2017 annual report - mccracken properties...2017 annual report 7 specifically, by entity mccracken...

2017 Annual Report 1

2017 Annual Report

PROPERTIESPROPERTIES

2

PLAY RELAXENJOY



ContentsReview of Operations 3

Chairman’s Report 4

Chief Executive Officer’s Report 6

McCracken Group Hotel Profile 9

Director’s Profile 10

Director’s Report 12

Consolidated Income Statement 13

Consolidated Statement of Comprehensive Income 14

Statement of Financial Position 15

Statement of Changes in Equity 16

Statement of Cash Flows 17

Notes to Financial Statements 18

Directors’ Declaration 31

Compilation Report 32

Independent Auditor’s Report 33


A summary of the consolidated results is set out below:

The Consolidated Accounts for the economic entity and the audit report thereon are contained in later in the Annual Report.

Economic PerformanceMembers of the group made the following contributions to profit:

Review of Operations

2017 2016 2015 2014 2013 2012 2011 2010

$,000 $,000 $,000 $,000 $,000 $,000 $,000 $,000

Revenue from Land Sales 0 0 0 96 0 0 838 1,693

Revenue from Hotel Operations 12,105 12,505 12,771 13,243 12,843 11,916 11,125 8,772

Other Revenue (1,395) 74 57 259 174 52 113 124

Profit before income tax expense (1,894) 35 168 482 106 (80) (282) 642

Income Tax expense 0 0 0 0 0 0 (115) 115

Profit after income tax expense (1,894) 35 168 482 106 (80) (167) 527

Entity $ $ $ $ $ $ $ $

McCracken Properties Pty. Ltd. 343,443 351,926 379,595 420,789 222,135 275,611 738,963 1,278,433

McCracken Country Club Pty. Ltd.

(332,886) (67,780) (226,946) (75,798) (90,485) (115,888) (467,284) (439,260)

McCracken Kent Town Pty. Ltd. (1,731,691) (267,190) (105,032) 17,735 (28,463) (26,899) (36,855) 93,539

McCracken Developments Pty. Ltd.

(172,032) 20,496 122,063 120,915 4,849 (212,317) (523,262) (288,688)

McCracken Developments (No 2) Pty. Ltd

(1,192) (1,539) (1,518) (1,511) (1,505) (1,477) 5,979 (1,058)

(1,894,358) 35,913 168,162 482,130 106,531 (80,969) (282,459) 642,966

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Chairman’s Report

I have to report to you on the 2016/17 performance of McCracken Properties Ltd, which embraces the McCracken Country Club, the Adelaide Meridien and for most of the period the Adelaide Royal Coach.

Regrettably I must say that it has been a very difficult year and the result is disappointing.

None of the three properties in our portfolio made a profit in the twelve months under report. A very unsatisfactory result and not one of which your board and management are proud of, indeed we are rather disappointed.

Were there warnings we should have seen? Yes; and I think we did see them but were unable to get the required action and turn around in place within the period. Many of these steps have now been taken, or are planned subject to finance.

The accounts have been given unqualified certificates by our auditor and we have full support from our bank with all our repayment agreements being met on time.

Whilst some published economic figures would indicate a growing economy, I would suggest to you that these are largely glossy numbers and that, in reality, only isolated pockets of the business did well.

Our industry is now being dominated by internet marketing, the emphasis on which is almost entirely aimed at “lower prices”. You’ve seen they only talk price on the Trivago and Hotels Combined adverts on TV, but price is not the only factor; and with all that advertising, online travel agencies are dominant in the market place, and in our reservations.

We have a full-time revenue management team who do a great job in their effort to maximise the factors of occupancy percentage with dollar rate, but increasingly our bookings (40% plus) are coming through these OTA’s who are charging 15% commission for bookings and are likely to push higher.

The internet also hosts Airbnb and whilst we do not compete in their market, they certainly do in ours and we believe unfairly because they are not regulated in the same way and mostly do not pay payroll taxes, insurance, etc.

Top line growth has been hard to achieve and at the same time; expenses, especially in staff wages, salaries and other payroll related items have continued to grow. It is not possible to provide 4-star service without staff – and good staff at that – despite the regular statements from Treasurer Koutsantonis that South Australia’s payroll tax is the lowest in the nation. Our payroll tax bill was up by 10% at $157,000.

Our electricity was up by around 50% despite the level of solar now installed at McCracken. We are still working on battery storage and have had a good

look at wind power. Both are still a work in progress, along with other savings measures recommended in a recent report.

Gaming has been in decline over the period, down by about 10% at McCracken (a bit worse than the industry average) and coupled with a record high return to player. As has been a policy over several years, we will shortly install new games to refresh our gaming offer. Golf revenue, both from green fees and membership were lower than last year. Accommodation sales were up by about 2.5% at both McCracken and Meridien. At the Meridien, food and beverage were both up significantly; 25% reflecting new menu, new branding to Angus & Co and improved staff service. At McCracken however, both were down; food 8.7% and beverage 4.5%, although bottle shop showed a positive 2.9%.

This far I have not mentioned the Royal Coach. You will be aware that when we first acquired that property in 2007/8 we immediately grew good cash profits for several years, then in about 2012 the opening of 300 rooms at the Crowne Plaza in Hindmarsh Square (recently relabelled ‘Pullmans’) changed the market place entirely, followed by the Ibis in Grenfell Street with another 300 rooms. They had a material effect on the Royal Coach. Hindsight might say that we should have seen that coming and that we should have exited then. However, our occupancy remained high although at a lower rate so we refurbished both inside and out, but the strategy did not succeed in raising the rate. The “character” of our guest also changed and was then having an effect on our F&B trade too. Our relationship with the landlord changed as their management drifted from family patriarch to lawyer son-in-law.


We still held a long lease but our cash losses were increasing and our only option was to sell out.

As you know the purchaser was Prince Alfred College whose offer was the highest of all submitted and that the agents, to their credit, were able to squeeze a small increase in to the final figure. However, that exit did result in a very significant write down of the book value.

We are now looking at the possibility of exiting our lease at Adelaide Meridien. We have been there for 6-7 years and feel that if the required figure can be achieved, we should exit with a good capital profit which could offset all and/or part of the Royal Coach capital loss or be applied to reduction of debt.

We are also considering new developments at McCracken, both clubhouse/bistro/bar/gaming and for additional accommodation which would improve our potential to attract larger scale conferences which have good profitability.

The final profit of McCracken Properties Ltd, your holding company, showed a profit of $343,443 against last year’s $351,926 having reduced bank exposure by $740,000. Regrettably this level of profit does not enable us to declare a dividend.

In conclusion, I must thank all my fellow directors for their considered inputs into all our deliberations and decisions, and particularly to CEO Andrew Bullock and his teams at McCracken, Meridien and Royal Coach, and also at 1834 Hotels. He is a tower of strength to all of them and to the board. He is held in the highest esteem by his peers in the industry, a reflection of which is mirrored in his appointments to the AHA board, SA Tourism etc. I know I value his advice and seek it regularly.

Barrie Mansom and Graham Meyers retire by rotation, both have indicated their intention to renominate, and are supported by all other board members.

I conclude with a note of thanks to Dan Court for his long service to us as a General Manager at McCracken and to welcome his successor Denny Keane who will start in early November.

Tony Colyer

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Chief Executive Officer’s Report

2017 proved to be one of the most difficult trade years that the McCracken Group of Companies has ever encountered. After a very strong Financial Year in 2016, the 2017 results at McCracken Country Club were very poor. Sales were significantly down and our costs continued to rise. We struggled to emulate the same strength in the conference market that we had in the previous year. The Adelaide Meridien also had a very ordinary year of trade by profit with results down on the 2016 year.

On a positive note, the results in the 2nd half of the financial year for the Adelaide Meridien were much better and the improved trade also followed through into the start of this year. It was a derivative of a poor start to the year along with some inflated costs associated with repairs and maintenance affiliated with the restaurant refurbishment. Aligned with that, to complete the perfect storm, was the settlement of the Adelaide Royal Coach incurring significant write-downs in asset value after continuous underwhelming trade. I will report further on that specifically in that entity further on.

Industry-wide we have recently seen the development of additional rooms in the Adelaide market with the introduction of the Holiday Inn Express; a brand new 245 room hotel on Hindley Street. We continue to see increased international demand in Adelaide and we are working hard to target opportunities in this space.

As a note of interest, China is now the leading market for South Australia – and has grown with incredible strength over the last 5 years. We anticipate further development in that market and will continue to look for ways to further maximise that opportunity. We are continuing to invest in innovative technology where possible.

In recent times we have engaged in an improved revenue management software tool, primarily focusing on the BAR (Best Available Rate) we may have in the market as well as what rates we are distributing by segmentation, market, and distribution channels. This will help in the battle against OTA’s (Online Travel Agents) and the like and is focused on reducing commission rates and maximising revenue.

We have also migrated to an improved digital CRM (Customer Relationship Management) for conference and corporate use. We are confident that this will improve corporate retention as well as producing better and more timely information for conference enquiry.

To assess further the year that was, I will identify each entity below and its contribution to the years result.

EBITDAMcCracken Properties – $489,675McCracken Developments – $80,456McCracken Country Club – ($171,511)McCracken Kent Town – ($1,603,260)McCracken Developments No.2 – ($1,539)Consolidated Group – ($1,206,179)

Net profit per accountsMcCracken Properties - $343,443McCracken Developments – ($172,032)McCracken Country Club – ($332,886)McCracken Kent Town – ($1,731,691)McCracken Developments No. 2 – ($1,192)Consolidated Group – ($1,894,358)In consolidation, the group had a loss of $1,894,358. Finance costs for the year were $405,225.


Specifically, by entityMcCracken PropertiesMcCracken Properties’ year was in line with previous results and forecasts. The revenues of rent came from the apartments at McCracken Country Club ($181k), rent from McCracken Country Club ($500k), and other revenues included interest recovery from the Adelaide Meridien and the Royal Coach. These interest figures will now reduce with the sale of the Royal Coach no longer paying an interest on its internal borrowings.

McCracken Developments (Adelaide Meridien)A year that was not our best for the Adelaide Meridien from a profitability aspect, however, there were a number of positive items that started this year. Most notably was the engagement of the Angus & Co restaurant space as reported last year. I am pleased to report that since the introduction we have seen on average a 50% increase in food revenues each month on the corresponding period last year. Our food sales had dropped to as low as $630k a few years ago and this year we are on track to break well over $1 million – a far improved result that will have positive profit results.

Accommodation, likewise, has started this year very well and last year had also seen growth in this space. We are tracking back towards exceeding $3 million in this space this Financial Year – a far improved performance and getting back to numbers we had enjoyed in the 14-15 year. Occupancy this year was 74% at an ADR of $111.

Areas that let us down this year were our increased expenses. Our labor cost increased by more than $100k, a derivate of additional sales requiring more work

but also higher and ever-increasing award wage rates, commissions increased by $75k in line with extra accommodation and OTA’s becoming more aggressive in the marketplace, electricity up almost $20k, and Repairs and maintenance almost $100k up. The Repairs and Maintenance related to the redevelopment of the restaurant – an expense that has certainly started to produce better returns since.

So, with all that considered many of the items were OK and the growth prospects are still strong. This Financial Year we are already tracking in front of last year and we expect that the Ashes in December is also forecast to have a significant financial impact.

The property is currently being marketed for sale and, subject to that, we are confident the numbers are showing good prospects for potential purchasers, but also should the market not bite at the numbers we are seeking, I am equally confident that the asset will grow and prosper over this next period.

McCracken Country ClubMcCracken Country Club had a very poor trading year. After a breakthrough record profitability in the 2016 year, 2017 fell by the wayside. Sales for the year were down in excess of $250k, Gaming being a significant player in that downturn, down almost $100k. As a profit center that is a critical element to our operation – the industry is hurting, McCracken was certainly impacted heavily with the introduction of $5 maximum bets without any legislative reform to assist.

Accommodation bucked the trend and was up approx. $50k on the previous year, with occupancy at 68% and a steady ADR of $152.

Food sales were the area of most contention, down around $150k for the year. This is an area that we are looking at options to ‘reface’. So overall, gross profit retracted by approximately $200k.

Expenses disappointingly, did not reduce in line with that. We saw employment expenses increase, electricity up by more than $40k and repairs and maintenance up $50k on the previous year which heavily impacted profitability.

With all that in mind, we have some positives to look forward to. We have a new General Manager Denny Keane starting with us in early November. Denny comes with a wealth of experience in hotels, from SkyCity in Auckland (accommodation division) and Michelin star restaurants in London. Of recent time, Denny has been General Manager of the Ozone Hotel on Kangaroo Island – we welcome him onboard.

We have also welcomed back to the resort Mark Crowe. Mark, after a stint at South Lakes Golf Club, has rejoined us and we welcome his influences in the resort broadly and specifically his wealth of experience in both golf and gaming.

Our Sales Manager has also moved on and we began the process of recruiting for a Business Development Manager to replace this role. I am pleased to report that we have had strong interest in this role and are near the point of appointing a preferred candidate.

So yes, there has been some turnover, however, I feel that we are starting to rebuild a team – a team that has a lot to do to get McCracken back to where it was 12-18 months ago, but a team that I am confident can do so.

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McCracken Kent Town (Royal Coach Motor Inn)Significant losses were incurred, both trading and capital, this year for the Royal Coach. It was the end of an extremely frustrating and unsatisfactory period and I don’t want to dwell heavily on the trading. I would like to help the shareholder group better understand however, how we got to be where we were with that property.

As you have been made aware we had struggled for several years with an ever-increasing rent position in a property that could not sustain the increased expenses. We had tried many negotiating tools with the landlord to no avail to have any relief or reduction in our rent position. The lease contained ratchet clauses that we, unfortunately, could not have rent repositioned to market. Conservatively we had advice that the hotel was overrented by as much as $250k per annum.

As such, the leasehold asset in itself was basically unsellable. This is an issue that has faced many similar leasehold assets in hotels over the last few years. Rentals are out of kilter with market rent but landlords are in many cases refusing to provide any relief. We saw a similar situation recently where an investor group lost over $3 million in the same process.

It was rationalized that the best way to get out of this was to try and sell the asset as a freehold going concern with the landlord. That meant we were in an unenviable position of being held to what the landlord wanted during a sale process. Whilst we had some levers to pull they were limited.

That lease provision of not being able to rationalize our rent back to a reasonable market position cost us badly. We are now free of the asset – whilst a very poor result has been posted, due to that we did avoid what could have been substantially worse.

The Royal Coach has been a disappointing investment for us in its finalisation. The positives however, we must remember are that it did cashflow McCracken Country Club losses in the early years, and allowed us to get into the Adelaide market where we made the investment into the Adelaide Meriden – one that I am confident is still sound albeit with some work to get it back to where it was.

SummaryA very poor year, one that we will learn from and look to put processes in place to ensure we are not faced with another like this. We watch with interest on the current marketing of the Adelaide Meridien, however, I am confident that if an attractive number is not forthcoming then we can also further improve trade and grow this asset.

McCracken Country Club will get a fresh look with a new management team which will be critical in generating success. We have many development opportunities that we are considering and we also continue to work with the government on opportunities for assistance.

I would like to thank the board for their ongoing advice and support over the year. Of note, our Chairman Tony Colyer, who works tirelessly on assisting us to ensure wherever possible, we are aiming to improve shareholder wealth while providing considerable advice to daily challenges.

Andrew Bullock


McCracken Group Hotel Profile

McCracken Group of Companies are suppliers of premier accommodation facilities in South Australia. Over theyears of operation we have supplied business groups, travel parties, golf groups, newly-weds and families with theease and service that has come to be expected through our accommodation operations. Our accommodationproperties are very popular and appropriate for all guest types who come for conferences, events, getaways, golftrips and weddings.

Specifically those accommodation properties are as follows:

Adelaide Meridien Hotel & Apartments

Superbly located on Melbourne Street in the heart of trendy North Adelaide, the Adelaide Meridien is situated amongst leafy parklands, with an abundance of restaurants, cafés, galleries and boutique shops nearby. The convenience of the central location, within walking distance to key Adelaide attractions, including the Adelaide Oval, Adelaide Zoo and just a short (free) bus ride to the city and Rundle Mall shopping precinct is a strong selling point.

All of the 94 spacious guest rooms were refurbished mid 2010, and now offer ensemble beds, 42” LCD televisions, iPod docking station, mini-bar, tea/coffee making facilities and wireless internet throughout and free Wifi. Curtains were replaced in all rooms, and new carpet in 53 Executive Rooms. The 42 One Room Suites were all upgraded with two reverse cycle air-conditioners for both living and bedrooms and carpet will soon follow. The new Angus & Co restaurant located on the ground floor, is open daily for breakfast, lunch and dinner. Serving restaurant meals with a relaxed atmosphere, dine alfresco or relax in the bar.

With meeting and function rooms available, swimming pool & spa, plus free secure car parking onsite, the Adelaide Meridien is the perfect choice for accommodation in Adelaide.

McCracken Country Club

Located just one hour from Adelaide at Victor Harbor, on the Fleurieu Peninsula, the McCracken Country Club comprises 39 resort rooms, 22 apartments, 2 villas and a stand-alone conference centre. Surrounded by the Tony Cashmore designed links/lakes McCracken Golf Course, it enjoys panoramic views across the Hindmarsh Valley and the beautiful Victor Harbor coast.

Facilities include indoor heated lap pool, sauna, spa baths in rooms, Health Club, including gymnasium, flood lit tennis courts and day spa. McCracken also boasts the 18 hole links/lakes Golf Course including 74 bunkers and 14 lakes.

The Bistro has a casual, hotel feel, with meals ordered at the counter, a long bar for drinks and pool table in the corner. Adjacent to the Bistro are both the Cellarbrations bottleshop retail outlet and the gaming room.

Baudins Restaurant offers service to your table , both style seating and uninterrupted views of the golf course.

Both dining outlets at the resort open onto respective outdoor areas for alfresco dining, with the Bistro offering an outdoor beer garden. Cutting edge conference and function facilities coupled with luxurious surroundings in a premier tourist region make business tourism a large part of McCracken’s market mix. Also offers free WiFi throughout.

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Anthony Wayne Colyer (Chairman)

Employment: Managing Director, Tony Colyer Pty Ltd

Qualifications: Associate Institute of Sales Management

Career Highlights: Tony’s business is in the supply of textile products for bed, bath & table into the hospitality, healthcare and linen rental business selling to major hotels, governments, nursing homes, hospitals and wholesalers around Australia. They have offices in Melbourne and Adelaide and also affiliates in all other Australian capital cities. Having a large involvement in amateur golf and in the supply of textile products to the hospitality industry, in 1988 he was invited to join a syndicate to build a motel on the Barmera Golf Course. There started his involvement in golf resorts which has gone on to other golf related developments at Clare and subsequently McCracken Country Club. Other Directorships: Clare Country Club Pty Ltd (Chairman); AW Colyer Nominees Pty Ltd; Other Private Companies.

Barrie Malcolm Mansom

Employment: Principal, MC Chartered Accountants

Qualifications: FCA, CTA, DipFP, JP.

Career Highlights: Through his role as Principal of MC Chartered Accountants, Barrie has been advising the hospitality industry for more than 30 years. He is a Fellow of the Institute of Chartered Accountants in Australia, Fellow of the Taxation Institute of Australia, Registered Company Auditor as well as holding other professional memberships.

Chartered Tax Advisor, Registered SMSF Auditor.

Other Directorships: Barkuma Incorporated; Clare Country Club Pty Ltd; Jimada Pty Ltd; Other Private Companies.

Peter David Pedler

Employment: Partner, Duncan Basheer Hannon

Qualifications: LLB (Hons) Adel

Career Highlights: Peter heads up the commercial and property division of Duncan Basheer Hannon which has grown rapidly in the last few years and now comprises 22 staff including 11 lawyers. Peter was admitted to practice in 1981 and has extensive experience in commercial agreements, commercial and property transactions, corporations, corporate governance and due diligence. Peter advises a wide range of small and medium size businesses involved in commercial activities ranging from aquaculture to manufacturing, transport and logistics, hospitality and property development.

Other Directorships: Scantech Limited (Chairman); Clare Country Club Pty Ltd; Trinity Place Ltd; Bodkin Pty Ltd.

Directors’ Profile

The following directors held office in 2017:


Gerard Patrick O’Brien

Qualifications: Diploma in Financial Planning

Career Highlights: Over 44 years in Financial Services Industry specialising In Superannuation and Financial Planning. Accredited Adviser for Advanced Strategies for Self ManagedSuperannuation. Received numerous awards for Financial Planning Excellence within Garvan Financial Planning. He has recently sold his Financial Planning practice and retired.

Other Directorships: Clare Country Club Pty Ltd; Western Suburbs Financial Services Pty Ltd.

Craig Douglas Lunn

Employment: Managing Director,Perfect Cup Australia; President/Chairman, Central Market Arcade Traders Association

Qualifications: Dip. Hotel Management; Fast Food Management

Career Highlights: Craig’s hospitality career spans over 30 years. 20+ years were spent in Hotels/Motels/Resortmanagement, following which Craig has since owned and operated a variety ofhospitality/retail based outlets. Currently his ownership and management includes The Perfect Cup in the Adelaide Central Market and the Perfect Cup, West Lakes. Craig also continues to consult to the Hotel & Motel industry. Other Directorships: Stag Enterprises Pty Ltd; Coverbow Pty Ltd; Perfect Cup Franchising Pty Ltd.

Graham John Meyers

Employment: Managing Director,Collaroy Developments Pty Ltd

Qualifications: Safety SupervisorCertificate; Building Technician;Building Work Supervisor Licence;Unlimited Building Work Contractor Licence

Career Highlights: In his role as Managing Director at Collaroy Group of Companies, Graham has been responsible for many significant building projects, including the first Kmart inAustralia, and as specialists for hospitality developments, built both the McCracken and Clare Country Clubs. Graham is acknowledged as beinginstrumental in changes to the Certificate of Occupancy provisions made during his 3 year presidency of the South Australian Master Builders Association, and was recognised for his service tothe building industry in 2008 with Life Membership of the association.

Other Directorships: Meyers Holdings Pty Ltd; Burbage Pty Ltd; Watervale Holdings Pty Ltd.

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Numbereligible

to attend

Numberattended

Directors’ Meetings

Directors’ Report

Your directors present their report on the company and its controlled entities for the financial year ended 30th June, 2017.

DirectorsThe names of the directors in office at any time during, or since the end of, the year are:-

Mr. Anthony W Colyer 9 9Mr. Gerard P O’Brien 9 9Mr. Craig D Lunn 9 9Mr. Barrie M Mansom 9 9Mr. Peter D Pedler 9 8Mr. Graham J Meyers 9 6

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

Company SecretaryMr. Barrie M Mansom held the office of Company Secretary from the start of the financial year to the date of this report.

Review of OperationsThe consolidated loss of the consolidated group for the financial year after providing for income tax amounted to $1,894,358

Significant Changes in the State of AffairsNo significant changes in the consolidated group’s state of affairs occurred during the financial year.

Principal ActivitiesThe principal activity of the consolidated group is the operation of motels. No significant change in the nature of these activities occurred during the year.

Events Subsequent to the End of the Reporting PeriodNo matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group in future financial years.

Likely Developments and Expected Results of OperationsLikely developments in the operations of the consolidated group and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the consolidated group.

Environmental RegulationThe consolidated group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory.

OptionsNo options over issued shares or interests in the company or controlled entity were granted during or since the end of the financial year and there were no options outstanding at the date of this report.

Indemnification of OfficersDuring the financial year, the group paid a premium in respect of a contract insuring Board members and executive officers of the entity against any liability incurred as Board members or executive officers to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The entity has not otherwise, during or since the end of the financial year, indemnified or agreed to indemnify an officer or auditor of the entity against any liability incurred as such an officer or auditor.

Proceedings on Behalf of the CompanyNo person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.The company was not a party to any such proceedings during the year.

Auditor’s Independence DeclarationA copy of the Auditor’s Independence Declaration as required under Section 370C of the Corporations Act 2001 is included in the financial report.Signed in accordance with a resolution of the Board of Directors:Dated this 10th day of October, 2017.

Anthony Wayne Colyer Director


For the year ended 30th June 2017

Consolidated Income Statement

Consolidated Group Parent Entity

Note 2017 2016 2017 2016

$ $ $ $

Revenue 2 12,105,488 12,505,034 - -

Other Revenue 2 (1,395,801) 74,163 935,622 956,138

Changes in inventories (2,605) (2,135) - -

Raw materials and consumables used (1,790,625) (1,791,373) - -

Employee benefits expense (4,442,349) (4,332,524) - -

Freight and cartage (3,432) (3,369) - -

Depreciation and amortisation expenses (283,661) (311,631) (5,919) (7,181)

Commissions paid (399,890) (288,303) - -

Finance Costs (405,225) (406,437) (394,373) (406,404)

Other Expenses (5,276,258) (5,407,512) (191,887) (190,627)

Profit/(Loss) before income tax (1,894,358) 35,913 343,443 351,926

Income tax expense - - - -

Profit/(Loss) for the year (1,894,358) 35,913 343,443 351,926

Profit/(Loss) attributable to:

Members of the parent entity (1,894,358) 35,913 343,443 351,926

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Consolidated Statement of Comprehensive Income


Note 2017 2016 2017 2016

$ $ $ $


Other Comprehensive income:

Net Gain/Loss on revaluation - - - -

Other Comprehensive income/(loss) for the year, net of tax - - - -

Total Comprehensive income/(loss) for the year (1,894,358) 35,913 343,443 351,926

Total Comprehensive income attributable to




Note 2017 2016 2017 2016

$ $ $ $


Other Comprehensive income:

Net Gain/Loss on revaluation - - - -

Other Comprehensive income/(loss) for the year, net of tax - - - -

Total Comprehensive income/(loss) for the year (1,894,358) 35,913 343,443 351,926

Total Comprehensive income attributable to


Statement of Financial Position

Consolidated Group Parent EntityNote 2017 2016 2017 2016

$ $ $ $

CURRENT ASSETSCash and Cash Equivalents 3 81,720 531,215 670 2,513

Trade and Other Receivables 4 156,500 218,735 207 4

Other Assets 5 34,362 32,895 - -

Financial Assets 6 - - - -

Inventories 7 200,829 203,433 - -

TOTAL CURRENT ASSETS 473,411 986,278 877 2,517

NON-CURRENT ASSETS

Land & Buildings 8 13,235,080 13,868,606 12,477,423 12,477,423

Plant & Equipment 9 1,534,047 1,753,447 32,259 38,178

Trade and Other Receivables 4 - - 7,249,256 7,632,963

Financial Assets 6 - - 4 4

Intangible Assets 10 51,622 1,407,449 - -

TOTAL NON-CURRENT ASSETS 14,820,749 17,029,502 19,758,942 20,148,568

TOTAL ASSETS 15,294,160 18,015,780 19,759,819 20,151,085

CURRENT LIABILITIES

Trade and Other Payables 11 871,165 919,274 35,874 29,686

Provisions 12 345,068 387,693 - -

Borrowings 13 50,038 46,566 45,669 46,566

TOTAL CURRENT LIABILITIES 1,266,271 1,353,533 81,543 76,252

NON-CURRENT LIABILITIES

Borrowings 13 6,400,000 7,140,000 6,400,000 7,140,000

TOTAL NON-CURRENT ASSETS 6,400,000 7,140,000 6,400,000 7,140,000

TOTAL LIABILITIES 7,666,271 8,493,533 6,481,543 7,216,252

NET ASSETS 7,627,889 9,522,247 13,278,276 12,934,833

EQUITY

Issued Capital

6,180,599 Fully Paid Ordinary Shares of $1 6,180,599 6,180,599 6,180,599 6,180,599

Retained Earnings (Accumulated Losses) 1,447,290 3,341,648 7,097,677 6,754,234

TOTAL EQUITY 7,627,889 9,522,247 13,278,276 12,934,833

As at 30th June 2017

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Statement of Changes in Equity

Share Capital- Ordinary

RetainedEarnings

(AccumulatedLosses)

Total

Consolidated GroupBalance at 1 July 2015 6,180,599 3,429,347 9,609,946

Profit attributable to members of the parent entity - 35,913 35,913

Subtotal 6,180,599 3,465,260 9,645,859

Dividends Paid or Provided for - 123,612 123,612

Balance at 30 June 2016 6,180,599 3,341,648 9,522,247

Balance at 1 July 2016 6,180,599 3,341,648 9,522,247

Profit attributable to members of the parent entity - (1,894,358) (1,894,358)

Subtotal 6,180,599 1,447,290 7,627,889

Dividends Paid or Provided for - - -

Balance at 30 June 2017 6,180,599 1,447,290 7,627,889

Parent EntityBalance at 1 July 2015 6,180,599 6,525,920 12,706,519


Subtotal 6,180,599 6,877,846 13,058,445

Dividends Paid or Provided for - 123,612 123,612

Balance at 30 June 2016 6,180,599 6,754,234 12,934,833

Balance at 1 July 2016 6,180,599 6,754,234 12,934,833


Subtotal 6,180,599 7,097,677 13,278,276

Dividends Paid or Provided for - - -

Balance at 30 June 2017 6,180,599 7,097,677 13,278,276




$ $ $ $

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers 12,124,476 12,412,443 - -

Payments to Suppliers and Employees (12,334,968) (12,499,915) (579,604) (623,436)

Rent Received 14,350 14,580 681,562 681,562

Interest Received 779 5,244 253,857 274,576

Government Subsidies 9,714 42,015 - -

Recoveries 32,042 12,197 - -

GST Collected 1,264,376 1,315,485 68,157 68,156

GST Refunded from ATO 618,350 640,226 7,984 9,467

Income Tax Paid - - - -

GST Paid on Purchases (608,947) (617,121) (8,452) (9,080)

GST Remitted to ATO (1,313,577) (1,286,312) (68,157) (68,156)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

14(b) (193,405) 38,842 355,347 333,089

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from Sale of Property, Plant & Equipment 795,158.00 - - -

Payment for Property, Plant & Equipment (314,720) (386,515) - -

Advances to/from Related Entities - - 383,707 (944,300)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

480,438 (386,515) 383,707 (944,300)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from Borrowings - 1,510,000 - 1,510,000

Repayment of Borrowings (740,000) (840,393) (740,000) (840,393)

Dividends Paid - (123,512) - (123,512)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

(740,000) 546,095 (740,000) 546,095

Net Increase (Decrease) in Cash Held (452,967) 198,422 (946) (65,116)

Cash at Beginning of Year 485,149 286,727 (43,553) 21,563

Cash at End of Year 14(a) 32,182 485,149 (44,499) (43,553)


Statement of Cash Flows

18

Notes to the Financial Statements

This financial report includes the consolidated financial statements and notes to accounts of McCracken Properties Ltd and controlled entities (the “consolidated group” or “group”) and the separate financial statements and notes of McCracken Properties Ltd as an individual parent entity (“parent entity”)

The financial statements were authorised for issue on 10th October, 2017 by the directors of the company.

Basis of PreparationThe financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The company is a for-profit entity for financial reporting purposes under Australian Accounting Standards.

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

The financial statements, except for the cash flow information, have been prepared on the accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar.

Accounting Policiesa. Principles of ConsolidationThe consolidated financial statements incorporate all the assets, liabilities and results of the parent entity (“the parent”), McCracken Properties Ltd, and its subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Details of the subsidiaries are provided in Note 18.

The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group

b. Income TaxThe income tax expense (income) for the year comprises current income tax expense (income) for the group. The group does not apply deferred tax.

Current income tax expense charged to the profit or loss is the tax payable on taxable income for the current period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the Australian Taxation Office using tax rates (and tax laws) that have been enacted and substantively enacted by the end of the reporting period.

Current tax assets and liabilities are offset where a legally enforceable right to set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.

Tax ConsolidationMcCracken Properties Ltd and its wholly owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation legislation. The income tax expense and liability applicable to each entity is recorded in the head entity of the tax consolidated group.

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

d. Property, Plant and EquipmentPlant and equipment are measured on the cost basis and are therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event of 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 losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(p) for details of impairment).

DepreciationThe depreciable amount of all fixed assets, excluding freehold land, is depreciated on a diminishing value method over the asset’s useful to the group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Depreciation is recognised in profit and loss


The depreciation rates used for each class of depreciable assets are:Class of Fixed Asset Depreciation Rate

Plant and Equipment 1.50 - 66.67%

Motor Vehicles 18.75 - 40.00%

Furniture and Fittings 1.5 - 40.00%

Office Furniture and Equipment 4.00 - 50.00%

Linen and Towels 100.00%

The assets’ residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater that its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the profit and loss in the period in which they arise. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.

e. IntangiblesGoodwillGoodwill is carried at cost less any accumulated impairment losses. Goodwill is tested for impairment annually.

f. Employee BenefitsProvision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits have been measured at the (undiscounted) amounts expected to be paid when the obligation is settled. Employee benefits are shown as current liabilities notwithstanding that some entitlements are not expected to be settled within twelve months after the end of the reporting period in which the employees rendered the related service.

The Group’s obligations for short-term employee benefits, such as wages, salaries and sick leave are recognised as part of trade and other payables in the statement of financial position.

Contributions are made to an employee superannuation fund and are charged as expenses when incurred.

g. ProvisionsProvisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.

h. Cash and Cash EquivalentsCash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term investments with original maturities of twelve months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

i. Revenue and Other IncomeRevenue is measured at the value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. For this purpose, deferred consideration is not discounted to present values when recognising revenue.

Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods.

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

Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at the end of the reporting period and where outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable.

All revenue is stated net of the amount of Goods and Services Tax.

j. Trade and Other PayablesTrade and other payables represent the liabilities for goods and services received by the Group 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 60 days of recognition of the liability

k. Goods and Services Tax (GST)Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST is not recoverable from the Australian Taxation Office (ATO).

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

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which are recoverable from, or payable to, the ATO are presented as operating cash flows. included in receipts from customers or payments to suppliers.

20

l. Comparative FiguresWhen required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

m. Critical Accounting Estimates and JudgmentsThe directors evaluate estimates and judgments incorporated in the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.

n. Going ConcernNotwithstanding the net loss from operating activities, the financial statements have been prepared on a going concern basis.

o. Financial InstrumentsInitial recognition and measurementFinancial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either purchase or sell the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified “at fair value through profit or loss” in which case transaction costs are recognised immediately as expenses in profit or loss.

Classification and subsequent measurementFinancial instruments are subsequently measured at fair value (refer to Note 1(q)), amortised cost using the effective interest rate method or cost. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method.

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

The Group does not designate any interest in subsidiaries, associates or joint ventures as being subject to the requirements of Accounting Standards specifically applicable to financial instruments. Accordingly, such interests are accounted for on a cost basis in the parent’s separate financial statements.

(i) Financial assets at fair value through profit or lossFinancial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying amount being

including in profit or loss.

(ii)Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.

(iii) Held-to-maturity investmentsHeld-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost. Gains and losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.

(iv)Available-for-sale investmentsAvailable-for-sale investments are non-derivative financial assets that are either not capable of being classified into other categories of financial assets due to their nature or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

They are subsequently measured at fair value with any remeasurements other than impairment losses and foreign exchange gains and losses recognised in other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.

Available-for-sale financial assets are classified as non-current assets when they are expected to be sold within 12 months after the end of the reporting period. All other available-for-sale financial assets are classified as current assets.



(v)Financial liabilitiesNon-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.

ImpairmentAt the end of each reporting period, the Group assesses whether there is objective evidence that a financial asset has been impaired. A financial asset (or a group of financial assets) is deemed to be impaired if, and only if, there is objective evidence that impairment as a result of one or more events (a “loss event”) has occurred, which has an impact on the estimated future cash flows of the financial asset(s).

In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the instrument is considered to constitute a loss event. Impairment losses are recognised in profit or loss immediately. Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at this point.

In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments; indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or economic conditions that correlate with defaults.

For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point the written-off amounts are charges to the allowance

account or the carrying amount of impaired financial assets is reduced directly if no impairment amount has previously been recognised in the allowance account.

When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the Group recognises the impairment for such financial assets by taking into account the original terms as if the terms have not been renegotiated so that the loss events that have occurred are duly considered.

Financial guaranteesFinancial guarantees issued, which require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due, are recognised as financial liabilities at fair value on initial recognition, where material.

The fair value of financial guarantee contracts has been assessed using the probability weighted discounted cash flow approach. The probability has been based on:-

- the likelihood of the guaranteed party defaulting during the next reporting period;

- the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and

- the maximum loss exposure if the guaranteed party were to default

Financial guarantees are subsequently measured at the higher of the best estimate of the obligation in accordance with AASB 137: Provisions, Contingent Liabilities and Contingent Assets, and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.

DerecognitionFinancial assets are derecognised when the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, or cancelled or have expired. The difference between the carrying amount of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

p. Impairment of AssetsAt the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include considering external sources of information and internal sources of information including dividends received from subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs of disposal and value in use to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.

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

22

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

q. Fair Value of Assets and LiabilitiesThe Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable Accounting Standard.

“Fair value” is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.

As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.

To the extent possible, market information is extracted from the principal market for the asset or liability (i.e. the market with the greatest volume and level of activity for the asset or liability). In the absence of such a market, market information is extracted from the most advantageous

market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts for the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs.

For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.

The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable market information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements.




$ $ $ $

2. Revenue and Other Income

Sales Revenue

Sale of Goods 4,323,644 4,399,888 - -

Provision of Services 7,781,844 8,105,146 - -

Total Revenue 12,105,488 12,505,034 - -

Other Revenue

Interest Revenue 2a 982 5,244 254,060 274,576

Government Subsidies 9,714 42,142 - -

Capital Gain of Sale of Non-Current Assets (1,452,889) - - -

Recoveries 32,042 12,197 - -

Rent Received 14,350 14,580 681,562 681,562

Total Other Revenue (1,395,801) 74,163 935,622 956,138

(a) Interest Revenue from:

wholly owned controlled entities - - 253,700 272,400

other persons 982 5,244 360 2,176

Total Interest Revenue 982 5,244 254,060 274,576

3. Cash and Cash Equivalents

Cash on Hand 28,426 29,026 - -

Cash & Cheques in Transit 21,928 19,323 - -

Cash at Bank 31,366 482,866 670 2,513

81,720 531,215 670 2,513

There are no restrictions with respect to access to the cash and cash equivalent balances shown

24


$ $ $ $

4. Trade and Other ReceivablesCurrent Trade Debtors 126,771 212,222 - - Accrued Income 721 572 - - Other Debtors 28,805 5,941 4 4

156,297 218,735 4 4 OtherIncome Tax Refund - - - - Loans - Unsecured 203 - 203 -

203 - 203 - 156,500 218,735 207 4

Non-CurrentLoans - Unsecured - - 7,249,256 7,632,963

- - 7,249,256 7,632,963 Total Loans and Receivables 156,500 218,735 7,249,463 7,632,967 Less Income Tax Refund - - - - Loans and receivables as financial assets 156,500 218,735 7,249,463 7,632,967

5. Other AssetsPrepayments 34,362 32,895 - -

34,362 32,895 - - 6. Financial Assets

Current Available-for-sale financial assetsLand & Buildings - - - -

- - - - Non-CurrentFinancial assets measured at cost:Shares - Controlled Entities - - 4 4

- - 4 4 7. Inventories

Stock on Hand - Food 28,733 39,525 - - Stock on Hand - Beverages 172,096 163,908 - -

200,829 203,433 - -




$ $ $ $

8. Land and BuildingsApartments at cost 1,284,897 1,284,897 1,284,897 1,284,897 Freehold Land 1,907,780 1,907,780 1,907,780 1,907,780 Building at cost 8,826,721 8,826,721 8,826,721 8,826,721 Land & Buildings - 27 Rapid Drive 274,439 274,439 - - Land & Buildings - 28 & 30 Rapid Drive 347,807 347,807 347,807 347,807 Property Improvements 593,436 1,226,962 110,218 110,218

13,235,080 13,868,606 12,477,423 12,477,423 9. Plant and Equipment

Property Improvements - at cost 216,464 216,464 - - Less: Accumulated Depreciation 25,891 17,211 - -

9a 190,573 199,253 - - Plant & Equipment - at cost 3,084,478 3,528,796 191,121 191,121 Less: Accumulated Depreciation 2,177,580 2,469,234 158,862 152,943

9a 906,898 1,059,562 32,259 38,178 Motor Vehicles - at cost 43,132 43,132 - - Less: Accumulated Depreciation 37,046 35,454 - -

9a 6,086 7,678 - - Furniture & Fittings - at cost 1,218,362 1,224,108 - - Less: Accumulated Depreciation 1,007,374 981,298 - -

9a 210,988 242,810 - - Office Furniture & Equipment - at cost 82,131 82,131 - - Less: Accumulated Depreciation 64,616 60,535 - -

9a 17,515 21,596 - - Linen & Towels - at cost 154,023 174,584 - - Less: Accumulated Depreciation 24,177 24,177 - -

9a 129,846 150,407 - - Crockery & Cutlery - at cost 72,141 72,141 - -

9a 72,141 72,141 - - Total Plant and Equipment 1,534,047 1,753,447 32,259 38,178 (a) Movements in Carrying Amounts

Movement in the carrying amounts for each class of plant and equipment between the beginning and end of the current financial yearProperty Improvements - at cost

Carrying Amount at Beginning of Year 199,253 67,562 - Additions 38,944 138,767 - Disposals - written down value (38,944) - - Depreciation Expense (8,680) (7,076) - Carrying Amount at End of Year 190,573 199,253 -

26


$ $ $ $

Plant & Equipment - at costCarrying Amount at Beginning of Year 1,059,562 1,098,224 38,178 45,359 Additions 161,281 193,485 - - Disposals - written down value (106,923) (9,807) - - Depreciation Expense (207,022) (222,340) (5,919) (7,181)Carrying Amount at End of Year 906,898 1,059,562 32,259 38,178

Motor Vehicles - at costCarrying Amount at Beginning of Year 7,678 9,707 - - Additions - - - - Disposals - written down value - - - - Depreciation Expense (1,592) (2,029) - - Carrying Amount at End of Year 6,086 7,678 - -

Furniture & Fittings - at costCarrying Amount at Beginning of Year 242,810 295,255 - - Additions 40,094 20,966 - - Disposals - written down value (9,630) (235) - - Depreciation Expense (62,286) (73,176) - - Carrying Amount at End of Year 210,988 242,810 - -

Office Furniture & Fittings - at costCarrying Amount at Beginning of Year 21,596 28,605 - - Additions - - - - Disposals - written down value - - - - Depreciation Expense (4,081) (7,009) - - Carrying Amount at End of Year 17,515 21,596 - -

Linen & Towels - at costCarrying Amount at Beginning of Year 150,407 150,407 - - Additions - - - - Disposals - written down value (20,561) - - - Depreciation Expense - - - - Carrying Amount at End of Year 129,846 150,407 - -

Crockery & Cutlery - at costCarrying Amount at Beginning of Year 72,141 72,141 - - Additions - - - - Disposals - written down value - - - - Depreciation Expense - - - - Carrying Amount at End of Year 72,141 72,141 - -




$ $ $ $

10. Intangible AssetsGoodwill 10a 26,351 1,382,178 - - Licence Costs 10a 25,271 25,271 - - 51,622 1,407,449 - - (a) Movements in Carrying AmountsGoodwill

Balance at Beginning of Year 1,382,178 1,382,178 - - Additions - - - - Disposals & Amortisation (1,355,827) - - - Impairment Losses - - - - Carrying Amount at End of Year 26,351 1,382,178 - -

Licence CostsBalance at Beginning of Year 25,271 25,271 - - Additions - - - - Disposals & Amortisation - - - - Impairment Losses - - - - Carrying Amount at End of Year 25,271 25,271 - -

11. Trade and Other PayablesCurrent Financial liabilities measured as amortised cost:

Sundry Creditors 531,138 563,931 4,307 6,213 Deposits in Advance 141,576 125,942 - - Accrued Expenses 66,610 61,968 16,150 7,586

739,324 751,841 20,457 13,799 OtherGST Payable 131,841 167,433 15,417 15,887

131,841 167,433 15,417 15,887 871,165 919,274 35,874 29,686

28


$ $ $ $

12. ProvisionsProvision for Annual Leave 12a 146,062 173,070 - - Provision for Long Service Leave 12a 199,006 214,623 - -

345,068 387,693 - - (a) Movements in Carrying AmountsProvision for Annual LeaveBalance at Beginning of Year 173,070 169,278 - - Movement for the year (27,008) 3,792 - - Balance at End of Year 146,062 173,070 - - Provision for Long Service LeaveBalance at Beginning of Year 214,623 308,260 - - Movement for the year (15,617) (93,637) - - Balance at End of Year 199,006 214,623 - -

13. BorrowingsCurrent Bank Overdraft 49,538 46,066 45,169 46,066 Loans - Unsecured 500 500 500 500

50,038 46,566 45,669 46,566 Non Current Loans - Bank 6,400,000 7,140,000 6,400,000 7,140,000 Loans - Unsecured - - - -

6,400,000 7,140,000 6,400,000 7,140,000 14. Cash Flow Information

(a) Reconciliation of CashCash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:-Cash on Hand 28,426 29,026 - - Cash & Cheques in Transit 21,928 19,323 - - Cash at Bank (18,172) 436,800 (44,499) (43,553)

32,182 485,149 (44,499) (43,553)




$ $ $ $

14. Cash Flow Information

(b) Reconciliation of Cash Flow from Operations with Profit from Ordinary Activities after Income Tax

Profit from Ordinary Activities after Income Tax (441,469) 35,913 343,443 351,926 Non-cash flows in profit from Ordinary Activities:-Bad Debts 18,450 - - - Depreciation 283,661 311,631 5,919 7,181 Capital Gain on Sale of Fixed Assets - - - - Loss on Sale of Fixed Assets 2,325 10,043 - - Changes in Assets and Liabilities:-Decrease/(Increase) in Receivables 43,785 (92,718) (203) - Decrease/(Increase) in Inventories (22,396) 2,136 - - Decrease/(Increase) in Other Assets (1,467) 31,536 - - (Decrease)/Increase in Payables (70,894) (169,854) 6,188 (26,018)(Decrease)/Increase in Provisions (5,400) (89,845) - - (Decrease)/Increase in Other Payables - - - - (Decrease)/Increase in Income Tax Payable - - - - Cash Flow from Operations (193,405) 38,842 355,347 333,089

15. Related Party Transactions

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

30


$ $ $ $

16. Financial Risk Management

Financial AssetsCash and Cash Equivalents 3 81,720 531,215 670 2,513Loans and Receivables 4 156,500 218,735 7,249,463 7,632,967Available-for-sale assets 6, 15(i) - - 4 4 Total Financial Assets 238,220 749,950 7,250,137 7,635,484Financial LiabilitiesFinancial liabilities at amortised cost:Trade and Other Payables 11 739,324 751,841 20,457 13,799

Net Fair Values

17. Dividends Paid or ProposedOrdinary Class Shares Paid - 123,612 - 123,612Ordinary Class Shares Proposed - - - -

18. Controlled Entities Consolidated Country of Incorporation Percentage Owned (%)McCracken Country Club Pty. Ltd. Aust 100 100 McCracken Developments Pty. Ltd. Aust 100 100 McCracken Developments No. 2 Pty. Ltd. Aust 100 100 McCracken Kent Town Pty. Ltd. Aust 100 100

19. Company Details

The company’s financial instruments consist mainly of deposits with banks, local money market investments, short-term investments, accounts receivable and payable.The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

(i) For listed available-for-sale financial assets, the fair values have been based on closing quoted bid prices at the end of the reporting period. In determining the fair values of the unlisted available-for-sale financial assets, the directors have used inputs that are observable either directly (as prices) or indirectly (derived from prices)

The registered office of the company is: McCracken Properties Ltd. Suite 5, Level 1, 102 Greenhill Road, Unley. S.A. 5061

The principal place of business is:- McCracken Properties Ltd. 21-39 Melbourne Street North Adelaide. S.A. 5006



Directors’ Declaration

32

Compilation Report


Independent Auditor’s Report

34

Independent Auditor’s Report


Notes


SURROUNDED BY MCCRACKEN GOLF COURSE WITH PANORAMIC VIEWS ACROSS THE HINDMARSH VALLEY

The registered office of the company is: McCracken Properties Ltd. Suite 5, Level 1, 102 Greenhill Road, Unley. S.A. 5061

The principal place of business is:- McCracken Properties Ltd. 21-39 Melbourne Street North Adelaide. S.A. 5006

McCracken Properties Limited 2017 Annual Report


2017 annual report - mccracken properties...2017 annual report 7 specifically, by entity mccracken...

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