Presidents Repor. The 2008/09 year commenced with Robert Walters assuming the role of President. Unfortunately, he became suddenly and seriously ill and eventually had to retire later in the term because of ill health. Robert.s recovery is progressing very well and we continue to see him on a regular basis.The family received a significant boost when Angela was awarded Albury Citizen of Year for her outstanding contributions to the welfare of the needy in our community. Congratulations to you, Angela. Peter Johnston likewise resigned early in the year and I take this opportunity to thank him and Nola for the fine contribution made to the advancement of the interests of the members of the Club. Peter was 1st elected to the Board in 1990 and has served on the Building & Grounds Committees over his 18 years and has held the position of Vice President. A truly amazing effort when you consider his long & decorated record involvement in Football.We welcomed on Board, as Peter.s replacement, Kevin Wild and he is proving to be a most energetic and inspirational Director. I do hope Kevin can spare us good many years at Board level.Your Board contains people of outstanding quality and I thank them (and their spouses) for once again showing me very welcome and much needed support. Board members have become more conspicuous & involved in maintenance & renovations around the Club and I am sure members see that as a most welcome development.The NSW Club Industry has endured a very difficult year.Trading conditions have suffered from the total ban on smoking indoors; high petrol prices; high interest rates; and,then the sudden economic downturn. Our Club has experienced a downturn in gaming revenue of about 17% which is in line with the Industry experience We had hoped that with the lifting of the burden of poker machine tax we would have been able to return a modest profit this year. This did not occur but it is not all doom and gloom. We have returned an Operating Loss of $78,000 which is a vast improvement on last year and back to the 2003 level. Our net cash inflow from our core activities returned a very positive result of $186,376 ($69,641 better than last year) and back to the levels returned in 2000 and 2001. This is a much improved state of affairs and congratulations go to Rod Maclean and our staff on a job well done.Congratulations are also extended to our Football & Netball Committee for the outstanding fund raising efforts of this year. In my view, the main achievement of these projects has been to cement relationships among members and re-energise our commitment to the advancement of sport in our community.Our constituent sporting groups are well organised and conducted. Congratulations and thanks to everyone involved. My warning is that you continue to nurture your members to succeed you or at the very least assist from time to time. To Club members, please become involved. However minor you see your efforts it is a major help, believe me.This Club has sport and the local community as its foundation. The decisions that are taken at Board level have 2 basic core values taken from the Club.s mission statement: 1. We will provide and encourage sporting activities within the Club; and, 2. We will continue to support our Community. Again, I urge all members to make sure their friends renew and always be on the lookout for new members. We have a number of projects in the pipeline aimed at improving the quality and appearance of the Club. We aim to ensure that attending the Club is an enjoyable experience in all respects.Finally, I ask you to attend the AGM, if only for a short while to promote your particular sporting and/or social interest in the Club. This is also a very effective way for you to provide valuable feedback to members of the Board. It allows you to meet other members outside your core interest, who may not know you and, who would like to get to know you.My final indulgence is to suggest that we carry this thought with us: PRIDE, PASSION & PERSISTENCE. With PRIDE we accept the challenge. With PASSION we undertake the task. With PERSISTENCE we get the job done. Sincerely yours, John McDonald. North Albury Sports Club Ltd ACN 54 002 064 217. Directors. Report. For the year ended 31 December 2008. Your directors present their report on the financial statements of the Company for the year ended 31 December 2008. Directors The following persons were directors of the North Albury Sports Club Ltd (.the Company.) during the whole of the financial year and up to the date of this report unless otherwise stated: J H McDonald K.F. Wild (elected 22/04/2008) R C Walters (resigned 13/1/2009) I T Townsend P J Johnston (resigned 22/4/2008) T L Towers L G Tomich (resigned 10/3/2009) P J Westland P A Dempsey R W Williams Principal activities The principal activities of the Company during the year consisted of the management and operation of the North Albury Sports Club for the promotion of sport, particularly Australian Rules Football and Lawn Bowls in the North Albury area. Dividends The company is a public company limited by guarantee and therefore prohibited from paying a dividend. Review of operations A review of operations for the financial year discloses the following: 2008 2007 $ $ Operating Profit/(Loss) after income tax (78,323) (105,128) With the global financial problems coming on top of the new smoking regulation changes, the year has proven to be very tough. Our poker machine revenue was the hardest hit with a decline in income of net $81,000. Our other areas only had small decreases in revenue. With very good fundraising events by NAFNC, cost cutting in club expenses, we were able to improve our overall net result from last year. Significant changes in the state of affairs There were no significant changes in the state of affairs of the Company during the financial year. North Albury Sports Club Ltd ACN 54 002 064 217. Directors. Report (continued. For the year ended 31 December 2008. Matters subsequent to the end of the financial year There have been no matters or circumstances that have arisen since the end of the financial year that have significantly affected or may significantly affect: (a) the Company.s operations in future financial years; or (b) the results of those operations in future financial years; or (c) the Company.s state of affairs in future financial years. Likely developments & expected results of operations The club is planning some small improvements to the entrance of the sports club, main lounge and poker machine room. Also a new netball court and entrance to the oval are planned. Funding for these projects will come from cash reserves, grants and finance Environmental regulations The Company.s operations were not subject to any particular or significant environmental regulations during the year. Information on directors J H McDonald I T Townsend Director for 13 years Director for 20 years Occupation . Solicitor Occupation . Retired President Vice President/Tresurer T L Towers L G Tomich Director for 9 years Director for 3 years Occupation . Retired Occupation . Manager P J Westland P A Dempsey Director for 3 years Director for 2 years Occupation . Manager Occupation . Business Owner K.F.Wild R W Williams New Director Director for 1 year Occupation . Retired Occupation-Accountant North Albury Sports Club Ltd ACN 54 002 064 217. Directors. Report (continued). For the year ended 31 December 2008. Meetings of directors The number of meetings of the company.s directors held during the year ended 31 December 2008, and the numbers of meetings attended by each director were: No. of Meetings Held* No. of Meetings Attended J H McDonald 12 11 R C Walters 12 5 I T Townsend 12 12 P J Johnston 5 1 T L Towers 12 9 L G Tomich 12 7 P J Westland 12 12 P A Dempsey 12 10 R W Williams 12 10 KFWild 8 6 * reflects the number of meetings held during the time the director held office during the year. Insurance of officers During the financial year the Company paid a premium of $680 (2007: $677) to insure its directors and officers in respect to liabilities that may arise from their position as directors and officers of the Company. Proceedings on behalf of the company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001. Lead Auditors Independence Declaration The lead auditor.s independence declaration is set out below and forms part of the Director.s Report. North Albury Sports Club Ltd ACN 54 002 064 217. Directors. Report (continued. For the year ended 31 December 2008. Auditor Johnsons MME continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of the directors. J H McDonald Director I T Townsend Director Albury 31 March 2009 Auditors. Independence Declaration As lead auditor for the audit of North Albury Sports Club Limited for the year ended 31 December 2008, I declare that, to the best of my knowledge and belief, there have been: a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) No contraventions of any applicable code of professional conduct in relation to the audit. Johnsons MME Chartered Accountants Hugh McKenzie-McHarg Partner Albury 31 March 2009 North Albury Sports Club Ltd ACN 54 002 064 217. Directors. Declaratio. For the year ended 31 December 2008. The directors declare that the financial statements and notes set out on pages 6 to 23: a) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and b) give a true and fair view of the company.s financial position as at 31 December 2008 and of its performance, as represented by the results of its operations and its cash flows, for the financial year ended on that date. In the directors opinion: a) the financial statements and notes are in accordance with the Corporations Act 2001; and b) at the date of this statement there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the directors. J H McDonald Director I T Townsend Director Albury 31 March 2009 North Albury Sports Club Ltd ACN 54 002 064 217. Income Statement. For the year ended 31 December 2008. Note 2008 2007 $ $ Revenue Kitchen expenses Keno expenses Poker machine expenses Bar trading expenses Borrowing costs Members amenities Other expenses 2 2,647,620 2,793,464 350,856 341,329 3,470 3,266 95,464 195,550 675,795 699,890 101,640 86,794 136,751 151,523 1,361,967 1,420,240 Profit/(Loss) before income tax Income tax expense 1(j) (78,323) - (105,128) - Net Profit/(Loss) (78,323) (105,128) The above income statement should be read in conjunction with the accompanying notes. Nort. Albury Sports Club Lt. ACN 5. 00. 064 21. Balance Sheet. For the year ended 31 December 2008. Note 2008 2007 $$ ASSETS Current assets Cash and cash equivalents 4 118,835 65,564 Trade and other receivables 5 22,370 38,611 Inventories 6 45,402 42,868 Other assets 7 23,639 33,435 Total current assets 210,246 180,478 Non-current assets Property, plant and equipment 8 1,984,976 2,281,671 Total non-current assets 1,984,976 2,281,671 Total assets 2,195,222 2,462,149 LIABILTIES Current liabilities Trade and other payables 9 358,668 278,603 Borrowings 10 279,918 449,802 Provisions 11 63,177 84,830 Other 12 23,979 22,619 Total current liabilities 725,742 835,854 Non-current liabilities Borrowings 13 557,577 632,058 Provisions 14 7,539 11,550 Total non-current liabilities 565,116 643,608 Total liabilities 1,290,858 1,479,462 Net assets 904,364 982,687 North Albury Sports Club Ltd ACN 54 002 064 217. Statement in changes of equity. For the year ended 31 December 2008. EQUITY Reserves 15 (a) 182,525 182,525 Retained profits 15 (b) 721,839 800,162 Total equity 904,364 982,687 2008 2007 $ $ Total equity at the beginning of the year 982,687 1,087,815 Net profit/(loss) for the year (78,323) (105,128) Total equity at the end of the year 904,364 982,687 The above balance sheet should be read in conjunction with the accompanying notes. North Albury Sports Club Ltd ACN 54 002 064 217. Cash flow statement. For the year ended 31 December 2008. Note 2008 2007 $ $ Cash flows from operating activities Receipts from members & customers (inclusive 2,876,620 3,090,713 of GST) Payments to suppliers and employees (inclusive (2,588,604 (2,887,184) of GST) 288,016 203,529 Interest paid (101,640) (86,794) Net cash inflow/(outflow) from operating 16 186,376 116,735 activities Cash flows from investing activities Proceeds from sale of property, plant and 340,875 13,705 equipment Payments for property, plant and equipment (154,827) (289,885) Net cash inflow/(outflow) from investing 186,048 (276,180) activities Cash flows from financing activities Proceeds from borrowings -247,050 Repayment of borrowings (326,441) (130,186) Repayment of leases (7,640) (12,598) Proceeds from issue of debentures -36,000 Net cash inflow/(outflow) from financing (334,081) 140,266 activities Net increase/(decrease) in cash held 38,343 (19,179) Cash at the beginning of the financial year (68,459) (49,280) Cash at the end of the financial year 4 (30,116) (68,459) Non-cash financing and investing activities 21 53,231 120,023 The above cash flow statement should be read in conjunction with the accompanying notes. North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 1. Summary of significant accounting policies The following is a summary of material accounting policies adopted by the company in preparation of the financial report. Basis of preparation This financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authorative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The principal accounting policies adopted in the presentation of the financial report are set out below. These policies have been consistently applied to both years presented, unless otherwise stated. (a) Going Concern The financial statements have been prepared on the basis that the company is a going concern. (b) Cash and cash equivalents Cash and cash equivalents includes cash on hand and deposits at call with financial institutions, which are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts. (c) Trade and other receivables Trade debtors are carried at their nominal amount. Collectibility of debtors is reviewed on an ongoing basis. Debts known to be uncollectible are written off. A provision for doubtful debts is raised when some doubt as to collection of the debt exists. (d) Inventories Inventory is stated at the lower of cost and net realisable value. North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statement. For the year ended 31 December 2008. Note 1. Summary of Significant Accounting Policies (continued) (e) Property, plant and equipment All property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Land is not depreciated. Depreciation on other assets is calculated on a straight line basis to write off the net cost of each item of property, plant and equipment over its expected useful life to the Company. Estimates of remaining useful lives are made on a regular basis for all assets, with annual reassessment for major items. The depreciation rates used are as follows: Buildings 2.5% -6% Leasehold Improvements 2.5% -10% Plant & Equipment 5% -40% Vehicles 12.5% Poker Machines 20% -40% (f) Leased non-current assets Leases of equipment where the Company has substantially all the risks and rewards of ownership are classified as finance leases (Note 18). Finance leases are capitalised at the lease.s inception at the lower of the fair value of the leased equipment or the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other long-term payables. Each lease payment is allocated between the principal component of the lease liability and the interest expense. Leased assets are amortised on a straight line basis over the term of the lease, or where it is likely that the Company will obtain ownership of the asset, the life of the asset. Leased assets held at the reporting date are being amortised over periods of between 4 and 10 years. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases (Note 18). Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of income in the periods in which they are incurred, as this represents the pattern of benefits derived from the leased assets. North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. (g) Leasehold improvements The cost of improvements to or on leasehold properties is amortised over the unexpired period of the lease or the estimated useful life of the improvement to the Company, whichever is the shorter. (h) Impairment of assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset.s carrying value exceeds its fair value. Note 1. Summary of Significant Accounting Policies (continued) (i) Trade and other payables These amounts represent liabilities for goods and services provided to the company prior to the end of the financial year and which are unpaid. These amounts are unsecured and usually paid within 30 days of recognition. (j) Income tax The Company has received advice from the Australian Taxation Office that it is exempt from income tax and will remain so whilst its activities remain the same as at present and the income tax legislation does not change in relation to the exemption provisions. (k) Borrowings Loans and debentures are carried at their principal amounts, which represent the present value of future cash flows associated with servicing the debt. Interest is accrued over the period it becomes due and is recorded as part of other creditors. North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. As at 31 December 2008. (l) Employee entitlements (i) Wages, salaries and sick leave Liabilities for wages and salaries, including non-monetary benefits and accrued rostered days off expected to be settled within 12 months of the reporting date are recognised in the current provision for employee benefits in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable. (ii) Annual Leave A liability for annual leave is recognised, and measured as the amount unpaid at the reporting date at current wage rates in respect of employees. service up to that date. All annual leave balances are classified as a current liability. (iii) Long Service Leave Long service leave entitlements payable are assessed at balance date having regard to expected employee remuneration rates on settlement, employment related oncosts and other factors including accumulated years of employment, and experience of employee departure per year of service. All long service leave which the company does not have an unconditional right to defer settlement of the liability for at least twelve months after reporting date is disclosed as a current liability and is measured at nominal value based on the amount expected to be paid when settled. Long service leave expected to be paid later than one year has been measured at the present value of the estimated future cash outflows to be made for these accrued entitlements. (m) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense. Receivables and payables in the Balance Sheet are shown inclusive of GST. North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 1. Summary of Significant Accounting Policies (continued) (n) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised for the major business activities as follows: (i) Subscriptions Subscriptions revenue is brought to account on a progressive basis over the period in which members are able to enjoy the use of the Company.s facilities. Any subscriptions received in advance are brought to account as a liability. (ii) Sale of Goods and Services Revenue from the sale of goods and services is recognised on the delivery of goods to customers. (iii) Interest Interest revenue is recognised on an accrual basis. (o) Borrowing costs Borrowing costs are recognised as expenses in the period in which they are incurred. (p) Maintenance and repairs Maintenance, repair costs and minor renewals are charged as expenses as incurred. Note 2. Revenue 2008 2007 $ $ Revenue Sales 2,540,492 2,723,373 Net profit on disposal of property, plant & equipment 51,724 5,000 Sundry 55,404 65,091 107,128 70,091 Total Revenue 2,647,620 2,793,464 North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 3. Expenses 2008 2007 $ $ Profit before income tax expense includes the following expenses: Cost of sales of goods 534,284 555,603 Depreciation Buildings 1,077 1,077 Plant and equipment 52,74 46,82 7 5 Poker machines 44,00 54,31 3 0 Motor vehicles 4,013 2,990 Keno equipment 443 568 Bowls equipment 2,034 2,173 104,3 107,9 17 43 Amortisation Leasehold improvements 74,42 73,20 2 4 Poker machines under lease 18,78 19,48 4 7 Plant & equipment under lease 1,310 3,664 94,51 96,35 6 5 Borrowing costs Interest and finance charges paid/payable 101,6 86,79 40 4 Operating lease expense 9,000 9,000 North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 4. Current assets . Cash and cash equivalents 2008 2007 $ $ Cash at bank and on hand 118,83 65,564 5 The above figures are reconciled to cash at the end of the financial year as shown in the Cash Flow Statement: Balances as above 118,835 65,564 Less: Bank overdrafts (note 10) (148,951) (134,023) Balance per statement of cashflows (30,116) (68,459) Note 5. Current assets . Trade and other receivables 2008 2007 $ $ Trade debtors 23,413 34,361 Provision for doubtful debts (5,951) (400) Other Debtors 4,908 4,650 22,370 38,611 Note 6. Current assets . Inventories 2008 2007 $ $ Bar 35,707 29,937 Kitchen 4,447 4,123 Bowling club 1,946 6,052 Football club 3,302 2,756 45,402 42,868 Note 7. Current assets . Other 2008 2007 $ $ Prepayments 20,708 26,950 Accrued Income 2,931 6,485 23,639 33,435 North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statement. For the year ended 31 December 2008. Note 8. Non-current assets . Property, plant and equipment 2008 2007 Land and buildings $ $ Freehold Land . Sports Club 56,696 56,696 Improvements . Sports Club 35,933 35,933 Less: Disposal - Less: Accumulated depreciation 17,885 16,808 18,048 19,125 Leasehold Improvements . Sports Club 2,570,40 2,562,70 5 4 Less: Accumulated amortisation 1,034,07 959,655 7 1,536,32 1,603,04 8 9 Total land and buildings 1,611,07 1,678,87 2 0 Plant and equipment Plant and equipment . Sports Club 696,252 662,503 Less: Accumulated depreciation 473,554 423,242 222,698 239,261 Plant and equipment . Bowling Club 58,724 56,734 Less: Accumulated depreciation 43,855 41,821 14,869 14,913 Plant and equipment . Football Club 78,394 66,093 Less: Accumulated depreciation 59,702 56,823 18,692 9,270 Total plant and equipment 256,259 263,444 Nort. Albury Sports Club Lt. ACN 5. 00. 064 21. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 8. Non-current assets . Property, plant and equipment (continued) 2008 2007 $ $ Poker machines Poker machines -at cost 562,916 536,016 Less: Accumulated depreciation 445,140 489,143 73,773 90,876 Poker machines . leased Poker machines . leased 100,525 100,525 Less: Accumulated amortisation 89,131 70,347 11,394 30,178 Plant and equipment . leased Plant and equipment . leased 27,265 23,640 Less: Accumulated amortisation 20,653 19,343 6,612 4,297 Motor vehicles Motor vehicles 32,100 32,100 Less: Accumulated amortisation 6,234 2,221 25,866 29,879 Capital works in progress -184,127 Total property, plant and equipment 1,984,976 2,281,671 Reconciliation Reconciliations of the carrying amounts of each class of property plant and equipment at the beginning and end of the current financial year are set out below: As at 1 January 2008 Carrying Additions Disposal Transfers Depreciation/ Carrying Amount 1 s Amortisation Amount 31 January December 2008 2008 Land & buildings 1,678,870 7,701 --(75,499) 1,611,072 Plant and equipment 263,444 48,039 --(55,224) 256,259 Plant and equipment -leased 4,297 3,625 --(1,310) 6,612 Poker machines 90,876 26,900 --(44,003) 73,773 Poker machines . leased 30,178 ---(18,784) 11,394 Motor Vehicles 29,879 ---(4,013) 25,866 Capital works in progress 184,127 121,793 (305,920) -- 2,281,671 208,058 (305,920) -(198,833) 1,984,976 As at 1 January 2007 Carrying Additions Disposals Transfers Depreciation/ Carrying Amount 1 Amortisation Amount 31 January December 2007 2007 Land & buildings 1,682,797 70,354 --(74,281) 1,678,870 Plant and equipment 241,688 71,322 --(49,566) 263,444 Plant and equipment -leased 7,961 ---(3,664) 4,297 Poker machines 101,799 43,153 -234 (54,310) 90,876 Poker machines . leased 41,048 8,851 -(234) (19,487) 30,178 Motor Vehicles 9,473 32,100 (8,704) -(2,990) 29,879 Capital works in progress -184,127 ---184,127 2,084,766 409,907 (8,704) -(204,298) 2,281,671 North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 9. Current liabilities . Trade and other payables 2008 2007 $ $ Trade creditors 195,215 202,609 Accrued expenses and other creditors 163,453 75,994 358,668 278,603 Note 10. Current liabilities . Borrowings 2008 2007 $ $ Bank overdraft (note 4) 148,951 134,023 Secured loans 60,000 248,912 Hire purchase liabilities 62,317 57,434 Lease liabilities (note 18) 1,136 4,526 Insurance premium 7,514 4,907 279,918 449,802 Security for borrowings The secured loans and bank overdraft are secured by first registered mortgage over the freehold and leasehold land of the company and by registered mortgage over the whole of the company.s assets. Hire purchase and lease liabilities are secured over the assets to which they relate. Note 11. Current liabilities . Provisions 2008 2007 $ $ Annual leave 44,754 62,755 Long service leave 18,423 22,075 63,177 84,830 Note 12. Current liabilities . Other 2008 2007 $ $ Subscriptions received in advance 23,979 22,619 North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 13. Non-current liabilities . Borrowings 2008 2007 $ $ Secured loans 450,000 510,000 Hire purchase liabilities 69,938 80,169 Debentures 36,000 36,000 Lease liabilities (note 18) 1,639 5,889 557,577 632,058 (a) Security for borrowings Details of security relating to these liabilities are set out in note 10. (b) Debentures The debentures are repayable on the third anniversary of the agreements being signed. Interest is repayable on each anniversary at rates of 4% in the first year, 6% in the second year and 8% in the third year. (c) Commercial bill The commercial bill was negotiated in April 2007, expiring in April 2010. The bill is repayable in $15,000 instalments each quarter until April 2010 where the bill will expire and will be renegotiated. (d) Financing arrangements 2008 2007 $ $ Credit standby arrangements Total facilities Bank overdraft 110,000 100,000 Commercial bill-secured 510,000 570,000 Other secured loan 142,544 345,690 762,544 1,015,690 Used at balance date Bank overdraft 148,951 134,023 Commercial bill-secured 510,000 570,000 Other secured loan -188,912 658,951 892,935 North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Unused at balance date Bank overdraft (38,951) (34,023) Commercial bill-secured - Other secured loan -156,778 (38,961) 122,755 Note 14. Non-current liabilities . Provisions 2008 2007 $ $ Long service leave 7,539 11,550 Note 15. Reserves and retained profits 2008 2007 $ $ a) Reserves Asset revaluation reserve 88,657 88,657 Capital profits reserve 93,868 93,868 182,525 182,525 b) Retained profits Retained profits at the beginning of the financial 800,162 905,290 year Net profit/(loss) for year (78,323) (105,128) Retained profits at the end of the financial year 721,839 800,162 North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 16. Reconciliation of profit after income tax to net cash outflow from operating activities 2008 2007 $ $ Profit/(Loss) from ordinary activities after income (78,323) (105,128) tax Depreciation and amortisation 198,833 204,298 Net (profit)/loss on sale of non current assets (51,724) (5,000) Change in operating assets and liabilities (Increase)/decrease in trade debtors 16,499 (5,073) (Increase)/decrease in sundry debtors (258) 63,060 (Increase)/decrease in inventories (2,534) (3,262) (Increase)/decrease in prepayments 6,242 (2,430) (Increase)/decrease in other current assets 3,554 (4,992) Increase/(decrease) in trade creditors 30,932 (10,699) Increase/(decrease) in other liabilities 87,459 (30,301) Increase/(decrease) in employee provisions (25,664) 17,396 Increase/(decrease) in income received in 1,360 (1,134) advance Net cash inflow from operating activities 186,576 116,735 North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 17. Related party transactions (a) Directors The names of persons who were directors of the Company at any time during the financial year are as follows: J H McDonald RC Walters IT Townsend P J Johnston T L Towers L G Tomich P J Westland P A Dempsey R W Williams K F Wild (b) Executives The company.s chief executive officer is the key executive with authority for strategic directions and management of the company. (c) Remuneration (i) Directors of the Company Members of the board of directors performed their duties in an honorary capacity, and as such no remuneration was paid. (ii) Specified executives of the Company Compensation paid or payable in respect of the services of the chief executive officer were: 2008 2007 $ $ Short term employee benefits Remuneration and non cash benefits paid 93,223 86,278 Post employment benefits Superannuation 6,665 6,046 Other long term benefits Accrual of leave liabilities 1,158 1,128 101,046 93,452 (d) Other transactions with directors and director-related entities Two directors, Mr J McDonald and Mr P A Dempsy, are a partner in the firm Adams Leyland Solicitors and the owner of Peter Dempsey Plumbing respectively. During the year Adams Leyland provided legal services to North Albury Sports Club Ltd amounting to $Nil (2007: $3,948) and Peter Dempsey Plumbing provided plumbing services of $5,960 (2007: $Nil). These services were provided on normal commercial terms and conditions. North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. Note 18. Commitments for expenditure 2008 2007 $ $ Operating leases: Commitments for minimum lease payments in relation to non-cancelable operating leases are as follows: Within one year 9,000 9,000 Later than one year but not later than 5 years 27,000 36,000 Later than 5 years -- Commitments not recognised in the financial 36,000 45,000 statements Finance Leases Commitments in relation to finance leases are payable as follows: Within one year 1,584 6,001 Later than one year but not later than 5 years 1,848 6,936 Minimum lease payments 3,432 12,937 Less: Future finance charges (657) (2,522) Recognised as a liability 2,775 10,415 Representing lease liabilities: Current (Note 10) 1,136 4,526 Non-current (Note 13) 1,639 5,889 2,775 10,415 Note 19. Remuneration of auditors 2008 2007 $ $ Remuneration for audit of the financial reports of the company Auditor of the company . Johnsons MME 9,135 8,700 Other services 12,370 12,740 21,505 21,440 Note 20. Financial Instruments 20(a) Interest Rate Risk Exposures The companys' exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at balance date, are as follows: Financial Instruments Note Floating Interest Rate $ Fixed Interest Maturing 1 year or less $ Fixed Interest Maturing in 2 to 5 years $ Non Interest Bearing $ Carrying Amount per Balance Sheet $ Weighted Average Effective Interest Rate (i)FinancialAssets Cash & cash equivalents 4 16,307 --102,528 118,835 0.00% Trade and other receivables 5 ---22,370 22,370 N/A ( i)FinancialLiabilities Trade and other payables 9 --(358,668) (358,668) N/A Bank overdraft 10 (148,951) ---(148,951) 14.58% Secured loans 10,13 -(60,000) (450,000) -(510,000) 7.1% Hire purchase 10,13 (62,317) (69,938) -(132,255) 12.59% Finance leases 10,13 (1,136) (1,639) -(2,775) 21.58% Insurance premium loan 10 (7,514) -(7,514) 20.16% Debentures 13 (36,000) (36,000) 6.00% Net financial Assets/ (Liabilities) (132,644) (130,967) (557,577) (233,770) (1,054,958) Financial Instruments Floating Interest Rate $ Fixed Interest Maturing 1 year or less $ Fixed Interest Maturing in 2 to 5 years $ Non Interest Bearing $ Carrying Amount per Balance Sheet $ Weighted Average Effective Interest Rate (i)FinancialAssets Cash & cash equivalents 4 23,103 --42,461 65,564 0.00% Trade and other receivables 5 ---38,611 38,611 N/A ( i)FinancialLiabilities Trade and other payables 9 ---(278,603) (278,603) N/A Bank overdraft 10 (134,023) ---(134,023) 15.20% Secured loans 10,13 (188,912) (60,000) (510,000) -(758,912) 7.30% Hire purchase 10,13 -(57,434) (80,169) -(137,603) 11.40% Finance leases 10,13 -(4,526) (5,889) -(10,415) 19.30% Insurance premium loan 10 -(4,907) --(4,907) 21.35% Debentures 13 (36,000) (36,000) 6.00% Net financial Assets/ (Liabilities) (299,832) (126,776) (632,058) (197,531) (1,256,288) North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statements. For the year ended 31 December 2008. 20(b) Credit risk exposures The credit risk on financial assets is generally the carrying amount disclosed on the Balance Sheet. 20(c) Net Fair Values For all financial assets and financial liabilities it is considered that carrying values as disclosed in the Balance Sheet reflect the net fair values. Note 21. Non-cash financing and investing activities 2008 2007 $ $ Acquisition of plant and equipment by means of hire purchase and lease agreements 53,231 120,023 Note 22. Events occurring after reporting date There were no significant events occurring after the reporting date likely to impact the affairs of the company in future. Note 23. Contingent assets and liabilities The company has poker machine licences which it acquired at no cost. While these licences are marketable and have a value, the value of these licences are not reflected in this report due to the fact that the company has adopted the historical cost basis of accounting. At the date of this report there are no known contingent liabilities of the company. Note 24. Financial risk management (a) Financial Risk Management The Company.s financial instruments consist mainly of accounts receivable and payable, secured loans, and bills. Risk management is carried out by the Board. Financial Risks The main risks the company is exposed to through its financial instruments are interest rate risk, liquidity risk and credit risk. (i) Interest rate risk Interest rate risk is managed with a mixture of fixed and floating rate debt. As at 31 December 2008 approximately 82% (2007: 72%) of company debt is fixed. North Albury Sports Club Ltd ACN 54 002 064 217. Notes to and forming part of the financial statement. For the year ended 31 December 2008. (ii) Liquidity risk The company manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained. (iii) Credit risk The company does not have any material credit risk exposure to any single receivable. (b) Interest Rate Risk The company.s exposure to interest rate risk, which is the risk that interest rate applied to a financial instrument will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on those financial liabilities. Independent auditors report to the members of. North Albury Sports Club Ltd. Scope We have audited the accompanying financial report of North Albury Sports Club Ltd (.the Company.) which comprises the balance sheet at 31 December 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors. declaration. Directors. Responsibility for the Financial Report The Directors. of the Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The audit opinion expressed in this report has been formed on the above basis. Auditor.s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor.s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity.s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity.s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. Independence In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. Independent auditors report to the members o. North Albury Sports Club Ltd. Audit opinion In our opinion, the financial report of the Company is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the Company.s financial position as at 31 December 2008 and of its performance for the year ended on that date; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Johnsons MME Chartered Accountant Hugh McKenzie-McHarg Partner Albury 2 April 2009 North Albury Sports Club Ltd ACN 54 002 064 217. Departmental .. ading Statements. For the year ended 31 December 2008. 2008 2007 $ $ Bar Trading Sales 887,155 914,158 Less: Cost of sales Opening stock 29,937 29,634 Purchases 377,059 385,770 Less closing stock (35,707) (29,937) 371,289 385,467 Gross profit/(loss) 515,866 528,691 58.1% 57.8% Less: Direct costs Wages 295,110 302,040 Freight 12,062 12,383 307,172 314,423 Net trading profit 208,694 214,268 23.5% 23.4% Poker Machine Trading Clearances 878,514 1,059,51 4 OSR . GST Rebate 17,180 17,180 895,694 1,076,69 4 Less: Direct costs Bus subsidy 3,121 1,208 Depreciation 62,787 73,797 Poker machine tax (2,666) 91,085 Poker machine monitoring fee 18,490 16,663 Poker unders/overs 504 1,234 Repairs and maintenance 13,219 11,563 95,455 195,550 Net trading profit 800,239 881,144 89.3% 81.8% North Albury Sports Club Ltd ACN 54 002 064 217. Departmental . . ading Statements. For the year ended 31 December 2008. Kitchen Trading Sales 354,152 374,787 Less: Cost of Sales Opening stock 4,123 4,546 Catering and guest meals 163,319 169,713 Less closing stock (4,447) (4,123) 162,995 170,136 Gross profit/(loss) 191,157 204,651 Less: direct costs Wages 187,861 171,193 Net trading profit 3,296 33,458 0.93% 8.9% North Albury Sports Club Ltd ACN 54 002 064 217. Combined trading statements. For the year ended 31 December 2008. 2008 2007 $ $ Income Net trading profit from bar trading 208,694 214,268 Net trading profit from poker machine trading 800,239 881,144 Net trading profit from kitchen trading 3,296 33,458 Net trading profit from keno trading 61,078 68,248 Net trading profit/(loss) of NAFC (30,189) (21,039) Net trading profit from TAB trading 11,678 7,258 Net trading profit of vending machine sales 82 826 Net trading profit of Albury Bowling Club 11,252 7,566 1,066,130 1,191,729 Other Income Members subscriptions and entrance fees 33,057 34,792 Commissions 3,762 Insurance claims -4,580 Government subsidies (1,023) 10,675 Vending machine commissions 2,626 4,127 Multi-screen income 1,967 2,218 Gain on sale of non-current assets 51,724 5,000 Sundry 15,015 8,699 107,128 70,091 Total income 1,173,258 1,261,820 Expenditure Advertising 40,383 34,130 Accounting fees 12,370 12,780 Auditors remuneration . auditing services 10,870 9,350 Bad debts 5,410 Bands & entertainment 7,512 30,367 Bank charges 17,986 18,480 Bowling green maintenance 9,897 10,879 Cleaning 57,567 56,369 Computer software 2,012 2,295 Consultancy fees -10,894 Depreciation & amortisation 130,829 125,757 North Albury Sports Club Ltd ACN 54 002 064 217. Combined trading statements. For the year ended 31 December 2008. Electricity & gas 60,430 52,061 Fines & penalties 1,100 220 Fringe benefits tax 5,613 3,795 Ground maintenance 7,736 2,627 Ground improvements 14,404 13,445 Hire charges 1,929 1,405 Honorarium 2,000 2,000 Insurance 20,740 21,755 Interest 83,065 67,632 Legal costs -3,590 Members entertainment & refreshments 136,751 151,523 Members draw prizes 39,291 35,273 Motor vehicle costs 6,174 7,042 Net raffle costs 3,586 6,796 Net bingo costs 13,267 14,781 Payroll tax 15,451 9,017 Patron entertainment 7,008 7,254 Poker fees 28,650 48,545 Printing, stationery and postage 15,969 21,258 Lease . Albury City Council 9,000 9,000 Leasing charges 589 682 Licenses and permits 2,262 727 Provision for employee entitlements (25,664) 17,397 Rates and taxes 3,180 2,981 Repairs and maintenance 14,906 23,252 Sponsorship 82,408 86,803 Security costs 8,236 16,734 Sky channel 11,407 8,623 Subscriptions 6,448 8,328 Superannuation contributions . employees 64,437 62,362 Sundry 2,492 2,211 Telephone 16,568 16,320 Traveling expenses -728 Training and meetings 1,011 3,869 Uniforms -989 Workers compensation 23,402 24,564 Working equipment 1,949 6,184 Wages 259,340 282,683 Water & sewage 11,610 10,209 Total Expenditure 1,251,581 1,366,948 Profit before income tax expense (78,323) (105,128)