norths annualreport 2014

FINANCIALACCOUNTS YEAR ENDED 31 DECEMBER

2013

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Live It Love It ANNUAL REPORT 2013

CONTENTSExecutive Report 4

Directors Report 6

Auditors Independence Declaration 9

Statement of Comprehensive Income 10

Statement of Financial Position 11

Statement of Changes in Equity 12

Statement of Cash Flows 12

Notes to the Financial Statements 13

Directors Declaration 29

Auditors Report 30

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ANNUAL REPORT 2013 Live It Love It

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Mark HolmanChairmannorths Group

Luke Simmons Chief Executive Officer norths Group

all our Board members and employees in 2013. Your hard work, ideas and tireless contribution have certainly carried us through difficult periods and made our three Clubs and Fitness Centres much stronger going into 2014. And thank you to all our members for your continued support of our growth.

2013 2012Revenue 36,738,597 35,859,930Expenses 27,604,946 29,230,851Operating Profit 9,133,651 6,629,079

State Government Taxes 6,735,825 6,539,950

Community Football 757,771 919,535Community Other 464,803 386,860Total Community Support 1,222,574 1,306,395

Profit / (Loss) 1,175,252 (1,217,266)

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DIRECTORS REPORT Your directors present their report on the company for the financial year ended 31 December 2013.

DIRECTORS

The following directors have been in office for the entire financial year unless otherwise stated below and attended the recorded board meetings

NAME OF DIRECTOR CLUB POSITION

TOTAL NUMBER OF DIRECTORS MEETINGS ATTENDED

TOTAL NUMBER OF DIRECTORS MEETINGS WHILST IN OFFICE

Mark Holman President 11 12

Willis A Salier Vice President 11 12

Warren F Morris Director 12 12

Frere Thompson Director 12 12

David O'Farrell Director 10 12

Terence Keen Director 11 12

Perry Lopez Director 11 12

Number of Directors meetings 12

INFORMATION ON DIRECTORS

NAME OF DIRECTOR QUALIFICATIONS EXPERIENCE

Mark Holman Chartered Accountant

- Chairman of North Sydney Leagues Club Ltd since December 2010- Vice-President of North Sydney Leagues Club Ltd from May 2008 to December 2010- Director of North Sydney Leagues Club Ltd for 8 years- Director of Carlson Hotels Asia Pacific Holdings Pty Ltd, which operates the Radisson

chain of hotels throughout Australia

Willis Salier Lawyer

- Vice-President of North Sydney Leagues Club Ltd since December 2010- Director of North Sydney Leagues Club Ltd for 14 years- Chairman of listed public company- Director of private companies, and trustee of charitable foundations and estates, with

combined assets well in excess of $100 million

Warren Morris Retired Customs Broker

- Vice-President of North Sydney Leagues Club Ltd from May 2000 to 2008- Director of North Sydney Leagues Club Ltd for 26 years- Life Member of North Sydney Leagues Club Ltd- Secretary of the Sports Council- Delegate and Patron of Metropolitan Leagues Sports Council- Patron of the Bridge, Indoor Bowls, Camera, Joggers, Snooker, Squash, Swimming

and Tennis Clubs- Co-Patron of the Lawn Bowls Clubs- Delegate to Leagues Clubs Australia

David OFarrell Retired Business Owner- Director of North Sydney Leagues Club Ltd for 11 years- Patron of the Bowls and Golf Club

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SHORT TERM OBJECTIVESProvide great community clubs with a commitment to ensuring our engagement within the community remains relevant and focuses on superior service for all to enjoy. Operate an efficient and diverse business whilst reducing the core debt of the Norths Group to ensure a financially sustainable future.

LONG TERM OBJECTIVES

Operate an efficient and diverse business to ensure the company is financially secure to the playing of sport, intraclubs and in particular the propagation of Rugby League.

STRATEGY FOR ACHIEVING THE OBJECTIVESThe development of a Strategic Plan that focuses on:

- Members' and their guests' experience

- Staff delivering a superior service

- Maximise utilisation of the Clubs Infrastructure for the benefit of members

- Engage and remain relevant within the local community

- Financial sustainability of the Norths Group

INFORMATION ON DIRECTORS

NAME OF DIRECTOR QUALIFICATIONS EXPERIENCE

Frere Thompson Retired Painter

- Director of North Sydney Leagues Club Ltd for 13 years- Director of North Sydney District Rugby League Football Club Ltd- Life Member of North Sydney Leagues Club Ltd- Life Member of North Sydney Junior Rugby League- Life Member of North Sydney District Rugby League Football Club Ltd- Life Member of NSW Rugby League- Delegate to Metropolitan Leagues Sports Council- Committeeman on North Sydney Leagues Club Sports Council- Delegate to New South Wales Rugby League- Delegate to Clubs NSW- Delegate to Leagues Clubs Australia- State Councillor of Australian Legion of Ex-Service Men and Women

Terrence Keen

Certified Workplace Trainer & Assessor in Hospitality

- Director of North Sydney Leagues Club Ltd for 7 years- Executive Officer Tweed Heads Seagulls Rugby League Football Club Ltd

Perry LopezRetired Managing Director

- Director of North Sydney Leagues Club since 2011- Chairman of North Sydney Rugby League Football Club since 2012- Director of North Sydney Rugby League Football Club since 2008- Director Central Coast Bears since 2009- Director SME Association since 2011

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PRINCIPAL ACTIVITIESThe principal activities of the company during the course of the financial year consisted of the conduct and promotion of licensed social and sporting clubs, and the provision of sporting and recreation facilities to members of the company, including the propagation of Rugby League.

HOW THESE ACTIVITIES ASSIST IN ACHIEVING THE OBJECTIVESThe principal activities of the company contributed to achieving the objectives by providing a stable base of operations. This ensured the financial position of the company remained stable and generated funds to meet the demands of the company and maintain high levels of service to members and guests.

PERFORMANCE MEASUREMENT AND KEY PERFORMANCE INDICATORSPerformance is assessed regularly against rolling forecasts, strategic plans and industry benchmarks using various metrics such as financial and non-financial metrics, financial analysis to measure strategic initiatives have been effective in achieving company short and long term objectives.

A number of KPI's are employed by the club in order to measure, monitor and hence improve the club's performance and to achieve the club objectives through sound financial management.

MEMBERS LIMITED LIABILITYThe entity is incorporated under the Corporations Act 2001 and is an entity limited by guarantee. If the entity is wound up the constitution states that each member is required to contribute a maximum of $4.00 towards meeting any outstanding obligations of the entity. At 31 December 2013 the total amount that members of the company are liable to contribute if the company is wound up is $135,344.

AUDITORS INDEPENDENCE DECLARATION

A copy of the auditors independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 9.

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

Director:

Mark Holman

Director:

Willis Salier

Dated this 21st day of March 2014

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We declare that, to the best of our knowledge and belief, during the year ended 31 December 2013 there have been:

(i)no contraventions of the auditor independence requirements of 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.

Maher Partners Assurance Pty Limited

Jason Maher

Taren Point

Dated this 22nd day of March 2014

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STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2013

NOTE 2013 2012

Revenue 2 36,738,597 35,449,628

Changes in inventories of finished goods and work in progress (2,659) (39,707)

Raw materials and consumables used (2,182,409) (2,041,041)

Advertising expenses (265,867) (283,196)

Auditors remuneration 3 (85,843) (115,522)

Bad and doubtful debt expenses - (7,039)

Depreciation and amortisation expenses (3,910,527) (3,726,220)

Directors expenses (18,678) (29,331)

Employee benefits expenses (8,563,206) (9,060,499)

Other expenses (20,554,512) (21,334,275)

Profit (Loss) before income tax 4 1,154,896 (1,187,202)

Income tax expense 5 20,356 (30,064)

Profit (Loss) for the year 1,175,252 (1,217,266)

Total comprehensive income for the year 1,175,252 (1,217,266)

Total comprehensive income attributable to members of the entitity 1,175,252 (1,217,266)

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STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2013

NOTE 2013 2012

CURRENT ASSETS

Cash and cash equivalents 6 2,041,358 1,754,547

Trade and other receivables 7 318,046 204,069

Inventories 8 263,959 271,786

Other current assets 9 372,722 260,936

TOTAL CURRENT ASSETS 2,996,085 2,491,338

NON-CURRENT ASSETS

Property, plant and equipment 10 79,627,526 78,027,743

Deferred tax assets 5 143,394 123,038

TOTAL NON-CURRENT ASSETS 79,770,920 78,150,781

TOTAL ASSETS 82,767,005 80,642,119

CURRENT LIABILITIES

Trade and other payables 11 5,453,504 3,337,742

Financial liabilities 12 3,038,332 2,563,904

Provisions 13 666,140 656,745

Tax liabilities 5 (12,987) (43,790)

Other current liabilities 14 289,697 254,792

TOTAL CURRENT LIABILITIES 9,434,686 6,769,393

NON-CURRENT LIABILITIES

Financial liabilities 12 17,014,228 18,743,795

Provisions 13 458,469 420,757

Tax liabilities 5 1,121,911 1,121,911

Other non-current liabilities 14 149,233 173,036

TOTAL NON-CURRENT LIABILITIES 18,743,841 20,459,499

TOTAL LIABILITIES 28,178,527 27,228,892

NET ASSETS 54,588,478 53,413,227

MEMBERS EQUITY

Reserves 15 43,245,766 43,245,766

Retained earnings 16 11,342,712 10,167,461

TOTAL MEMBERS EQUITY 54,588,478 53,413,227

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STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2013

NoteRetained earnings

Asset Revaluation

Reserve

Capital Redemption

Reserve Total

$ $ $ $

Balance at 1 January 2012 11,384,727 43,082,634 163,132 54,630,493

Profit attributable to members (1,217,266) (1,217,266)

Balance at 31 December 2012 10,167,461 43,082,634 163,132 53,413,227

Profit attributable to members 1,175,252 1,175,252

Balance at 31 December 2013 11,342,713 43,082,634 163,132 54,588,479

STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2013

NOTE 2013 2012

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 36,535,463 35,401,024

Payments to suppliers and employees (29,704,926) (31,315,970)

Interest received 24,112 21,904

Finance costs paid (1,558,088) (1,557,090)

Net cash provided by operating activities 21 5,296,561 2,549,868

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of property, plant and equipment 12,500 -

Proceeds from sale of intangibles 177,624 -

Payments for property, plant and equipment (3,909,051) (2,371,519)

Net cash provided by (used in) financing activities (3,718,927) (2,371,519)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 1,005,666 2,121,377

Repayment of borrowings (2,207,786) (1,795,727)

Net cash provided by financing activities (1,202,120) 325,650

Net increase (decrease) in cash held 375,514 503,999

Cash at beginning of financial year 1,636,996 1,132,997

Cash at end of financial year 21 2,012,510 1,636,996

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NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2013

1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements cover North Sydney Leagues Club Limited as an individual entity. North Sydney Leagues Club Limited is a company limited by guarantee, incorporated and domiciled in Australia.

BASIS OF PREPARATION

North Sydney Leagues Club Limited has elected to early adopt the Australian Accounting Standards - Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010-2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. The company has also adopted the following Amending Standards containing reduced disclosure requirements:

- AASB 2011-2: Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project - Reduced Disclosure Requirements; and

- AASB 2012-7: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirement

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The company is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards.

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

The financial statements, except for the cash flow information, 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. The amounts presented in the financial statements have been rounded to the nearest dollar.

The financial statements were authorised for issue on 21 March 2014 by the directors of the company.

ACCOUNTING POLICIES

Comparative Figures

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

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NOTES TO THE FINANCIAL STATEMENTS cont...FOR THE YEAR ENDED 31 DECEMBER 2013

INCOME TAX

The income tax expense for the year is the tax payable on the current year's taxable income. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets and liabilities are recognised at the tax rates expected to apply when the assets are recovered or the liabilities are settled. Current and deferred tax is recognised as an expense in the income statement except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.

Deferred tax assets are recognised to the extent that it is probable that sufficient taxable profits will be available, against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation, and the anticipation that the company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

INVENTORIES

Inventories are measured at the lower of cost and net realisable value. Costs are assigned on a first-in first-out basis.

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PROPERTY, PLANT AND EQUIPMENTEach class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

PROPERTY

Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less accumulated depreciation for buildings.

In the periods when the freehold land and buildings are not subject to an independent valuation, the directors conduct directors' valuations to ensure the land and building's carrying amount is not materially different to the fair value.

Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are recognised against fair value reserves directly in equity; all other decreases are recognised in profit or loss.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

PLANT AND EQUIPMENT

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

In the event the carrying value of plant and equipment is greater than the estimated recoverable amount, the carrying value is written down immediately to the estimated recoverable amount. A formal assessment of recoverable amount is made when impairment indicators are present.

The cost of fixed assets constructed within the company includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

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DEPRECIATION

The depreciation method and useful life used for items of property, plant and equipment (excluding freehold land) reflects the pattern in which their future economic benefits are expected to be consumed by the company. Depreciation commences from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation method and useful life of assets is reviewed annually to ensure they are still appropriate.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate

Buildings & Refurbishments 2.5% - 10.0%

Plant & Equipment 5.0% - 33.0%

The estimated useful life for each class of depreciable assets are:

Class of Fixed Asset Useful Life

Buildings & Refurbishments 10 - 40 Years

Plant & Equipment 3 - 20 Years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are recognised in profit or loss. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.

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.

Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all the risks and benefits remain with thelessor, are recognised as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised over the life of the lease term

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EMPLOYEE BENEFITS

Provision is made for the company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs.

Contributions are made by the company to an employee superannuation fund and are charged as expenses when incurred.

PROVISIONS

Provisions are recognised when the company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period.

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.

REVENUE

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

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

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

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

BORROWING COSTS

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

GOODS AND SERVICES TAX (GST)Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the Balance Sheet are shown inclusive of GST.

TRADE AND OTHER PAYABLESThese amounts represent unpaid liabilities for goods received and services provided to the entity prior to the end of the financial year. These amounts are unsecured and are normally settled within 14 to 45 days.

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2013 2012

2 REVENUE

Operating activities

Sale of goods and Gaming revenue 32,201,461 31,171,262

Interest Received 24,112 21,904

Rendering of services 3,277,210 3,185,243

Other revenue 1,235,814 1,071,219

Total Revenue 36,738,597 35,449,628

3 AUDITORS REMUNERATION

Auditors Remuneration

Audit & Review of Financial Reports 75,000 78,000

Other Services 10,843 37,522

85,843 115,522

4 PROFIT

Expenses

Finance Costs

Interest Paid 1,394,388 1,593,771

Depreciation of property, plant and equipment

Depreciation - Buildings 1,690,061 1,693,390

Depreciation - Plant & Equipment 2,220,466 2,032,830

3,910,527 3,726,220

Bad Debts Written Off - 7,039

Total bad and doubtful debts - 7,039

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5 INCOME TAX EXPENSE

North Sydney Leagues Club Limited is liable for income tax, based upon income derived from non-members and from investments in outside entities. In view of these special circumstances, it is not appropriate to compare income tax payable with the net profit disclosed in the Statement of Comprehensive Incomes.

a) Income Tax Expense

The Income Tax Assessment Act, 1997 (amended) provides that under the concept of mutuality clubs are only liable for income tax on income derived from non-members and from outside entities.

2013 2012

The amount set aside for income tax in the Statement of Comprehensive Incomes has been calculated as follows:

Portion of income attributable to non-members 5,858,350 5,715,414

Less: Portion of expenses attributable to non-members (5,259,184) (5,462,557)

599,166 252,857

Add: Other assessable income 990,160 658,121

Less: Other deductible expenses (1,584,963) (1,370,963)

Tax loss carried forward (1,129,216) (669,231)

Net income subject to tax (1,124,853) (1,129,216)

Current income tax applicable to above at 30% - -

Increase in deferred tax liability - -

Decrease (Increase) in deferred tax asset (20,356) 16,443

Over provision in prior year - (13,621)

Income tax attributable to operating profit (20,356) 2,822

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2013 2012

5 INCOME TAX EXPENSE cont...

a) Current Tax (Asset)/Liabilities

Movements during the year:

Balance at beginning of year (43,790) (40,821)

Income tax paid (38,110) (54,729)

Refunds received 68,913 38,139

Under (Over) provision in prior year - 13,621

(12,987) (43,790)

b) Deferred Tax Assets

Amounts recognised in profit or loss

Employee benefits 61,471 58,896

Accruals 20,438 2,419

Tax losses 61,484 61,723

143,393 123,038

Movements

Opening balance 123,038 139,481

Credited to the Statement of Comprehensive

Income 20,356 (16,443)

Closing balance 143,394 123,038

c) Deferred Tax Liabilities

The balance comprises temporary differences attributable to:

Revaluations 1,121,911 1,121,911

Movements

Opening balance 1,121,911 1,121,911

Charged to Comprehensive income - -

Closing balance 1,121,911 1,121,911

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2013 2012

6 CASH AND CASH EQUIVALENTS

Current

Cash on Hand & Cash at Bank 2,041,358 1,754,547

7 TRADE AND OTHER RECEIVABLES

Current

Trade Debtors 208,305 116,528

Loan - Tweed Heads Seagulls RLFC 80,000 80,000

Other Debtors 29,741 7,541

318,046 204,069

The company does not hold any financial assets whose terms have been renegotiated, but which would otherwise be past due or impaired.

8 INVENTORIES

Current

At cost:

Stock on Hand - Bar 245,642 253,099

Stock on Hand - Other 18,317 18,687

263,959 271,786

9 OTHER CURRENT ASSETS

Current

Prepayments 372,722 260,936

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2013 2012

10 PROPERTY, PLANT AND EQUIPMENT

LAND AND BUILDINGS

Freehold land at:

Independent valuation 15,500,000 15,500,000

15,500,000 15,500,000

Buildings at:

Independent valuation 54,150,000 54,150,000

Directors valuation 171,636 171,636

Refurbishments and Improvements at cost 6,166,225 4,302,115

Less accumulated depreciation (4,885,322) (3,208,174)

55,602,539 55,415,577

Total Land and Buildings 71,102,539 70,915,577

PLANT AND EQUIPMENT

Plant and Equipment:

At cost 21,246,979 17,981,670

Accumulated depreciation (12,761,135) (11,073,141)

8,485,844 6,908,529

Capital Work in Progress 39,143 203,637

39,143 203,637

Total Plant and Equipment 8,524,987 7,112,166

Total Property, Plant and Equipment 79,627,526 78,027,743

Refer to Note 12 for details of security over property, plant and equipment.

Valuation

The independent valuation of the companys land and buildings carried out as at 20 August 2010 by registered valuers, Global Valuation Services Pty Limited on the basis of market value for existing use resulted in a valuation of Land and Building at $69,650,000. The directors are of the opinion the amount reflects the value as at 31 December 2013.

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Movements in Carrying Amounts

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.

Land BuildingsPlant &

Equipment

Capital Work in Progress Total

$ $ $ $ $

Balance at 1 January 2012 15,500,000 56,279,044 7,885,969 28,466 79,693,479

Additions - 829,922 1,351,380 183,883 2,365,185

Disposals - - (295,990) (8,712) (304,702)

Depreciation expense - (1,693,390) (2,032,830) - (3,726,220)

Balance at 31 December 2012 15,500,000 55,415,576 6,908,529 203,637 78,027,742

Additions - 1,877,612 3,857,104 19,076 5,753,792

Disposals / transfers - (588) (59,323) (183,570) (243,481)

Depreciation expense - (1,690,061) (2,220,466) - (3,910,527)

Carrying amount at 31 December 2013

15,500,000 55,602,539 8,485,844 39,143 79,627,526

11 TRADE AND OTHER PAYABLES

Current

Trade Creditors 3,494,057 1,532,962

Other Creditors 1,959,447 1,804,780

5,453,504 3,337,742

2013 2012

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2013 2012

12 BORROWINGS

Current

Bank Overdraft 28,848 117,551

Hire Purchase Liability 477,024 165,677

Loan - Ebet 661,379 692,959

Commercial Bill - Bankwest 1,625,000 1,425,000

Hunter Premium Funding 246,081 162,717

3,038,332 2,563,904

Non-Current

Hire Purchase Liability 264,228 393,795

Commercial Bill - Bankwest 16,750,000 18,350,000

17,014,228 18,743,795

Security

The security for the commercial bill facility is:

Registered first mortgage over:- 12 Abbott Street, Cammeray known as North Sydney Leagues Club,- Ridge Street, North Sydney known as North Sydney Leagues Bowling Club- Gollan Drive, Tweed Heads West known as Seagulls Club

- First Registered Company Charge Number 1190698(Mortgage Debenture) over all the assets and undertakings of the club.

13 PROVISIONS

Provision for Annual Leave 666,140 656,745

Provision for Long Service Leave 458,469 420,757

Total provisions 1,124,609 1,077,502

Analysis of Total Provisions

Current 666,140 656,745

Non-current 458,469 420,757

1,124,609 1,077,502

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2013 2012

14 OTHER LIABILITIES

Current

Income In Advance 42,716 20,336

Subscriptions In Advance 246,981 234,456

289,697 254,792

Non Current

Subscriptions In Advance 149,233 173,036

15 RESERVES

Asset Revaluation Reserve

Opening Balance for the year 43,082,634 43,082,634

Capital Redemption Reserve

Opening Balance for the year 163,132 163,132

43,245,766 43,245,766

16 RETAINED EARNINGS

Retained earnings at the beginning of the financial year 10,167,460 11,384,727

Net profit (Net loss) attributable to members of the company 1,175,252 (1,217,266)

Retained earnings at the end of the financial year 11,342,712 10,167,461

17 CAPITAL HIRE PURCHASE (HP) AND LEASING COMMITMENTS

Finance HP/Lease Commitments

Payable:

Not later than one year 519,655 194,599

Later than one year but not later than two years 216,179 194,599

Later than two years but not later than five years 74,335 233,767

Minimum lease payments 810,169 622,965

Less future finance charges (68,937) (63,494)

Total HP/lease liability 741,232 559,471

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2013 2012

18 CONTINGENT LIABILITIES

The directors are of the opinion that there are no contingent liabilities.

19 KEY MANAGEMENT PERSONNEL

The totals of remuneration paid to key management personnel (KMP) of the company during the year are as follows:

Key management personnel compensation 810,278 987,745

20 RELATED PARTY TRANSACTIONS

No director has entered into a material contract with the company since the end of the previous financial year and there were no material contracts involving directors interests existing at year end.

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21 CASH FLOW INFORMATION

a) Reconciliation of Cash

Cash and cash equivalents consist of cash on hand and balances with banks, and investments in money market instruments. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:

2013 2012

Cash on Hand & Cash at Bank 2,041,358 1,754,547

Cash at Bank - Bank Overdraft (28,848) (117,551)

2,012,510 1,636,996

b) Reconciliation of net cash provided by operating activities to profit after income tax

Operating profit (loss) after income tax 1,175,252 (1,217,266)

Non-cash flows in profit:

(Profit) / Loss on sale of intangible assets (177,624) -

(Gain) / Loss on sale of non-current assets 40,857 -

Depreciation 3,910,527 3,726,220

Charges to provisions 47,107 (96,946)

Increase (Decrease) in income taxes payable 30,803 (2,969)

Financing flows in operating profits 35,683 36,681

Changes in assets and liabilities, net of the effects of purchase and disposals of subsidiaries

(Increase) Decrease in current inventories 7,827 49,907

(Increase) Decrease in current receivables (113,977) 52,840

(Increase) Decrease in prepayments (111,786) (22,366)

(Increase) Decrease in deferred tax assets (20,356) 16,443

Increase (Decrease) in trade creditors 306,479 181,785

Increase (Decrease) in other creditors 154,667 (458,797)

Increase (Decrease) in income in advance 11,102 (26,700)

5,296,561 2,238,832

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22 COMPANY DETAILS

The registered office of the company is: 12 Abbott Street, Cammeray, NSW 2062The principal place of business is: 12 Abbott Street, Cammeray, NSW 2062

The principal activities of the company are that of a Registered Club.

23 DISCLOSURE REQUIREMENTS UNDER SECTION 41J OF THE REGISTERED CLUBS ACT

Core and Non Core Property

Section 41J of the Act defines core property as meaning any real property owned or occupied by the Club that comprises:-

(a) the defined premises of the club, or

(b) any facility provided by the club for use of its members and their guests or

(c) any other property declared, by resolution passed by a majority of the members present at a general meeting of the ordinary members of the club, not to be core property of the Club.

Non-core property is defined as meaning any real property owned or occupied by the Club that is not core property.

The Directors consider the Clubs defined premises at North Sydney Leagues Club, 12 Abbott Street, Cammeray, NSW 2062; North Sydney Leagues Bowling Club, Ridge Street, North Sydney, NSW 2060; and sections of Seagulls Club, Gollan Drive Tweed Heads West, NSW 2486 to be core Property.

The remaining sections of Seagulls Club as voted by members by ordinary resolution at the Annual General Meetings on 14th May 2012 & 25th May 2009, are considered non-core property.

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The directors of the company declare that:

1.The financial statements and notes, as set out on pages 1 to 24, are in accordance with theCorporations Act 2001:

(a)give a true and fair view of the financial position as at 31 December 2013 and of its performance as represented by the results of its operations and its cash flows for the year ended on that date of the company.

(b)complying with Australian Accounting Standards - Reduced Disclosure Requirements and Corporations Regulations 2001.

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 directors.

Director:

Mark Holman

Director:

Willis Salier

Dated this 21st day of March 2014

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INDEPENDENT AUDITORS REPORTTO THE MEMBERS OF NORTH SYDNEY LEAGUES CLUB LIMITED

Report on the Financial ReportWe have audited the accompanying financial report of North Sydney Leagues Club Limited which comprises the statement of financial position as at 31 December 2013 and the statement of comprehensive income, statement of changes in equity and statement of cash flows 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 ReportThe directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal control 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.

Auditors 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 auditors' 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 auditors consider internal control 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

IndependenceIn conducting our audit, we have complied with the independence requirements of the Corporations Act2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of North Sydney Leagues Club Limited on 22nd March 2014, would be in the same terms if provided to the directors as at the date of this auditors report.

Auditors Opinion

In our opinion:

(a) tthe financial report of North Sydney Leagues Club Limited is in accordance with theCorporations Act 2001, including:

(i) giving a true and fair view of the companys financial position as at 31 December2013 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Regulations 2001.

Maher Partners Assurance Pty Limited

Jason Maher

Taren Point

Dated this 22nd day of March 2014

norths annualreport 2014

Documents

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david ofarrell director

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terence keen director

perry lopez director