16 NSW Masonic Club October 2017 ANNUAL REPORT 2017 (e) Impairment of Assets At the end of each reporting period, the Club assesses whether there is any indication that an asset has been impaired. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the profit and loss account. Where it is not possible to estimate the recoverable amount of an individual asset, the Club estimates the recoverable amount of the cash- generating unit to which the asset belongs. (f) Employee Benefits Provision is made for the Club’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at 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 employees may not satisfy vesting requirements. Those cash flows are discounted using market yields on corporate bonds with terms to maturity that match the expected timing of cash flows. (g) Provisions Provisions are recognised when the Club 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 reporting date. (h) 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. (i) Revenue Revenue from the sale of goods is recognised at the point of delivery to customers. Revenue from the rendering of a service is recognised at the point of delivery to customers. Membership income is recognised on a proportional basis over the period to which the membership renewal relates. Interest revenue is recognised using the effective interest rate method. Dividend revenue is recognised when the right to receive a dividend has been established. All revenue is stated net of the amount of goods and services tax (GST). (j) Goods and Services Tax (“GST”) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows (k) Comparative Figures Where required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. The financial report was authorised for issue on 4 October 2017 by the directors of the Club. 2017 2016 $ $ NOTE 2: REVENUE AND OTHER INCOME Sales of goods and provision of services 4,078,957 3,445,885 Poker machine takings 18,909 21,077 Rent received 189,360 186,885 Members subscriptions 74,249 79,856 Room hire 77,988 46,598 Interest received 68,582 57,468 Dividends received 12,425 8,299 Other 10,262 1,456 Total revenue 4,530,732 3,847,524 2017 2016 $ $ NOTE 2: REVENUE AND OTHER INCOME Continued Other income/(expense): Net gain on disposal of investments 10,446 - Net loss on available-for-sale financial assets at fair value (after tax effect) (12,605) (20,642) Net loss on fair value of financial assets has been determined with reference to the market value of the investments at reporting date. NOTE 3: PROFIT BEFORE INCOME TAX Depreciation of buildings 234,201 182,376 Depreciation of plant and equipment 189,573 233,576 Bad debts written off - trade and other receivables - - NOTE 4: INCOME TAX EXPENSE The components of tax expense/(benefit) comprise: Current tax 6,815 (65,606) Deferred tax 93,993 111,770 100,808 46,164 The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax expense as follows: Prima facie tax payable at 27.5% (2016: 30%) 169,288 95,591 Less tax effect of: Income tax rate change on deferred tax assets 10,234 - Mutuality rate change on timing differences (1,714) (3.388) Franked dividends received (3,597) 1,059 Net non-allowable/non-assessable items (4,247) (3,833) Net mutual income and non allowable items (69,156) (43,265) Income Tax Expense 100,808 46,164 The applicable weighted average effective tax rates are: 16.4% 14.5% NOTE 5: CASH AND CASH EQUIVALENTS Cash on hand 17,000 32,000 Cash at bank 323,658 383,171 340,658 415,171 NOTE 6: TRADE AND OTHER RECEIVABLES Current Trade receivables 88,436 104,360 Provision for impairment - - Other receivables 29,698 16,659 118,134 121,019 Lease commitments receivable Future minimum lease payments receivable from non-cancellable operating leases at reporting date: Receivable - Not later than one year 164,091 213,369 Later than one year and not later than five years 161,476 325,567 325,567 538,936 Lease receivables relate to premises owned and let by the Club. NOTE 7: FINANCIAL ASSETS Current Fixed interest deposits 3,400,000 2,200,000 Non Current Available-for-sale financial assets at fair value - shares in listed corporations 358,383 267,966 Available-for-sale financial assets comprise investments in the ordinary share capital of various entities. There are no fixed returns or fixed maturity dates attached to these investments. NOTE 8: INVENTORIES Current - at cost Raw materials - Beverages and consumables 34,228 41,291 - Car parking vouchers - 1,114 34,228 42,405 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017