2015 CHP RSL financial statement by Marcel Melick

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Consolidated Financial Statements For the Year Ended 31 December 2014

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Contents For the Year Ended 31 December 2014

Page Consolidated Financial Statements Directors' Report Auditors Independence Declaration under Section 307C of the Corporations Act 2001 Consolidated Statement of Profit or Loss Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Directors' Declaration Independent Audit Report

1 5 6 7 8 9 10 11 28 29

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Directors' Report For the Year Ended 31 December 2014

The directors present their report, together with the financial statements of the Group, being the Company and its controlled entities, for the financial year ended 31 December 2014. Directors The names of the directors in office at any time during, or since the end of, the year are: Names Position Neville Brown Robert Crowhurst Michelle Boon Stephen Baker Mark Mclntyre Neville Rose Malcolm Tyler

President Senior Vice President Junior Vice President Director Director Director Director

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Principal activities The principal activities of Canterbury-Hurlstone Park RSL Club Limited during the financial year were those of a licenced club providing: •

Social facilities;

•

Food, beverage, entertainment, event and gaming facilities;

•

Sporting facilities; and

•

Vocational hospitality training and education.

The following significant changes in the nature of the principal activities occurred during the financial year: •

CHPRSL Holdings Pty Ltd was established as a wholly owned subsidiary of Canterbury-Hurlstone Park RSL Club Limited to facilitate future diversification opportunities.

•

Camperdown Project Pty Limited was established as a wholly owned subsidiary of CHPRSL Holdings Pty Ltd. Camperdown Project Pty Limited has signed an agreement for lease with Marrickville Council for the use of the land at the former Camperdown Bowling Club site, 31A Mallett St Camperdown, NSW. The lease term and payments will commence on completion of siteworks, expected to be completed during the 2015 financial year.

Short term objectives The Group's short term objectives are to: •

Maintain and / or modernise the Club's premises;

•

Provide best possible hospitality services to members and to the local community; and

•

Ensure ongoing profitability of the Club to secure its financial future.

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Directors' Report For the Year Ended 31 December 2014

Long term objectives The Group's long term objectives are to: •

Always endeavour to satisfy or exceed members' expectations for all services and facilities provided by the Club;

•

To maintain a dynamic and relevant presence through the provision of hospitality, lifestyle and entertainment services to the communities in which the Club operates;

•

Invest funds generated by the Club's operations to develop the Club's assets so that the Club is able to continue to provide services to members and the local community that are concurrent with the needs of the members and local community;

•

To continue to set aside 20% of net profit each year for community contributions; and

•

Always endeavour to attract and retain excellent hospitality staff.

Strategy for achieving the objectives To achieve these objectives, the Group has adopted the following strategies: •

Ensure Club policies are appropriate;

•

Ensure professional management;

•

Ensure proficient and cost effective operation of the Club; and

•

Ensure continued trading profitability and invest surplus funds securely with good returns.

Information on directors The names of each person who has been a director during the year and to the date of this report are:

Neville Brown Occupation Years as Director of Club Special responsibilities

Assistant Curator 17 President

Robert Crowhurst Occupation Years as director of the Club Special responsibilities

Company Director 9 Senior Vice President, Chairperson of the Operations Committee

Michelle Boon Occupation Years as Director of Club Special responsibilities

Stephen Baker Occupation Years as Director of Club Special responsibilities

Financial Controller 10 Junior Vice-President, Chairperson of the Audit and Compliance Committee

Carpenter 13 Director, Chairperson of the Disciplinary Committee, Member of the Operations Committee

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Directors' Report For the Year Ended 31 December 2014 Information on directors continued Mark Mclntyre Occupation Years as Director of Club Special responsibilities

Neville Rose Occupation Years as Director of Club Special responsibilities

Malcolm Tyler Occupation Years as Director of Club Special responsibilities

Industrial Chemist (retired) 8 Director, Member of the Operations Committee and the Disciplinary Committee

Aircraft Ground Engineer (retired) 9 Director, Member of the Audit and Compliance Committee and the Disciplinary Committee

IT Business Analyst (retired) 6 Director, Member of the Audit and Compliance Committee

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Significant changes in state of affairs No significant changes in the state of affairs occurred during the financial year. Meetings of directors During the financial year, 47 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

Directors' Meetings

Audit & Compliance Committee Meetings

Disciplinary Committee Meetings

Operations Committee Meetings

Number Number Number Number eligible to Number eligible to Number eligible to Number eligible to Number attend attended attend attended attend attended attend attended

Neville Brown Robert Crowhurst Michelle Boon Stephen Baker Mark Mclntyre Neville Rose Malcolm Tyler

14 14 14 14 14 14 14

13 13 12 13 9 13 14

12 12 12 12

12 11 10 12

11 2 11 11 11 -

10 2 10 8 10 -

10 10 10 10 10 -

10 10 10 9 8 -

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Directors' Report For the Year Ended 31 December 2014

Auditor's independence declaration The lead auditor's independence declaration in accordance with section 307C of the Corporations Act 2001, for the year ended 31 December 2014 has been received and can be found on page 5 of the financial report. Signed in accordance with a resolution of the Board of Directors:

Director: ............................................................... Neville Brown

Director: ................................................................ Robert Crowhurst

Dated: 17 March 2015

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Level , 1 Oâ&#x20AC;&#x2122;Connell Street Sydney NSW 2000 Australia GPO Box 5446 Sydney NSW 2001

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Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Consolidated Statement of Profit or Loss For the Year Ended 31 December 2014 Consolidated 2014 Note Revenue Profit on amalgamation Gain on revaluation of investment properties Cost of sales Employee benefits expense Advertising expense Cleaning and waste removal expense Club magazine cost Entertainment and promotion cost Insurance expense Poker machine duty Printing, postage and stationery expense Rates and utilities expense Member expenses Repairs and maintenance expenses Other expenses Security cost Profit before income tax, depreciation, interest and support to community Interest and finance charge Donations and sponsorships Depreciation, amortisation and impairments Profit before income tax Income tax expense

2013

$ 43,140,898 565,000 (2,608,779) (12,335,107) (143,620) (561,130) (176,776) (3,001,572) (309,699) (8,321,125) (198,686) (1,058,515) (506,992) (697,125) (3,652,001) (543,551)

41,352,723 283,526 (2,345,943) (11,617,948) (148,890) (487,460) (76,420) (2,862,552) (527,862) (8,090,788) (379,624) (1,076,225) (485,926) (667,474) (3,432,227) (534,015)

9,591,220 (724,147) (1,094,996) (3,251,388)

8,902,895 (675,279) (997,708) (3,066,763)

4,520,689 -

4,163,145 -

4,520,689

4,163,145

2 11 3 3

Profit for the year

The accompanying notes form part of these financial statements. 6

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Consolidated Statement of Comprehensive Income For the Year Ended 31 December 2014 Consolidated

Profit for the year

2014

2013

4,520,689

Other comprehensive income Net movement on revaluation of property, plant and equipment

4,163,145

8,924,642

Total comprehensive income for the year

13,445,331

4,163,145

Total comprehensive income attributable to: Members of the club

13,445,331

4,163,145

The accompanying notes form part of these financial statements. 7

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Consolidated Statement of Financial Position As At 31 December 2014 Consolidated Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other assets

2014

2013

6,213,125 111,560 178,012 513,934

3,564,581 263,116 165,979 518,416

7,016,631

4,512,092

60,048,433 2,855,000 1,191,712

47,239,956 2,290,000 1,200,692

TOTAL NON-CURRENT ASSETS

64,095,145

50,730,648

TOTAL ASSETS

71,111,776

55,242,740

2,601,001 2,585,750 1,652,607

2,742,454 2,253,654 1,608,640

6,839,358

6,604,748

93,243 11,141,578 224,668 197,577

105,307 8,940,966 55,168 197,030

TOTAL NON-CURRENT LIABILITIES

11,657,066

9,298,471

TOTAL LIABILITIES

18,496,424

15,903,219

NET ASSETS

52,615,352

39,339,521

EQUITY Reserves Retained earnings

12,958,398 39,656,954

4,203,256 35,136,265

TOTAL EQUITY

52,615,352

39,339,521

6 7 8 9

TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Investment property Intangible assets

LIABILITIES CURRENT LIABILITIES Trade and other payables Financial liabilities Provisions

10 11 12

13 15 14

TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Trade and other payables Financial liabilities Deferred tax liabilities Provisions

13 15 5 14

The accompanying notes form part of these financial statements. 8

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Balance at 1 January 2014

Retained Earnings

Asset Realisation Reserve

Total

Profit attributable to members of the entity Revaluation increment

35,136,265 4,520,689 -

4,203,256 8,755,142

39,339,521 4,520,689 8,755,142

Balance at 31 December 2014

39,656,954

12,958,398

52,615,352

Consolidated

Balance at 1 January 2013

Retained Earnings

Asset Realisation Reserve

Total $

Profit attributable to members of the entity

30,973,120 4,163,145

4,203,256 -

35,176,376 4,163,145

Balance at 31 December 2013

35,136,265

4,203,256

39,339,521

The accompanying notes form part of these financial statements. 9

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Consolidated Statement of Cash Flows For the Year Ended 31 December 2014 Consolidated Note

2014

2013

CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Payments to suppliers and employees Interest received Finance costs

43,814,457 (35,932,370) 93,119 (724,147)

42,001,337 (34,747,634) 103,486 (675,279)

Net cash provided by (used in) operating activities

7,251,059

6,681,910

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment Government grants received in relation to construction of asset Aggregate cash flows through amalgamation Proceeds from sale of plant and equipment Net proceeds of finance lease liabilities

(7,391,731) 256,508 1,836,946

(6,329,553) 204,100 51,421 13,000 (1,322,977)

Net cash used by investing activities

(5,298,277)

(7,384,009)

1,300,000 (500,000)

(600,000)

800,000

(600,000)

2,752,782 3,564,581

(1,302,099) 4,800,864

6,317,363

3,498,765

Bank overdraft

(104,238)

65,816

Cash and cash equivalents at end of financial year

6,213,125

3,564,581

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings Repayment of borrowings Net cash used by financing activities

Net increase (decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year

The accompanying notes form part of these financial statements. 10

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Summary of Significant Accounting Policies (a)

Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001. 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 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.

(b)

Revenue and other income Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established. Investment property revenue is recognised on a straightline basis over a period of lease term so as to reflect a constant periodic rate of return on the net investment. Gaming machine revenue is recognised on an accrual basis calculated as net of gaming machine collections and payouts, less any costs associated with future jackpot contributions. Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at the reporting date and where the outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable. All revenue is stated net of the amount of goods and services tax (GST).

(c)

Property, Plant and Equipment Each 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 subsequent depreciation for buildings.

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Summary of Significant Accounting Policies continued (c)

Property, Plant and Equipment continued Property continued 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 charged against this reserve directly in equity and reflected in other comprehensive income; all other decreases are charged to the Statement of Comprehensive Income. 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 less depreciation and impairment losses. Cost includes expenditure that is directly attributable to the asset. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Depreciation The depreciable amount of all fixed assets excluding building and freehold land are depreciated on a reducing balance basis over the asset's useful life to the Club from the time the asset is held ready for use. Buildings are depreciated on a straight line basis of the useful life. Land is not depreciated. The depreciation rates used for each class of depreciable asset are shown below: Fixed asset class Depreciation rate Capital works in progress Freehold Land Buildings Plant and Equipment

Nil until works are complete Nil 2% - 2.5% 4.5% - 36%

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

Construction in progress Expenditure on the construction, installation and completion of assets under construction, is capitalised within property, plant and equipment, capital works in progress. When development is completed, the asset will be transferred to plant and equipment. No depreciation or amortisation is charged during the development phase.

(e)

Inventories Inventories are measured at the lower of cost and net realisable value. Inventories acquired at no cost, or for nominal consideration are valued at the current replacement cost as at the date of acquisition.

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Summary of Significant Accounting Policies continued (f)

Investment property Investment property is held to generate long term rental yields and/or for capital appreciation. All tenant leases are on an arm's length basis. Investment property is carried at fair value determined by current market values. Changes to the fair value are recorded separately as an income or expense items directly in the Statement of Comprehensive Income.

(g)

Financial instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions of the instrument. For financial assets, this is the equivalent to the date that the Company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transactions costs, except where the instrument is classified 'at fair value through profit or loss' in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties in an arm's length transaction. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Amortised cost is calculated as: (a)

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

(b)

less principal repayments;

(c)

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

(d)

less any reduction for impairment.

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

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Summary of Significant Accounting Policies continued The classification of financial instruments depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and at the end of each reporting period for held-to-maturity assets. The Club does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments. (i)

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting year. (ii)

Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Fees payable on the establishment of loan facilities are recognised as transaction costs of the loan. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Impairment of financial assets At the end of the reporting period the Company assesses whether there is any objective evidence that a financial asset or group of financial assets is impaired. Financial assets at amortised cost If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the assetâ&#x20AC;&#x2122;s carrying amount and the present value of the estimated future cash flows discounted at the financial assets original effective interest rate. Impairment on loans and receivables is reduced through the use of an allowance accounts, all other impairment losses on financial assets at amortised cost are taken directly to the asset. (h)

Impairment of assets At the end of each reporting period the Group determines whether there is an evidence of an impairment indicator for non-financial assets. Where this indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets not yet available for use, the recoverable amount of the asset is estimated. Where assets do not operate independently of other assets, the recoverable amount of the relevant cash-generating unit (CGU) is estimated.

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Summary of Significant Accounting Policies continued (h)

Impairment of assets continued The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit. Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss. Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.

(i)

Provisions Provision is made for the Club's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits expected to be settled more than twelve months after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss. Employee benefits are presented as current liabilities in the statement of financial position if the Group does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date regardless of the classification of the liability for measurement purposes under AASB 119. Contributions are made by the club to an employee superannuation fund and are charged as expenses when incurred.

(j)

Cash and cash equivalents Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Bank overdrafts also form part of cash equivalents for the purpose of the statement of cash flows and are presented within current liabilities on the statement of financial position.

(k)

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 statement of financial position are shown inclusive of GST.

(l)

Income Tax The income tax expense (revenue) for the year comprises current income tax expense (income).

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Summary of Significant Accounting Policies continued (l)

Income Tax continued Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of reporting year. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. 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. The club is assessed for income tax on the basis of mutuality concept and accounts for its income tax liabilities after excluding income from members which is exempt under this concept. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting year. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current assets and liabilities are offset where a legally enforceable right of setoff exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of setoff exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

(m)

Intangible Assets Poker machine entitlements Poker machine entitlements are initially recorded at cost. Poker machine entitlements have an indefinite life and are tested annually for impairment and carried at cost less any accumulated amortisation and impairment losses.

(n)

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

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Summary of Significant Accounting Policies continued (n)

Comparative Amounts continued When the club applies an accounting policy retrospectively makes a retrospective restatement or reclassifies items in its financial statements, a statement of financial position as at the beginning of the earliest comparative period will be disclosed.

(o)

Trade and other payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the club during the reporting period which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

(p)

Leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the Club, are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the life of the lease term. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

(q)

Principles of Consolidation The consolidated financial statements include the financial position and performance of the controlled entities from the date on which control is obtained until the date that control is lost. Intragroup assets, liabilities, equity, income, expenses and cashflows relating to transactions between entities in the consolidated entity have been eliminated in full for the purpose of these financial statements. Appropriate adjustments have been made to a controlled entityâ&#x20AC;&#x2122;s financial position, performance and cash flows where the accounting policies used by that entity were different from those adopted by the consolidated entity. All controlled entities have a December financial year end. A list of controlled entities is contained in Note 21 to the financial statements. Subsidiaries Subsidiaries are all entities (including structured entities) over which the parent has control. Control is established when the parent is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Summary of Significant Accounting Policies continued (r)

Critical accounting estimates and judgements The directors make estimates and judgements during the preparation of these financial statements regarding assumptions about current and future events affecting transactions and balances. These estimates and judgments are based on the best information available at the time of preparing the financial statements, however as additional information is known then the actual results may differ from the estimates. The significant estimates and judgements made have been described below. Key estimates - Fair value of poker machine entitlements The directors have performed a directors' valuation on poker machine entitlements obtained from the amalgamation. The values of poker machine entitlements were determined at $50,000 per block of three. The valuations were based on the market values. The critical assumptions adopted in determining the valuation included the current strong demand for poker machine entitlements and recent sales price in the local gaming area. Key estimates - Fair Value of Investment Properties The Investment Properties were independently valued on 10 September 2014 by Global Valuation Services. The valuations were based on the market values. The critical assumptions adopted in determining the valuation included the location of land buildings, the current strong demand for land and buildings in the area and recent sales data for similar properties. Key estimates â&#x20AC;&#x201C; Fair Value of Land and Buildings The Land and Buildings were independently valued on 9 September 2014 by Global Valuation Services. The valuations were based on the market values. The critical assumptions adopted in determining the valuation included the location of land buildings, the current strong demand for land and buildings in the area and recent sales data for similar properties.

(s)

New accounting standards and interpretations The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The directors do not expect the adoption of these standards to have any impact on the reported position or performance of the Club.

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Consolidated 2014 2013 $ 2

Revenue Sale of goods Gaming machine revenue Anytime fitness membership Commissions received Promotions revenue Training services revenue Interest received Member subscriptions Rent received Other revenue

Items of expense included in the result of the year Interest and finance charges Cost of sales Depreciation, amortisation and impairments Employee benefits expense

6,364,506 33,385,565 987,312 500,855 471,736 469,374 93,119 104,548 43,138 720,745

6,026,689 32,526,445 909,887 536,399 533,414 336,997 103,486 100,811 27,678 250,917

43,140,898

41,352,723

724,147 2,608,779 3,251,388 12,335,107

675,279 2,345,943 3,066,763 11,617,948

1,381,216

1,248,944

(1,470,317) 128,003 (38,902)

(1,319,374) 70,430 -

Income Tax Expense (a) The major components of tax expense (income) comprise: Prima facie tax payable on profit from ordinary activities before income tax at 30% (2013: 30%) Add/Less: - Net income and expenditure items relating to member activity - Tax losses recouped (not brought to account) - Tax effect of temporary differences Income tax expense

(b) The Income Tax Assessment Act, 1936 (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. 5

Deferred Tax Liabilities Revaluation on land

224,668

55,168

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Cash and cash equivalents Cash on hand Cash at bank

2013

1,732,452 4,480,673

1,551,378 2,013,203

6,213,125

3,564,581

111,560

263,116

178,012

165,979

513,934

518,416

Trade and other receivables CURRENT Trade receivables

2014

Inventories CURRENT At cost: Beverages and catering stock

Other assets CURRENT Prepayments

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

2014

2013

Property, plant and equipment LAND AND BUILDINGS Freehold land At valuation

16,000,000

10,200,000

Buildings At valuation Accumulated depreciation

30,892,328 (265,772)

28,302,150 (1,125,069)

30,626,556 46,626,556

27,177,081 37,377,081

Capital works in progress At cost

5,548,217

872,027

Plant and equipment At valuation Accumulated depreciation

25,650,028 (17,776,368)

24,454,805 (15,463,957)

Total plant and equipment and capital works

7,873,660 13,421,877

8,990,848 9,862,875

Total property, plant and equipment

60,048,433

47,239,956

Total buildings Total land and buildings PLANT AND EQUIPMENT

Total plant and equipment

An independent valuation of freehold land and buildings situated at 18-34 Canterbury Road and 120-126 Crinan Street Hurlstone Park NSW 2193 was undertaken on the 9 September 2014 resulting in a fair value adjustment of $9,107,465 being recognised for the 2014 financial year. An independent valuation of freehold land and buildings situated at 3580 Remembrance Drive Bargo NSW 2574 was undertaken on the 10 September 2014 resulting in a fair value adjustment of $312,177 being recognised for the 2014 financial year. The 2014 valuation was performed by Global Valuation Services. Valuations were made on the basis of open market value in an armâ&#x20AC;&#x2122;s length transaction based on similar properties. The revaluation surplus net of applicable deferred income taxes was credited to an asset revaluation reserve in shareholders' equity.

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

2014

2013

Property, plant and equipment continued

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

Buildings

Plant and Equipment

Total

872,027

10,200,000

27,177,082

8,990,847

47,239,956

Additions

4,676,190

985,842

1,528,574

7,190,606

Disposals

(55,383)

Depreciation

(661,010)

(2,590,378)

(3,251,388)

Revaluation increase recognised in equity

5,800,000

3,124,642

8,924,642

5,548,217

16,000,000

30,626,556

7,873,660

60,048,433

Balance at 1 January 2014

Balance at 31 December 2014

Capital Works in Progress

Investment Property Balance at beginning of year Fair value adjustments

2,290,000 565,000

2,290,000 -

Balance at end of year

2,855,000

2,290,000

Core and Non-core Property Pursuant to Section 41J(2) of the Registered Clubs Act, the club is now required to notify members of the club's core and non-core property in each annual report for the financial year to which the annual report relates. Core property is specified as land, buildings and the club's capital works in progress. These are classified as property, plant and equipment in the statement of financial position. Non-core property is specified as 117, 119 Crinan Street, Hurlstone Park, NSW 2193, 8 The Avenue, Hurlstone Park, NSW 2193 and 48 Hampton Street, Croydon Park, NSW 2133. These are classified as investment properties in the statement of financial position. Valuation information The fair value model is applied to all investment property. Investment properties are independently revalued and are based on an active liquid market and are performed by a registered independent valuer. A valuation of the investment properties was performed in September 2014 by Global Valuation Services which resulted in an increase in the value of investment properties of $565,000 which has been reflected in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

Intangible Assets Licenses and franchises Cost Accumulated amortisation and impairment

2013

44,900 (20,953)

44,900 (11,973)

Net carrying value Poker machine entitlements Cost

23,947

32,927

1,167,765

Total Intangibles

1,191,712

1,200,692

2,323,588 777 167,531 109,105

2,513,910 1,677 165,353 61,514

2,601,001

2,742,454

93,243

105,307

1,652,607 197,577

1,608,640 197,030

1,850,184

1,805,670

Trade and other payables CURRENT Trade payables Amounts received in advance Accrued expenses Unpaid progressive jackpot

NON-CURRENT Trade and other payables 14

2014

Provisions Current Non-current

Consolidated Employee entitlements Opening balance 1 January 2014 Additional provisions Provisions used

$ 1,805,670 903,204 (858,690)

Balance at 31 December 2014

1,850,184

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

2014

2013

Unsecured liabilities: Other financial liabilities

104,699

123,504

Secured liabilities: Bank overdraft Bank loans Finance lease obligation

104,238 500,000 1,876,813

65,816 498,000 1,566,334

2,481,051

2,130,150

2,585,750

2,253,654

6,800,000 1,300,000 3,041,578

7,300,000 1,640,966

11,141,578

8,940,966

Financial Liabilities CURRENT

(a) (c)

NON-CURRENT Secured liabilities: Bank loans CHPRSL Sub Branch Loan Finance lease obligation

(a)

(a) (b) (c)

Bank loan The bank loan from ANZ is secured by a registered first mortgage over the Club's property at 20 - 26 Canterbury Road, Hurlstone Park.

(b)

CHPRSL Sub Branch Loan The loan from CHPRSL Sub Branch is secured by a registered first mortgage over residential investment properties as 117, 119 Crinan Street and 8 The Avenue Hurlstone Park, NSW 2193.,

(c)

Finance lease obligation Finance leases are secured against the underlying asset of the hire purchase or finance leases.

Capital and Leasing Commitments (a)

Finance leases Minimum lease payments: - not later than one year - between one year and five years

1,863,485 3,087,486

1,776,384 1,759,813

Less: finance charges

4,950,971 (271,638)

3,536,197 (328,897)

Minimum lease payments

4,679,333

3,207,300

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

2014

2013

441,379 398,016

290,677 342,898

839,395

633,575

Capital and Leasing Commitments continued

(b)

Operating leases Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable - minimum lease payments: - not later than one year - between one year and five years

(c)

Capital Expenditure Commitments Capital expenditure contracted for at the end of the reporting period but not yet incurred yet is as follows: 3,007,232 Payable within 12 months 722,494

Key Management Personnel Disclosures The total remuneration paid to key management personnel of the Group is $ 1,361,561 (2013: $ 1,216,141).

Financial Risk Management The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk. The Group's financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable, bank loans and overdrafts, loans to and from subsidiaries, bills and leases. The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows: Financial Assets Cash and cash equivalents Trade and other receivables

6,213,125 111,560

3,564,581 263,116

Total financial assets

6,324,685

3,827,697

Financial Liabilities Loans Finance lease obligations Trade and other payables Bank overdraft

8,600,000 5,023,090 2,692,271 104,238

7,798,000 3,328,281 2,847,762 65,816

16,419,599

14,039,859

Total financial liabilities

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

2014

2013

Contingent Liabilities and Contingent Assets Estimates of the potential financial effect of contingent liabilities that may become payable: Contingent Liabilities Bank Guarantee Bank guarantee issued on behalf of the Club in favour of TAB Mortality benefits Mortality benefits payable to members 2014: 650 (2013: 650) who joined the Club prior to 29 May 1984 and who have maintained continuous membership. The maximum potential benefit payable to each eligible member is $225.

5,168

10,000

146,250

Events Occurring After the Reporting Date No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of, the results of those operations or the state of affairs of the Group in future financial years.

Interests in Subsidiaries Principal place of business / Country of Incorporation

Percentage Owned (%)*

2014

2013

Parent entity Canterbury-Hurlstone Park RSL Club Limited

Australia

100

Subsidiaries CHPRSL Holdings Pty Limited Camperdown Project Pty Limited**

Australia Australia

100 100

*The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries. ** Owned indirectly through another group company CHPRSL Holdings Pty Limited was established as a wholly owned subsidiary of Canterbury-Hurlstone Park RSL Club Limited to facilitate future diversification opportunities. Camperdown Project Pty Limited was established as a wholly owned subsidiary of CHPRSL Holdings Pty Ltd. Camperdown Project Pty Limited has signed an agreement for lease with Marrickville Council for the use of the land at the former Camperdown Bowling Club site, 31A Mallett St Camperdown, NSW. The lease term and payments will commence on completion of siteworks, expected to be completed during the 2015 financial year.

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

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

2014

2013

Parent entity Statement of Financial Position Assets Current assets Non-current assets

7,004,476 64,095,145

4,512,092 50,730,648

Total Assets

71,099,621

55,242,740

Liabilities Current liabilities Non-current liabilities

6,740,265 11,657,066

6,604,748 9,298,471

Total Liabilities

18,397,331

15,903,219

Equity Retained earnings Asset revaluation reserve

39,743,892 12,958,398

35,136,265 4,203,256

Total Equity

52,702,290

39,339,521

Statement of Profit or Loss Total profit or loss for the year Other comprehensive income

4,607,627 8,924,642

4,613,145 -

Total comprehensive income

13,532,269

4,613,145

Company Details The registered office of the club is: Canterbury-Hurlstone Park RSL Club Limited 20-26 Canterbury Road Hurlstone Park NSW 2193 The principle places of business are: Canterbury-Hurlstone Park RSL Club Limited 20-26 Canterbury Road Hurlstone Park NSW 2193 Bargo Sports Club 3580 Remembrance Drive Bargo NSW 2574 Magpie Sports Club 46 Hampton Street Croydon Park NSW 2133

Canterbury-Hurlstone Park RSL Club Limited ABN: 56 000 967 199

Directors' Declaration The directors of the Group declare that: 1.

The financial statements and notes, as set out on pages 6 to 27, are in accordance with the Corporations Act 2001 and: a.

comply with Accounting Standards - Reduced Disclosure Requirements; and

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

In the directors' opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

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

Director .................................................................. Neville Brown

Director .................................................................. Robert Crowhurst

Dated: 17 March 2015

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