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WESTS’ BOARD OF DIRECTORS

2013 - 2014

Wests Entertainment Group Management Eileen Smyth Deputy CEO

Therese Brodbeck Employee Relations Manager

Amanda Logan Entertainment & Promotions Manager

Robyn Taylor Operations Facility Manager

Graham Menzies Customer Services Manager

Chris Hardy Membership Manager

Geoff Shanley Technical Services Manager

Sandy Barnett Catering Manager

Michelle Bullock Executive Assistant

Keith Clark Administrative Services Manager

Leesa Peck Functions & Events Manager WTLC ANNUAL REPORT

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PRESIDENT’S REPORT Dear members It is my pleasure, as president of the Wests Entertainment Group, to once again present the club’s annual report for the financial year ending June 30 2014. This report is to be considered at the Annual General Meeting to be held on Tuesday November 25 commencing at 6.30pm at Wests, Phillip Street. As one of the North West’s leading clubs, Wests Entertainment Group is focused on performance from our two clubs to the boardroom. Our goal is to entertain and delight every member we serve and make Wests and Diggers a special place for every employee, supplier partner and community partner. This year has again been a busy one for the board and management. Club trading was very encouraging with, yet again, another terrific result. It is an exciting time to be a member as we have taken a number of initiatives that will grow and enhance the group in the upcoming year and beyond. The board has progressed with the next stage of the group’s master plan. This next stage will see the relocation of Scully Park football ground to the attached leased ground located next to our former football oval. This new facility will be known as Scully Park Regional Sporting Precinct. The relocation of the football ground will make way for a new development of a three-storey 53-room hotel and function centre. The board has spent considerable time and effort on a feasibility study and research to ensure the new complex’s success. Most members will agree that this venture is very exciting for our group and will not only ensure employment opportunities and diversification of our business, this expansion will certainly grow our footprint in Tamworth and ensure our viability. I can also assure members that the next stage of our master plan is even more exciting. This year’s results again include a combined result from Wests and Diggers. Our combined result recorded an operating profit before provisions and finance costs of $2.614 million, which is a very good result. The combined club poker machine profits of $11.723 million were also very pleasing. The Wests group had a net turnover of $19.716 million in the last financial year, a wages bill of $5.287 million, purchases of food and beverages of $2.506 million, repairs and maintenance of $371,647, poker machine and payroll tax of $2.680 million and payments made to members and guests as gaming prizes, amenities, entertainment and promotions of $41.996 million. Club treasurer Max Sharpe has done an excellent job in controlling our finances and he will present a full finance report at our AGM. The vision and experience of CEO Rod Laing and the leadership of our specialist managers has been instrumental in the club’s achievements for 2013/14. All members will agree with me, our group is blessed to have the quality of staff we have today. I thank each of you for your hard work, dedication and constant quest for excellence in service. Over the coming months, the group will be developing an indigenous employment strategy that will further increase our community commitment. This program is designed to provide long-term, sustainable employment opportunities for indigenous people. It will be made

2013 - 2014 up of an extensive action plan that deals with pre-employment, training and education that focuses not only on on-the-job training but also relationships, respect, opportunities and tracking progress and reporting. Each year the group plays a major role in financially supporting your community. This year is no exception as we supported in excess of 150 individuals, community groups and sporting bodies. The board and I welcome your comments, suggestions or concerns. You may contact us by either mail or email. Our email address is info@tamworthwests.com.au. Sadly, a year does not pass without the loss of someone near and dear to us. The club extends its deepest sympathies to our members who have lost loved ones this year. Today our organisation is a very large one, with many thousands of members. It is important to maintain a level of communication that incorporates the ability for members to access information when necessary. This is why our website www.wtlc.com.au, Facebook page Wests Entertainment Group, Twitter account @Tamworthwests and in-house advertising along with our new magazine, ENJOY, is important to us. The ENJOY magazine is mailed to local mailboxes every two months, so keep an eye out for it. These vehicles allow us to communicate all the activities that are on offer at your clubs. The Wests Entertainment Group continues to grow and diversify, requiring decisions that involve skills and experience. I take this opportunity to thank individual board members for their ongoing contributions and their continued support of me as president. I would also like to take this opportunity of thanking Anthony Hollis who resigned as director in November last year after 10 years of service. Thank you, Anthony. In closing, I thank all members for their support and patronage. This club belongs to you, our members, and I urge you to look after it and treasure it. Finally, I would like to remind members to vote at this year’s board election. There are two positions to be elected. Voting will commence on Friday November 14 and close on Friday November 21. Voting is a right of all members and we encourage you to use your voice to guide the future of your club. I look forward to seeing many of you at the Annual General Meeting.

John McClelland President

WTLC ANNUAL REPORT

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CHIEF EXECUTIVE OFFICER’S REPORT Dear members On behalf of our board of directors, management and staff, I thank you for your continued patronage and loyalty to our clubs. As another financial year comes to an end, it is my pleasure to submit rd the 53 annual report and balance sheets for the year ended June 30 2014. The 2014 financial report highlights a positive financial result for the Wests Entertainment Group. This is a terrific result which has occurred during a difficult period for clubs throughout the North West. The ongoing drought, downturn in mining jobs and, at times, a lack of consumer confidence, certainly made 2014 a challenging year. Given this backdrop, I am sure our members will be very happy with the group’s results. Financially, the Wests group recorded an operating profit of $2.614 million before provisions and finance costs and a net profit of $685,086 was realised. This year, Wests’ trading has been outstanding, resulting in an operating profit of $2.250 million before provisions and finance costs, while Diggers has returned an operating profit of $364,061. Indeed, for the past decade there have been some significant changes within the club industry. There is no doubt that some of these changes have affected the growth of club land in general. To respond to long-term industry trends, for the past decade we have been pursuing a strategy of updating our club’s facilities while at the same time researching ideas and concepts that would allow our clubs to diversify and remain competitive. The club industry is a competitive business which is sensitive to changes in economic conditions, trends in lifestyles and fluctuating costs. Our priority has remained the same as it had back 10 years ago. This includes remaining profitable while growing the business, offering improved facilities and a better club experience for members. We have designed both operational and financial strategies to achieve this goal. We are committed to strategies and initiatives that are centred on long-term growth, enhancing our members’ experience and team member engagement. During the last financial year, the board and management have been communicating the importance along with benefits of our next stage of the group’s master plan. These next stages of the master plan ensure our organisation moves forward with other leading clubs in NSW and diversifies our business. This diversity will assist the club’s long-term profitability. The Wests group is a major organisation in our community and both the board and management want to ensure that our business will remain a major part of the community for years to come. In addition to the new football ground, hotel and function centre, the board has also committed to upgrading our power supply/switchboard and a new generator, an extension to the administration building and an upgrade to the al fresco poker machine room. There are more ongoing upgrades of both Wests and Diggers facilities that will be announced during 2015. I would like to thank the Wests board, headed by president John McClelland, which has worked tirelessly throughout the past year. Over the past year we have been implementing far-reaching improvements for all elements of the group. One of these improvements is the new cash register system installed recently.

2013 - 2014 The capacity of this new till system is endless and soon members will see firsthand what this new system is capable of; including promotions, better ordering experiences in our food areas and the introduction of buying raffle tickets over the counter in our bars or cafés. This Christmas Eve, we will be combining a special Christmas Eve one-day bonanza raffle at both clubs. Our Wests group team members are responsible for creating a great member experience. Our success has been dependent on doing what we have done best from the very beginning – delivering great products and excellent service. I have continually stated that the Wests group is blessed to have team members who are dedicated and have the “spirit to serve”. Thanks to their continued efforts we have had a very successful year. It is also not possible to achieve great results if the engine room is not running at its peak. This is the responsibility of our management team and I can’t thank them enough for their contribution and support. My special thanks to Eileen Smyth and Michelle Bullock for their behind-the-scenes support. During the last financial year, we appointed Robyn Taylor to position of group operations facility manager. Robyn is responsible for the day-to-day operations of both clubs, a well-deserved appointment. I say it all the time “our people make the difference”. I know that talented, committed team members and managers are the most important part of the equation. Finally, I cannot end this report without expressing once again, my appreciation to all members who continue on a daily basis to support our clubs. Our focus is still looking after our members, their club and the community we serve. I trust you will see that this report confirms the commitment of the Wests Entertainment Group to its members and the wider community. I look forward to seeing you at the Annual General Meeting on Tuesday November 25.

Rod Laing Chief Executive Officer

WTLC ANNUAL REPORT

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TREASURER’S REPORT

2013 - 2014

Dear members On behalf of the board of directors it is once again my pleasure to submit the annual financial reports for the year ending 30 June 2014. The 12-month period has resulted in the Wests Entertainment Group recording a net profit after provisions and finance costs of $685,086. West Tamworth League Club made a profit before provisions and finance costs of $2.2 million and Wests’ Diggers made $364,643. Income for the group was $19.7 million which was down 3.80% compared to last year. Expenses for the group before provisions and finance costs at $17.1 million were down 1.81%. The profit reduction before provisions and finance costs from $3.1 million in 2012/2013 to $2.6 million in 2013/2014 was, in part, a reflection of the downturn in the economy and drought impacts on the regional economy in general. During the financial year the club has undertaken a number of small projects such as hail-damage louvers for the air conditioning and hand dryers for the restrooms. A new point-of-sale system was purchased for both Wests and Wests’ Diggers with a number of new features and promotions already introduced. More will be introduced in the coming year. Two major projects will commence in the 2013/2014 financial year. They are the hotel/motel project and the Scully Park Regional Sporting Precinct, which will be situated on the former Scully No. 2 Oval. I have been busy this past year arranging structured financial arrangements for the loans to build these new and exciting initiatives. I will again be delivering a detailed financial report at our Annual General Meeting on Tuesday 25 November 2014. Questions regarding the report will be accepted from the floor on the night, however, it would be appreciated if any questions could be put in writing and submitted to the club’s chief executive officer, Rod Laing, no later than Monday 17 November 2014.

West Tamworth

Wests

League Club

Diggers

Combined

Last Year

Income Sales

3,905,786

2,298,351

6,204,137

6,532,042

Rendering Services

9,290,790

2,398,172

11,688,962

11,976,755

Other Income

1,362,287

461,052

1,823,339

1,987,125

14,558,863

5,157,575

19,716,438

20,495,922

Cost of Goods Sold

1,637,197

868,899

2,506,096

2,650,990

Operating Expenses

8,024,492

2,983,752

11,008,244

11,374,626

Other Expenses Admin & Overhead Expenses

1,804,295

626,399

2,430,694

2,322,511

842,621

313,882

1,156,503

1,070,201

12,308,603

4,792,932

17,101,535

17,418,326

2,250,258

364,643

2,614,901

3,077,596

Expenses

Profit before provisions and Finance costs

Source: Company management accounts.

Max Sharpe Treasurer

WTLC ANNUAL REPORT

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DIRECTORS REPORT

2013 - 2014

DIRECTORS The names of the directors in office at any time during, or since the end of, the year are: Names John McClelland Terry Psarakis Maxwell Sharpe Robert Both Alice Edmunds Dennis Gross Anthony Hollis

Position President Vice President Treasurer Director Director Director Director

Appointed/Resigned Appointed 26 November 2013

Resigned 27 November 2013

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. COMPANY SECRETARY Mr Rodney John Laing held the position of the company secretary at the end of the financial year. PRINCIPAL ACTIVITIES The principal activities of West Tamworth League Club Limited during the financial year were:  

Operating a Licensed Club including the activities of liquor, gaming, catering, sports, community; and Providing facilities for members.

No significant change in the nature of these activities occurred during the year. OBJECTIVES AND STRATEGIES Objectives The Short-Term objectives of the Club are capital improvements to facilities and the enhancement of the customer experience through products and services. The Company strives as a matter of priority to be a responsible provider of products within the community. The long term objectives of the Company are to provide facilities and entertainment for its members and support to the wider community through provision of amenities for Sport and Recreation. The Company assists in the promotion of Rugby League and through its memorandum of amalgamation supports the traditions of the RSL movement. Strategies The strategies to meet these objectives are centred on maintenance of existing operations with the development of new enhanced facilities and amenities. Core activities were the consistent provision of service and entertainment to the membership and community support. Performance Measures The company regularly measures its performance through budgetary control and individual KPI’s placed on projects or areas of operations. Monthly the Club benchmarks its performance including earnings before interest, tax, depreciation and amortisation (EBITDA) against other Clubs through Astute BI. DIRECTOR INFORMATION Name

Position

Qualifications

Experience

Special Responsibilities

John McClelland

President

Retired

28 years as Director

Membership Committee, Compliance Committee

Terry Psarakis

Vice President

Accountant

4 years as Director

Finance Committee

Maxwell Sharpe

Treasurer

Company Director

20 years as Director

Membership Committee, Finance Committee, Sponsorship Committee

Robert Both

Director

Dental Technician

16 years as Director

Sponsorship Committee, Compliance Committee, Neighbourhood Committee

Alice Edmunds

Director

Retired

9 years as Director

Neighbourhood Committee

Dennis Gross

Director

Retired

9 years as Director

Membership Committee, Sponsorship Committee, Sports Committee

WTLC ANNUAL REPORT

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Meetings of Directors During the financial year, 38 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows: Directors' Meetings

Membership Committee Meetings

Sponsorship Committee Meetings

Eligible to attend

Number attended

Eligible to attend

Number attended

Eligible to attend

Number attended

John McClelland

14

14

-

-

13

12

Terry Psarakis

14

9

-

-

-

-

Maxwell Sharpe

14

14

11

9

13

11

Robert Both

14

14

11

11

-

-

Alice Edmunds

14

12

-

-

-

-

Dennis Gross

14

14

11

11

13

7

Anthony Hollis

6

3

-

-

6

3

The Neighbourhood, Compliance, Finance and Sports Committees did not formally meet during the year and any matters were discussed and resolved in the general directors meetings. Incorporation and Member's Guarantee The club is incorporated under the Corporations Act 2001 as a company limited by guarantee. If the club is wound up, the constitution states that each member is required to contribute a maximum of $4 towards meeting any outstanding obligations of the club. At 30 June 2014 the number of members was 20,917 (2013: 20,683). 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 at page 7. Non-Core Property Non-core property is disclosed in Note 24.

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

Director John McClelland Dated 24 September 2014

Director Maxwell Sharpe

Auditor’s Independence Declaration Auditors Independence Declaration under Section 307C of the Corporations Act 2001 I declare that, to the best of my knowledge and belief, during the year ended 30 June 2014 there have been: (i)

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

(ii)

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

Paul Cornall Principal 24 September 2014 92 Rusden St, Armidale NSW 2350 P +61 2 6773 8400 f +61 2 6772 9957 e armidale@forsyths.com.au ABN 24 935 296 22 WTLC ANNUAL REPORT

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Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2014 Sales revenue Cost of sales Gross profit Other income Marketing expenses Occupancy costs Administrative expenses Entertainment costs Operating costs Other expenses Finance costs

Note

2014 $

2013 $

2 3

19,694,756 (4,886,324)

20,450,847 (5,091,348)

14,808,432 21,684 (1,614,360) (211,195) (2,622,133) (728,674) (7,071,418) (1,899,683) 2,433

15,359,499 45,076 (1,634,971) (213,929) (2,669,641) (791,240) (7,044,222) (1,934,127) (57,820)

685,086

1,058,625

2

Profit before income tax Income tax expense

4

-

-

Profit for the year

685,086

Other comprehensive income

-

Total comprehensive income for the year

685,086

1,058,625

Note

2014 $

2013 $

7 8 9 10

1,272,849 81,073 211,864 195,818

1,988,463 96,138 190,577 237,205

1,761,604

2,512,383

25,291,453 894,738

24,961,117 1,076,162

Total non-current assets

26,186,191

26,037,279

TOTAL ASSETS

27,947,795

28,549,662

1,458,633 291,893 1,239,196

1,594,331 473,611 1,286,484

2,989,722

3,354,426

67,597

989,847

67,597

989,847

3,057,319

4,344,273

24,890,476

24,205,389

Reserves Retained earnings

6,459,878 18,430,598

6,459,878 17,745,511

TOTAL EQUITY

24,890,476

24,205,389

1,058,625 -

Statement of Financial Position For the year ended 30 June 2014

ASSETS Current assets Cash and cash equivalents Trade and other receivables Inventories Other assets

Total current assets Non-current assets Property, plant and equipment Intangible assets

11 12

LIABILITIES Current liabilities Trade and other payables Borrowings & Lease liabilities Employee benefits

13 14 15

Total current liabilities Non-current liabilities Borrowings & Lease liabilities

Total non-current liabilities TOTAL LIABILITIES NET ASSETS

14

EQUITY

The accompanying notes form part of these financial statements.

WTLC ANNUAL REPORT

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Statement of Changes in Equity For the Year Ended 30 June 2014

2014

Balance at 1 July 2013 Profit for the year

Balance at 30 June 2014

Retained Earnings

Asset Revaluation Reserve

Total

$

$

$

17,745,511 685,086 18,430,597

6,459,878 -

24,205,389 685,086

6,459,878

24,890,475

2013

Balance at 1 July 2012 Profit for the year

Balance at 30 June 2013

Retained Earnings

Asset Revaluation Reserve

Total

$

$

$

16,686,886 1,058,625 17,745,511

6,459,878 -

23,146,764 1,058,625

6,459,878

24,205,389

Statement of Cash Flows For the Year Ended 30 June 2014

Note

2014 $

2013 $

Cash from operating activities: Receipts from customers Payments to suppliers and employees Interest received Finance costs

21,680,803 (19,711,814) 21,684 (17,694)

22,440,664 (19,871,502) 45,076 (57,820)

1,972,979

2,556,418

Proceeds from sale of plant and equipment Payment to acquire property, plant and equipment

59,623 (1,474,750)

77,325 (3,070,273)

Net cash (used by) investing activities

(1,415,127)

(2,992,948)

Net cash provided by (used in) operating activities

20

Cash flows from investing activities:

Cash flows from financing activities: Proceeds from borrowings Repayment of borrowings Payment of finance lease liabilities

Net cash used by financing activities Net cash increase (decreases) in cash and cash equivalents

(781,352) (492,114)

2,341,352 (1,560,000) (575,934)

(1,273,466)

205,418

(715,614)

(231,112)

1,988,463

2,219,575

1,272,849

1,988,463

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

7

WTLC ANNUAL REPORT

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NOTES TO THE FINANCIAL STATEMENTS

2013 - 2014

1. Summary of Significant Accounting Policies (a) General information The financial statements are for West Tamworth League Club Limited as an individual entity, incorporated and domiciled in Australia. West Tamworth League Club Limited is a Company limited by guarantee. (b) Basis of preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below. They 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. (c)

Revenue

Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. Interest revenue is recognised on a proportional basis taking into account the interest rate applicable to the financial assets. Revenue from the rendering of a service is recognised upon the delivery of the service to the customers. Grants are recognised at their fair value when it is received. All revenue is stated net of the amount of goods and services tax (GST). (d)

Income taxes

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). The Income Tax Act 1997 (as amended) provides that under the concept of member mutuality, clubs are only liable for income tax derived from non-members. 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 reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. 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 reporting date. 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. (e) Leases Finance leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the Company are classified as finance leases. In accordance with accounting standards, the gross lease liabilities have been discounted to net present value as the company has obtained a benefit from securing these leases on interest free terms. This discount has been recorded as revenue in the Statement of Profit or Loss and Other Comprehensive Income in the 2012 financial year. From the 2013 financial year and future years the discount unwinds as the company pays the gross lease payments. This adjustment is included in finance costs in the Statement of Profit or Loss and Other Comprehensive Income. Finance leases are capitalised, recording an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual values. Leased assets are depreciated on a straight-line basis over their estimated useful lives. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

WTLC ANNUAL REPORT

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(f) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short term borrowings in current liabilities on the statement of financial position. (g) Inventories Inventories are measured at the lower of cost and net realisable value. (h)

Property, plant and equipment

Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses. Property Freehold land and buildings are shown at their cost less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment Plant and equipment are measured on the cost basis. 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 of plant and equipment for not-for-profit entities is the current replacement cost discounted to current asset condition. Depreciation The depreciable amount of all fixed assets including buildings but excluding freehold land, is depreciated on a straight line basis over the asset's useful life to the Company commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Buildings and Improvements: Plant and Equipment: Furniture, Fixtures and Fittings: Poker Machines: Motor Vehicles: Office Equipment:

1.0% 10.0 - 20.0% 7.5 - 15.0% 27.0% 23.0% 10.0 - 30.0%

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. (i) Intangible assets Poker Machine Entitlements The company, as a result of state legislation, received for no cost, poker machine entitlements for those machines it held at the time the legislation was enacted. These entitlements can be sold should the company decide to reduce or cease its poker machine activities. The company has not recorded these initial poker machine entitlements in the financial statements as there was no fair value on acquisition of these entitlements. The company has subsequently acquired a number of poker machine entitlements which were recognised at cost upon acquisition. Poker machine entitlements are considered to have an indefinite life and as a result entitlements acquired and capitalised since the legislation was enacted have not been amortised. Poker machine entitlements are tested for impairment annually or more frequently if events or changes in circumstances indicate that might be impaired, and are carried at cost less accumulated impairment losses. Software Software is recorded at cost. Software has a finite life and is carried at cost less any accumulated amortisation and impairment losses. Software is considered to have an estimated useful life of three years. Amortisation Amortisation is based on the cost of an asset less its residual value. Amortisation is recognised in the Statement of Profit or Loss and Other Comprehensive Income on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. (j) Financial Instruments Recognition and Initial Measurement Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below. Classification and Subsequent Measurement 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 using the effective interest rate method.

WTLC ANNUAL REPORT

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(j) Financial Instruments continued Financial liabilities Non derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation. (k) Employee benefits Provision is made for the Company's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at present value of the estimated future cash outflows to be made for those benefits. (l)

Borrowing Costs

Borrowing costs are recognised in the income statement in the period in which they are incurred. (m) 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 Company 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. (n)

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 Taxation 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. Cash flows are presented 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. (o)

Comparatives

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

Critical accounting estimates and judgments

The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and based on current trends and economic data, obtained both externally and within the company. Key estimates - impairment of plant and equipment The Company assesses impairment at the end of the reporting year by evaluating conditions specific to the Company that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions. Key estimates - 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 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. (q)

Adoption of new and revised accounting standards

During the current year, the Company adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. The following new and amended accounting standards have not been adopted: AASB 13: Fair Value Measurement. AASB 13 refines the requirements for determining fair value as a measurement and captures the requirements for fair value measurement in a single Standard. As a result, the measurement of certain assets of an entity measured at fair value (eg property, plant and equipment or financial assets) may be affected. It is deemed that there was no material impact on the financial statements of the Company in terms of measurement disclosure. AASB 119: Employee Benefits (September 2011). Accounting for short term employee benefits may have been affected for some entities. AASB 119 (September 2011) defines obligations for short term employee benefits as obligations expected to be settled wholly before 12 months after the end of the annual reporting period in which the employee render the related services. Where an entity expects that most employee benefits will be taken more than 12 months after the end of the period in which the benefits were earned, such obligations for these employee benefits must be measured on a discounted basis. The Company has determined that it expects most employee benefits to be taken within 12 months of the reporting period in which they were earned. Consequently, the change in accounting policy had no material impact on the reported obligations for employee benefits. Note also that these changes do not impact the classification of leave entitlements between current and non-current liabilities in Company's financial statements.

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Page 13


(r)

New accounting standards for application in future periods

The AASB has issued new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The company has decided against early adoption of these standards as none of the changes are expected to have a material effect on the company. 2. Revenue 2014

2013

$

$

- Bar - Sales

2,795,968

2,929,742

- Catering Sales

3,054,371

3,200,345

Sales revenue

- Bottle Shop Sales

353,800

401,956

11,723,323

12,011,115

- Gaming Commissions

113,109

106,081

- Bingo & Raffle Income

497,205

525,263

- Concert Ticket Sales

357,695

410,001

- Keno Income

193,230

166,785

- Other Income

445,325

539,371

- Poker Machines - net clearances

- Membership Subscriptions Total Revenue

160,730

160,188

19,694,756

20,450,847

Other revenue: - Interest - cash at bank

21,684

45,076

3. Profit for the year 2014 $

2013 $

Expenses Total interest paid/ (discount received) banks and lease entities

(2,433)

57,820

Cost of Sales

4,886,324

5,091,348

Depreciation and amortisation

1,450,126

1,517,836

4. Income tax expense The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows: 2014 $ Prima facie tax payable on profit from ordinary activities before income tax at 30% (2013: 30%)

2013 $

205,525

317,587

(482,319) 276,794

(407,218) 89,631

Add: Tax effect of: - Principal of Mutuality adjustment and permanent differences - Adjustment for unrecognised losses

-

Income tax attributable to entity

-

The company has unrealised tax losses of $1,080,846 (2013: $804,052) at a tax rate of 30%. No deferred tax asset has been taken up, as it is not probable that these losses will be utilised in future years. 5. Key Management Personnel Compensation Key management personnel include the Chief Executive Officer/Company Secretary, Deputy Chief Executive Officer, Operations Manager Wests, Operations Manager Wests Diggers and Director's honorarium. Short-term benefits $ 2014 Total compensation 2013 Total compensation

Post-employment benefit $

Total $

459,544

54,049

513,593

462,586

48,495

511,081

WTLC ANNUAL REPORT

Page 14


6. Auditors’ Remuneration 2014 $

2013 $

39,500 10,100

36,755 11,831

49,600

48,586

2014 $ 553,965 77,738 641,146

2013 $ 688,567 641,105 658,791

1,272,849

1,988,463

2014 $

2013 $

1,272,849

1,988,463

1,272,849

1,988,463

2014 $

2013 $

81,073

96,138

81,073

96,138

2014 $

2013 $

0-30 days

57,206

31,213

31-60 days

8,256

8,019

61-90 days (past due not impaired)

2,238

424

13,373

56,482

81,073

96,138

2014 $

2013 $

211,864

190,577

211,864

190,577

2014 $

2013 $

195,818

237,205

195,818

237,205

Remuneration of the auditor of the Company for: - auditing the financial statements - taxation services

7. Cash and cash equivalents

Cash on hand Cash at bank Short-term bank deposits

Reconciliation of Cash

Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows: Cash and cash equivalents

8. Trade and other receivables

CURRENT Trade receivables

(a) Aged analysis The ageing analysis of receivables is as follows:

91+ days (past due not impaired) No provision for impairment was required for 2014 or 2013.

9. Inventories

CURRENT At Cost Finished goods

10. Other Assets

CURRENT Prepayments

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11. Property, plant and equipment 2014 $

2013 $

1,000,000

1,000,000

1,000,000

1,000,000

22,270,019 (1,737,224)

21,612,805 (1,519,198)

Total buildings

20,532,795

20,093,607

Total land and buildings Plant and equipment At cost Accumulated depreciation

21,532,795

21,093,607

13,014,222 (9,410,165)

12,831,073 (9,141,468)

3,604,057

3,689,605

184,206 (152,375)

184,206 (129,071)

31,831

55,135

122,770

122,770

3,758,658

3,867,510

25,291,453

24,961,117

LAND AND BUILDINGS Freehold land At cost Total Land Building At cost Accumulated depreciation

Total plant and equipment Computer equipment Under lease Accumulated amortisation Total computer equipment Crockery, Glass & Linen At cost Total plant and equipment Total property, plant and equipment

Movements in Carrying Amounts Movement in the carrying amount for each class of property, plant and equipment between the beginning and the end of the current financial year

Balance at the beginning of year

Land $ 1,000,000

Additions

-

Disposals - written down value

-

Depreciation expense Carrying amount at the end of year

1,000,000

Crockery, Glass & Linen Total $ $ 122,770 24,961,117

Buildings $ 20,093,607

Plant and Equipment $ 3,689,605

Computer equipment $ 55,135

657,214

1,007,161

-

-

-

-

(65,383)

(23,304)

-

(1,268,656)

-

(65,383)

(218,026) (1,027,326) 20,532,795

3,604,057

31,831

1,664,375

122,770

25,291,453

12. Intangible assets 2014 $

2013 $

727,717 (390,759)

727,717 (209,335)

Net carrying value Poker Machines Entitlements Cost

336,958

518,382

557,780

557,780

Total Intangibles

894,738

1,076,162

Computer software Cost Accumulated amortisation and impairment

(a) Reconciliation Detailed Table

Parent

Computer software $

Year ended 30 June 2014 Balance at the beginning of the year Amortisation

518,382 (181,424)

557,780 -

1,076,162 (181,424)

336,958

557,780

894,738

Closing value at 30 June 2014

Poker machine entitlements $

WTLC ANNUAL REPORT

Total $

Page 16


13. Trade and other payables CURRENT Unsecured liabilities Trade payables Membership income in advance Other payables Revenue in advance

2014 $

2013 $

846,804 124,690 427,246 59,893

949,481 153,476 411,488 79,886

1,458,633

1,594,331

2014 $

2013 $

291,893

473,611

291,893

473,611

2014 $

2013 $

67,597 -

208,495 781,352

67,597

989,847

2014 $ 359,490

2013 $ 781,352 682,106

359,490

1,463,458

2014 $ 21,532,795

2013 $ 21,093,607

21,532,795

21,093,607

2014 $

2013 $

578,276 660,920

586,542 699,942

1,239,196

1,286,484

14. Borrowings and Lease Liability Note CURRENT Secured liabilities Finance lease and hire purchase obligations

17

NON CURRENT

Note

Secured liabilities Finance lease and hire purchase obligations Bank loans

(a)

17

Total current and non-current secured liabilities

Bank loans Finance lease and hire purchase obligations

(b)

The carrying amounts of non-current assets pledged as security are:

First mortgage over freehold land and buildings

15. Employee Benefits

CURRENT Provision for long service leave Annual leave entitlements

16. Reserves Asset Revaluation Reserve The asset revaluation reserve records historical revaluations of non-current assets. When the Company adopted revised Accounting Standards it chose to treat previously revalued land and buildings as being deemed cost and has not performed any subsequent revaluations. 17. Capital and Leasing Commitments Finance Lease commitments Payable - minimum lease payments - no later than 12 months - between 12 months and 5 years Minimum lease payments Less: interest free net present value discount and amortised interest charges Present value of minimum lease payments

1(e)

2014 $

2013 $

349,097 67,597 416,694

535,147 258,812 793,959

(57,204)

(111,853)

359,490

682,106

The finance lease and hire purchases are secured over the assets acquired with the lease or hire purchase agreement. Finance leases are on an interest free basis and therefore in accordance with accounting standards discounted to net present value with the discount taken to revenue.

WTLC ANNUAL REPORT

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18. Financial Instruments Financial Risk Management Policies The company's financial instruments consist mainly of deposits with banks, short term investments, accounts receivable and payable and bank loans. The main purpose of those financial instruments is to raise finance for the company's operations. The Board's overall risk management strategy seeks to meet the company's financial targets, whilst minimising potential adverse effects on financial performance. The Board is focused on debt repayment and interest expense reduction as well as maintaining healthy cash reserves and borrowing capacity. The company does not have any derivative instruments at 30 June 2014. The Company's main financial risks relate to credit, liquidity and interest rates discussed below. (a) Credit risk The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The profile of the Club's credit risk at 30 June 2014 was as follows: 2014

2013

83.5% 16.5%

41.2% 58.8%

Percentage of sundry (unsecured) receivables - Current - Past due

Although the company has a portion of receivables past due, the Company does not consider there to be sufficient risk of collection of these receivables to require a doubtful debts provision. The company does not have any material credit risk exposure to any single receivable or group of receivables. (b) Interest rate risk Financial instrument composition and maturity analysis The Company's exposure to interest rate risk, which is the risk that a financial instruments value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows:

Weighted Average Effective Interest Rate

Financial Assets Cash and cash equivalents Receivables

Floating Interest Rate

Non-Interest Bearing

Total

2014 %

2013 %

2014 $

2013 $

2014 $

2013 $

2014 $

2013 $

1.35 -

2.75 -

718,884 -

1,299,896 -

553,965 81,073

688,567 96,138

1,272,849 81,073

1,988,463 96,138

718,884

1,299,896

635,038

784,705

1,353,922

2,084,601

141,340

781,352 -

1,458,633 218,150

1,594,331 682,106

1,458,633 359,490

781,352 1,594,331 682,106

141,340

781,352

1,676,783

2,276,437

1,818,123

3,057,789

Total Financial Assets Financial Liabilities: Bank loans Trade and sundry payables Lease liabilities Total Financial Liabilities

2.00

4.70 -

(c)Liquidity risk The company manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained. Further, the company maintains significant cash on hand and at bank to manage day to day operations. (d)Net fair values The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of financial position and in the notes to the financial statements. (e)Sensitivity Analysis Interest rate risk The Company has not performed a sensitivity analysis relating to its exposure to interest rate risk at balance date as the directors do not believe the sensitivity analysis is material.

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Page 18


19. Capital Management Management controls the capital of the Company to ensure that adequate cash flows are generated to fund its operations and that returns from investments are maximised. The company's capital consists of financial assets and liabilities. Management effectively managed the company's capital by assessing the company's financial risks and responding to changes in these risks. Responses may include the consideration of debt levels and maintaining adequate cash reserves. There has been no change in the capital management strategy of the company since the previous year. 20. Cash Flow Information (a) Reconciliation of Cash Flow from Operations with Profit after Income Tax

Profit for the year Cash flows excluded from profit attributable to operating activities Non-cash flows in profit Depreciation and amortisation Net (gain)/loss on disposal of property, plant and equipment Net present value discount on finance leases Correction of error

2014 $ 685,086

2013 $ 1,058,625

1,450,126 5,714 (20,126) -

1,517,836 (3,321) 46,000 18,413

15,065 41,387 (21,287) (135,698) (47,288) 1,972,979

(50,243) (15,059) 13,011 (31,117) 2,273 2,556,418

Changes in assets and liabilities (Increase)/decrease in trade and term receivables (Increase)/decrease in prepayments (Increase)/decrease in inventories Increase/(decrease) in trade payables and accruals Increase/(decrease) in provisions Cash flow from operations

(b) Non-cash financing and investing activities Acquisition of plant and equipment by means of hire purchase or finance leases:

Computer equipment and plant and equipment

2014 $

2013 $

189,625

63,152

The above assets were acquired through finance lease arrangements. (c) Credit Standby Arrangement and Loan Facilities The Company has unused bank lending facilities amounting to $ 2,100,000. Interest rates are variable. The Company is intending to enter into a new finance agreement with the Westpac Bank, total loan facilities of $15,610,000 to cover the financing of the proposed motel and the relocation of Scully Park Oval. 21. Contingent Liabilities and Contingent Assets In the opinion of the Directors, the Company did not have any contingencies at 30 June 2014 (30 June 2013: None). 22. Events after the end of the Reporting Period The financial statements was authorised for issue on 24 September 2014 by the Board of Directors. The Company has had plans drawn up for the development of a 54 room motel and purpose built function centre adjacent to the West Tamworth League Club. The project is to be funded by a $14.6 million loan from Westpac Bank. The project was approved by Tamworth Regional Council in June 2014. The development work will be undertaken in four stages, with the first stage being the upgrade of the existing outdoor area. Stage 2 is the construction of the 54 room motel, with new car parking facilities, swimming pool, courtyard and associated service areas and stage 3 being the upgrade of the existing administration block. The final stage is the development of a purpose built function centre as an extension to the current club, which will include additional parking for the function centre. The Company also has plans to develop the Scully Park Sporting Precinct as a replacement to the existing Scully Park No 1 Oval. The Company has entered into a formal lease with Tamworth Regional Council for the land known as Scully Park No 2 Oval for the development of the Scully Park Sporting Precinct. The project is estimated to cost $2.8 million and is to be funded by $1.5 million loan from Westpac Bank. The precinct is being designed to cater for Rugby League games in the winter and also to accommodate National Rugby League Games. The Scully Park Sporting Precinct development involves four main components being a grandstand and renovation of existing buildings, playing field, oval surrounds and provision of utilities. Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years. 23. Related party transactions Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

WTLC ANNUAL REPORT

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24. Core and Non-core property Core property is defined as any real property owned by the company that comprises the defined premises of the club or any facility provided by the club for the use of its members and their guests. Pursuant to section 41J of the Registered Clubs Act 1976 the following properties are considered core property of West Tamworth League Club Limited: 1) Wests Diggers Club, Lot 1 DP 1142453, 4 Kable Avenue, Tamworth NSW 2340. 2) West Tamworth League Club, Lot 2 DP815862, 58 Phillip Street, West Tamworth NSW 2340. The company does not hold any non-core property as at 30 June 2014 or 2013. 25. Company Details Registered office The registered office of the company is: West Tamworth League Club Limited 56 Phillip Street Tamworth, NSW 2340 Principal place of business The principal places of business are: West Tamworth League Club Limited 58 Phillip Street Tamworth, NSW 2340 and Wests Diggers 4 Kable Avenue Tamworth, NSW 2340

Directors Declaration The directors of the Company declare that: 1. The financial statements and notes, as set out on pages 8 to 21, are in accordance with the Corporations Act 2001 and: (a) comply with Accounting Standards and the Corporations Regulations 2001; and (b) give a true and fair view of the financial position as at 30 June 2014 and of the performance for the year ended on that date of the Company. 2. In the directors opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors.

John McClelland Director

Maxwell Sharpe Director

Dated

WTLC ANNUAL REPORT

Page 20


INDEPENDENT AUDIT REPORT

2013 - 2014

Report on the Financial Statements We have audited the accompanying financial statements of West Tamworth League Club Limited, which comprises the statement of financial position as at 30 June 2014, 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 Statements The directors of the Company are responsible for the preparation of the financial statements that give a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor’s Responsibility Our responsibility is to express an opinion on the financial statements 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 statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, 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 statements that give 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 statements. 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 West Tamworth League Club Limited, would be in the same terms if given to the directors as at the time of this auditor’s report. Auditor’s Opinion In our opinion: (a) the financial statements of West Tamworth League Club Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the company’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and (b) the financial statements also complies with International Financial Reporting Standards as disclosed in Note 1.

Paul Cornall Principal 24 September 2014 92 Rusden Street, Armidale NSW 2350 P +61 2 6773 8400 f +61 2 6772 9957 e armidale@forsyths.com.au ABN 24 935 296 22

WTLC ANNUAL REPORT

Page 21


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