Norths Annual Report 2012

NOTICE is hereby given that the Annual General Meeting of North Sydney Leagues’ Club Limited ACN 000 147 544 (Club) will be held at:

12 Abbott Street, Cammeray NSW and by video link at Seagulls Club, Gollan Drive Tweed Heads NSW

Monday, 20th May 2013 7.00pm

BUSINESS

1. Apologies.

2. To receive and consider the Annual Report and Balance Sheet for the year ended 31st December 2012.

3. To consider and, if thought fit, to pass the Ordinary Resolution appearing under the heading “Ordinary Resolution” with regard to benefits of Directors of the Club and others.

The Club’s Annual Report for 2012 may be viewed on the Club’s website.

ORDINARY RESOLUTION

“(a) That pursuant to section 10(6A)(b) of the Registered Clubs Act 1976 (NSW), the members hereby approve a sum not exceeding $50,000 and agree to, the members of the Board and the other persons referred to below, during the period from the 2013 Annual General Meeting to the 2014 Annual General Meeting, receiving the following benefits and the members further acknowledge that the benefits outlined in sub-paragraphs (i) to (vii) are not available to members generally but only to those members who are elected Directors of the Club and the other persons referred to below:

I. The reasonable costs of travel, meals and refreshments to be associated with each Board meeting of the Club;

II. The right for Directors to incur reasonable expenses in travelling to and from Directors’ meetings or to other constituted meetings as approved by the Board from time to time on the production of invoices, receipts or other proper documentary evidence of such expenditure;

III. The reasonable costs of Directors attending Industry Association conferences and meetings;

12 Abbott Street, Cammeray NSW 2062Tel: 02 9245 3000 I Fax: 02 9955 1543Email: [email protected] Web: www.norths.com.auABN 92 000 147 544

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

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

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

VII. The reasonable cost of Directors and their spouses attending an annual dinner and other industry functions where appropriate and required to represent the Club.”

GENERAL NOTES FOR MEMBERS REGARDING THE ORDINARY RESOLUTION 1. In accordance with the requirements of section 10 of

the Registered Clubs Act 1976 (NSW) (Registered Clubs Act), members are asked to approve the above benefits and expenses for the Board up to the next Annual General Meeting.

2. To be passed, the Ordinary Resolution must receive votes in its favour from not less than a simple majority of those members, who being eligible to do so, vote in person at the meeting.

3. Members who are employees of the Club are not entitled to vote.

4. Proxy voting is prohibited by the Registered Clubs Act.

5. The Board recommends that members vote in favour of the Ordinary Resolution.

Please direct any questions or concerns about the business to be conducted at the Annual General Meeting (including the Financial Reports) to the Chief Executive Officer, if possible at least 7 days before the Annual General Meeting.

Mr Luke SimmonsChief Executive OfficerBy direction of the Board

Dated: 3 April 2013

NORTH SYDNEY LEAGUES’ CLUB LIMITEDACN 000 147 544

NOTICE OF ANNUAL GENERAL MEETING

FINANCIAL ACCOUNTS YEAR ENDED 31 DECEMBER

2012

NORTH SYDNEY LEAGUES CLUB LIMITED

ABN 92 000 147 544

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Live It Love It ANNUAL REPORT 2012

CONTENTSExecutive Report 4

Directors’ Report 5

Auditors’ Independence Declaration 8

Statement of Comprehensive Income 9

Statement of Financial Position 10

Statement of Changes in Equity 11

Statement of Cash Flows 11

Notes to the Financial Statements 12

Directors’ Declaration 28

Auditors’ Report 29

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ANNUAL REPORT 2012 Live It Love It

EXECUTIVE REPORTIt has been a challenging year for the norths Group, however one in which we have made further inroads on our journey to re‑position the business to better capture opportunities, drive efficiencies and maximise returns for our membership.

We have developed and maintained a consistent strategy over the past 12 months and this is starting to show real tangible benefits as we move into 2013. However, in keeping with the changing nature of the marketplace, our strategy is constantly reviewed and continually evolves.

As disclosed in last year’s financial statements, the Club had two significant legal cases, which have been before the courts for a number of years. In both cases, an adverse outcome against the Club occurred, which was the single largest contributor to the 2012 loss. Both matters are now completely finalised and we can now focus on driving the many opportunities our Clubs have in 2013 and beyond. There are no other disputes before the courts.

Many investments made across the business in 2012 will continue to generate steady revenue in a more efficient manner.

A key strategy for the Group over the past 12 months has been to arrest the unsustainable losses occurring at seagulls Club and ensure any future development contributes to the bottom line. A combination of new development and rationalisation of un‑utilised areas will re‑position this Club over 2013 and into 2014.

May 2012 saw the opening of Mangrove, our waterfront dining area which includes a la carte dining, wood fire pizza and café. This has been a great success and is adding true value for our members. The Stars area on level one will be renamed and returned to functions and special events space, with one such event being the fabulous ‘Coolie Rocks On’ in June 2013!

Enormous thanks to Marco Cenfi for taking on the catering at seagulls and managing a complete transformation to the reception and entire Mangrove area for members to enjoy the fabulous views across the water.

Where the old Connections Bar and pit area on level one was located now resides the exciting TABATINGA Family Fun Centre offering “amazing fun guaranteed!”. The centre is spread out over 1500 sqm and stage one opened on Friday 5th April with stage two planned to open later in 2013. Enormous thanks to Brian and Cathy Parker of Tabatinga for making this a reality at seagulls. Congratulations!

Thanks to seagulls members and staff for their patience as we have made minor improvements to the Lakeview Lounge and TAB areas to make things more comfortable and improve efficiency.

Members may have heard about our Development Application in with Tweed Shire Council for a Supa IGA supermarket. If approved, this will benefit the community and ensure the long term viability of the seagulls premises in which over 100 employees are currently employed.

norths has traded well in 2012, however there are great opportunities to improve further. We are currently finalising the master plan which will completely remake the main floor at Cammeray. Stage one of the master‑plan will commence in

Mark HolmanChairmannorths Group

Luke Simmons Chief Executive Officer norths Group

June 2013 and see our entire out door area transformed with improvements to ensure members are more comfortable in adverse weather conditions and make the area more inviting.

Stage two will involve a complete redevelopment of the catering areas and re‑position food for norths in what is a very discerning market.

Significant progress has been made in energy management with the norths Group adopting market leading EDGE technology from EP&T Global to manage energy and water consumption and additionally drive efficiencies across each Club.

2013 sees norths Bowling Club celebrate its 125th birthday. At the time of printing we are out to tender for works to upgrade the facilities with monies allocated by council for the relocation of the North Sydney RSL Sub‑branch from the old Anzac Club site. These necessary works will also enable us to reduce the operational costs of running the Club in future.

Our bank partner, Bankwest, continues to be supportive of our aggressive debt amortisation program and has shown confidence in us by extending our facility for another three years. Bankwest are fully supportive as we work toward upgrading our facilities at norths whilst continuing to support the community and the propagation of rugby league.

During 2012, the norths Group spent $2.1m on completed capital improvements primarily made up of three significant projects. These included the much needed upgrade of our gaming machines and the implementation of the EDGE technology from EP&T Global. As well as the creation of Mangrove, a unique food offering which incorporates a cafe, with a cook to order menu and wood fired pizza oven, overlooking the Tweed River at seagulls.

I would like to take this opportunity to thank the board, our leadership team, our people, stakeholders and most importantly our members for their continued support.

2012 norths bowlo seagulls total

Revenue 21,950,509 451,353 13,458,068 35,859,930

Expenses 15,983,643 683,338 12,563,870 29,230,851Operating Profit 5,966,866 (231,985) 894,198 6,629,079

State Government Taxes

4,226,830 7,457 2,305,663 6,539,950

Community Football 603,350 316,185 919,535

Community Other 224,598 162,262 386,860

Total Community Support

827,948 0 478,447 1,306,395

Profit / (Loss) 912,088 (239,442) (1,889,912) (1,217,266)

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DIRECTORS’ REPORT Your directors present their report on the company for the financial year ended 31 December 2012.

DIRECTORS

The following directors have been in office for the entire financial year unless otherwise stated below and attended the recorded board meetings

NAME OF DIRECTOR CLUB POSITION

TOTAL NUMBER OF DIRECTORS’ MEETINGS ATTENDED

TOTAL NUMBER OF DIRECTORS’ MEETINGS WHILST IN OFFICE

Mark Holman President 11 12

Willis A Salier Vice President 11 12

Warren F Morris Director 12 12

Frere Thompson Director 12 12

David O’Farrell Director 10 12

Terence Keen Director 12 12

Perry Lopez (Appointed 25/01/12) Director 10 12

John Humphries (Resigned 26/06/12) Director 5 5

Number of Directors meetings 12

INFORMATION ON DIRECTORS

NAME OF DIRECTOR QUALIFICATIONS EXPERIENCE

Mark Holman Chartered Accountant

‑ Chairman of North Sydney Leagues Club Ltd since December 2010‑ Vice‑President of North Sydney Leagues Club Ltd from May 2008 to December 2010‑ Director of North Sydney Leagues Club Ltd for 7 years‑ Director of Carlson Hotels Asia Pacific Holdings Pty Ltd, which operates the Radisson

chain of hotels throughout Australia

Willis Salier Lawyer

‑ Vice‑President of North Sydney Leagues Club Ltd since December 2010‑ Director of North Sydney Leagues Club Ltd for 13 years‑ Chairman of listed public company ‑ Director of private companies, and trustee of charitable foundations and estates, with

combined assets well in excess of $100 million

Warren Morris Retired Customs Broker

‑ Vice‑President of North Sydney Leagues Club Ltd from May 2000 to 2008‑ Director of North Sydney Leagues Club Ltd for 25 years‑ Life Member of North Sydney Leagues Club Ltd‑ Secretary of the Sports Council‑ Delegate and Patron of Metropolitan Leagues Sports Council‑ Patron of the Bridge, Indoor Bowls, Camera, Joggers’, Snooker, Squash, Swimming

and Tennis Clubs‑ Co‑Patron of the Lawn Bowls Clubs‑ Delegate to Leagues Clubs Australia

David O’Farrell Retired Business Owner

‑ Director of North Sydney Leagues Club Ltd for 10 years‑ Patron of the Bowls and Golf Club

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DIRECTORS’ REPORT cont...

SHORT TERM OBJECTIVES

Operate an efficient diverse business to ensure the company is financially secure to enable continued financial assistance or otherwise supporting the playing of sport, intraclubs and in particular the propagation of Rugby League continues.

LONG TERM OBJECTIVESProvide great community club’s with a commitment to ensuring our engagement within the community remains relevant and focuses on superior service for all to enjoy. Operate an efficient and diverse business whilst reducing the core debt of the Norths Group to ensure a financially sustainable future.

STRATEGY FOR ACHIEVING THE OBJECTIVESThe development of a Strategic Plan that focus on:

‑ Members and their guests experience

‑ Staff delivering a superior service

‑ Maximise utilisation of the Clubs Infrastructure for the benefit of members

‑ Engage and remain relevant within the local community

‑ Financial sustainability of the Norths Group

INFORMATION ON DIRECTORS

NAME OF DIRECTOR QUALIFICATIONS EXPERIENCE

Frere Thompson Retired Painter

‑ Director of North Sydney Leagues Club Ltd for 12 years‑ Director of North Sydney District Rugby League Football Club Ltd‑ Life Member of North Sydney Leagues Club Ltd‑ Life Member of North Sydney Junior Rugby League‑ Life Member of North Sydney District Rugby League Football Club Ltd‑ Life Member of NSW Rugby League‑ Delegate to Metropolitan Leagues Sports Council‑ Committeeman on North Sydney Leagues Club Sports Council‑ Delegate to NSW Rugby League‑ Delegate to Clubs NSW‑ Delegate to Leagues Club Australia‑ State Councillor of Australia Legion of Ex‑Servicemen and Women

Terrence Keen

Certified Workplace Trainer & Assessor in Hospitality

‑ Director of North Sydney Leagues Club Ltd for 6 years‑ Executive Officer Tweed Heads Seagulls Rugby League Football Club Ltd

Perry LopezRetired Managing Director

‑ Director of North Sydney Leagues Club Ltd since 2012‑ Chairman of North Sydney Rugby League Football Club since 2012‑ Director of North Sydney Rugby League Football Club since 2008‑ Director Central Coast Bears since 2009‑ Director SME Association since 2011

John Humphries Business Manager

‑ Director of North Sydney Leagues Club Ltd for 5 years‑ Life Member Tweed Heads Seagulls Junior Rugby League

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PRINCIPAL ACTIVITIESThe principal activities of the company during the course of the financial year consisted of the conduct and promotion of licensed social and sporting clubs, and the provision of sporting and recreation facilities to members of the company, including the propagation of Rugby League.

HOW THESE ACTIVITIES ASSIST IN ACHIEVING THE OBJECTIVESThe principal activities of the company contributed to achieving the objectives by providing a stable base of operations. This ensured the financial position of the company remained stable and generated funds to meet the demands of the company and maintain high levels of service to members and guests.

PERFORMANCE MEASUREMENT AND KEY PERFORMANCE INDICATORSPerformance is assessed regularly against strategic score cards, rolling forecasts, strategic plans and industry benchmarks using various metrics such as financial and non‑financial metrics, financial analysis to measure whether strategic initiatives have been effective in achieving company short and long term objectives.

A number of KPI’s are employed by the club in order to measure monitor and hence improve the club’s performance and to achieve the club objectives through sound financial management.

MEMBERS’ LIMITED LIABILITYThe entity is incorporated under the Corporations Act 2001 and is an entity limited by guarantee. If the entity is wound up the constitution states that each member is required to contribute a maximum of $4.00 towards meeting any outstanding obligations of the entity. At 31 December 2012 the total amount that members of the company are liable to contribute if the company is wound up is $138,988.

AUDITORS’ INDEPENDENCE DECLARATION

A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 8.

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

Director:

Mark Holman

Director:

Willis Salier

Dated this 20th day of March 2013

AUDITORS’ INDEPENDENCE DECLARATIONUNDER SECTION 307C OF THE CORPORATIONS ACT 2001TO THE DIRECTORS OF NORTH SYDNEY LEAGUES CLUB LIMITED

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We declare that, to the best of our knowledge and belief, during the year ended 31 December 2012 there have been:

(i)no contraventions of the auditor independence requirements of 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.

Maher Partners Assurance Pty Limited

Jason Maher

Taren Point


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STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2011

NOTE 2012 2011

Revenue 2 35,449,628 36,955,271

Changes in inventories of finished goods and work in progress (39,707) (117,756)

Raw materials and consumables used (2,041,041) (2,017,238)

Advertising expenses (283,196) (285,667)

Auditors’ remuneration 3 (115,522) (116,140)

Legal and consultancy (937,494) (997,751)

Bad and doubtful debt expenses (7,039) ‑

Depreciation and amortisation expenses (3,726,220) (3,363,016)

Directors’ expenses (29,331) (19,339)

Employee benefits expenses (9,060,499) (9,061,762)

Other expenses (20,396,781) (21,086,615)

Loss before income tax 4 (1,187,202) (110,013)

Income tax expense 5 (30,064) 42,690

Loss for the year (1,217,266) (67,323)

Total comprehensive income for the year (1,217,266) (67,323)

Total comprehensive income attributable to members of the entitity (1,217,266) (67,323)

The accompanying notes form part of these financial statements.

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STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2012

NOTE 2012 2011

CURRENT ASSETS

Cash and cash equivalents 6 1,754,547 1,856,614

Trade and other receivables 7 204,069 256,909

Inventories 8 271,786 321,693

Other current assets 9 260,936 238,569

TOTAL CURRENT ASSETS 2,491,338 2,673,785

NON-CURRENT ASSETS

Property, plant and equipment 10 78,027,743 79,693,480

Deferred tax assets 5 123,038 139,481

TOTAL NON-CURRENT ASSETS 78,150,781 79,832,961

TOTAL ASSETS 80,642,119 82,506,746

CURRENT LIABILITIES

Trade and other payables 11 3,337,742 3,614,754

Financial liabilities 12 2,563,904 3,101,433

Provisions 13 656,745 707,781

Tax liabilities 5 (43,790) (40,821)

Other current liabilities 14 254,792 258,691

TOTAL CURRENT LIABILITIES 6,769,393 7,641,838

NON-CURRENT LIABILITIES

Financial liabilities 12 18,743,795 18,450,000

Provisions 13 420,757 466,667

Tax liabilities 5 1,121,911 1,121,911

Other non‑current liabilities 14 173,036 195,837

TOTAL NON-CURRENT LIABILITIES 20,459,499 20,234,415

TOTAL LIABILITIES 27,228,892 27,876,253

NET ASSETS 53,413,227 54,630,493

MEMBERS’ EQUITY

Reserves 15 43,245,766 43,245,766

Retained earnings 16 10,167,461 11,384,727

TOTAL MEMBERS’ EQUITY 53,413,227 54,630,493


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STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2012

NoteRetained earnings

Asset Revaluation

Reserve

Capital Redemption

Reserve Total

$ $ $ $

Balance at 1 January 2011 11,452,050 43,082,634 163,132 54,697,816

Profit attributable to members (67,323) (67,323)

Balance at 31 December 2011 11,384,727 43,082,634 163,132 54,630,493

Profit attributable to members (1,217,266) (1,217,266)

Balance at 31 December 2012 10,167,461 43,082,634 163,132 53,413,227

STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2012

NOTE 2012 2011

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 35,401,024 36,405,278

Payments to suppliers and employees (31,315,970) (30,655,447)

Interest received 21,904 46,131

Finance costs paid (1,557,090) (1,625,080)

Net cash provided by operating activities 21 2,549,868 4,170,882

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of intangibles ‑ 515,614

Payments for property, plant and equipment (2,371,519) (5,507,915)

Net cash used in investing activities (2,371,519) (4,992,301)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 2,121,377 1,941,050

Repayment of borrowings (1,795,727) (1,451,806)

Net cash provided by financing activities 325,650 489,244

Net increase (decrease) in cash held 503,999 (332,175)

Cash at beginning of financial year 1,132,997 1,465,172

Cash at end of financial year 21 1,636,996 1,132,997

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NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2012

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements cover North Sydney Leagues Club Limited as an individual entity. North Sydney Leagues Club Limited is a company limited by guarantee, incorporated and domiciled in Australia.

BASIS OF PREPARATION

North Sydney Leagues Club Limited has elected to early adopt the Australian Accounting Standards ‑ Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010‑2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. As a consequence, the entity has also early adopted the following Amending Standards containing reduced disclosure requirements:

‑ AASB 2011‑2: Amendments to Australian Accounting Standards arising from the Trans‑Tasman Convergence Project ‑ Reduced Disclosure Requirements; and

‑ AASB 2011‑6: Amendments to Australian Accounting Standards ‑ Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation ‑ Reduced Disclosure Requirements.

The 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.

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 these financial statements are presented below and have been consistently applied unless otherwise stated.

The financial statements, except for the cash flow information, have been prepared on an 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 financial statements were authorised for issue on 20 March 2013 by the directors of the company.

ACCOUNTING POLICIES

Comparative Figures

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

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NOTES TO THE FINANCIAL STATEMENTS cont...FOR THE YEAR ENDED 31 DECEMBER 2012

INCOME TAX

The income tax expense for the year is the tax payable on the current year’s taxable income. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets and liabilities are recognised at the tax rates expected to apply when the assets are recovered or the liabilities are settled. Current and deferred tax is recognised as an expense in the income statement except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.

Deferred tax assets are recognised to the extent that it is probable that sufficient taxable profits will be available, against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation, and the anticipation that the company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

INVENTORIES

Inventories are measured at the lower of cost and net realisable value. Costs are assigned on a first‑in first‑out basis.

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PROPERTY, PLANT AND EQUIPMENTEach class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

PROPERTY

Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less accumulated depreciation for buildings.

In the periods when the freehold land and buildings are not subject to an independent valuation, the directors conduct directors’ valuations to ensure the land and building’s carrying amount is not materially different to the fair value.

Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are recognised against fair value reserves directly in equity; all other decreases are recognised in profit or loss.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

PLANT AND EQUIPMENT

Plant and equipment are measured on the cost basis and are therefore carried at cost less accumulated depreciation and any accumulated impairment.

In the event the carrying value of plant and equipment is greater than the estimated recoverable amount, the carrying value is written down immediately to the estimated recoverable amount. A formal assessment of recoverable amount is made when impairment indicators are present.

The cost of fixed assets constructed within the company includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

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

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DEPRECIATION

The depreciation method and useful life used for items of property, plant and equipment (excluding freehold land) reflects the pattern in which their future economic benefits are expected to be consumed by the company. Depreciation commences 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. The depreciation method and useful life of assets is reviewed annually to ensure they are still appropriate.

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

Class of Fixed Asset Depreciation Rate

Buildings & Refurbishments 2.5% ‑ 10.0%

Plant & Equipment 5.0% ‑ 33.0%

The estimated useful life for each class of depreciable assets are:

Class of Fixed Asset Useful Life

Buildings & Refurbishments 10 ‑ 40 Years

Plant & Equipment 3 ‑ 20 Years

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

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than 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 statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

LEASES

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

Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal 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.

Leased assets are depreciated on a straight‑line basis over the shorter of their estimated useful lives or the lease term.

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

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

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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 have been measured at the amounts expected to be paid when the liability is settled, plus related on‑costs.

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

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.

CASH AND CASH EQUIVALENTS

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

REVENUE

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

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

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

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

BORROWING COSTS

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

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

GOODS AND SERVICES TAX (GST)Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the Balance Sheet are shown inclusive of GST.

TRADE AND OTHER PAYABLESThese amounts represent unpaid liabilities for goods received and services provided to the entity prior to the end of the financial year. These amounts are unsecured and are normally settled within 14 to 45 days.

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2012 2011

2 REVENUE

Operating activities

Sale of goods and Gaming revenue 31,171,262 32,031,930

Interest Received 21,904 46,131

Rendering of services 3,185,243 2,770,880

Other revenue 1,071,219 1,590,716

35,449,628 36,439,657

Non-operating activities

Proceeds on disposal of other assets ‑ 515,614

‑ 515,614

Total revenue 35,449,628 36,955,271

3 AUDITORS’ REMUNERATION

Auditor’s Remuneration

Audit & Review of Financial Reports 78,000 90,845

Other Services 37,522 25,295

115,522 116,140

4 LOSS

Expenses

Finance Costs

Interest Paid 1,593,771 1,676,004

Depreciation of property, plant and equipment

Depreciation ‑ Buildings 1,693,390 1,514,784

Depreciation ‑ Plant & Equipment 2,032,830 1,848,232

3,726,220 3,363,016

Bad Debts Written Off 7,039 ‑

Total bad and doubtful debts 7,039 ‑

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5 INCOME TAX EXPENSE

North Sydney Leagues Club Limited is liable for income tax, based upon income derived from non‑members and from investments in outside entities. In view of these special circumstances, it is not appropriate to compare income tax payable with the net profit disclosed in the Statement of Comprehensive Incomes.

a) Income Tax Expense

The Income Tax Assessment Act, 1997 (amended) provides that under the concept of mutuality clubs are only liable for income tax on income derived from non‑members and from outside entities.

2012 2011

The amount set aside for income tax in the Statement of Comprehensive Incomes has been calculated as follows:

Portion of income attributable to non‑members 5,715,414 6,067,996

Less: Portion of expenses attributable to non‑members (5,462,557) (5,731,256)

252,857 336,740

Add: Other assessable income 658,121 1,232,093

Less: Other deductible expenses (1,370,963) (2,238,064)

Tax loss carried forward (669,231) ‑

Net income subject to tax (1,129,216) (669,231)

Current income tax applicable to above at 30% ‑ ‑

Increase in deferred tax liability ‑ ‑

Decrease (Increase) in deferred tax asset 16,443 (42,690)

Over provision in prior year 13,621 ‑

Income tax attributable to operating profit 30,064 (42,690)

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2012 2011

5 INCOME TAX EXPENSE cont...

a) Current Tax (Asset)/Liabilities

Movements during the year:

Balance at beginning of year (40,821) (40,821)

Income tax paid (54,729) ‑

Refunds received 38,139 ‑

Under (Over) provision in prior year 13,621 ‑

(43,790) (40,821)

b) Deferred Tax Assets

Amounts recognised in profit or loss

Employee benefits 58,896 64,195

Accruals 2,419 38,706

Tax losses 61,723 36,580

123,038 139,481

Movements

c) Deferred Tax Liabilities

The balance comprises temporary differences attributable to:

Revaluations 1,121,911 1,121,911

Movements during the year:

Opening balance 1,121,911 1,121,911

Charged to Comprehensive income ‑ ‑

Closing balance 1,121,911 1,121,911

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2012 2011

6 CASH AND CASH EQUIVALENTS

Current

Cash on Hand & Cash at Bank 1,754,547 1,856,614

7 TRADE AND OTHER RECEIVABLES

Current

Trade Debtors 116,528 164,779

Loan ‑ Tweed Heads Seagulls RLFC 80,000 80,000

Other Debtors 7,541 12,130

204,069 256,909

The company does not hold any financial assets whose terms have been renegotiated, but which would otherwise be past due or impaired.

8 INVENTORIES

Current

At cost:

Stock on Hand ‑ Bar 253,099 292,806

Stock on Hand ‑ Other 18,687 28,887

271,786 321,693

9 OTHER CURRENT ASSETS

Current

Prepayments 260,936 238,569


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2012 2011

10 PROPERTY, PLANT AND EQUIPMENT

LAND AND BUILDINGS

Freehold land at:

Independent valuation 15,500,000 15,500,000

15,500,000 15,500,000

Buildings at:

Independent valuation 54,150,000 54,150,000

Directors’ valuation 171,636 171,636

Refurbishments and Improvements at cost 4,302,115 3,472,193

Less accumulated depreciation (3,208,174) (1,514,784)

55,415,577 56,279,045

Total Land and Buildings 70,915,577 71,779,045

PLANT AND EQUIPMENT

Plant and Equipment:

At cost 17,981,670 17,595,386

Accumulated depreciation (11,073,141) (9,709,417)

6,908,529 7,885,969

Capital Work in Progress 203,637 28,466

203,637 28,466

Total Plant and Equipment 7,112,166 7,914,435

Total Property, Plant and Equipment 78,027,743 79,693,480

Refer to Note 12 for details of security over property, plant and equipment.

Valuation

The independent valuation of the company’s land and buildings carried out as at 20 August 2010 by registered valuers, Global Valuation Services Pty Limited on the basis of market value for existing use resulted in a valuation of Land and Building at $69,650,000. The directors are of the opinion the amount reflects the value as at 31 December 2012.

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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.

Land BuildingsPlant &

Equipment

Capital Work in Progress Total

$ $ $ $ $

Balance at 1 January 2011 15,500,000 54,321,636 7,389,378 354,905 77,565,919

Additions ‑ 3,472,193 2,362,160 28,466 5,862,819

Disposals ‑ ‑ (17,338) (354,905) (372,243)

Depreciation expense ‑ (1,514,784) (1,848,231) ‑ (3,363,015)

Balance at 31 December 2011 15,500,000 56,279,045 7,885,969 28,466 79,693,480

Additions ‑ 829,922 1,351,380 183,883 2,365,185

Disposals / transfers ‑ ‑ (295,990) (8,712) (304,702)

Depreciation expense ‑ (1,693,390) (2,032,830) ‑ (3,726,220)

Carrying amount at 31 December 2012

15,500,000 55,415,577 6,908,529 203,637 78,027,743

11 TRADE AND OTHER PAYABLES

Current

Trade Creditors 1,532,962 1,351,177

Other Creditors 1,804,780 2,263,577

3,337,742 3,614,754

2012 2011

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2012 2011

12 BORROWINGS

Current

Bank Overdraft 117,551 723,617

Hire Purchase Liability 165,677 314,856

Loan ‑ Ebet 692,959 729,627

Commercial Bill ‑ Bankwest 1,425,000 1,333,333

Hunter Premium Funding 162,717 ‑

2,563,904 3,101,433

Non-Current

Hire Purchase Liability 393,795 ‑

Commercial Bill ‑ Bankwest 18,350,000 18,450,000

18,743,795 18,450,000

Security

The security for the commercial bill facility is:

Registered first mortgage over:‑ 12 Abbott Street, Cammeray known as North Sydney Leagues Club,‑ Ridge Street, North Sydney known as North Sydney Leagues Bowling Club‑ Gollan Drive, Tweed Heads West known as Seagulls Club

‑ First Registered Company Charge Number 1190698(Mortgage Debenture) over all the assets and undertakings of the club.

13 PROVISIONS

Provision for Annual Leave 656,745 707,781

Provision for Long Service Leave 420,757 466,667

Total provisions 1,077,502 1,174,448

Analysis of Total Provisions

Current 656,745 707,781

Non‑current 420,757 466,667

1,077,502 1,174,448

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2012 2011

14 OTHER LIABILITIES

Current

Income In Advance 20,336 26,262

Subscriptions In Advance 234,456 232,429

254,792 258,691

Non Current

Subscriptions In Advance 173,036 195,837

15 RESERVES

Asset Revaluation Reserve

Opening Balance for the year 43,082,634 43,082,634

Capital Redemption Reserve

Opening Balance for the year 163,132 163,132

43,245,766 43,245,766

16 RETAINED EARNINGS

Retained earnings at the beginning of the financial year 11,384,727 11,452,050

Net loss attributable to members of the company (1,217,266) (67,323)

Retained earnings at the end of the financial year 10,167,461 11,384,727

17 CAPITAL HIRE PURCHASE (HP) AND LEASING COMMITMENTS

Finance HP/Lease Commitments

Payable:

Not later than one year 194,599 320,339

Later than one year but not later than two years 194,599 (5,483)

Later than two years but not later than five years 233,767 ‑

Minimum lease payments 622,965 314,856

Less future finance charges (63,494) ‑

Total HP/lease liability 559,471 314,856

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2012 2011

18 CONTINGENT LIABILITIES

Capital Finance / TCP & Synergy Protection Agency

During the year, the Club settled two significant litigation cases that were before the courts, Capital Finance / TCP and Synergy Protection Agency. In both cases an adverse outcome against the Club occurred, which is the single largest contributor to the 2012 loss. Confidentiality clauses prevent detailing additional information.

There are no other litigation matters before the courts.

19 KEY MANAGEMENT PERSONNEL

The totals of remuneration paid to key management personnel (KMP) of the company during the year are as follows:

Key management personnel compensation 987,745 1,112,671

20 RELATED PARTY TRANSACTIONS

No director has entered into a material contract with the company since the end of the previous financial year and there were no material contracts involving directors’ interests existing at year end.

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21 CASH FLOW INFORMATION

a) Reconciliation of Cash

Cash and cash equivalents consist of cash on hand and balances with banks, and investments in money market instruments. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:

Cash on Hand & Cash at Bank 1,754,547 1,856,614

Cash at Bank ‑ Bank Overdraft (117,551) (723,617)

1,636,996 1,132,997

b)Reconciliation of net cash provided by operating activities to profit after income tax

Operating profit (loss) after income tax (1,217,266) (67,323)

Non-cash flows in profit:

Profit on sale of non‑current assets ‑ (498,276)

(Gain) / Loss on sale of non‑current assets 311,036 ‑

Depreciation 3,726,220 3,363,016

Charges to provisions (96,946) (204,862)

Increase (Decrease) in income taxes payable (2,969) ‑

Financing flows in operating profits 36,681 50,924

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

(Increase) Decrease in current inventories 49,907 113,317

(Increase) Decrease in current receivables 52,840 417,310

(Increase) Decrease in prepayments (22,366) (14,797)

(Increase) Decrease in deferred tax assets 16,443 (42,690)

Increase (Decrease) in trade creditors 181,785 415,812

Increase (Decrease) in other creditors (458,797) 626,699

Increase (Decrease) in income in advance (26,700) 11,752

2,549,868 4,170,882

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22 COMPANY DETAILS

The registered office of the company is: 12 Abbott Street, Cammeray, NSW 2062The principal place of business is: 12 Abbott Street, Cammeray, NSW 2062

The principal activities of the company are that of a Registered Club.

23 DISCLOSURE REQUIREMENTS UNDER SECTION 41J OF THE REGISTERED CLUBS ACT

Core and Non Core Property

Section 41J of the Act defines core property as meaning 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 resolution passed by a majority of the members present at a general meeting of the ordinary members of the club, not to be core property of the Club.

Non‑core property is defined as meaning any real property owned or occupied by the Club that is not core property.

The Directors consider the Club’s defined premises at North Sydney Leagues Club, 12 Abbott Street, Cammeray, NSW 2062; North Sydney Leagues Bowling Club, Ridge Street, North Sydney, NSW 2060; and sections of Seagulls Club, Gollan Drive Tweed Heads West, NSW 2486 to be core Property.

The remaining sections of Seagulls Club as voted by members by ordinary resolution at the Annual General Meetings on 14th May 2012 & 25th May 2009, are considered non‑core property.

DIRECTORS DECLARATION

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The directors of the company declare that:

1.The financial statements and notes, as set out on pages 5 to 28, are in accordance with the Corporations Act 2001:

(a)give a true and fair view of the financial position as at 31 December 2012 and of its performance as represented by the results of its operations and its cash flows for the year ended on that date of the company.

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

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 directors.

Director:

Mark Holman

Director:

Willis Salier


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INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OF NORTH SYDNEY LEAGUES CLUB LIMITED

Report on the Financial ReportWe have audited the accompanying financial report of North Sydney Leagues Club Limited which comprises the statement of financial position as at 31 December 2012 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration.

Directors’ Responsibility for the Financial ReportThe directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards ‑ Reduced Disclosure Requirements and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ 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. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance 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 auditors’ 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 auditors consider internal control relevant to the entity’s preparation and fair presentation of the financial report 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 entity’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.

IndependenceIn 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, provided to the directors of North Sydney Leagues Club Limited on 20th March 2013, would be in the same terms if provided to the directors as at the date of this auditors’ report.

Auditors’ Opinion

In our opinion:

(a) the financial report of North Sydney Leagues Club Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the company’s financial position as at 31 December 2012 and of its performance for the year ended on that date; and

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

Maher Partners Assurance Pty Limited

Jason Maher

Taren Point


NOTES

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12 Abbott Street, Cammeray NSW 2062

Tel. 02 9245 3000 Fax: 02 9955 1543

Email: [email protected]: www.norths.com.au

ABN 92 000 147 544

Documents

Norths Annual Report 2012