingent liabilities that may become payable:

Bank GuaranteesTabcorp Holdings Limited 10,000 10,000

The Company has banker's guarantees in favour of Tabcorp Holdings Limited (TAB) totalling $10,000.

The guarantee is secured by mortgage over the Company’s assets. The guarantee is only payable in theevent of economic loss caused to TAB by the Company and its staff. To date there has been no event orevents that would require the guarantee to be called upon.

27



Note 20 Key Management Personnel Compensation

Key management personnel are those persons having authority and responsibility for planning,directing and controlling the activities of the Company, directly or indirectly, including any Director(whether executive or otherwise) of that entity. Control is the power to govern the financial and operatingpolicies of an entity so as to obtain benefits from its activities.

The aggregate compensation of key management personnel during the financial year comprisingamounts paid or payable or provided for was as follows:

2018$

2017$

Short-term employee benefits 310,817 281,368Post-employment benefits 27,825 24,005Other long-term benefits 18,237 22,381Termination benefits - 4,162

356,879 331,916

Note 21 Related Party Transactions

Transactions between related parties are on normal commercial terms and conditions no morefavourable than those available to other persons unless otherwise stated.

Note 22 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 amaximum of $1 each towards meeting any outstanding obligations of the Company. At 30 June 2018 thenumber of members was 10,014 (2017: 9,039).

28



Note 23 Financial Risk Management

The Company's financial instruments consist mainly of deposits with banks and other financialinstitutions, cash on hand, accounts receivable and payable, bank overdraft, bank loans and otherborrowings.

The carrying amounts for each category of financial instruments, measured in accordance with AASB139 as detailed in the accounting policies to these financial statements, are as follows:

Note2018

$2017

$

Financial AssetsCash and cash equivalents 5 338,053 445,198Trade and other receivables 6 59,235 74,419Investments 8 157 157

Total financial assets 397,445 519,774

Financial LiabilitiesFinancial liabilities at amortised cost

Trade and other payables 13 692,879 606,571Bank loans 15 1,425,147 1,575,016Chattel mortgage loans 15 116,040 168,448Bank overdraft 15 - 11,319Other borrowings 15 250,710 190,071

Total financial liabilities 2,484,776 2,551,425

Net Fair Values

The net fair values of financial assets and financial liabilities approximates their carrying values. Theaggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed inthe statement of financial position and in the notes to the financial statements.

Note 24 Company Details

The registered office of the Company is:Laurieton United Services Club LimitedSeymour Street Laurieton NSW 2443

29

laurieton united services club limited fi… · laurieton united services club limited abn 44 000...

Documents