kendall services & citizens club limited abn 43 001 058

Kendall Services & Citizens Club Limited

ABN 43 001 058 153

Financial Statements

for the Year Ended 30 June 2019

Contents Page

Directors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Auditor's Independence Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Directors' Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . 8

Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Compilation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Dept Trading Profit & Loss Statement - Bar & Other . . . . . . . . . . . . 32

Dept Trading Profit & Loss Statement - Poker Machines . . . . . . . . . 33

Profit & Loss Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Kendall Services & Citizens Club LimitedABN 43 001 058 153Directors' Report


- 1 -

Your directors present this report on the Club for the financial year ended 30th June 2019.

DirectorsThe names of each person who has been a director during the year and to the date of this report are:

Director Qualifications Special Responsibilities

William Jones Retired PresidentAllan Sandersan (Res. 09/12/2018) StoremanRaymond O'Neill Retired Forestry WorkerIan Twomey Air-conditioning TechnicianMargot McLennan Home DutiesBarry Barr RetiredJim Stewart Self EmployedGray Malone Retail AssistantRoss Bate RetiredJoanne Jones (App. 09/12/2018) School Teacher

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

Short Term ObjectivesThe Club's short term objectives are to:

1. Maintain a viable community asset that offers licensed facilities with gaming, dining and entertainment optionsfor our members, their families and their guests.

2. Consolidate the Club's financial position by increasing income and strictly controlling expenditure.

3. Be sustainable and strive for continuous improvement so as to offer the best facility in the local area and onethat is inviting to people of all ages and gender.

Long Term ObjectivesThe Club's long term objectives are to:

1. Retire the Club's debt and focus on savings accumulation.

2. Maintain the Club's property and when necessary make alterations to accommodate new trends and potentialmarkets.

3. Increase membership in the local area and offer the products and services that will ensure a membersrelationship with the Club continues year after year.

StrategiesTo achieve these objectives, the Club has adopted the following strategies:

1. Develop and nurture a culture within the community that the Club's reason for existence and its objectives arefocused on our members. Building and maintaining membership through our product range, exceptional serviceand diverse entertainment options is a prerequisite for our future success.

2. Developing income streams independent of gaming has become extremely important for clubs of all sizes. Inuncertain times of legislation changes and economic downturns, the Board has committed to exploring alternativeforms of income away from normal daily trade as a strategy to lessen our reliance on income generated in thisarea.

Kendall Services & Citizens Club LimitedABN 43 001 058 153Directors' Report


- 2 -

Principal ActivitiesThe principal activities of the Club during the course of the year were to operate a registered Club.No significant changes in the nature of this activity occurred during the financial year.

How Activities Assist in Meeting ClubThe principal activities of the Club include the operation of the bar and gaming area, provision of entertainmentand the sale of take home liquor. The operation, management and promotion of these activities assisted the Clubin achieving its objectives.

Performance MeasurementThe Club's board is currently developing a Strategic Plan culminating with a Masterplan that will serve the Clubfor many years. This Strategic Plan will be reviewed on a regular basis to ensure relevance.

A number of Key Performance Indicators (KPI's) are used by the Club to measure, monitor and improve theClub's performance and to achieve our objectives through sound financial management.

Business activities are monitored to ensure that the goals, objectives and business strategies are achieved.

Meetings of DirectorsDuring the twelve months ended 30 June 2019, 13 ordinary meetings of the Club's directors were held, andattendances were:

Director Meetings Eligible to Attend Number Attended

William Jones 13 12Allan Sandersan 7 7Raymond O'Neill 13 10Ian Twomey 13 8Margot McLennan 13 12Barry Barr 13 11Jim Stewart 13 11Gray Malone 13 9Ross Bate 13 12Joanne Jones (App. 09/12/2018) 6 2

Limited by GuaranteeThe Club is an incorporated company under the Corporations Act 2001 and is a company limited by guarantee. Ifthe Club is wound up, the constitution states that each member is required to contribute a maximum of $1 eachtowards any outstanding obligations of the Club. As at 30 June 2019 the collective liability of members was$1,132.

Kendall Services & Citizens Club LimitedABN 43 001 058 153

Statement of Profit or Loss and Other Comprehensive IncomeFor the Year ended 30 June 2019

Note 2019$

2018$

- 8 -

The accompanying notes form part of these financial statements.These financial statements have been subject to audit and should be read in conjunction with the attached Independent Auditor's Report

Revenue 2 1,957,262 1,679,122Other Income 2 27,655 18,448

1,984,917 1,697,570

Cost of Sales 1,161,752 1,029,797Employee Benefits 291,473 261,479Advertising 12,339 19,177Bingo Expenses 12,990 13,414Cleaning 61,975 37,284Depreciation 55,796 45,485Electricity & Gas 51,878 20,685Entertainment for Members & Guests 9,129 12,207Insurance 34,159 30,007Interest Paid 8,611 10,050Promotional Drinks/Giveaways 11,512 14,020Raffle Expenses 59,058 60,839Repairs & Maintenance 48,118 26,293Sky Channel 17,335 17,268Other Expenses 109,397 115,449

1,945,522 1,713,454

Current year surplus 3 39,395 (15,884)

Income tax (expense)/benefit 4 - -

Net current year surplus 39,395 (15,884)

Other comprehensive income - -

Total other comprehensive income for the year 39,395 (15,884)

Total comprehensive income attributable to members 39,395 (15,884)


Statement of Financial PositionAs at 30 June 2019

Note 2019$

2018$

- 9 -

The accompanying notes form part of these financial statements.These Financial Statements have been subject to audit and should be read in conjunction with the attached Independent Auditor's Report.

CURRENT ASSETSCash and Cash Equivalents 5 62,719 101,952Trade and Other Receivables 6 46,392 20,187Inventories 7 34,663 22,489Other 8 2,682 5,162TOTAL CURRENT ASSETS 146,456 149,790

NON-CURRENT ASSETSProperty, Plant and Equipment 9 2,559,725 2,514,066TOTAL NON-CURRENT ASSETS 2,559,725 2,514,066TOTAL ASSETS 2,706,181 2,663,856

CURRENT LIABILITIESTrade and Other Payables 10 73,861 66,152Borrowings 11 68,881 66,774Provisions 12 15,927 11,664Other 13 555 5,050TOTAL CURRENT LIABILITIES 159,224 149,640

NON-CURRENT LIABILITIESBorrowings 11 104,456 111,567Provisions 12 816 359TOTAL NON-CURRENT LIABILITIES 105,272 111,926TOTAL LIABILITIES 264,496 261,566NET ASSETS 2,441,685 2,402,290

EQUITYReserves 14 1,058,471 1,058,471Retained Earnings 1,383,214 1,343,819TOTAL EQUITY 2,441,685 2,402,290


Statement of Changes in EquityFor the Year ended 30 June 2019

2019$

2018$

- 10 -

The accompanying notes form part of these financial statements.These financial statements have been subject to audit and should be read in conjunction with the attached Independent Auditor's

Report.

RETAINED SURPLUS

Balance at 1 July 1,343,819 1,359,704

Surplus/(Deficit) for the year attributable to members 39,395 (15,885)- -

Balance at 30 June 1,383,214 1,343,819

ASSET REVALUATION RESERVE

Movement for the year 1,058,471 1,058,471

Balance 30 June 1,058,471 1,058,471


Statement of Cash FlowsFor the Year ended 30 June 2019

Note 2019$

2018$

- 11 -

The accompanying notes form part of these financial statements.These financial statements have been subject to audit and should be read in conjunction with the attached Independent Auditor's Report.

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 2,078,622 1,778,269Payments to suppliers and employees (2,018,791) (1,722,505)Receipts from government 17,180 17,180Interest received 77 28Finance costs (9,863) (10,050)

Net cash provided by operating activities 17 67,225 62,922

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of plant & equipment (101,455) (3,490)Additions to land & building - -

Net cash used in investing activities (101,455) (3,490)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 74,448 -Repayment of borrowings (79,452) (22,206)

Net cash provided by/(used in) financing activities (5,004) (22,206)

NET INCREASE/(DECREASE) IN CASH HELD (39,233) 37,226

Cash and cash equivalents - beginning of the financial year 101,952 64,726

Cash and cash equivalents - end of the financial year 5 62,719 101,952


Notes to the Financial StatementsFor the Year ended 30 June 2019

- 12 -These Notes to the Financial Statements should be read in conjunction with the attached Independent Auditor's Report.

These financial statements cover Kendall Services & Citizens Club Limited as an individual entity,incorporated and domiciled in Australia. Kendall Services & Citizens Club Limited is a companylimited by guarantee.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

These general purpose financial statements have been prepared in accordance with AustralianAccounting Standards (including Australian Accounting Interpretations) and the Corporations Act2001. The company is a for-profit entity for financial reporting purposes under Australian AccountingStandards.

Except for cash flow information, these financial statements have been prepared on an accruals basisand are based on historical costs, modified, where applicable, by the measurement at fair value ofselected non-current assets, financial assets and financial liabilities.

Material accounting policies adopted in the preparation of the financial statements are presentedbelow and have been consistently applied unless otherwise stated.

Accounting Policies

(a) Cash and Cash EquivalentsCash and cash equivalents includes cash on hand, deposits held at call with banks, other shortterm highly liquid investments with original maturities of three months or less and bankoverdrafts. Bank overdrafts are shown within current borrowings on the Statement of FinancialPosition.

(b) Employee BenefitsProvision is made for the company's liability for employee benefits arising from servicesrendered by employees to balance date. Employee benefits have been measured at the amountexpected to be paid when the liability is settled for all employees with service periodsexceeding 5 years.

(c) InventoriesInventories are measured at the lower of cost and net realisable value.

(d) Property, Plant & EquipmentEach class of property, plant and equipment is carried at cost or fair value, as indicated, less anyaccumulated depreciation and impairment losses.

PropertyFreehold land & buildings are measured on the cost basis and are therefore carried at cost lessaccumulated depreciation and any accumulated impairment losses.




Plant & EquipmentPlant and equipment are measured on the cost basis and are therefore carried at cost lessaccumulated depreciation and any accumulated impairment losses.

The directors annually review the carrying amount of property, plant and equipment to ensure itis not in excess of the estimated recoverable amount of those assets. In the event the carryingamount is greater than the estimated recoverable amount, the carrying amount is written downimmediately to the estimated recoverable amount and impairment losses are recognised ineither profit or loss or as a revaluation decrease if the impairment losses relate to a revaluedasset. A formal assessment of recoverable amount is made when impairment indicators arepresent (refer note 1(f)).

DepreciationThe depreciable amount of all fixed assets including buildings and capitalised leased asset, butexcluding freehold land, is depreciated over the useful lives of the assets to the Clubcommencing from the time the asset is ready for use.

The depreciation rates used for each class of assets are:

Class of Fixed Assets Depreciation Rate

Buildings 2.5 - 30%Plant & Equipment 5 - 40%Gaming Machines 30 - 40%Office Equipment 7.5 - 50%Kitchen Equipment 7.5 - 20%

Gains and losses on disposals are determined by comparing proceeds with the carrying amount.The gains or losses are recognised in profit or loss in the period in which they arise.




(e) Income TaxIncome tax expense/(revenue) for the year comprises current income tax expense/(income) anddeferred tax expense/(income).

Current income tax expense charged to the profit or loss is the tax payable on taxable incomecalculated using applicable income tax rates enacted, or substantially enacted, as at reportingdate. Current tax liabilities/(assets) are therefore measured at the amounts expected to bepaid/(recovered from) the relevant taxation authority,

Deferred income tax expense reflects movements in deferred tax assets and deferred tax liabilitybalances during the year as well as unused tax losses.

Current and deferred income tax expense/(income) is charged or credited directly to equityinstead of profit or loss when the tax relates to items that are credited or charged directly toequity.

Deferred tax assets and liabilities are ascertained based on temporary differences arisingbetween the tax bases of assets and liabilities and their carrying amounts in the financialstatements. Deferred tax assets also result where amounts have been fully expensed but futuretax deductions are available. No deferred income tax will be recognised from the initialrecognition of an asset or liability, excluding a business combination, where there is no effect onaccounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to theperiod when the asset is realised or the liability is settled, based on the tax rates enacted orsubstantially enacted at reporting date. Their measurement also reflects the manner in whichmanagement 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 onlyto the extent that it is probable that future taxable profit will be available against which thebenefits of the deferred tax asset can be utilised.

(f) Impairment of AssetsAt the end of each reporting period, the company reviews the carrying values of its tangible andintangible assets to determine whether there is any indication that those assets have beenimpaired. If such an indication exists, the recoverable amount of the asset, being the higher ofthe asset's fair value less costs to sell and value in use, is compared to the asset's carrying value.Any excess of the asset's carrying value over its recoverable amount is expensed to the IncomeStatement.

Where it is not possible to estimate the recoverable amount of an individual asset, the companyestimates the recoverable amount of the cash-generating unit to which the asset belongs.




(g) Revenue and Other IncomeRevenue from the sale of goods is recognised when the goods are delivered to customers.

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

Income from providing a service is recognised when the customer receives the service.

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

(h) Goods and Services Tax (GST)Revenues, expenses and assets are recognised net of the amount of GST, except where theamount of GST incurred is not recoverable from the Australian Taxation Office, it is thenrecognised as part of the cost of acquisition of an asset or as part of an item of expenses.Receivables and payables in the Balance Sheet are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GSTcomponent of investing and financing activities, which are disclosed as operating cash flows.

(i) Critical Accounting Estimates and JudgementsThe directors evaluate estimates and judgments incorporated in the financial report based onhistorical knowledge and best available current information. Estimates assume a reasonableexpectation of future events and are based on current trends and economic data, obtained bothexternally and within the company.

Key Estimates - ImpairmentThe company assesses impairment at the end of each reporting period by evaluating conditionsand events specific to the company that may be indicative of impairment triggers. Recoverableamounts of relevant assets are reassessed using value -in-use calculations which incorporatevarious key assumptions.

No impairment has been recognised in respect of assets at 30 June 2019.

Key Judgments - Provision for Impairment of ReceivablesThe directors believe the full amount of trade receivables are recoverable, and no doubtful debtprovision has been made at 30 June 2019.




(j) Financial Instruments

Initial Recognition and MeasurementFinancial assets and financial liabilities are recognised when the entity becomes a party to thecontractual provisions to the instrument. For financial assets, this is equivalent to the date thatthe company commits itself to either purchase or sell the asset.

Financial instruments are initially measured at fair value plus transaction costs except wherethe instrument is classified as 'at fair value through profit or loss' in which case transactioncosts are expensed to profit and loss immediately.

Classification and Subsequent MeasurementFinancial instruments are subsequently measured at either cost, fair value or amortised costusing the effective interest rate method.

Fair value represents the amount for which an asset could be exchanged or a liability settled,between knowledgeable, willing parties. Where available, quoted prices in an active market areused to determine fair value. In other circumstances valuation techniques are adopted.

Amortised cost is calculated as: (i) the amount by which the financial asset or financial liabilityis measured at initial recognition, (ii) less principal repayments; (iii) plus or minus thecumulative amortisation of the difference, if any, between the amount initially recognised andthe maturity amount calculated using the effective interest method; and (iv) less any reductionfor impairment.

The effective interest method is used to allocate interest income or interest expense over therelevant period and is equivalent to the rate that exactly discounts future cash payments orreceipts (including fees, transaction costs and other premiums or discounts) through theexpected life (or when this can not be reliably predicted, the contractual term) of the financialinstrument to the net carrying amount of the financial asset or financial liability. Revisions toexpected net cash flows will necessitate an adjustment to the carrying value with aconsequential recognition of an income or expense in the profit and loss.

(i) Financial assets at fair value through profit or loss

Financial assets are classified at 'fair value through profit or loss' when they are either held fortrading for the purpose of short term profit taking, derivatives not held for hedging purposes, orwhen they are designated as such to avoid an accounting mismatch or to enable performanceevaluation where a group of financial assets is managed by key management personnel on a fairvalue basis in accordance with a documented risk management or investment strategy. Suchassets are subsequently measured at fair value with changes in carrying value being included inprofit or loss.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market and are subsequently measured at amortised cost.




(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities orfixed or determinable payments, and it is the companies intention to hold these investments tomaturity. They are subsequently measured at amortised cost.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not capableof being classified into other categories of financial assets due to their nature, or they aredesignated as such by management. They comprise investments in the equity of other entitieswhere there is neither a fixed maturity nor fixed or determinable payments.

(v) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measuredat amortised cost.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expire orthe asset is transferred to another party whereby the entity no longer has any significantcontinuing involvement in the risks and benefits associated with the asset. Financial liabilitiesare derecognised where the related obligations are either discharged, cancelled or expire. Thedifference between the carrying value of the financial liability extinguished or transferred toanother party and the fair value of consideration paid, including the transfer of non-cash assetsor liabilities assumed, is recognised in profit or loss.

(k) Comparative FiguresWhere required by accounting Standards, comparative figures have been adjusted to conform tochanges in presentation for the current financial year.

(l) New and Amended Accounting PoliciesAdopted by the Entity

Australian Accounting Standards and Interpretations that have recently been issued or amendedbut are not yet mandatory, have not been early adopted by the company. There was no materialimpact on the profit for the year or the amounts recognised in prior periods and is not expectedto materially affect future periods.

The directors have assessed the impact of AASB 16 Leases, AASB 15 Revenue from Contractswith Customers, and AASB 9 Financial Instruments and has determined there will be nomaterial impact on the financial statements once adoption becomes mandatory.



2019$

2018$


2. REVENUE AND OTHER INCOME

Revenue

Sale of goods 1,814,812 1,544,225Bingo Takings 11,567 12,036Keno Commission 27,879 34,093TAB Commission 12,065 11,546Other Commissions 15,375 12,994Raffle Ticket Sales 67,888 60,233Membership Fees 7,676 3,995

1,957,262 1,679,122

Other IncomeInterest Received 77 28Sundry Income 23,433 18,420Insurance Recoveries 4,145 -

27,655 18,448

3. DEFICIT FOR THE YEAR

(a) Expenses

Cost of Sales 1,161,752 1,029,797Finance costs 8,611 10,050

Movements in Provisions- depreciation of Club property, plant & equipment 55,796 45,485- employee entitlements 7,377 (13,054)

Remuneration of the Auditor:-- audit of financial statements 9,730 9,990- other services 890 230



2019$

2018$


4. INCOME TAX EXPENSE

(a) The components of tax expense comprise:

Current year tax - -Deferred tax - -

- -

(b) The prima facie tax payable on profit from ordinary activities is reconciled to the income tax income tax expense at a rate of 27.5% as follows;

Prima Facie Income Tax on the Operating Profit 10,834 (4,368)

Add:Tax effect of:Other Non Allowable Items 176,373 156,111Non-assessable income (185,196) (149,263)Recoupment of Prior Year Tax Losses (2,011) (2,480)

Income Tax Expense - -

The Club has carry forward income tax losses at 30 June 2019 of $178,176A Deferred Tax Asset has not been recognised for these losses as it is notprobable that future tax profits will be available against which deductible temporary differences can be utilised.

5. CASH AND CASH EQUIVALENTS

Cash Floats 35,202 30,000ANZ Cheque Account 8,600 -Bendigo Bank Business Cash Management Account 5,074 71,952ANZ Card 13,843 -

62,719 101,952



2019$

2018$


6. TRADE AND OTHER RECEIVABLES

CurrentTrade Receivables 6,224 867Other Receivables

- ATM Clearing 28,630 5,090- ATO RBA - 27- EFTPOS Clearing 5,217 2,837- Undeposited Funds Account 3,186 9,514

GST Provision 3,135 1,85246,392 20,187

7. INVENTORIES

Stock on Hand - at cost 34,663 22,48934,663 22,489

8. OTHER ASSETS

CurrentPrepayments 2,682 5,162

2,682 5,162



2019$

2018$


9. PROPERTY, PLANT & EQUIPMENT

Land & Buildings - 4 Graham St., Kendall

- Land - at Cost 20,613 20,613- Revaluation June 2017 99,387 99,387

120,000 120,000Car Park - Leasehold Expenses at Cost

- Professional Fees 3,070 3,0703,070 3,070

Buildings - at Cost- Club Council Fees 13,262 13,262- Club Professional Fees 12,153 12,153- Club Construction and Additions 1,867,292 1,867,292- Verandah Council Fees 21,476 21,476- Verandah Professional Fees 8,730 8,730- Verandah Construction Costs 149,063 149,063- Building Works 4,893 4,893- Revaluation June 2017 959,084 959,084

Less Accumulated Depreciation (792,953) (792,953)2,243,000 2,243,000

Total Land & Buildings 2,366,070 2,366,070

Plant & Equipment

Plant & Equipment - at Cost 269,484 243,229Less Accumulated Depreciation (186,740) (173,132)

82,744 70,097

Gaming Machines - at Cost 404,699 330,225Less Accumulated Depreciation (327,368) (290,720)

77,331 39,505

Office Equipment - at Cost 36,305 36,305Less Accumulated Depreciation (18,567) (16,970)

17,738 19,335

Kitchen Equipment - at Cost 40,517 39,765Less Accumulated Depreciation (24,675) (20,706)

15,842 19,059

Total Plant & Equipment 193,655 147,996Total Property, Plant & Equipment 2,559,725 2,514,066



2019$

2018$


(a) Movements in Carrying AmountsMovement in the carrying amounts for each class of property, plant andequipment between the beginning and the end of the current financial year:

Land and BuildingsBalance at beginning of year 2,366,070 2,366,070Additions - -Depreciation expense - -Balance at end of year 2,366,070 2,366,070

Plant and EquipmentBalance at beginning of year 147,996 189,991Additions 101,455 3,490Disposal proceeds - -Depreciation expense (55,796) (45,485)Balance at end of year 193,655 147,996

Total Carrying amount at end of year 2,559,725 2,514,066

(b) Insured ValueThe Club has insured its building for $5.52m and its contents, plant and equipment for $1.145m.

(c) ValuationIn August 2017, PM Valuations Pty Ltd valued the land, buildings and site improvements of the Club. For the purposes of AASB 116, they determined the fair value of the assets at 30/06/17 to be $2.36M.

The directors have determined that this value would be representative of thefair value of the assets as at 30 June 2019.



2019$

2018$


10. TRADE AND OTHER PAYABLES

CurrentUnsecured LiabilitiesOther Payables

- BAS 13,618 12,731- Superannuation 1,846 2,388- TAB Clearing 680 1,330- Keno Clearing 2,485 (2,621)

18,629 13,828

Trade Payables 38,683 42,464Accrued Expenses 16,549 9,860

73,861 66,152

11. BORROWINGS

CurrentBank Overdraft - 17,125Secured LiabilitiesANZ Business Loan 36,000 36,000Aristocrat Loans (Poker Machines) 32,881 13,649

68,881 66,774

Non-CurrentSecured LiabilitiesANZ Business Loan 77,572 104,743Aristocrat Loans (Poker Machines) 26,884 6,824

104,456 111,567

(a) Collateral ProvidedThe bank loan is secured by registered first mortgage over the land and buildings owned by the Club.

The remaining loans and leases are secured by the assets to which the finance relates.

(b) Overdraft FacilityThe Club has a $49,000 overdraft facility with the ANZ Bank.



2019$

2018$


12. PROVISIONS

CurrentProvision for Annual Leave 9,021 6,706Provision for Long Service Leave 6,906 4,958

15,927 11,664

Non-CurrentProvision for Long Service Leave 816 359

(a) Aggregate Employee Benefits Liability 16,743 12,023

(b) Movement in ProvisionsOpening Balance 1 July 12,023 25,077Additions during the year 13,440 1,799Amounts used or reversed (8,720) (14,853)Balance at 30 June 16,743 12,023

13. OTHER LIABILITIES

CurrentMemberships and Subscriptions in Advance 555 5,050

555 5,050

14. RESERVES

Asset Revaluation Reserve (Land) 1,058,471 1,058,4711,058,471 1,058,471

Movements during the year were due to the revaluation ofland & buildings at 4 Graham Street Kendall.



2019$

2018$


15. KEY MANAGEMENT PERSONNEL COMPENSATION

Key management personnel have been taken to comprise the Directors and the Secretary Managerduring the financial year. The aggregate compensation of key management personnel during thefinancial year comprising amounts paid or payable or provided for was as follows:-

Short Term Benefits 87,683 100,941Long Term Benefits 2,317 (2,012)Post Employment Benefits 8,330 9,589Total Compensation 98,330 108,518

16. AUDITOR'S REMUNERATION

Remuneration of the Auditor of the company for:

- Audit & review of financial reports 9,730 9,9909,730 9,990

17. CASH FLOW INFORMATION

(a) Reconciliation of Cash Flow from Operations with Profit/(Loss) after Income Tax

Profit/(Loss) after income tax 39,395 (15,885)

Non Cash Flows in Profit:- Depreciation 55,796 45,485- Profit on sale non-current assets - -

Changes in Assets and Liabilities:- Decrease/(increase) in trade & other receivables (24,922) (7,335)- Decrease/(increase) in other assets 2,480 6,517- Decrease/(increase) in inventories (12,173) 14,011- Increase/(decrease) in trade & other payables 11,234 36,662- Increase/(decrease) in other liabilities (9,305) (3,480)- Increase/ (decrease) in provisions 4,720 (13,054)

Net Cash provided by operating activities 67,225 62,922



2019$

2018$


18. FINANCIAL RISK MANAGEMENT

The Company's financial instruments consists of cash and cash equivalents, accounts receivable, termdeposit, accounts payable and a fixed term bank loan. The totals for each category of financialinstruments, measured in accordance with AASB 139 as detailed in the accounting policies to thesefinancial statements, are as follows:

Financial assets

Cash and cash equivalents 62,719 101,952Trade and other receivables 46,392 20,187

109,111 122,139

Financial liabilities

Trade and other payables 73,861 66,152Borrowings 173,337 178,341

247,198 244,493

Financial Risk Management Policies

The directors' overall risk management strategy seeks to assist the company in meeting its financialtargets, whilst minimising potential adverse effects on financial performance. Risk managementpolicies are approved and reviewed by the directors on a regular basis. These include the credit riskpolicies and future cash flow requirements.

Specific Financial Risk Exposures andManagement

The main risks the company is exposed to through its financial instruments are interest rate risk,liquidity risk and credit risk.

(a) Interest Rate RiskExposure to interest rate risk arises on financial assets and financial liabilities recognised at reportingdate whereby a future change in interest rates will affect future cash flows or the fair value of fixedrate financial instruments. The company is also exposed to earnings volatility on floating rateinstruments.

The Company is exposed to interest rates risk on cash at bank and term deposits and its fixed rateloan.



2019$

2018$


(b) Credit RiskExposure to credit risk relating to financial assets arises from the potential non-performance bycounterparties of contract obligations that could lead to a financial loss to the company. Credit riskmay arise from exposures to customers and deposits with financial institutions.

Credit risk is managed through maintaining procedures ensuring, to the extent possible, that clientsand counterparties to transactions are of sound credit worthiness.

The company is not materially exposed to credit risk.

(c) Liquidity RiskLiquidity risk arises from the possibility that the company might encounter difficulty in settling itsdebts or otherwise meeting its obligations related to financial liabilities. The company manages thisrisk by monitoring forecast cash flows on a monthly basis.

Net Fair Values

The net fair values of financial assets and financial liabilities approximates their carrying values.

The aggregate net fair values and carrying amounts of financial assets and financial liabilities aredisclosed in the balance sheet and in the notes to the financial statements.

Interest Rate Risk Sensitivity Analysis

The company has not performed a sensitivity analysis relating to its exposure to interest rate risk at balance date as the directors believes the effect on profitability and equity is immaterial.

(d)

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018% % $ $ $ $ $ $ $ $ $ $

FINANCIAL ASSETS:

Cash on Hand 35,202 30,000 35,202 30,000Cash at Bank 0.15% 0.06% 27,517 71,952 0 0 27,517 71,952Trade & Other Receivables - - 46,392 20,187 46,392 20,187

Total Financial Assets 27,517 71,952 0 0 0 0 81,594 50,187 109,111 122,139

FINANCIAL LIABILITIES:

Trade and Other Payables - - 73,861 66,152 73,861 66,152Borrowings 6.20% 6.20% 113,572 157,868 0 0 0 0 59,765 20,473 173,337 178,341

Total Financial Liabilities 113,572 157,868 0 0 0 0 133,626 86,625 247,198 244,493

Effective Interest Rate Within 1 Year 1 - 5 Years

These Notes to the Financial Statements should be read in conjunction with the attached Independent Auditor's Report

- 28 -

Financial Instrument Composition and Maturity Analysis

The table below reflects the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management's expectations of the settlement periodfor all other financial instruments. As such, the amounts may not reconcile to the Statement of Financial Position.

Weighted Average Floating Interest Rate Fixed Interest Rate Maturing Non-Interest Bearing Total


Notes to the Financial Statements for the Year ended 30 June 2019

NOTE 18: FINANCIAL RISK MANAGEMENT (Cont.)



2019$

2018$


19. CAPITAL AND LEASE COMMITMENTS

A. Capital Commitments

(a) In October 2016 the Club committed to the purchase of a new gaming machine licence (diamondtype 4) through Aristocrat. The total cost of the hardware and software is $37,224 plus GST, payablein equal ($1,034.00 plus GST) interest free monthly instalments over 3 years, payments commencedin January 2017.

(b) In July 2018 the Club committed to the purchase of two new gaming machine licences (GameChoice Diamond Licence) through Aristocrat. The total cost of the hardware and software is $74,448plus GST, payable in equal ($2,038 plus GST) interest free monthly instalments over 3 years,payments commenced in August 2018.

B. Finance Lease Commitments

Payable - minimum lease payments- not later than 12 months 34,122 13,649- later than 12 months but not later than 5 years 29,572 6,824

Minimum lease payments 63,694 20,473Present value of minimum lease payments 63,694 20,473

20. CONTINGENT ASSETS & LIABILITIES

Contingent Assets:

The Club holds entitlements for 15 poker machines. No cost was attached to these entitlements, butthey would currently have value if sold.

Contingent Liabilities:

The company has a contingent liability for permanent employees' sick leave. As sick leave is notpayable unless physically taken, no liability for this leave has been taken up in the financialstatements.




21. RELATED PARTY TRANSACTIONS

Transactions between related parties are on normal commercial terms and conditions unless otherwisestated.

(a) During the 2019 financial year the Club paid Hastings Air Conditioning Services a total of $18,958for general repairs. Hastings Air Conditioning Services is a related entity of Club director, IanTwomey. (b) During the 2019 financial year the Club paid Praise Services a total of $5,023 for the delivery ofkitchen supplies. Praise Services is a related entity of Club director, Jim Stewart.

22. EVENTS AFTER THE REPORTING DATE

The directors are not aware of any other events after 30 June 2019 that may have a significant affecton these financial statements.

23. MEMBERS' GUARANTEE

The Company is incorporated under the Corporations Act 2001 and s a company limited byguarantee. If the company is wound up, the Articles of Association state that each member is requiredto contribute a maximum of $1 each towards meeting outstanding obligations of the company.

Membership numbers as at 30 June 2019: 1,132 (2018 677)

24. COMPANY DETAILS

The registered office of the Club is;

C/- PDD Advisory Group2/75 Bold Street, Laurieton NSW 2443

The principal place of business is;

4 Graham Street, Kendall NSW 2439


Trading, Profit and Loss StatementFor the Year ended 30 June 2019

2019$

2018$

- 32 -

The accompanying notes form part of these financial statements.These financial statements have not been subject to audit or review and should be read in conjunction with the

attached Compilation Report.

BAR AND OTHER SALES

Sales 684,755 566,699

LESS COST OF GOODS SOLDOpening Stock 22,490 36,501Purchases 342,358 269,250Bar Requisites - 1,535Cash Unders/Overs (721) 23,558

364,127 330,844Closing Stock 34,663 22,489

329,464 308,355GROSS PROFIT FROM TRADING 355,291 258,344

OPERATING PROFIT BEFORE INCOMETAX

355,291 258,344


Trading, Profit and Loss StatementFor the Year ended 30 June 2019

2019$

2018$

- 33 -

The accompanying notes form part of these financial statements.These financial statements have not been subject to audit or review and should be read in conjunction with the

attached Compilation Report.

POKER MACHINES

Takings 1,130,057 977,526

LESS COST OF GOODS SOLDRepairs & Maintenance 13,590 11,153Analysis Fee 8,122 9,691Payouts 810,576 700,598

832,288 721,442832,288 721,442

GROSS PROFIT FROM TRADING 297,769 256,084

OPERATING PROFIT BEFORE INCOMETAX

297,769 256,084


Additional Financial DataProfit and Loss Statement

For the Year ended 30 June 2019

2019$

2018$

- 34 -

These Detailed Trading, Profit & Loss Statements have not been subject to audit or review and should be read in conjunction with theattached Compilation Report.

INCOME

Commissions- Eftpos & ATM 13,203 11,139- Vending & Amusement Machines 2,172 1,855

15,375 12,994Net Bingo Income

- Takings 11,567 12,036- Expenses (12,990) (13,414)

(1,423) (1,378)Net Keno Income

- Commission 27,879 34,093- Expenses (1,970) (2,159)

25,909 31,934Net TAB Income

- Commission 12,065 11,546- Expenses (5,267) (5,299)

6,798 6,247Net Raffles Income

- Ticket Sales 67,888 60,233- Expenses (59,058) (60,839)

8,830 (606)Interest Received

- Bendigo Bank 77 2877 28

Sundry Income- GST Compensation 17,180 17,180- Room Hire & Functions - 74- Donations 613 1,166- Other 5,640 -

23,433 18,420

Membership Fees 7,676 3,995Insurance Recoveries 4,145 -Gross Profit from Trading 653,060 514,428

743,880 586,062




2019$

2018$

- 35 -


EXPENDITURE

Advertising 12,339 19,177Auditor's Remuneration

- Audit & review of financial reports 9,730 9,990- Other Services 890 230

10,620 10,220

Bank Charges 3,172 2,720Bookkeeping - 1,900Cleaning 61,975 37,284Consultants Fees - 2,200Depreciation & loss on sale 55,796 45,485Directors Training 4,231 805Welfare Expenses 390 526Donations

- Sub-Clubs 222 3,458- RSL Sub-Branch 1,530 1,021

1,752 4,479

Electricity & Gas 51,878 20,685Employee Leave Provision

- Annual Leave 6,202 (9,568)- Long Service Leave 1,175 (3,486)

7,377 (13,054)

Entertainment for Members & Guests 9,129 12,207Freight & Cartage - 1,736Hire of Plants 573 491Insurance

- General 27,925 25,135- Workers Compensation 6,234 4,872

34,159 30,007Interest Paid

- ANZ Loan 8,611 10,0508,611 10,050

- Photocopier Lease 1,252 -Members Draws 24,760 16,047Members Expenses 9,010 7,774Postage 1,421 2,555Printing & Stationery 5,287 8,580Promotional Drinks/Giveaways 11,512 14,020Rates & Taxes 10,670 9,389




2019$

2018$

- 36 -


Rent- Carpark 6,399 8,429- Multiscreen - 520

Repairs & Maintenance 48,118 26,293Salaries & Wages 259,740 251,720Security Costs 745 2,914Sky Channel 17,335 17,268Sponsorship 4,401 8,465Subscriptions & Memberships 8,759 8,887Sundry Expenses

- AGM - 677- Filing Fees - 208- Other 90 -- Annual Report 750 750

840 1,635

Superannuation Contributions 24,356 22,813Telephone 7,669 7,674Travelling Expenses 209 45

704,485 601,946

SURPLUS/(DEFICIT) BEFORE INCOME TAX 39,395 (15,884)

kendall services & citizens club limited abn 43 001 058

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