Blacktown Workers ClubPost board meeting financial statements 2015 by DailyPressGroup

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Blacktown Workers Club Limited ABN 21 000 858 006

Annual Financial Report 31 December 2015 _____________________________________

Blacktown Workers Club Limited

Presidentâ&#x20AC;&#x2122;s Report Hello Members, Another year has sped past and I would like to take this opportunity to update you on some of the happenings during the year. In 2015 we celebrated our 60th Birthday and what a big year it was. We gave away 11 cars, plenty of giveaways, free promotions and raffles for our members. Over 1 million dollars. I hope you shared in the prizes. We held some amazing major events including Ace Awards, Blacktown Police Office of Year Awards, White Ribbon Breakfast, Children's Xmas Party, Old Tin Shed- VIP Lunch and Anita Cobby Memorial Dinner to name a few. At the Ace awards we won Best Venue and we were equal second as runner up for Blacktown City Council Australia Day Awards Best event for the White Ribbon breakfast. We were nominated for Clubs NSW Welfare & Social Inclusion for White Ribbon Breakfast and NSW Green Globe Sustainability Award for Water Efficiency. We won both of these awards. We also won Silver for NSW Govt, Sustainability Advantage. We continued with our Corporate box at Allphones Arena where our members had the opportunity to win tickets to top International shows. This was a real winner and they certainly appreciated the full package that they received and thoroughly enjoyed the shows. We have been asked to keep it going. Our Wanderers Box is also a major attraction. This has also been renewed by popular demand. The Club was proud to donate over $1,634,355 to worthwhile charities and events on behalf of the members. Elizabeth Star booked some fabulous shows and bands for the Club with many members enjoying their Leisure time at the shows and dining facilities. We will again host the Ace Awards in April 2016. The Board and General Manager Neale Vaughan spent a lot of 2015 discussing, planning and meeting with Blacktown Council, State Planning, Builders, Architects and Consultants re the possibility of an over 55's Resort and Aged Care Facility at Reservoir Road. This is a major development and will not be undertaken without due diligence and ticking all the boxes. The feedback from members is very encouraging as they embrace this venture. For this to commence we need to move the Sporting Fields to our Walters Road end of the Complex where we envisaged building a Sporting Precinct of Excellence. A presentation was shown to members on 16th March so they had the opportunity to ask questions and see information to date. We have re-opened our revolving restaurant with refurbishment, new management and a new name. "Cucina Locale" and made changes at Workers Hubertus with "Westview Restaurant" overlooking the lake and views out to the mountains. Workers Sports boasts an updated and remodelled "Grange Buffet" and "Sports Cafe". With "Impressions" "Tingha Palace" and "Bungarribee Buffet" there are plenty of dining choices for you to consider. Our renovations are complete in the interior of Workers Sports and we are now working towards a new outdoor area which will be family friendly for everyone to enjoy. Additional food, snacks and gelato will be available We anticipate completion mid-year. We have not been idle. I would like to thank my fellow Directors, Management, Staff and members for the support they give so we can all move forward well into the future. Keep Smiling and Be Kind to Each Other Kay Kelly PRESIDENT

Blacktown Workers Club Limited

General Manager’s Report It is with great pleasure that I present to all members the Annual Financial Report for the Blacktown Workers Club Group for 2015. Financial Results: • We achieved a net profit after tax of $3.084M • This was a good trading result for the year due to building works taking place at both Workers Sports and Workers Hubertus Country Club throughout the year. • Whilst Hubertus Country Club showed a loss for the year, we expect to see a gradual improvement in this clubs performance now renovations are complete. • EBITDA for the year was $10.908M, an increase of $143K on 2014. Most notable positives in this result were: • Increase in trading revenue of $3.548M from 2014. • Improvement in the catering performance which saw revenue increase by $496K and our loss in this area reduce by $333K. We expect to see continued improvements in our catering trading performance in 2016. • Sports club performed above expectations considering the year was interrupted with major building works and improvements. There was minimal disruption to trading at the Sports during the building works program which was a testament to the excellent planning by the club and the builders throughout this process. • Workers Hubertus is a work in progress but with the improvements made to the club in 2015 we expect to see positive results emanating from that part of the club group in the future. • Beverage revenue was up by $153K on 2014 but the Gross Profit was slightly down; this was due to the decision not to pass on all of the excise increases that we receive from the breweries and other beverage companies, however we will need to monitor future excise and CPI increases to ensure the profitability and performance of this area is not affected. • Total assets $117,964,886 • Net Assets $108,522,030 • Community Benefits paid(Club Grants) $1,634,355 Other notables: • Increase in depreciation and amortisation of $306K due to the building and improvement works at the Sports club and Hubertus. • Increase of $792K in gaming related taxes due to increased department revenue for the year. • Increase in marketing expenses due to the clubs 60th birthday year. The club celebrated 2015 by increasing our promotions and raffle prizes to all our members. • Increase in Clubs Grants both Category 1 & 2 of $252K, this continues the commitment by the Board in supporting both the Community, charities and our Sporting bodies. The club had a positive trading year in 2015 and with the major improvements that were undertaken in 2015 and future building improvements and diversification plans being developed we expect the clubs trading performance to continue to improve as the Board and management continue to diversify the clubs business model. 2015 was a year of recognition for the work that Blacktown Workers has done and continues to do in the community and with charities. • Winner of the social and welfare category at the 2015 Clubs NSW Clubs and Community awards for our work with the White Ribbon Foundation in its campaign to stop violence against women. • 2016 Green Globe award for the Blacktown Workers Sports club water retention program. • We were the 1st registered club in Australia to be awarded White Ribbon Foundation workplace accreditation. • Major sponsor and organiser of the 1st “say no to domestic violence” Raceday held at Hawkesbury Racecourse an event that we raised over $70k and has now become an annual event. • Annual White Ribbon Breakfast that attracted over 700 attendees with special guest 2015 Australian of the year Rosie Batty. Neale Vaughan General Manager

Blacktown Workers Club Limited

Directorsâ&#x20AC;&#x2122; Report The directors present their report together with the financial statements of Blacktown Workers Club Limited (the company) for the year ended 31 December 2015.

Directors The directors of the company in office at any time during or since the end of the financial year are: Kay Kelly Les Winters Terry O'Loughlin Maureen Mackey (deceased 10 February 2015) James Buckley Mark Cowgill Robert Vincent Pat Collins Gary Callaghan Jack Miller JP (appointed 29 March 2015)

Information on directors Kay Kelly Life Member. Club Member since 1976. Club Director since 1995. Current President of Blacktown Workers Club Limited. Member of all sub-committees. Delegate to the Federation of Workers Clubs Holiday units. Director of a successful Club promotions company since 1986.

Les Winters Life Member. Club Member since 1959. Club Director since 1973. Current Vice President of Blacktown Workers Club Limited. Member of all sub-committees. Delegate of the Registered Clubs Association. Born and worked in Blacktown all his working life. Now retired.

Terry Oâ&#x20AC;&#x2122;Loughlin JP Life Member. Club Member since 1969. Club Director since 1994. Current Senior Vice President of Blacktown Workers Club Limited. Member of all sub-committees. Delegate to and member of the Executive of Federation of Workers Clubs Holiday units. House and Field Committee Chairman. Life Member of the BWC Golf Club. Now retired.

James Buckley JP Life Member. Club Member since 1966. Club Director 1988, 1991-1994, 2007-present. Current Treasurer of Blacktown Workers Club Limited. Member of the House and Field Committee. State Councillor Clubs NSW North Western Region. Previous Director of family Transport Company. Now retired.

Mark Cowgill Life Member. Club Member since 1979. Club Director since 1999. Member of all sub-committees. Member of the Small Boats Club. Has been working in the Blacktown Workers Hairdressing salon since 1973.

Blacktown Workers Club Limited

Directors’ Report Information on directors (continued) Robert Vincent Club Member since 1964. Club Director since 2007. Has lived in Blacktown all his life. Involved in community projects and member of various Blacktown Council sub-committees. Presently operates a family hairdressing business in Blacktown since 1967.

Pat Collins Club Member since 1984. Club Director since 2007. Blacktown resident for over 40 years. Now retired.

Gary Callaghan Club Member since 1999. Club Director since 2012. Actively involved in the strong growth of the Clubs Junior Rugby League, having held senior positions on the committee. Employed at Orora since 1986, assisting in HR and workplace development. Alternate Director for Media Superannuation.

Jack Miller JP Club Member since 1976. Club Director 2010-2012, 2015 (appointed 29-Mar-2015) – present. Passionate about sporting bodies and Club business. 30 years management experience. Blacktown resident since 1975. Now retired.

Directors’ meetings The number of meetings of the company’s Board of Directors (the Board) held during the year ended 31 December 2015 and the number of meetings attended by each director were:

Kay Kelly Les Winters Terry O’Loughlin Maureen Mackey (deceased 10 February 2015) James Buckley Mark Cowgill Robert Vincent Pat Collins Gary Callaghan Jack Miller JP (appointed 29 March 2015)

Number of Meetings Held *

Number of Meetings Attended

65 65 65 19 65 62 62 62 62 44

64 64 61 0 61 49 54 56 55 37

This represents the number of meetings held during the time the director held office during the year. Where a director has not attended a meeting it was generally due to work commitments, leave granted or illness.

Sub-committee meetings are not compulsory for all directors.

Blacktown Workers Club Limited

Directors’ Report Membership The company is a company limited by guarantee and is without share capital. The number of members as at 31 December 2015 and the comparison with last year is as follows:

Ordinary Life

2015

2014

54,552 9

54,366 10

54,561

54,376

Members' limited liability In accordance with the Constitution of the company, every member of the company undertakes to contribute an amount limited to $2 per member in the event of the winding up of the company during the time that he is a member or within one year thereafter. The total liability in the event of winding up is $109,122 (2014: $108,752).

Operating result The table below shows a reconciliation of Blacktown Workers Club Limited earnings before interest, income tax, depreciation, amortisation and impairment losses. This is referred to as EBITDA. 2015 $ Net profit after income tax expense attributable to members Add back/(deduct): Profit on sale of Parramatta premises Depreciation and amortisation expense Income tax expense

EBITDA

2014 $

3,084,420

6,512,702

7,120,358 703,630

(4,096,893) 6,814,038 1,535,408

10,908,408

10,765,255

Objectives The objectives for which the company is established are to provide for members and for members’ guests a social and sporting club with all the usual facilities of a club, to look after the members in every possible way by providing service, comfort, entertainment, good food and a wide range of facilities to cater for every age group, and to give the community a significant proportion of the club’s profits in support of various charities and community organisations.

Short term • • • • •

Maintain membership numbers and increase attendance at all premises Improve the experience of members using the club facilities Improve profitability and efficiency of club operations Increase cash reserves of the club Maintain level of community support funding

Blacktown Workers Club Limited

Directors’ Report Objectives (continued) Long term • • • •

Diversify income streams Maintain financial stability of the club Ensure facilities continue to cater for members’ needs Increase efficiency of energy consumption.

Strategy for achieving the objectives • • • • •

Research on members’ preferences for facilities and services Review promotional activity conducted in the club Evaluate operational procedures and staff training Install monitoring equipment and solar energy generation plant Investigate alternatives for producing income from non-traditional sources.

Principal activities The 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.

How these activities assist in achieving the objectives The 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 indicator The financial performance of the club is measured against the budget set and benchmark data from the club industry. Some of the criteria reported on are • • • • •

Earnings before Interest, Taxation, Depreciation and Amortisation (EBITDA) Per Capita Spend Gross Profit Margins Expense Ratios and Analysis Cash Flow

Non-financial performance is assessed by a variety of measures including: • • • • •

Mystery shoppers Members’ feedback Staff turnover Comparison with industry wide initiatives Market research

Blacktown Workers Club Limited

Directors’ Report Key performance indicators 2015 $

2014 $

Bar Gross profit Gross profit percentage Wages to sales percentage

2,661,869 62% 36%

2,927,242 66% 33%

1,540,923 61% 61%

1,449,268 59% 64%

Catering Gross profit Gross profit percentage Wages to sales percentage

Auditor’s independence declaration A copy of the auditor’s 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 directors.

Dated at Blacktown this 2nd day of March 2016.

Kay Kelly President

Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au

Level 11, 1 Margaret St Sydney NSW 2000 Australia

DECLARATION OF INDEPENDENCE BY PAUL CHEESEMAN TO THE DIRECTORS OF BLACKTOWN WORKERS CLUB LIMITED

As lead auditor of Blacktown Workers Club Limited for the year ended 31 December 2015, I declare that, to the best of my knowledge and belief, there have been no contraventions of: â&#x20AC;˘ â&#x20AC;˘

The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and Any applicable code of professional conduct in relation to the audit.

Paul Cheeseman Partner

BDO East Coast Partnership Sydney, 2nd March 2016

BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au

Level 11, 1 Margaret St Sydney NSW 2000 Australia

INDEPENDENT AUDITOR’S REPORT To the members of Blacktown Workers Club Limited

Report on the Financial Report We have audited the accompanying financial report of Blacktown Workers Club Limited, which comprises the statement of financial position as at 31 December 2015, the statement of profit or loss and other 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 judgement, 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 Blacktown Workers Club Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion In our opinion the financial report of Blacktown Workers 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 2015 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.

BDO East Coast Partnership

Paul Cheeseman Partner

Sydney, 2nd March 2016

Blacktown Workers Club Limited

Directors’ Declaration

The directors of Blacktown Workers Club Limited declare that: (a)

(b)

In the Directors’ opinion the financial statements and notes set out on pages 12 to 35, are 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 2015 and of its performance, for the financial year ended on that date; and

(ii)

Complying with Australian Accounting Standards – Reduced Disclosure Requirements and Corporations Regulations 2001.

There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the directors.

Dated at Blacktown this 2nd day of March 2016

Kay Kelly President

Blacktown Workers Club Limited

Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 December 2015 Note Revenue Sale of goods Rendering of services Other revenue

2015 $

2014 $

6,784,750 41,972,763 1,383,487

6,135,264 39,419,413 1,038,180

Total revenue

50,141,000

46,592,857

Other income

4,096,893

Expenses Raw materials and consumables used Employee benefits expense Depreciation and amortisation expense Grants paid Marketing and promotional expenses Poker machine licences and taxes Property expenses Contractor expenses Other expenses

Profit before income tax Income tax expense

4(a)

(2,683,960) (12,228,986) (7,120,358) (1,634,355) (4,018,963) (10,391,560) (4,413,476) (1,398,774) (2,462,518)

(2,508,373) (11,461,961) (6,814,038) (1,382,042) (2,861,441) (9,599,869) (4,420,885) (1,299,048) (2,293,983)

(46,352,950)

(42,641,640)

3,788,050

8,048,110

(703,630)

(1,535,408)

Net profit after income tax expense attributable to members

3,084,420

6,512,702

Other comprehensive income for the year, net of tax Items that will not be reclassified subsequently to profit or loss Gain on amalgamation of Hubertus Country Club

14,048

2,577,705

3,098,468

9,090,407

Total comprehensive income for the year attributable to members

The Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes set out on pages 16 to 35.

Blacktown Workers Club Limited

Statement of Financial Position As at 31 December 2015 Note

2015 $

5 6 7 8

24,173,381 134,478 247,622 747,890

32,488,498 30,052 244,491 1,034,947

25,303,371

33,797,988

ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventories Other current assets Total Current Assets Non-Current Assets Property, plant and equipment Deferred tax assets Intangible assets

9 4(c) 10

Total Non-Current Assets

91,634,130 137,789 889,596

2014 $

79,737,447 152,528 889,596

92,661,515

80,779,571

117,964,886

114,577,559

3,850,788 313,894 2,219,106 120,000 234,351

2,919,852 1,084,744 1,902,886 103,000 199,560

6,738,139

6,210,042

121,720 1,893,000 689,997

402,001 1,843,982 697,972

Total Non-Current Liabilities

2,704,217

2,943,955

Total Liabilities

9,442,856

9,153,997

108,522,030

105,423,562

105,930,277 2,591,753

102,845,857 2,577,705

108,522,030

105,423,562

Total Assets LIABILITIES Current Liabilities Trade and other payables Current tax liabilities Employee benefits Other provisions Other current liabilities

11 4(b) 13 14 15

Total Current Liabilities Non-Current Liabilities Employee benefits Provisions Other non-current liabilities

13 14 15

Net Assets Membersâ&#x20AC;&#x2122; Funds Retained profits Reserves Total Membersâ&#x20AC;&#x2122; Funds

16 17

The Statement of Financial Position should be read in conjunction with the accompanying notes set out on pages 16 to 35.

Blacktown Workers Club Limited

Statement of Changes in Equity For the Year Ended 31 December 2015 Retained Earnings $

Equity Reserve $

96,333,155

6,512,702

Other comprehensive income for the year

2,577,705

Total comprehensive income for the year

6,512,702

2,577,705

9,090,407

102,845,857

2,577,705

105,423,562

Balance at 1 January 2014

Net profit for the year

Balance at 31 December 2014

Net profit for the year Other comprehensive income for the year, net of tax

Total comprehensive income for the year

Balance at 31 December 2015

Total Equity $

3,084,420

14,048

3,084,420

14,048

3,098,468

105,930,277

2,591,753

108,522,030

The Statement of Changes in Equity should be read in conjunction with the accompanying notes set out on pages 16 to 35. 14

Blacktown Workers Club Limited

Statement of Cash Flows For the Year Ended 31 December 2015 Note

2015 $

2014 $

54,665,108 (43,863,167) 920,641 462,846 (1,459,742)

51,329,917 (40,725,595) 634,951 403,229 (516,196)

10,725,686

11,126,306

Cash Flows From Investing Activities Proceeds from held to maturity investments Proceeds from sale of property, plant and equipment Payment for property, plant and equipment

304,923 (19,345,726)

500,000 13,448,718 (7,814,463)

Net cash (outflow)/inflow from investing activities

(19,040,803)

6,134,255

(8,315,117)

17,260,561

Cash Flows From Operating Activities Receipts from customers Payments to suppliers and employees Interest received Rent received Income taxes paid

Net cash inflow from operating activities

Net (decrease)/increase in cash and cash equivalent Net cash acquired as part of Hubertus amalgamation Cash and cash equivalent at the beginning of the financial year

Cash and cash equivalent at the end of the financial year

160,816

32,488,498

15,067,121

24,173,381

32,488,498

The Statement of Cash Flows should be read in conjunction with the accompanying notes set out on pages 15 to 35.

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 1

Summary of Significant Accounting Policies The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a)

Basis of Preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001, as appropriate for not-for-profit orientated entities. The financial report consists of the financial statements, notes to the financial statements and the directorsâ&#x20AC;&#x2122; declaration. The financial report is presented in Australian dollars, which is the company's functional and presentation currency. The company is a not-for-profit company for the purpose of preparing these financial statements, which means that in preparing the financial report, the company has applied the exemptions available for not-for-profit entities. The financial report was authorised for issue on 2nd March 2016, in accordance with a resolution of directors. The directors have the power to amend and reissue the financial report. Historical Cost Convention The financial statements have been prepared under the historical cost convention. New, Revised or Amending Accounting Standards and Interpretations Adopted The company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The following Accounting Standards and interpretations are most relevant to the company: â&#x20AC;˘ AASB 2014-1 Amendments to Australian Accounting Standards (Parts A to C) The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the company.

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 1

Summary of Significant Accounting Policies (continued)

(b)

Revenue Recognition â&#x20AC;&#x201C; Note 2 Revenues are recognised at fair value of the consideration received or receivable net of the amount of goods and services tax (GST) payable to the taxation authority. Exchanges of goods or services of the same nature and value without any cash consideration are not recognised as revenues. Sale of Goods Revenue from the sale of goods comprises revenue earned from the provision of food, beverage and other goods and is recognised (net of rebates, returns, discounts and other allowances) on the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods. Rendering of Services Revenue from rendering services comprises revenue from gaming facilities together with other services to members and other patrons of the club and is recognised when the services are provided. Interest Revenue Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets is the rate inherent in the instrument. Rent Revenue Rent revenue from investment properties is recognised on a straight-line basis over the lease term. Lease incentives granted are recognised as part of the rental revenue. Contingent rentals are recognised as income in the period when earned. Other income Other revenue is recognised when it is received or when the right to receive payment is established.

(c)

Goods and Services Tax Revenues, 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. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part the expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included as a current asset or liability in the Statement of Financial Position. Cash flows are included in the Statement of Cash Flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the Australian Taxation Office.

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 1

Summary of Significant Accounting Policies (continued)

(d)

Finance Costs Finance costs include interest, premiums relating to borrowings, amortisation of ancillary costs incurred in connection with arrangement of borrowings and lease finance charges. Finance costs are expensed as incurred unless they relate to qualifying assets. Qualifying assets are assets which take more than 12 months to get ready for their intended use or sale. In these circumstances, finance costs are capitalised to the cost of the assets. Where funds are borrowed specifically for the acquisition, construction or production of a qualifying asset, the amount of finance costs capitalised is those incurred in relation to that borrowing, net of any interest earned on those borrowings. Where funds are borrowed generally, finance costs are capitalised using a weighted average capitalisation rate.

(e)

Income Tax – Note 4 The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable income tax rate, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and the adjustment recognised for prior periods, where applicable. The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entity’s which intend to settle the claim simultaneously.

(f)

Impairment of Assets Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pretax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

(g)

Cash and Cash Equivalents – Note 5 Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 1

Summary of Significant Accounting Policies (continued)

(h)

Trade and Other Receivables â&#x20AC;&#x201C; Note 6 Trade debtors and other receivables represent the principal amounts due at balance date plus accrued interest and less, where applicable, any unearned income and provisions for doubtful accounts. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the consolidated entity will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. Other receivables are recognised at amortised cost, less any provision for impairment.

(i)

Inventories â&#x20AC;&#x201C; Note 7 Inventories are measured at the lower of cost and net realisable value. Costs are assigned on the basis of weighted average costs.

(j)

Fair Value Estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of financial instruments traded in active markets such as trading and available-forsale securities is based on quoted market prices at the Statement of Financial Position date. The quoted market price used for financial assets held by the company is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 1

Summary of Significant Accounting Policies (continued)

(k)

Property, Plant and Equipment – Note 9 All property, plant and equipment is stated at historical cost less depreciation. includes expenditure that is directly attributable to the acquisition of the items.

Historical cost

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 profit or loss during the financial period in which they are incurred. Useful lives are estimated as follows: Buildings Plant and Equipment Poker Machines

40 years 5-15 years 4-5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each Statement of Financial Position date. 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 carrying amount. These are included in the profit or loss. Capital works in progress are the cost incurred to date for capital projects that are underway at reporting date. Capital works in progress are not depreciated until they are ready for use and allocated to the appropriate asset category.

(l)

Intangible Assets – Note 10 Poker Machine Entitlements Poker machine entitlements are considered to be intangible assets with an indefinite life as there is no set term for holding the entitlements. As a result the entitlements are not subject to amortisation. Instead, poker machine entitlements are tested for impairment annually and are carried at cost less accumulated impairment losses. Poker machine entitlements are not considered to have an active market, hence the fair value is calculated using the value in use method based on management's 5 year forecasts. Licences to Occupy Holiday Units Licences held by the company are considered to be intangible assets with an indefinite life as there is no set term to the contractual agreement. As a result the licences are not subject to amortisation. Instead the licences are tested for impairment annually and are carried at cost less accumulated impairment losses.

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 1

Summary of Significant Accounting Policies (continued)

(m) Trade and Other Payables – Note 11 These amounts represent liabilities for goods and services provided to the company prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(n)

Employee Benefits – Note 13 Wages and Salaries, Annual Leave and Sick Leave Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave are recognised in other payables with respect to employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable. Long Service Leave The provision for employee benefits relating to long service leave represents the present value of the estimated future cash outflows to be made resulting from employees’ services provided to reporting date. The provision is calculated using expected future increases in wage and salary rates including related on-costs and expected settlement dates based on turnover history and is discounted using the market yields on national government bonds at reporting date which most closely match the terms of maturity with the expected timing of cash flows. The unwinding of the discount is treated as long service leave expense. Superannuation Plan The company contributes to several defined contribution superannuation plans. Contributions are recognised as an expense as they are made. The company has no legal or constructive obligation to fund any deficit.

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 1

Summary of Significant Accounting Policies (continued)

(o) Critical Accounting Judgements, Estimates and Assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events that management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Estimation of Useful Lives of Assets The company determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.

(p)

Critical Accounting Judgements, Estimates and Assumptions (continued) Long Service Leave Provision As discussed in note 1(n), the liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect to all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account. Intangible Assets As discussed in note 1(l), impairment of poker machine entitlements is recognised based on value in use calculations and is measured at the present value of the estimated future cash inflows available to the company from the use of these licenses. In determining the present value of the cash inflows growth rate and appropriate discount factors have been considered. Mortality Fund Provision A mortality fund provision is recognised based on the estimated future cash outflows to members of the mortality fund. The provision is based on the maximum amount payable on the death of a member. The maximum amount payable is determined by the companyâ&#x20AC;&#x2122;s constitution.

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 2015 $

2014 $

Revenue Sale of Goods Revenue Bar sales Catering sales

4,600,487 2,184,263

4,447,596 1,687,668

6,784,750

6,135,264

39,561,035 360,381 1,033,170 392,061 326,737 299,379

36,963,680 406,200 1,074,115 368,724 313,903 292,791

41,972,763

39,419,413

920,641 462,846

634,951 403,229

1,383,487

1,038,180

50,141,000

46,592,857

4,096,893

50,141,000

50,689,750

Rendering of Services Revenue Poker machines â&#x20AC;&#x201C; net clearances Membersâ&#x20AC;&#x2122; subscriptions Entertainment and promotions TAB and Keno sales Commission received Sundry income

Other Revenues Interest received Rent received

Total other revenue

Total Revenue

Other Income Gain on sale of Parramatta Club

Total Revenue and Other Income

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015

2015 $

2014 $

2,683,960

2,508,373

Buildings and improvements Plant and equipment Poker machines

2,715,714 2,357,370 2,047,274

2,924,760 1,766,835 2,122,443

Total depreciation and amortisation

7,120,274

6,814,038

Net loss on disposal of property, plant and equipment

169,245

224,084

Defined contribution superannuation expense

922,286

850,980

Expenses Profit before income tax including the following specific expenses: Cost of sales Cost of sales

Depreciation

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 4

Income Tax

(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.

2015 $

2014 $

The amount set aside for income tax in the Statement of Profit or Loss and Other Comprehensive Income has been calculated as follows:

(b)

Current income tax applicable at rate of 30% Decrease/(increase) in deferred tax

688,891 14,739

1,587,009 (51,601)

Income tax attributable to operating profit

703,630

1,535,408

Current Tax Liabilities Movements during the year: Balance at beginning of year Income tax paid Refund received Current yearâ&#x20AC;&#x2122;s income tax expense on profit

(c)

1,084,744 (1,459,741) 688,891

13,918 (516,196) 13 1,587,009

313,894

1,084,744

Amounts recognised in profit or loss Employee benefits

137,790

152,528

Net deferred tax assets

137,790

152,528

Opening balance at 1 January Debited/(credited) to the Statement of Profit or Loss and Other Comprehensive Income

152,528

100,927

(14,739)

51,601

Closing balance at 31 December

137,790

152,528

Deferred Tax Assets The balance comprises temporary differences attributable to:

Movements:

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 5

Cash and Cash Equivalents Reconciliation of Cash Cash as at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

Cash and cash equivalents

24,173,381

32,488,498

134,478

30,052

247,622

244,491

347,587 400,302

700,140 334,808

747,889

1,034,948

Inventories Finished goods â&#x20AC;&#x201C; at cost

2014 $

Trade and Other Receivables Trade Debtors

2015 $

Other Assets Prepayments Deposits

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015

2015 $

2014 $

3,686,680

Property, Plant and Equipment Freehold land At cost Buildings At cost Accumulated depreciation

Total Land and Buildings Plant and equipment At cost Accumulated depreciation

Poker machines At cost Accumulated depreciation

Capital works in progress At cost

Total property, plant and equipment net book value

108,966,151 (37,179,776)

94,508,584 (34,464,062)

71,486,375

60,044,522

75,473,055

63,731,202

34,102,499 (23,735,306)

31,500,015 (21,576,259)

10,367,193

9,923,756

14,909,994 (9,742,566)

13,278,807 (8,138,692)

5,167,428

5,140,115

626,454

942,374

91,634,130

79,737,447

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 9

Property, Plant and Equipment (continued) Valuation An independent valuation by Hymans Asset Management Pty Limited of the companyâ&#x20AC;&#x2122;s properties being the land and buildings was carried out in October 2013 with an effective date of October 2013 on the basis of open market value for existing use resulted in a valuation of $69,725,400. As the properties are recorded at cost the valuation has not been brought to account. Additions since this valuation date amount to $10,324,457. The Directors do not believe there has been a material movement in the fair value since the valuation date.

2015 $

2014 $

3,686,680 -

5,354,680 (2,680,000) 1,012,000

3,686,680

Buildings Carrying amount at beginning of year Additions Acquired via Hubertus acquisition Transfer from WIP Depreciation expense Disposals

60,044,522 80,087 14,377,480 (2,715,714) -

65,817,284 1,769,000 2,876,102 (2,924,760) (7,493,104)

Carrying amount at end of year

71,786,375

60,044,522

Plant and Equipment Carrying amount at beginning of year Additions Acquired via Hubertus acquisition Transfer from WIP Depreciation expense Disposals

9,923,756 1,170,559 1,809,651 (2,357,370) (179,403)

8,781,049 244,007 709,061 2,438,490 (1,766,835) (482,016)

Carrying amount at end of year

10,367,193

9,923,756

Reconciliations Movements in Carrying Amounts Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year are set out below: Land Carrying amount at beginning of year Disposals Acquired via Hubertus acquisition

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 2015 $

2014 $

Property, Plant and Equipment (continued) Reconciliations (continued) Poker Machines Carrying amount at beginning of year Additions Transfer from WIP Depreciation expense Disposals

Carrying amount at end of year

Capital Works in Progress Carrying amount at beginning of year Additions Transfers to buildings Transfers to plant and equipment Transfers to poker machines

Carrying amount at end of year

5,140,115 2,186,536 37,327 (2,047,274) (149,276)

5,629,554 1,920,620 (2,122,443) (287,616)

5,167,428

5,140,115

942,374 15,908,538 (14,377,480) (1,809,651) (37,327)

1,632,630 4,624,336 (2,876,102) (2,438,490) -

626,454

942,374

The land holdings of Blacktown Workers Club Limited are classified as either core or non-core properties, as listed below: Core Properties • • • •

Workers Blacktown club premises, multi-level car park, air-bridge and airspace at 55 Campbell Street, Blacktown Multi-storey car park at Colo Lane, Blacktown Workers Sports club premises, car park and sporting facilities at 170 Reservoir Road, Blacktown Hubertus Club premises at Adams Road, Luddenham

Non-core Properties • • • •

Vacant land at Walters Road, Blacktown Ground level car park at Colo Lane, Blacktown 34 Campbell Street, Blacktown 52 Campbell Street, Blacktown

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 2015 $

2014 $

10 Intangible Assets Poker machine entitlements At cost Accumulated impairment losses

247,000 -

247,000

Licence to occupy holiday units:

642,596

Total intangibles

889,596

Licences The amount represents the costs incurred in acquiring licences at certain holiday units in Sussex Inlet, Fingal Bay and Uranga.

11 Trade and Other Payables Trade creditors Goods and Services Tax (GST) payable Other creditors and accruals

1,818,343 281,020 1,751,425

1,110,761 200,190 1,608,901

3,850,788

2,919,852

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 12 Financial Liabilities Financing Arrangements The company has access to the following lines of credit: Total facilities available and unused: Bank overdraft

500,000

Security over the financial liabilities consists of:

â&#x20AC;˘

Registered mortgage by Blacktown Workers Club over land and club premises situated at 55 Campbell Street, Blacktown NSW

13 Employee Benefits Aggregate liability for employee benefits including on-costs Current Non-current

2,219,106 121,720

1,902,886 402,001

2,340,826

2,304,887

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: Assumed rate of increase in wage and salary rates Discount rate Settlement term (years)

2.3% 2.8% 10 years

2.5% 2.45% 10 years

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 2015 $

2014 $

120,000

103,000

Mortality Fund

1,893,000

1,843,982

Carrying amount at the beginning of the year Contributions to the fund Payments from the fund Mortality provision charged/(written back)

1,946,982 97,363 (120,000) 88,655

1,974,329 87,120 (114,401) (66)

Carrying amount at the end of the year

2,013,000

1,946,982

14 Provisions Current Mortality Fund

Non-Current

The valuation of the Mortality Fund liability was performed by Professional Financial Solutions Pty Ltd as at 31 December 2015. The Fund's liability is calculated for the death benefit of an average of 15 years discounted at 2%. The Fund is a closed fund. Per the charter, a valuation is required every 5 years.

15 Other Liabilities Current Income received in advance

234,351

199,560

689,997

697,972

Retained profits at the beginning of the year Net profit attributable to members of the company

102,845,857 3,084,420

96,333,155 6,512,702

Retained profits at the end of the year

105,930,277

102,845,857

Non-Current Income received in advance

16 Retained Profits

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 2015 $

2014 $

Equity reserve at the beginning of the year Gain on amalgamation

2,577,705 14,048

2,577,705

Equity reserve at the end of the year

2,591,753

2,577,705

4,404,000

11,968,960

17 Reserves Equity reserve

18 Commitments Capital Expenditure Commitments Plant and equipment Contracted but not provided for and payable: Within one year

19 Mutuality Principle The company calculates its income in accordance with the mutuality principle which excludes from income, any amounts of subscriptions and contributions from members, and payments received from members for particular services provided by the club or association, eg. poker machines, bar and dining room service in the case of social clubs. The Commissioner of Taxation accepts this method of calculating income as appropriate for recognised clubs and associations. Amendments to the Income Tax Assessment Act 1997 ensure social clubs continue not to be taxed on receipts from contributions and payments received from members.

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 20 Key Management Personnel Details (a)

Directors The following persons were non-executive directors of the company during the financial year: Kay Kelly Les Winters Terry O'Loughlin Maureen Mackey (deceased 10 February 2015) James Buckley Mark Cowgill Robert Vincent Pat Collins Gary Callaghan Jack Miller (appointed 29 March 2015)

(b)

Other Key Management Personnel The following persons also had authority and responsibility for planning, directing and controlling the activities of the company, directly or indirectly during the financial year:

(c)

Name

Position

Neale Vaughan Morgan Stewart David Higgins Frank Raiti

General Manager / Company Secretary Operations Manager Financial Controller (resigned 27 October 2015) Financial Controller (appointed 2 November 2015)

Key Management Personnel Compensation

Benefits and payments made to the Directors and Other Key Management Personnel

2015 $

2014 $

732,482

849,970

Blacktown Workers Club Limited

Notes to the Financial Statements For the Year Ended 31 December 2015 21 Related Parties Key Management Personnel Disclosures relating to key management personnel are set out in Note 20.

Directorsâ&#x20AC;&#x2122; Transactions with the Company A director of the company, K Kelly, has an interest in a promotions company, which offers services to the company under normal commercial terms and conditions. A director of the company, M Cowgill, has an interest in a hairdressing salon, which the company leases to him under normal commercial terms and conditions. The value of the transactions during the year with directors and their director related entities were as follows: Director

Director Related Entity

Transaction

K Kelly M Cowgill

Tovemint Pty Limited Markâ&#x20AC;&#x2122;s Haircare

Promotions expense Rental income

2015 $

2014 $

277,742 (18,489)

273,261 (21,939)

During the year a relative of M Cowgill, P Collins, G Callaghan and a relative of M Mackey were employed by Blacktown Workers Club Limited and received wages within normal employee terms and conditions. During the year, Brittania Catering was engaged to operate the outsourced restaurant within the Hubertus premises owned by the club. The owners of Brittania Catering are relatives of Les Winters, a director of the club. Brittania Catering is still in its rent free period therefore no rent was received during the financial year ended 31 December 2015. From time to time directors of the company may purchase goods from the company or participate in other Club activities. These purchases and participations are on the same terms and conditions as those entered into by any other member of the Club. Apart from the details disclosed in this note, 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 directorsâ&#x20AC;&#x2122; interests subsisting at year end.

22 Company Details The Club is incorporated and domiciled in Australia as a company limited by guarantee. In accordance with the Constitution of the company, every member of the company undertakes to contribute an amount limited to $2 per member in the event of the winding up of the company during the time that he is a member or within one year thereafter. At 31 December 2015 there were 54,561 members. The registered office of the company is 55 Campbell Street, Blacktown NSW 2148.

23 Events Subsequent to Reporting Date There are no matters or circumstances that have arisen since the end of the financial year that have 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.