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Mittagong RSL Club Limited ABN 69 001 069 674

Financial Statements For the Year Ended 31 December 2014


Contents For the Year Ended 31 December 2014

Page

Financial Statements

Notice of Annual General Meeting 1

President’s Report 2

General Manager’s Report 3

Sub Branch President’s Report 5

Declaration of Core and Non-Core Property 6

Ordinary Resolution 7

Directors' Report 8

Auditors Independence Declaration under Section 307C of the Corporations Act 2001 13

Statement of Profit or Loss 14

Statement of Comprehensive Income 15

Statement of Financial Position 16

Statement of Changes in Equity 17

Statement of Cash Flows 18

Notes to the Financial Statements 19

Directors' Declaration 39

Independent Audit Report 40

Compilation Report and Trading Statements 42

Detailed Profit and Loss 46


Notice of Annual General Meeting

1

Notice is hereby given that the 43rd Annual General Meeting of Members of the Mittagong RSL Club Limited will be held in the

Clubhouse on Sunday 22nd March, 2015 at 10.00 am.

BUSINESS

1. Apologies.

2. To confirm the Minutes of the previous General Meeting on Sunday 23rd March 2014.

3. To receive, consider and adopt the reports of the President and the General Manager.

4. To receive, consider and adopt the Financial Statement of the Company for the year ended 31st December, 2014 together

with the Reports therein of the Directors and Auditors.

5. Notice of Ordinary Resolutions.

6. Declaration of the Ballot for the Board of Directors.

7. Appointment of Patron or Patrons.

8. Deal with any business of which due notice has been given.

9. General Business: to transact any other business that may be lawfully brought forward.

BY THE ORDER OF THE BOARD CRAIG MADSEN

Dated this 4th

February 2015 General Manager


President’s Report For the Year Ended 31 December 2014

2

After 4 years of strategic, corporate and building planning the much anticipated stage one of the clubs building Masterplan

commenced during August 2014. An immense amount of time and effort has gone into this project from the Club Directors,

Management and general staff members and I would like to recognise the efforts of those involved. The end result will be a

tremendous asset to the members and the community, with significantly upgraded food, beverage and function facilities.

During the building phase trading sales performance had contracted somewhat but this was expected and it follows previous

trends that we have encountered during our other major renovation projects. There is no doubt that when the building work is

completed we will see trading conditions improve as has also happened following previous occasions.

In May 2014 at the ClubsNSW Clubs in the Community Awards, the Mittagong RSL Club was formally recognised for its

contribution to the community through our support of the Rural Bush Fire Brigade during the Hall Road bush fire crisis. It was a

very gratifying moment for the Club to be recognised in this way. This award also recognises the achievement of our amazing

staff who gave up their personal time and volunteered to assist during the bushfires. I defy anyone to think they have better

staff than the Mittagong RSL Club. Thank you for your outstanding efforts.

As approved with other changes to the Club’s Constitution at the AGM in 2014, this year will see changes introduced for the

term of election of Directors. This year is the introduction of 2 year terms for Directors. This change in term is in line with

preferred corporate government practice recommendations of ClubsNSW and the NSW Government which will give newly

elected Directors time to settle in and become accustomed to board practices and operation.

Myself, Ross Cowley and Roger Cole attended the ClubsNSW Annual Conference and professional development seminars

this year. The conference content included masterclass and seminar sessions with content such as:

• Risk Appetite vs Risk Capacity

• Renovators Guide to Workplace Culture

• Turbocharge your Board Performance

• Finance for Club Boards

There were also presentations from guest speakers such as Mark Bouris, the Chairman of Yellow Brick Road regarding

leadership and Luke Bowen GM of Northern Australian Development, with the theme of his presentation being the

co-ordination of alignment and solidarity. These conferences prove invaluable as a source of education, professional

development and discussion for the directors.

As always our staff members continue to excel under trying conditions and given that the building work still has some time to go

it would be remiss of me not to recognise the efforts of all of the catering staff. They are doing a great job in not ideal conditions.

Keep up the great work, you will be in a great new facility soon.

To the General Manager and his management team thank you for your efforts during the year to keep the club operating as well

as what it does. Everything just seems to fall into place, but I know the amount of work that you and the team does. It does not

go unnoticed and is greatly appreciated.

To our loyal members, the building work will soon be completed and we look forward to you enjoying some of the best club

facilities on offer anywhere in the State. Thank you for you loyalty during this period of building. We know at times the

conditions have been a little difficult the short term pain will be worth the long term gain.

As always the Ladies Auxiliary have been very active on various projects and the Sub Branch Committee and Members are to

be commended for their continued service and support of Veteran’s Services.

In closing my report, I would like to pass on my condolences to all of our members who lost loved ones during the course of the

year.

Graham Millbank

President

Mittagong RSL Club Limited


General Manager's Report For the Year Ended 31 December 2014

3

I am pleased to present to the members my synopsis of the 2014 Annual Report, highlighting our activities for what proved to

be another successful and exciting year.

From the beginning of the year through to July 2014 the business experienced favourable trading conditions, with all key areas

in revenue generation such food, beverage, gaming and wagering all performing to or better than budget expectation. Crunch

time for trade arrived in early August 2014 when the Club commenced demolition and building work associated with Stage 1 of

the building Masterplan. Trade compacted in all revenue areas due to the perceived inconvenience of the building work, which

was expected and budgeted for. The fact that the Club recorded a bottom line profit of $439,922 given the difficult trading

conditions of the last four months of the year should be positively recognised by all members. I will discuss different aspects of

the building work later in this report.

In reviewing the 2014 year from a financial perspective, as mentioned above we believe that the Club has traded quite well.

The Club recorded a Net Profit of $439,922 and after adding back depreciation of $1,095,146 recorded an Operating Profit of

$1,530,990 a solid result, but down by $238,684 on the operating profit of 2013. Again, this drop in operating profit was

recorded from the start of the building program in August 2014.

Total revenue of $14,068,496 was 3.9% down on the previous year, with the major revenue decreases being recorded in

Beverages -10.3% and Catering -9.8%. It must be remembered in assessing these reductions that the drop in beverages

includes the closing of the bottleshop and the drop in catering includes a substantial reduction in function revenue, again due to

the start of the building works. We have no doubt that once the building work is finalised, these particular revenue streams will

increase accordingly. Gaming & Wagering revenue for the reporting period basically replicated that of 2013. Again there was a

substantive drop in this area when building work began.

Gross profit from sales of $12,195,177 was down by 2.9% in comparison to the previous year and again this is attributable to

the reasons mentioned above.

Overall expenditure of $11,755,439 was 4.3%% down on the previous year with significant cost departments such as wages

held below the level of annual CPI increases. Power costs decreased significantly due to equipment and building facilities

being decommissioned during the building work.

The first 6 months of the past year had seen the Club’s Board, Management and Architects, Abeo Architects focus on putting

the finishing touches on all pre-planning for the much anticipated Stage 1 Building Project and sent this project to tender in

May/June 2014.

In late June 2014 Meridian Constructions were successful in winning the competitive tender process from three other

companies and were awarded the tender for building and delivering Stage 1 of the Masterplan Building Project, with a

contracted value of $7,414,734 plus GST. When work began on this project in August 2014, it was anticipated that work would

take 48 weeks to complete, which included allowances for inclement weather conditions. This would have seen a July 2015

completion of the building project. At the time of writing this report to the members it must be noted that the time for completion

has been extended by at least 4 weeks due to poor weather over the first 5 months of the project. At this stage an August 2015

completion date is anticipated.

The Club has had a strategic business and finance relationship with the Commonwealth Bank of Australia for a number of

years. This relationship has been expanded to assist with the financial delivery of the Masterplan Project. The Club has

available via the CBA a line of finance to the value of $7,000,000 to assist with the payment of the project. It was a requirement

of the CBA that the club utilise its own cash reserves initially to pay for the project prior to calling on approved funds from the

bank. This form of financing has been adopted and followed by the Club.

During the first five months of the building project there have been some significant challenges to overcome to ensure that we

deliver quality products and services to our members. It would be remiss of me not to formally recognise the efforts of every

person associated with the catering department. This area has been impacted like no other during the demolition and building

process and our staff have shone through in trying circumstances. Keep going everyone we are only half way there but the end

result will be worth the battle.


General Manager's Report For the Year Ended 31 December 2014

4

Equally we need to also recognise the efforts of the people who work in the Reception and Podium area of the Club. This area

has been impacted during the building program, particularly when the heavens opened up during the first two weeks of

December. The guys and girls who work in this area are the face of the Club, the first point of contact a lot of our members and

visitors see and I thank them for keeping up a great personal disposition when times may not have been so great.

Our architects, ABEO are doing a fantastic job supervising and co-ordinating the builders Meridian and thanks should also go

to Site Supervisor of Meridian, Graeme Dawson who works very seamlessly with the Club, to try to keep disruption to services

to a minimum.

When reflecting on the past year we have had, my thoughts continually go back to the people at the club. We are a people

business and it is our responsibility to ensure that we provide goods and service to our members and visitors. This cannot be

done without an effective team of staff at the club and I must say I think we have a brilliant team. We consistently receive

correspondence at the club congratulating us on the quality of our products and service from our people. I would like to thank

each and every one of our staff members for your commitment to the Club and our members, as you are all a prime reason as

to why this club is so successful.

I would like to pass on my thanks to the management and supervisory team of Alan, Dan, Ross and Trish for the past year as

their commitment and input to the club has been invaluable. Equally, I would also like to recognise the commitment and efforts

of the front of house management and supervisory team of Ray, Donna, Di, Leanne & Robert who all do a fantastic job of

organising and leading our staff on the floor in the food, function, gaming and bar areas. Well done everyone.

I would like to commend to the members the contribution of our Board of Directors over the last 12 months. They have again

contributed significantly to the operations of the Club with solid policy direction and fulfil the role of key decision makers with the

best interests of the members in mind. As General Manager of the Club, they have shown faith in my ability to carry out Board

policy to manage the Club and I thank them for being entrusted with that responsibility.

The continued success of the Club is always dependent upon the support of our wonderful members. Our member’s dedication

to the club is our inspiration for us to offer you the best possible service, products and facilities that we can. We would like to

extend a thank you to all of our members for contributing to the amenity of Mittagong RSL and trust that we can catch up with

you here at the Club in the very near future.

Craig Madsen

General Manager



Sub Branch President’s Report For the Year Ended 31 December 2014

5

I would like to begin my 2014 report by paying our respects and sad farewells to our following members; Ron Little, Ross James, William Cunynghame, Frank Wilmont, Robert Shelley, Ron Sharpe, Steve Dickman, K. Henderson and Raymond Peters. To the families who experienced bereavement through the loss of loved ones during the year, we express our deepest sympathy. I would also like to thank the Board and staff of the RSL Club for the tremendous support they continue to provide to the Sub-Branch, particularly in the form of a significant amount of staff support, the use of Club facilities and financial considerations. This support is a major reason why the Sub-Branch continues to maintain a healthy financial position and is able to provide such high quality Services to our members and the members of the general Mittagong community. The year began with the President chairing the AGM of the RSL Women’s Auxiliary with the election of office bearers. During the year the Women’s Auxiliary held 4 Coffee Mornings as well as running a trading table at the CWA Rooms in Mittagong. All these were well attended by members of the Sub-Branch and friends. The money raised by the Auxiliary is donated to RSL Life Care and the Welfare and Benevolent Institution. The Sub-Branch AGM was held in February and resulted in the electing of a number of new members to the Executive. I would like to take this opportunity to thank Ross Spirou for the huge amount of work he has put into the Sub-Branch over the years and particularly during the period when he was President. He ensured the Sub-Branch remained dynamic and healthy and he has left very large shoes to fill. The Anzac Day church service was held at the Mittagong Baptist Church and was well attended by our members. The Anzac Day Dawn and Main Services were also well supported by the local population and once again there was a formation fly-past by aircraft from the Berrima District Aero Club. A special aspect of the fly-past was the ‘missing man’ formation which paid a very visual respect to all the fallen members of the ADF. The secretary Steve Spence and Robert Brown attended an Anzac Day Service at Kangaloon School. Steve Spence and Ray Kuschert attended the Mittagong Public School Anzac Day service A cheque for $4,900 was presented to Berrima Legacy, the proceeds coming from Anzac Day collections. The State Congress this year was held at Coffs Harbour but unfortunately no one was able to attend from the Sub-Branch due to the distance and costs involved. Many Sub-Branch members went on a very informative trip to RAAF Base Richmond. Bob Gilroy, Stephen Spence and I attended the Southern District Council Meetings at Braidwood and Warilla. VP Day and Remembrance Day Services were held at the RSL Memorial. Students from Frensham, Mittagong Public School and Kangaloon Schools attended and gave impressive presentations on the importance of each day. Flag Marshals on the day were from the Southern Highlands Squadron of the Air League. In December Ross Spirou attended the local Air League Presentation Dinner where the Sub-Branch presented the League with a cheque for $200. Our Christmas BBQ was held at the RSL Club and was reasonably well attended and appreciated by all members. The work of the Pension Officer, Stephen Spence, is greatly appreciated by all members for his dedication and efficiency. Welfare Officers Brian Hicks and Ray Kuschert with the help of Jim Bunce and Norm Mallard were kept busy visiting members in hospitals and nursing homes. To the Treasurer, Bob Gilroy, Secretary, Stephen Spence, Vice Presidents, Jeff Thyer and Craig Larkin and editors of the “Lion Review”, Phill Moscatt, Jim Reynolds and Max Bulluss, I would like to particularly extend my thanks for the tremendous work they have done during the past year – the Sub-Branch could not work without their tireless efforts. I would like to thank the Women’s Auxiliary for the wonderful work they have done in selling Anzac Day and Remembrance Day Badges and for the great help they have given to us leading up to, and during, Anzac Day, Remembrance Day, VP Day and at the Christmas BBQ. To the Sub-Branch members, I would also like to express my thanks for your support during the year and wish you all a happy and healthy 2015. Jim Cole President


Declaration of Core and Non-Core Property For the Year Ended 31 December 2014

6

Pursuant to Section 41J(2) of the Registered Clubs Act for the financial year ended 31 December, 2014:

(a) The following properties are core property of the Club;

(i) The land upon which the Club’s licensed premises are located;

(ii) The land upon which the Club’s car parking areas are located other than the 10 car parking spaces adjacent

to the northern wall of the Springs Resorts Mittagong RSL Motel.

(b) The following properties are non-core property of the Club;

(i) The land upon which the Mineral Springs Motel behind the Club’s licensed premises is located;

(ii) The land in lot 3 DP 365917 on Old Hume Highway containing the residential property on the corner of the

Old Hume Highway and Bessemer Street Mittagong;

(iii) The land in Lot 1 DP 1086496 upon which the Springs Resorts Mittagong RSL Motel is located including the

ten car parking spaces which are adjacent to the northern wall of the motel; and

(iv) The land in Lot 1 DP 237330 on Henderson Avenue containing the residential property situated at 26

Henderson Avenue, Mittagong.

Notes to Members

1. Section 41J(2) of the registered Clubs Act requires the annual report to specify the core and non-core property of the

Club as at the end of the financial year to which the report relates.

2. Core property is any real property owned or occupied by the Club that comprises:

(a) The defined premises of the Club; or

(b) Any facility provided by the Club for use of its members and their guests; or

(c) Any other property declared by a resolution passed by a majority of the members present at a general meeting of

Ordinary members of the Club to be core property of the Club.

3. Non-core property is any other property other than that referred to above as core property and any property which is

declared by the members at a general meeting of Ordinary members of the Club not to be core property.

4. The significance of the distinction between core property and non-core property is that the Club cannot dispose of any

core property unless:

(a) The property has been valued by a registered valuer within the meaning of the Valuers Act 2003; and

(b) The disposal has been approved at a general meeting of the Ordinary members of the Club at which the majority

of votes cast support the approval; and

(c) Any sale is by way of public auction or open tender conducted by an independent real estate agent or auctioneer.

5. These disposal provisions and what constitutes a disposal for the purposes of section 41J are to some extent

modified by regulations made under the Registered Clubs Act and by Section 41J itself. For example, the

requirements in paragraph 4 above do not apply to:

• Core property that is being leased or licensed for a period not exceeding 10 years on terms that have been

subject of a valuation by a registered valuer;

• Core property that is leased or licensed to a telecommunications provider for the purposes of a

telecommunications tower.


Ordinary Resolution

7

“That pursuant to the Registered Clubs Act, the members hereby approve and agree to the members of the Board during the twelve (12) months preceding the 2015 Annual General Meeting receiving the following benefits, and the members further acknowledge that the benefits outlined in the sub-paragraphs (1) to (10) are not available to members generally but only to those members who are elected Directors of the Club”. 1. A reasonable meal if required and refreshments to be associated with each Board meeting of the Club.

2. Provision for seven car parking spaces to be reserved for the exclusive use of Directors.

3. The reasonable cost of Directors, and their spouses, attending the Registered Clubs Association Annual General

Meeting.

4. The reasonable cost of Directors and their spouses attending seminars, lectures, trade displays and other similar events as may be determined by the Board from time to time.

5. The reasonable cost of Directors and their spouses attending other registered clubs for the purpose of viewing and assessing their facilities and the method of such operation provided that such attendances are approved by the Board as being necessary for the benefit of the Club.

6. The provision of blazers and associated apparel for the use of Club Directors when representing the Club.

7. The reasonable cost of an annual dinner for Directors and their spouses.

8. The reasonable cost of refreshments whilst a Director is on duty at the Club.

9. The reasonable cost of welcoming and entertaining industry representatives, VIPs and other invited guests.

10. The reasonable cost of membership of Clubs NSW Directors Institute and related training seminars and workshops.

By direction of the Board CRAIG MADSEN

General Manager


Directors' Report For the Year Ended 31 December 2014

8

The directors present their report on Mittagong RSL Club Limited for the financial year ended 31 December 2014.

1. General information

Directors

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

Names Position Appointed/Resigned

Graham J Millbank President

Roger F Cole Vice President

Ross J Cowley Vice President

Robert S Jones Director Resigned: 18th August 2014

Phillip G Moscatt Director

Brian F Smith Director

Stephen Spence Director

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

Company secretary

The following person held the position of Company secretary at the end of the financial year:

Mr Craig Madsen. Mr Madsen has worked for Mittagong RSL Club Limited for the past nine years, performing management roles. Mr Madsen was appointed company secretary on 5 March 2005.

Principal activities

The principal activity of Mittagong RSL Club Limited during the financial year was that of a registered club.

No significant changes in the nature of the Company's activities occurred during the financial year.

2. Operating results and review of operations for the year

Operating results

The profit of the Company after providing for income tax amounted to $ 439,922 (2013: $ 434,274).

2014

$

2013

$

Operating profit 1,530,990 1,769,684

Depreciation (1,095,146) (1,336,622)

Profit/(loss) on disposal of assets 4,078 1,212

Total 439,922 434,274

Dividends paid or recommended

In accordance with the Constitution, no dividend is payable.



2. Operating results and review of operations for the year continued

9

Review of operations

During the course of the year the Board of Directors engaged Meridian Constructions as the builders responsible for delivering the Club's Masterplan refurbishment and expansion to the food and function areas of the Club. Work on this project commenced during the first week of August 2014, with a contract projected cost for the building work being $7,414,734 plus GST. At the time of executing the contract with the builders, the expected time for completion of the project was 48 weeks, taking the date to July 2015.

The Club has had a strategic business and finance relationship with the Commonwealth Bank of Australia for a number of years. This relationship has been expanded to assist with the financial delivery of the Masterplan project. The Club has available via the CBA a line of finance to the value of $7,000,000 to assist with the payment of the project. It was a requirement of the CBA that the Club utilise its own cash reserves initially to pay for the project prior to calling on approved funds from the bank. This form of financing has been adopted and followed by the Club.

During the course of the year, the Club continued to operate in a profitable manner to the benefit of its Members, with the main sales sectors being beverage, food, gaming and functions. To ensure the continued profitability of the business there has been a constant review of costs and where deemed necessary our charges to members and visitors have increased.

The Club's main sources of revenue came from food, beverage, gaming and wagering operations which serviced the social requirements of our members and visitors. Most revenue lines trade to expectation. Expenditures through the various departments were considered to be within budget expectation.

Staff development has continued and the Board of Directors has also undertaken the necessary training to maintain compliance with the legislation that covers our business activities.

The maintenance of profitability of the Club in our core business activities has enabled us to maintain our contributions to the local community and junior sports organisations to a greater degree than our responsibilities are required under the Community Development Support Expenditure Scheme.

Further details of the Club's operations are noted in the various Directors and Management Reports which accompany this Annual Report.

3. Other items

Significant changes in state of affairs

There have been no significant changes in the state of affairs of the Company during the year.

Events after the reporting date

No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years.



3. Other items continued

10

Likely developments

The provision and improvements of services for our Members is the prime objective of the Club in all of its activities. It is the intention of the Board to continue to maintain the profitability of the business through the growth in its service and social activities as well as the development of its asset base for the Members.

Within the next 12 months the Club will complete the major development and masterplan improvements and have these facilities available to our members and community for their use. It is anticipated that the Club will consolidate its debt obligation with the CBA and begin principle and interest payback of our loans with them.

It is not envisaged that there will be any major legislative impacts on the business from either the Federal or State Governments during 2015.

The Directors and Management are continuously planning the strategic development of the business to ensure its future viability for the members. It is envisaged once building work has been completed, that robust trading conditions will continue into the next reporting period and will have a positive impact on revenue generation for the foreseeable future.

Indemnification and insurance of officers and auditors

No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of Mittagong RSL Club Limited, with the exception of a directors and officers company reimbursement insurance policy.

Auditor's independence declaration

The lead auditor's independence declaration in accordance with section 307C of the Corporations Act 2001, for the year ended 31 December 2014 has been received and can be found on page 13 of the financial report.



11

4. Director Information

Information on directors

Graham J Millbank President

Qualifications Self Employed

Experience 33 years

Roger F Cole Vice President

Qualifications Retired School Teacher

Experience 30 years

Ross J Cowley Vice President

Qualifications Bachelor of Business, Certified Practicing Accountant

Experience 10 years

Robert S Jones Director

Qualifications Company Director

Experience 9 years 8 months (resigned: 18th August 2014)

Phillip G Moscatt Director

Qualifications Retired Sales and Marketing Manager

Experience 6 years

Brian F Smith Director

Qualifications Company Director

Experience 16 years (non-continuous)

Stephen Spence Director

Qualifications Retired Manager - Electrical Industry

Experience 2 years



4. Director Information continued

12

Meetings of directors

During the financial year, 22 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

Directors' Meetings

Audit Committee Meetings

Special Board Meeting

Strategic Planning Meeting

Remuneration Committee Meetings

Number eligible to

attend Number attended

Number eligible to


Number eligible to


Number eligible to


Number eligible to


Graham J Millbank 13 13 - - 2 2 2 2 2 2

Roger F Cole 13 12 3 3 2 2 2 2 2 2

Ross J Cowley 13 11 3 3 2 2 2 2 2 2

Robert S Jones 8 8 - - 2 1 2 2 - -

Phillip G Moscatt 13 10 - - 2 2 2 1 - -

Brian F Smith 13 12 3 3 2 2 2 1 - -

Stephen Spence 13 13 - - 2 2 2 2 - -

Signed in accordance with a resolution of the Board of Directors:

Director: ...............................................................

Graham J Millbank

Director: ................................................................

Roger F Cole

Dated this 4th day of February 2015


Auditors Independence Declaration under Section 307C of the Corporations Act 2001 To the Board of Directors Mittagong RSL Club Limited

13

I declare that, to the best of my knowledge and belief, during the year ended 31 December 2014, there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

Gillespies

Chartered Accountants

David M Duff Partner 4 February 2015

BOWRAL


Statement of Profit or Loss For the Year Ended 31 December 2014

14

Note

2014

$

2013

$

Sales revenue 5,460,191 6,065,092

Cost of sales (1,853,182) (2,054,930)

Gross profit 3,607,009 4,010,162

Gaming machine revenue 8,066,833 8,057,450

Other income 4 556,921 501,567

Profit on sale of non-current assets 4,078 1,212

Marketing expenses (95,511) (87,757)

Occupancy costs (177,035) (153,248)

Administrative expenses (2,858,396) (3,011,937)

Finance costs (38,484) (65,215)

Bar expenses (834,282) (777,707)

Catering expenses (2,663,246) (2,636,601)

Promotions expenses (775,765) (876,926)

Gaming machine expenses (3,019,469) (2,957,683)

Other expenses (237,585) (232,421)

Income before depreciation and income tax 1,535,068 1,770,896

Income tax expense - -

Depreciation (1,095,146) (1,336,622)

Profit attributable to members 439,922 434,274


Statement of Comprehensive Income For the Year Ended 31 December 2014

15

2014

$

2013

$

Profit for the year 439,922 434,274

Other comprehensive income for the year, net of tax - -

Total comprehensive income for the year 439,922 434,274


Statement of Financial Position 31 December 2014

16

Note

2014

$

2013

$

ASSETS

CURRENT ASSETS

Cash and cash equivalents 8 255,970 1,415,650

Trade and other receivables 9 43,511 63,855

Inventories 10 169,018 225,627

Other assets 14 209,045 704,677

TOTAL CURRENT ASSETS 677,544 2,409,809

NON-CURRENT ASSETS

Financial assets 760 760

Property, plant and equipment 12 25,904,139 22,899,141

Investment property 13 313,396 315,771

Intangible assets 15 833,588 833,588

TOTAL NON-CURRENT ASSETS 27,051,883 24,049,260

TOTAL ASSETS 27,729,427 26,459,069

LIABILITIES

CURRENT LIABILITIES

Trade and other payables 16 1,183,760 1,316,204

Borrowings 18 1,819,683 1,150,058

Short-term provisions 19 594,336 572,047

Other liabilities 17 94,886 99,361

TOTAL CURRENT LIABILITIES 3,692,665 3,137,670

NON-CURRENT LIABILITIES

Borrowings 18 274,759 25,065

Long-term provisions 19 404,016 378,269

TOTAL NON-CURRENT LIABILITIES 678,775 403,334

TOTAL LIABILITIES 4,371,440 3,541,004

NET ASSETS 23,357,987 22,918,065

EQUITY

Reserves 7,821,107 7,821,107

Retained earnings 15,536,880 15,096,958

23,357,987 22,918,065

TOTAL EQUITY 23,357,987 22,918,065


Statement of Changes in Equity For the Year Ended 31 December 2014

17

2014

Retained Earnings

$

Asset Revaluation

Surplus

$

Total

$

Balance at 1 January 2014 15,096,958 7,821,107 22,918,065

Profit attributable to members of the entity 439,922 - 439,922

Balance at 31 December 2014 15,536,880 7,821,107 23,357,987

2013

Retained Earnings

$

Asset Revaluation

Surplus

$

Total

$

Balance at 1 January 2013 14,662,684 7,821,107 22,483,791

Profit attributable to members of the entity 434,274 - 434,274

Balance at 31 December 2013 15,096,958 7,821,107 22,918,065


Statement of Cash Flows For the Year Ended 31 December 2014

18

Note

2014

$

2013

$

CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers 15,385,163 16,005,962

Payments to suppliers and employees (13,366,376) (14,224,800)

Interest received 34,389 26,803

Interest paid (38,484) (65,215)

Net cash provided by/(used in) operating activities 24(b) 2,014,692 1,742,750

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of plant and equipment 4,078 1,212

Purchase of property, plant and equipment (4,097,769) (560,435)

Net cash used by investing activities (4,093,691) (559,223)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds/(repayments) of borrowings 663,992 (310,404)

Net Hire purchase proceeds/(repayments) 255,327 (59,787)

Net cash used by financing activities 919,319 (370,191)

Net increase/(decrease) in cash and cash equivalents held (1,159,680) 813,336

Cash and cash equivalents at beginning of year 1,415,650 602,314

Cash and cash equivalents at end of financial year 24(a) 255,970 1,415,650


Notes to the Financial Statements For the Year Ended 31 December 2014

19

The financial report covers Mittagong RSL Club Limited as an individual entity. Mittagong RSL Club Limited is a not-for-for profit Company limited by guarantee, incorporated and domiciled in Australia.

The functional and presentation currency of Mittagong RSL Club Limited is Australian dollars.

1 Basis of Preparation

The financial statements are general purpose financial statements that have been prepared in accordance with the Australian Accounting Standards - Reduced Disclosure Requirements, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

2 Summary of Significant Accounting Policies

(a) Revenue and other income

Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the Company and specific criteria relating to the type of revenue as noted below, has been satisfied.

Revenue is measured at the fair value of the consideration received or receivable and is presented net of returns, discounts and rebates.

Sale of goods

Revenue is recognised on transfer of goods to the customer as this is deemed to be the point in time when risks and rewards are transferred and there is no longer any ownership or effective control over the goods.

Rendering of services

Revenue in relation to rendering of services is recognised depending on whether the outcome of the services can be estimated reliably. If the outcome can be estimated reliably then the stage of completion of the services is used to determine the appropriate level of revenue to be recognised in the period.

If the outcome cannot be reliably estimated then revenue is recognised to the extent of expenses recognised that are recoverable.

Interest revenue

Interest is recognised using the effective interest method.

Rental income

Investment property revenue is recognised on a straight-line basis over a period of the lease term so as to reflect a constant periodic rate of return on the net investment.

Subscriptions

Revenue from the provision of membership subscriptions is recognised on a straight line basis over the financial year.



2 Summary of Significant Accounting Policies continued

(a) Revenue and other income continued

20

Other income

Other income is recognised on an accruals basis when the Company is entitled to it.

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

(b) Income Tax

The principle of mutuality has been applied in calculating the taxable income of the company. Subscriptions and other amounts received from members are excluded from the assessable income of the company. The company is assessed for income tax purposes on income from non-members (including other investment income such as interest and rent.) Operating expenses are apportioned between member and non-member income. Accordingly, taxable income is not directly related to the operating result and can vary substantially from year to year.

(c) Inventories

Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined using the first-in-first-out basis and is net of any rebates and discounts received.

(d) Property, Plant and Equipment

Where the cost model is used, the asset is carried at its cost less any accumulated depreciation and any impairment losses. Costs include purchase price, other directly attributable costs and the initial estimate of the costs of dismantling and restoring the asset, where applicable.

Assets measured using the revaluation model are carried at fair value at the revaluation date less any subsequent accumulated depreciation and impairment losses. Revaluations are performed whenever there is a material movement in the value of an asset under the revaluation model.

Land and buildings

Land and buildings are measured using the revaluation model.

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

Items of property, plant and equipment acquired for nil or nominal consideration have been recorded at the acquisition date fair value.




(d) Property, Plant and Equipment continued

21

Plant and equipment

Plant and equipment are measured using the cost model.

Depreciation

Property, plant and equipment, excluding freehold land, is depreciated on a straight-line basis over the assets useful life to the Company, commencing when the asset is ready for use.

Leased assets and leasehold improvements are amortised over the shorter of either the unexpired period of the lease or their estimated useful life.

The depreciation rates used for each class of depreciable asset are shown below:

Fixed asset class Depreciation rate

Buildings 2.5%

Plant and Equipment 13 - 33.33%

Motor Vehicles 18.75 - 22.5%

Poker machines 25 - 50%

At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.

(e) Investment property

Investment property is held at cost which includes expenditure that is directly attributable to the acquisition of the investment property. The investment properties are depreciated on a straight line basis.

(f) Intangible Assets

Poker Machine Entitlements

Poker machine entitlements are considered as intangible assets as per AASB 138 and have been brought to account at cost. They are considered to have an indefinite life and as such are not amortised.

Social impact assessment study costs incurred in order to obtain additional entitlements have been accounted for as prepayments until the entitlements are acquired. The prepayment is then capitalised together with the cost of the entitlements.




22

(g) Impairment of non-financial assets

At the end of each reporting period the Company determines whether there is an evidence of an impairment indicator for non-financial assets.

Where this indicator exists and regardless of goodwill, indefinite life intangible assets and intangible assets not yet available for use, the recoverable amount of the asset is estimated.

Where assets do not operate independently of other assets, the recoverable amount of the relevant cash-generating unit (CGU) is estimated.

The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.

Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.

Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.

(h) Leases

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

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

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the life of the lease term.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.




23

(i) Employee benefits

Provision is made for the Company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled.

Employee benefits expected to be settled more than twelve months after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss.

Employee benefits are presented as current liabilities in the statement of financial position if the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date regardless of the classification of the liability for measurement purposes under AASB 119.

(j) Provisions

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

Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period.

(k) Goods and Services Tax (GST)

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payable are stated inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position.

Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.



24

3 Fundamental Error - Revaluation of Land and Buildings as disclosed December 2012

The company obtained a valuation of land and buildings on 12 September 2012 for the purposes of determining any adjustment required to the amounts disclosed at valuation in accordance with the accounting policy note 2 (d) as at 31 December 2012. This resulted in an upward revaluation adjustment of $530,000 to land and $2,012,611 to buildings.

Subsequent to this the directors obtained additional evidence and valuations which did not corroborate the valuation obtained on 12 September 2012.

The revised revaluation resulted in fair value of land effective 31 December 2012 $5,230,000 (Previous: $5,880,000).

The revised revaluation resulted in fair value of buildings effective 31 December 2012 $16,020,000 (Previous: $21,870,000).

The above has resulted in a correction to the comparative figures (2013) as follows:

$

Land and buildings previously stated at 31 December 2012 27,750,000

Land and buildings subsequent valuation 21,250,000

Downward adjustment

6,500,000

Revaluation reserve previously reported at 31 December 2012 14,321,107

Revaluation reserve restated 7,821,107

Downward adjustment

6,500,000

Depreciation previously reported 1,496,817

Depreciation restated 1,336,622

Downward adjustment

160,195



25

4 Revenue and Other Income

Revenue from continuing operations

Finance income includes all interest-related income, other than those arising from financial assets at fair value through profit or loss. The following amounts have been included in the finance income line in the statement of comprehensive income for the reporting periods presented:

2014

$

2013

$

Sales revenue

- Beverage sales 1,724,732 1,922,767

- Catering sales 3,735,459 4,142,324

5,460,191 6,065,091

Other revenue

- Gaming machine revenue 8,066,833 8,057,450

Total Revenue 13,527,024 14,122,541

Other Income

Other Income


Rent received 27,984 27,613

Commission 192,484 169,612

Lease receipts 159,659 167,238

Sundry revenue 27,931 14,902

Member subscriptions 91,106 80,941

Utilities reimbursements - Springs Motel 30,131 25,621

Sports and Recreation (6,763) (11,163)

Total other income 556,921 501,567

5 Profit from Ordinary Activities

2014

$

2013

$

Depreciation and Amortisation

Depreciation of non-current assets 1,095,146 1,336,622

Interest expense 38,484 65,215

Borrowing charges 3,487 3,329

Employees' leave entitlements 48,036 40,277



26

6 Remuneration of Auditors

2014

$

2013

$

Remuneration of the auditor, GILLESPIES, for:

- auditing or reviewing the financial statements 35,900 34,900

- taxation services 1,850 1,800

- taxation services provided by related practice or auditor 7,000 6,800

- other services 3,920 3,805

48,670 47,305



27

7 Income Tax Expense

Reconciliation of income tax expense to profit from ordinary activities before income tax is as follows:

2014

$

2013

$

Profit from ordinary activities before income tax 439,922 274,079

Adjustments due to the mutuality principle:

Exempt income from members (276,358) (271,567)

Wholly assessable income (465,399) (416,887)

Exempt expenditure 400,762 527,203

Wholly deductible expenditure 689,644 622,478

788,571 735,306

Portion applicable to non-members 4.46% (2013: 4.86%) 35,203 35,724

Prima facie income tax expense @ 30% (2013: 30%) 10,561 10,717

Increase in income tax expense due to wholly assessable income:

Donations adjustment - prior years 8,467 -

Interest 10,317 8,041

Rent 56,293 58,455

Commission 58,817 50,884

Utilities Reimbursements - Mineral Springs 9,039 7,686

GST Rebate 5,154 -

GST rebate adjustment - prior years 19,835 -

Decrease in income tax expense due to wholly deductible expenditure:

Other expenses (556) (2,767)

Superannuation (129,408) (123,433)

Rates and taxes (21,789) (15,751)

Commission expenditure (51,561) (44,793)

(24,831) (50,961)

Amount transferred (from)/to future income tax benefit not brought to account 24,831 50,961

Tax losses carried forward 2,987,411 2,904,641

Income tax expense attributable to profit from ordinary activities - -



28

8 Cash and cash equivalents

2014

$

2013

$

Cash on hand 118,600 141,378

Cash at bank 137,370 1,274,272

255,970 1,415,650

9 Trade and other receivables

2014

$

2013

$

CURRENT

Trade receivables 43,511 63,855

10 Inventories

2014

$

2013

$

CURRENT

At cost:

Stock on hand 169,018 225,627

11 Other financial assets

Available-for-sale financial assets

2014

$

2013

$

- shares in other corporations 760 760



29

12 Property, plant and equipment

2014

$

2013

$

LAND AND BUILDINGS

Freehold land

At independent valuation 5,230,000 5,230,000

Total Land 5,230,000 5,230,000

Buildings

At independent valuation 16,020,000 16,020,000

At cost 109,590 -

Accumulated depreciation (997,697) (498,154)

Total buildings 15,131,893 15,521,846

Total land and buildings 20,361,893 20,751,846

PLANT AND EQUIPMENT

Capital works in progress

At cost 3,472,688 -

Plant and equipment

At cost 3,494,047 3,312,982

Accumulated depreciation (2,631,256) (2,397,231)

Total plant and equipment 862,791 915,751

Motor vehicles

At cost 52,960 52,960

Accumulated depreciation (38,411) (33,588)

Total motor vehicles 14,549 19,372

Poker machines

At cost 5,441,310 5,329,210

Accumulated depreciation (4,249,092) (4,117,038)

Total poker machines 1,192,218 1,212,172

Total plant and equipment 5,542,246 2,147,295

Total property, plant and equipment 25,904,139 22,899,141

The fair value of freehold land and buildings is determined at least every three years based on valuations by an independent valuer. Generally at each intervening preiod, the directors review the independent valuation and, where appropriate, update the fair value measurement to reflect current market conditions using a range of valuation techniques, including recent observable market data and discounted cash flow methodologies. Where necessary, the use of independent valuers are used to assist in this process. The Company's land and buildings were revalued at 23 January 2014 by independent valuers. This valuation was obtained to assist the directors in correcting a previous over-estimation of the value of land and buildings at 31 December 2012. Valuations were made using the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date.



12 Property, plant and equipment continued

30

(a) Movements in Carrying Amounts

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

Capital Works in Progress

$

Land

$

Buildings

$

Plant and Equipment

$

Motor Vehicles

$

Poker machines

$

Total

$

Year ended 31 December 2014

Balance at the beginning of year - 5,230,000 15,521,846 915,751 19,372 1,212,172 22,899,141

Additions 3,472,688 - 109,590 185,245 - 330,246 4,097,769

Depreciation expense - - (499,543) (238,204) (4,823) (350,201) (1,092,771)

Balance at the end of the year 3,472,688 5,230,000 15,131,893 862,792 14,549 1,192,217 25,904,139



31

13 Investment Property

2014

$

2013

$

Balance at beginning of the period 315,771 318,146

Depreciation (2,375) (2,375)

Balance at end of the period 313,396 315,771

14 Other assets

2014

$

2013

$

CURRENT

Prepayments 184,509 157,396

Other assets 2,170 15,549

Borrowing costs 22,366 8,872

Masterplan - 522,860

209,045 704,677

15 Intangible Assets

Poker machine licences

Cost 833,588 833,588

Accumulated amortisation and impairment - -

Net carrying value 833,588 833,588

Total Intangibles 833,588 833,588

16 Trade and other payables

2014

$

2013

$

CURRENT

Trade payables 694,622 824,091

Accrued expenses 245,914 242,421

American express 12,301 -

Other payables 230,923 249,692

1,183,760 1,316,204

17 Other liabilities

2014

$

2013

$

CURRENT

Subscriptions in advance 94,886 99,361



32

18 Borrowings

2014

$

2013

$

CURRENT

Unsecured liabilities:

Hire purchase liabilities 369,432 363,799

Secured liabilities:

Bills of exchange and promissory notes 1,450,251 750,000

Bank loans - 36,259

1,450,251 786,259

Total current borrowings 1,819,683 1,150,058

2014

$

2013

$

NON-CURRENT

Unsecured liabilities:

Hire purchase liabilities 274,759 25,065

Secured liabilities:

Total non-current borrowings 274,759 25,065

(a) Total current and non-current secured liabilities

2014

$

2013

$

Bank loans - 36,259

Commercial bills 1,450,251 750,000

1,450,251 786,259

(b) Commercial bill facilities

The Company has a fixed term interest rate rolling commercial bill facility which expires on 30 November 2019. This facility has an interest rate of 3.70% and requires capital payments of $87,500 per quarter. Current balance is $1,450,251.



18 Borrowings continued

33

(c) Financing Facilities

2014

$

2013

$

The company has access to the following lines of credit:

Total facilities available:

Corporate credit card 50,000 50,000

Bill facilities 7,000,000 1,750,000

Bank overdraft 250,000 -

Facilities used at balance date:

Corporate credit card - -

Bill facilities 1,450,251 750,000

Bank overdraft - -

Facilities not utilised at balance date:

Corporate credit card 50,000 50,000

Bill facilities 5,549,749 1,000,000

Bank overdraft 250,000 -

(d) Securities pledged

The credit facilities are secured by:

i) a registered first mortgage over non-residential property located at Cnr Bessemer Street and Old Hume Highway Mittagong NSW 2575.

ii) a registered equitable mortgage over the whole of its assets and undertakings of the company.



34

19 Provisions

Employee entitlements

$

Total

$

Current

Opening balance at 1 January 2014 572,047 572,047

Additional provisions 22,289 22,289

Balance at 31 December 2014 594,336 594,336

Employee entitlements

$

Total

$

Non-current

Opening balance at 1 January 2014 378,269 378,269

Additional provisions 25,747 25,747

Balance at 31 December 2014 404,016 404,016

Analysis of total provisions

2014

$

2013

$

Current 594,336 572,047

Non-current 404,016 378,269

998,352 950,316

The present value of employee benefits not expected to be settled within 12 months of reporting date have been calculated using the following weighted averages.

Inflation rate: 2.30%

Discount rate: 2.50%

20 Reserves and retained surplus

(a) Asset revaluation reserve

The asset revaluation reserve records fair value movements on property, plant and equipment held under the revaluation model.



35

21 Directors' Remuneration

2014

$

2013

$

The number of directors of the company whose income falls within the following bands:

$0 - $9,999 7 8

Total benefits received or due and receivable by all directors of the company:

Payment to directors - -

Benefits to directors in kind in attending seminars, functions, club business and the like 6,906 9,843

22 Key Management Personnel Disclosures

Directors:

G Millbank (President) R Cole (Vice President) R Cowley (Vice President)

R Jones P Moscatt B Smith

S Spence

Other Key Management Personnel

C Madsen (General Manager)

A Cunynghame (Catering Manager)

D Marmont (Operations Manager)

The totals of remuneration paid to the key management personnel of Mittagong RSL Club Limited during the year are as follows:

2014

$

2013

$

Short-term employee benefits 390,596 405,033

Post-employment benefits 26,110 6,188

416,706 411,221



36

23 Capital and Leasing Commitments

Finance lease commitments

2014

$

2013

$

Minimum lease payments:

- not later than one year 236,769 227,740

- between one year and five years 293,764 25,819

Minimum lease payments 530,533 253,559

- less finance charges (40,304) (8,755)

Present value of minimum lease payments 490,229 244,804

24 Cash Flow Information

(a) Reconciliation of cash

2014

$

2013

$

Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows:

Cash and cash equivalents 255,970 1,415,650

Bank overdrafts - -

255,970 1,415,650



24 Cash Flow Information continued

37

(b) Reconciliation of result for the year to cashflows from operating activities

Reconciliation of net income to net cash provided by operating activities:

2014

$

2013

$

Profit for the year 439,922 434,274

Cash flows excluded from profit attributable to operating activities

Non-cash flows in profit:

Depreciation 1,095,146 1,336,622

(Profit) on sale of non-current assets (4,078) (1,212)

Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:

- decrease in trade and other receivables 20,344 49,238

- (increase) in other assets 495,451 (250,160)

- (increase) in inventories 56,609 (27,910)

- increase/(decrease) in trade and other payables (132,263) 140,661

- increase/(decrease) in other liabilities (4,475) 20,960

- increase in provisions 48,036 40,277

Cashflows from operations 2,014,692 1,742,750

25 Related Parties

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

There were no related party transactions during the course of the financial year. The company did not trade with any of its directors or director related entities.

26 Bank Guarantee

At the request of the company, the company's bank is holding bank guarantees in favour of the Totalisator Agency Board of NSW to the value of $5,000.

27 Members' Guarantee

The Company is incorporated under the Corporations Act 2001 and is a Company limited by guarantee. If the Company is wound up, the constitution states that each member is required to contribute a maximum of $ 1 each towards meeting any outstandings and obligations of the Company. At 31 December 2014 the number of members was 12,959 (2013: 12,846).



38

28 Company Details

The registered office of and principal place of business of the company is:


Corner Hume Highway and Bessemer Street

Mittagong NSW 2575


Directors' Declaration

39

The directors of the Company declare that: 1. The financial statements and notes, as set out on pages 14 to 38, are in accordance with the Corporations Act 2001 and:

a. comply with Accounting Standards - Reduced Disclosure Requirements; and

b. give a true and fair view of the financial position as at 31 December 2014 and of the performance for the year ended on that date of the Company.

2. In the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and

when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Director ..................................................................

Graham J Millbank

Director ..................................................................

Roger F Cole

Dated this 4th day of February 2015


Independent Audit Report to the members of Mittagong RSL Club Limited

40

Matters relating to the electronic presentation of the audited financial report

This audit report relates to the financial report of Mittagong RSL Club Limited for the year ended 31 December 2014 included on Mittagong RSL Club Limited’s web site. The Mittagong RSL Club Limited’s directors are responsible for the integrity of the Mittagong RSL Club Limited’s web site. We have not been engaged to report on the integrity of the Mittagong RSL Club Limited’s web site. The audit report refers only to the statements named below. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site.

Report on the Financial Report

We have audited the accompanying financial report of Mittagong RSL Club Limited, which comprises the statement of financial position as at 31 December 2014, the statement of profit or loss and statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration.

Directors' Responsibility for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Mittagong RSL Club Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.


Independent Audit Report to the members of Mittagong RSL Club Limited

41

Opinion

In our opinion the financial report of Mittagong RSL Club Limited is in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the Company’s financial position as at 31 December 2014 and of its performance for the year ended on that date; and

(b) complying with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Regulations 2001.

Gillespies Chartered Accountants

David M Duff Partner

BOWRAL Dated this4th day of February 2015


For the Year Ended 31 December 2014

42

Compilation Report

The additional financial data presented on pages 42 - 47 is in accordance with the books and records of the Company which have been subjected to the auditing procedures applied in our statutory audit of the Company for the year ended 31 December 2014. It will be appreciated that our statutory audit did not cover all details of the additional financial data. Accordingly, we do not express an opinion on such financial data and we give no warranty of accuracy or reliability in respect of the data provided. Neither the firm nor any member or employee of the firm undertakes responsibility in any way whatsoever to any person (other than Mittagong RSL Club Limited) in respect of such data, including any errors of omissions therein however caused.

Gillespies

....................................................................

BOWRAL

4 February 2015



43

Detailed trading account

2014

$

2013

$

Bar and Bottleshop

Sales revenue

Bar sales 1,430,115 1,520,024

Bottleshop sales 227,810 327,108

Recoups - discounts and specials 66,807 75,635

1,724,732 1,922,767

Cost of sales

Opening stock 131,163 112,493

Purchases 678,686 865,657

Closing stock (79,338) (131,163)

Cost of goods sold 730,511 846,987

Gross profit 994,221 1,075,780

Less: Direct expenses

Beer gas 3,963 4,081

Rental of equipment 5,276 5,181

Electricity 38,400 38,400

Payroll tax 33,300 30,525

Repairs and maintenance 7,878 8,574

Requisites (3,005) (2,231)

Salaries and wages 687,638 634,387

Staff training (39) 2,573

Superannuation 60,871 56,217

834,282 777,707

Net profit / (loss) 159,939 298,073



44


2014

$

2013

$

Gaming Machines

Income

Net clearances 8,066,833 8,057,450


Central monitoring system 81,799 79,481

Community sponsorships, donations and support 296,927 280,149

Duty tax 1,634,256 1,631,893


Equipment rental 41,047 31,290

Links fees 145,807 152,645


Promotions - Bush Bounty 208,220 177,478

Quickchange 3,977 6,129

Repairs and maintenance and requisites 150,687 171,899

Salaries and wages 306,290 279,731


3,019,469 2,957,683

Net profit / (loss) 5,047,364 5,099,767



45


2014

$

2013

$

Catering

Sales revenue

Sales 3,231,741 3,614,716

Recoups - discounts and specials 503,718 527,609

3,735,459 4,142,325

Cost of sales

Opening stock 53,960 51,173

Purchases 1,121,809 1,210,730

Closing stock (53,098) (53,960)

Cost of goods sold 1,122,671 1,207,943

Gross profit 2,612,788 2,934,382


Advertising 252 -


Gas 22,913 24,000

Laundry 27,799 30,454

Payroll tax 107,406 101,641


Requisites 70,059 78,086

Salaries and wages 2,173,609 2,127,169

Staff training (10,596) 274


2,663,247 2,636,601

Net profit / (loss) (50,459) 297,781


Detailed Profit and Loss For the Year Ended 31 December 2014

46

2014

$

2013

$

Net contribution from bar and bottleshop 159,939 298,073

Net contribution from gaming machines 5,047,364 5,099,767

Net contribution from catering (50,459) 297,781

Net profit from trading 5,156,844 5,695,621

Other income


Rent received 27,984 27,613

Commission 192,484 169,612

Sundry revenue 27,932 14,904

Lease receipts 159,659 167,238

Member subscriptions 91,106 80,941

Sports and Recreation (6,763) (11,163)

Utilities reimbursements - Springs Motel 30,131 25,621

Total other income 556,922 501,569

Total operating income 5,713,766 6,197,190

Expenditure

Advertising 95,511 87,757

Annual leave paid 260,181 294,998

Auditors remuneration 48,670 47,305

Bank charges 58,442 75,760

Borrowing charges 3,487 3,329

Cash discrepancy 878 1,619

Cleaning material and waste disposal 70,939 68,981

Club promotions - general 247,458 264,703

Club promotions - members only 528,307 612,223

Commission - motel 4,889 6,280

Consultants 42,425 23,333

Directors expenses 6,906 9,843

Directors professional development 10,595 11,797

Donations and sponsorships 1,350 3,650

Electricity and gas 116,366 153,406

Employees' leave entitlements 48,036 40,277

Entertainment 58,935 56,567

Fringe benefits tax 24,653 13,808

General expenses 7,254 10,670

Hire of plant and equipment 4,668 10,076

Insurance 199,141 231,420

Interest paid 38,484 65,215

Long service leave paid 47,307 36,233

Magazines, journals and periodicals 736 691

Management expenses 14,238 15,144

Management professional development 14,516 9,559

Motor vehicle expenses 27,304 33,640


Printing, postage and stationery 46,194 58,900

Rates and taxes 72,630 52,502


Salaries and wages 1,282,235 1,338,272


Detailed Profit and Loss For the Year Ended 31 December 2014

47

2014

$

2013

$

Security 104,404 100,746

Sick leave paid 68,748 76,118

Sky Channel and Fox Sports 65,939 65,998

Staff expenses 86,884 85,143

Subscriptions 23,205 19,899

Superannuation contributions 141,532 143,990

Telephone 28,857 25,581

Total expenditure 4,182,776 4,427,506

Operating profit for the year before depreciation and income tax 1,530,990 1,769,684

Depreciation 1,095,146 1,336,622

Profit on sale of non-current assets 4,078 1,212

Profit for the year attributable to members 439,922 434,274

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