FINANCIAL REPORT
CONTENTS Page No. Auditor's Independence Declaration 2 Independent Audit Report 3 Income Statement 5 Statement of Comprehensive Income 6 Statement of Financial Position 7 Statement of Changes in Equity 8 Cash Flow Statement 9 Notes to the Financial Statements 10 Director's Declaration 20
AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTOR OF ROYAL MOTOR YACHT CLUB TORONTO I declare that, to the best of my knowledge and belief, during the year ended 30 June 2011 there have been: (i) (ii) No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and No contraventions of any applicable code of professional conduct in relation to the audit. K H PERRY & CO PTY LTD Chartered Accountant Suite 12, 108-112 The Boulevarde Toronto, NSW, 2283 Director: Ian Hamilton Perry 1 September 2011 Page 2
INDEPENDENT AUDIT REPORT TO THE MEMBER OF ROYAL MOTOR YACHT CLUB TORONTO We have audited the accompanying financial report of Royal Motor Yacht Club Toronto (the company) which comprises the statement of financial position as at 30 June 2011 and the income statement, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the director's declaration. Director's Responsibility for the Financial Report The director of the company is responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the financial reporting requirements of the company's constitution. 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. In Note 1, the director also state, in accordance with Accounting Standard AASB 101: 'Presentation of Financial Statements', that compliance with the Australian equivalents to International Financial Reporting Standards (IFRS) ensures that the financial report, comprising the financial statements and notes, complies with IFRS. 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 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. Independence In conducting our audit, we complied with the independence requirements of Australian professional ethical pronouncements. Page 3
INDEPENDENT AUDIT REPORT TO THE MEMBER OF ROYAL MOTOR YACHT CLUB TORONTO Auditor's Opinion In our opinion: a. The financial report of Royal Motor Yacht Club Toronto is in accordance with the company's constitution including: (i) (ii) giving a true and fair view of the company's financial position as at 30 June 2011 and of its performance for the year ended on that date; and complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the the company's constitution. b. The financial report also complies with International Financial Reporting Standards as disclosed in Note 1. K H PERRY & CO PTY LTD Chartered Accountant Suite 12, 108-112 The Boulevarde Toronto, NSW, 2283 Director: Ian Hamilton Perry 1 September 2011 Page 4
INCOME STATEMENT Note 2011 2010 $ $ Revenue 2 1,643,168 1,495,291 Changes in inventories 3,794 7,917 Cost of sales and related expenses (469,657) (434,944) Employee benefits expense (433,768) (398,619) Depreciation and amortisation expenses (79,281) (68,496) Finance costs 3 (8,270) (4,174) Other expenses (642,658) (543,653) Profit before income tax expense 3 13,328 53,322 Income tax expense - - Profit for the year 13,328 53,322 Profit attributable to members of the company 13,328 53,322 The accompanying notes form part of these financial statements. Page 5
STATEMENT OF COMPREHENSIVE INCOME Note 2011 2010 $ $ Profit for the year 13,328 53,323 Other comprehensive income: Other comprehensive income for the year, net of tax - - Total comprehensive income for the year 13,328 53,323 Total comprehensive income attributable to members of the company 13,328 53,323 The accompanying notes form part of these financial statements. Page 6
ASSETS ROYAL MOTOR YACHT CLUB TORONTO STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011 Note 2011 2010 $ $ CURRENT ASSETS Cash and cash equivalents 5 107,805 177,772 Trade and other receivables 6 13,378 7,610 Inventories 7 32,828 29,034 Other current assets 8 21,551 21,891 TOTAL CURRENT ASSETS 175,562 236,307 NON-CURRENT ASSETS Property, plant and equipment 9 3,151,110 3,103,981 TOTAL NON-CURRENT ASSETS 3,151,110 3,103,981 TOTAL ASSETS 3,326,672 3,340,288 LIABILITIES CURRENT LIABILITIES Trade and other payables 10 96,415 113,516 Borrowings 11 456 10,346 Short-term provisions 12 12,062 10,184 Other 13 59,406 65,313 TOTAL CURRENT LIABILITIES 168,339 199,359 NON-CURRENT LIABILITIES Long-term provisions 12 7,237 3,161 TOTAL NON-CURRENT LIABILITIES 7,237 3,161 TOTAL LIABILITIES 175,576 202,520 NET ASSETS 3,151,096 3,137,768 EQUITY Reserves 2,469,677 2,469,677 Retained profits 681,419 668,091 TOTAL EQUITY 3,151,096 3,137,768 The accompanying notes form part of these financial statements. Page 7
STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2011 Share Capital Retained Non-Controlling Earnings Interests Total $ $ $ Balance at 1 July 2009 610,935 2,469,677 3,080,612 Retrospective adjustment upon change in accounting policy: Interest Expense Waived 1 3,833 3,833 Profit attributable to the members of the company 53,323 53,323 Balance at 30 June 2010 668,091 2,469,677 3,137,768 Balance at 1 July 2010 668,091 2,469,677 3,137,768 Profit attributable to the members of the company 13,328 13,328 Balance at 30 June 2011 681,419 2,469,677 3,151,096 The accompanying notes form part of these financial statements. Page 8
STATEMENT OF CASH FLOWS Note 2011 2010 $ $ CASH FLOW FROM OPERATING ACTIVITIES Receipts from customers 1,785,721 1,606,676 Payments to suppliers and employees (1,716,293) (1,533,616) Interest received 5,175 4,815 Finance costs (8,270) (4,174) Net cash provided by (used in) operating activities 15 66,333 73,701 CASH FLOW FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment - - Proceeds from sale of investments - - Purchase of property, plant and equipment (126,410) (47,309) Purchase of investments - - Net cash provided by (used in) investing activities (126,410) (47,309) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from borrowings 64,305 56,996 Repayment of borrowings (74,410) (63,437) Net cash provided by (used in) financing activities (10,105) (6,441) Net increase/(decrease) in cash held (70,182) 19,951 Cash at beginning of financial year 177,556 157,605 Effects of exchange rates on cash holdings - Cash at end of financial year 5 107,374 177,556 The accompanying notes form part of these financial statements. Page 9
NOTES TO THE FINANCIAL STATEMENTS This financial statements cover Royal Motor Yacht Club Toronto as an individual entity. Royal Motor Yacht Club Toronto is a company limited by shares, incorporated and domiciled in Australia. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) of the Australian Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (a) Inventories Inventories are measured at the lower of cost and net realisable value. (b) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Page 10
NOTES TO THE FINANCIAL STATEMENTS 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 independent valuers, less subsequent 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 buildings' 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 charged against fair value reserves directly in equity; all other decreases are charged to the statement of comprehensive income. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount related to the revalued amount of the asset. Plant and Equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from those assets. The recoverable amount is assessed on the basis of expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to present values in determining recoverable amounts. Subsequent costs are included in the asset's carrying amount or recognised as a separate assets, 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. Increases in the carrying amount arising on revaluation of property, plant and equipment are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are charges against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the statement of comprehensive income and depreciation based on the asset's original cost is transferred from the revaluation reserve to retained earnings. Page 11
NOTES TO THE FINANCIAL STATEMENTS Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, are depreciated on a straight line basis over their estimated useful lives to the entity commencing from the time the asset is held ready for use. 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 included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. (c) 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 that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows. (d) 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 are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period. (e) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other shortterm highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position. Page 12
NOTES TO THE FINANCIAL STATEMENTS (f) Revenue and Other Income Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted as a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. Dividend revenue is recognised when the right to receive a dividend has been established. Revenue recognition relating to the provision of a service is determined with reference to the stage of completion of the transaction at the end of the reporting period and where outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable. All revenue is stated net of the amount of goods and services tax (GST). (g) Trade and Other Payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the company during the reporting period, which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. (h) 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 income in the period in which they are incurred. (i) 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 Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. Page 13
NOTES TO THE FINANCIAL STATEMENTS (j) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current year. (k) Critical Accounting Estimates and Adjustments The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company. Page 14
2. REVENUE AND OTHER INCOME Sales revenue: ROYAL MOTOR YACHT CLUB TORONTO NOTES TO THE FINANCIAL STATEMENTS Note 2011 2010 $ $ Sale of goods 1,139,954 1,097,099 Other revenue: Rebates and commissions 37,143 34,445 Interest income 5,175 4,815 Competition and function Income 143,978 43,952 Rent received 28,782 50,285 Marina income 215,261 198,729 Member income 54,205 46,464 Sailing section income 18,670 19,502 Total revenue 1,643,168 1,495,291 (a) Rebates and commissions from: Other corporations 37,143 34,445 3. PROFIT FOR THE YEAR Expenses: Interest expense on financial liabilities not at fair value through profit or loss: Other related corporations 5,175 1,835 Associated companies 1,231 952 External 1,864 1,387 Total finance costs 8,270 4,174 Cost of sales 469,657 434,944 Bad and doubtful debts 12,000-4. AUDITORS' REMUNERATION Auditors' remuneration 17,000 17,000 Accounting and other services 6,150 5,000 Page 15
NOTES TO THE FINANCIAL STATEMENTS 5. CASH AND CASH EQUIVALENTS Note 2011 2010 $ $ Cash on hand 11,885 11,627 ATM cash on hand 15,540 14,820 Cash at bank 15,650 44,916 Electronic clearing account - 775 Undeposited funds 4,103 - Fixed term deposit 60,627 105,634 107,805 177,772 6. TRADE AND OTHER RECEIVABLES CURRENT Trade debtors 25,378 7,610 Less provision for impairment (12,000) - 13,378 7,610 7. INVENTORIES CURRENT At cost: Stock on hand 32,828 29,034 8. OTHER ASSETS CURRENT Prepayments 21,551 21,891 9. PROPERTY, PLANT AND EQUIPMENT Freehold land 2,250,000 2,250,000 Buildings and property improvements 996,383 996,383 Less accumulated depreciation (332,522) (307,712) 663,861 688,671 Total land and buildings 2,913,861 2,938,671 Plant and equipment 868,560 787,571 Less accumulated depreciation (668,128) (622,261) 200,432 165,310 Poker machine licences 36,817 - Page 16
NOTES TO THE FINANCIAL STATEMENTS Note 2011 2010 $ $ Total plant and equipment 237,249 165,310 Total property, plant and equipment 3,151,110 3,103,981 (a) Movement in carrying amounts For disclosure on movement in carrying amounts please refer to note 16(a) in the end of this financial report. 10. TRADE AND OTHER PAYABLES CURRENT Good and services tax 7,123 8,650 Trade creditors 48,138 72,192 Accrued charges 33,682 27,386 Withholding taxes payable 7,472 5,288 11. BORROWINGS 96,415 113,516 CURRENT Keno clearing account 431 216 Loans 25 10,130 456 10,346 12. PROVISIONS Provision for holiday pay 12,062 10,184 Provision for long service leave 7,237 3,161 19,299 13,345 Analysis of Total Provisions Current 12,062 10,184 Non-current 7,237 3,161 19,299 13,345 Page 17
13. OTHER LIABILITIES ROYAL MOTOR YACHT CLUB TORONTO NOTES TO THE FINANCIAL STATEMENTS Note 2011 2010 $ $ CURRENT Unexpended insurance proceeds - 14,613 Income in advance 59,406 50,700 14. COMPANY DETAILS The registered office and principal place of business of the company is: Royal Motor Yacht Club Toronto 6 Arnott Street Toronto NSW 2283 15. CASH FLOW INFORMATION 59,406 65,313 (a) Reconciliation of Cash Flow from Operations with Profit after Income Tax Profit after income tax 13,328 53,322 Non-cash flows in profit Depreciation 79,281 68,496 Changes in assets and liabilities (Increase)/Decrease in receivables (5,768) 1,791 (Increase)/Decrease in prepayments 340 (8,799) Increase/(Decrease) in income in advance (5,907) (29,906) (Increase)/Decrease in inventories (3,794) (7,917) Increase/(Decrease) in payables (17,101) (2,856) Increase/(Decrease) in provisions 5,954 (430) Increase /(Decrease) in income tax payable - - Decrease/(Increase) in deferred taxes - - Net cash provided by operating activities 66,333 73,701 (b) Credit Stand-by Arrangement and Loan Facilities The Club has a bank overdraft facility amounting to $55,000 (2010: $55,000). This may be drawn upon at any time, and terminated at any time at the option of the bank. The Club has a mortgage loan facility amounting to $25 (2010: $10,130) at balance date. At balance date the Club was $4,449 in advance of required repayments. Page 18
16. (a) MOVEMENT IN CARRYING AMOUNTS ROYAL MOTOR YACHT CLUB TORONTO NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2011 Movements in carrying amounts for each class of property, plant and equipment. Freehold land Buildings and property improvements Plant and equipment Poker machine licences $ $ $ $ $ Total Balance at 1 July 2009 2,250,000 713,481 161,687-3,125,168 Additions - - 47,309-47,309 Disposals - - - - - Depreciation expense - (24,810) (43,686) - (68,496) Carrying amount at 30 June 2010 2,250,000 688,671 165,310-3,103,981 Additions - - 89,593 36,817 126,410 Disposals - - - - - Depreciation expense - (24,810) (54,471) - (79,281) Carrying amount at 30 June 2011 2,250,000 663,861 200,432 36,817 3,151,110 Page 19