annual reportInvercargill Licensing Trust & ILT Foundation

2013Annual General Meetingto be held at Elmwood Garden7.30pm Wednesday 21 August 2013

Overview

Invercargill Licensing Trust | ILT Foundation

“The vast array of organisations we support reaches all corners of our community and that’s something I’m immensely proud of.”

Alan DennisPresident

“A community-owned enterprise such as ours delivers unrivalled benefits and continuing to make that a reality for the people of Invercargill is powerful motivation for us all.”

Greg MulveyGeneral Manager

The Invercargill Licensing Trust and ILT Foundation produced a solid profit performance during the 2012/2013 financial year despite still operating in a challenging economic environment.

Business activity remained flat and the aftermath of the Christ-church earthquakes also continues to impact negatively on our operations with a reduction in visitor numbers to the South Is-land.

Regardless, the ILT group strived to meet our dual objectives of reinvesting significantly in our portfolio of businesses and injecting a high level of returns to the community.

An extensive range of organisations and community projects undoubtedly benefited from the $9,477,000 in total grants allocated during the year - a slight increase on the previous year’s effort.

With both the ILT and ILT Foundation in a strong financial position, we will continue to make an unrivalled positive contribution to all facets of life within the Invercargill community. With a significant level of cash reserves for future expansion opportunities, it’s an integral role the Invercargill Licensing Trust will play long into the future.

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$10.92ILT GroupAn after tax profit of

MILLION

Consolidated Financial Performance

Review of your Trusts

Key components of the group result are:

• The Invercargill Licensing Trust net after-tax profit of $6.108 million (before grants) is up on last year’s result of $6.001 million.

• The value of our investment in DB South Island Brewery

Ltd increased by $169,000 due primarily to the timing of profit distributions which affects the net tangible asset value included in our financial statements.

• The ILT Foundation’s net surplus of $4.648 million is down

10.9% on last year’s result of $5.219 million. • Total grants allocated for the year were $9,477,000,

comprising $3,463,000 from the Invercargill Licensing Trust and $6,014,000 from the ILT Foundation. This represents a slight increase on the grants allocated last year.

The consolidated group consists of the Invercargill Licensing Trust, the ILT Foundation and the equity accounted value of the Invercargill Licensing Trust’s investment in DB South Island Brewery Ltd. The net after-tax profit, before grants, of the group is: 2013 2012

Invercargill Licensing Trust (Parent) $6,108,000 $6,001,000

Change in Value of Associated Company $169,000 ($175,000)

ILT Foundation $4,648,000 $5,219,000

Consolidated (Group) $10,925,000 $11,045,000

The consolidated net after-tax profit, before grants, is $10.925 million – a decline of 1.1% compared to last year’s $11.045 million.

for the year ended 31 March 2013

Zerofees Southland Sharks Basketball Team – Winners of the 2013 NBL

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An after tax profit of

MILLIONTotal Grants Allocated

$9.47 MILLION

Executive Management TeamGreg McElhinney, Gary Muir, Neil Affleck, Terry Laidlaw and Greg Mulvey.

Invercargill Licensing TrustExceeding budget expectations, the Invercargill Licensing Trust operating surplus before taxation and grants is $7.516 million – down 4.2% on last year but considered a very satisfactory performance.

The net after-tax profit, before grants, is $6.108 million – up on last year’s result of $6.001 million.

Overall, in comparison to last year’s result which included the revenue-boosting impact of the Rugby World Cup, it is a pleasing performance for the Trust.

Factors which influenced the result include:

• Total sales increased only 1% and reflect the challenging trading environment referred to earlier.

• Investment income was similar to last year.

• Operating expenses were well managed during the year with only a modest 1% increase on the previous year.

• The current year’s taxation expense is down $435,000, part of which relates to a prior year’s deferred taxation adjustment of $128,000.

Financial StrengthThe Trust’s financial position remains very strong with a low level of term debt and total assets of $84.6 million. This includes substantial cash reserves which will be used to fund future developments to ultimately benefit Invercargill residents for many years to come.

Equity has increased by $2.65 million to a total of $68.4 million.

Investing in the FutureIn the competitive world of hospitality, reputation is everything. Establishments featuring in our portfolio of businesses have earned numerous accolades over the years and we continually strive to ensure the expectations of our patrons are not only met, but exceeded.

The hospitality industry is constantly evolving and we are ever-mindful of changing trends - both locally and globally. It goes without saying that reinvesting significant capital expenditure back into our ventures is crucial to our future success.

We have invested in the following projects during the past year:

• Speight’s Ale House

One of Invercargill’s favourite inner-city

establishments, the Speight’s Ale House received an extensive refurbishment. Structural strengthening was completed to ensure the building itself meets building code requirements. It also presented an ideal opportunity to revamp the interior and ensure our own high standards are maintained at one of our most popular restaurant and bar complexes. As our Mission Statement proclaims, we will seek “to operate the best quality hospitality businesses” - our Speight’s Ale House is testament to that.

• Kelvin Hotel The Trust initiated a redevelopment

of the ground floor area at the Kelvin Hotel to bring it up to the high standard now evident throughout the rest of the complex. Conversion of the bottle store into a seminar/meeting room facility has been completed, providing a sought-after business venue in the inner-city. Redevelopment of the Chances Bar, to be re-launched as Editors Cut Sports Bar, is underway and due for completion mid-year, marking the last component of the hotel’s modernisation.

• Cable Court Motel

An extensive two-year project to refurbish all rooms at Cable Court Motel has reached completion. Located in Cumberland Street, Dunedin, the final 16 rooms at the complex were upgraded during the 2012/13 year resulting in a modern, user-friendly environment for guests to enjoy.

Several other establishments, including

our flagship Ascot Park Hotel, received upgrades during the year as part of our on-going maintenance programme to ensure all our individual businesses reflect our high standards.

Last year we reported planning work had been advanced for a complete rebuild of the Waikiwi Tavern and it was our intention to continue progressing this potential project in the year under review. However, we experienced some delays as we sought approval from the authorities to transfer the gaming machines in the existing tavern to the new development. With approval now received, design work will be completed with the aim of commencing construction in mid-2014. This major development will prove exciting for the large catchment around the Waikiwi suburb.

It was also reported last year that planning work had been undertaken for an expansion of our Ashford Motor Lodge in Papanui Road, Christchurch, to meet increased demand for accommodation in the city. This project also struck delays as planning issues were worked through and, at the time of publication, no final decision had been made. However, the Trust remains hopeful the project will commence during the new year provided construction costs meet our budget expectations.

Proposed developments stem from our longstanding policy of investing in our hospitality businesses so we remain well positioned for the future and able to pro-duce reasonable profit streams to ultimate-ly support the Invercargill community.

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ILT (Parent)An operating surplus (before tax) of

MILLION$7.51

Alan DennisPresident

Adv Dip TCHG

Mike MikaDeputy President

LL.B, BA

Sean Bellew Neville CookMBA

Angela NewellBA PG DipDip TCHG

LTCL

John YoungLL.B, BA

Ray HarperILT Foundation

Board OnlyQSM QSO

Chris WardILT Foundation

Board OnlyLL.B MNZTA

Registered Trustee

Ann EustaceILT Foundation

Manager

ILT Foundation

Invercargill Licensing Trust & ILT Foundation Boards

Your City, Your Trust

Established by the ILT to own and operate all gaming machines in its establishments, the ILT Foundation is a model designed to ensure a maximum level of grants is returned to our Invercargill community. All funds raised in the city are allocated to organisations within its boundary.

Since its inception, the ILT Foundation has remained acutely aware of its social responsibilities. It adheres to a comprehensive Gambling Harm Minimisation Policy and undertakes extensive staff training in order to recognise the need for care in dealing with a sensitive product such as gambling. The community is notably more aware of the social impact of gambling and the ILT Foundation shares in that commitment to provide safe gaming venues.

The ILT Foundation’s excellent performance in past years has been well-documented, particularly with notable accolades in the Department of Internal Affairs’ Gambit publication. The level of profits returned to the community has been consistently high and this past year was no exception with the ILT Foundation distributing grants totalling $6,014,000. The year’s grants were funded from the Foundation’s annual profit of $4,648,000 and the balance was funded from prior years’ reserves – which have now been fully distributed. The

percentage of annual profit distributed this year was 48.6% which is one of the highest levels of all gaming machine societies in New Zealand. The minimum level required by the Department of Internal Affairs is 37.12%.

For the year ended 31 March 2013 the ILT Foundation achieved an operating profit (before grants) of $4,648,000 - down 10.9% on last year’s result of $5,219,000 and a direct result of declining gaming revenue.

Our dedicated Board is primarily community-elected, another example of the best model for a gaming society. Connected to our local community, Trustees are well-informed to make decisions on where funding will have the greatest benefit and have served their constituents strongly by approving grants which support a vast array of organisations across education, sport, arts, culture, welfare, health, religion and leisure time activities.

All current ILT Board Members are represented on the ILT Foundation, together with the Trust’s solicitor Chris Ward and retired ILT Past President Ray Harper.

It’s an uncomplicated slogan which epitomises our philosophy.

By its very nature, as a community-owned enterprise, the ILT is inextricably linked to the city of Invercargill and accountable to its residents.

We are not immune to the on-going debate about the benefits of the licensing trust model but now, more than ever, there is an increasing appreciation around the globe for the benefits organisations such as ours deliver.

Perhaps the best measure of what the Trust achieves on behalf of our community is simply to imagine life without it.

• Our city may not have had the high calibre assets of Stadium Southland, Splash Palace and the Velodrome;

• Our residents may have been

without life-saving initiatives like the defibrillator project or the school swimming programme;

• Our children may have been deprived of educational innovations such as En-rich@ILT or the interactive whiteboards which exist in every classroom;

• Our sporting stars may have struggled to reach the international stage.

However, we don’t have to contemplate those possibilities thanks to the ‘bold social experiement’ which led to the creation of the ILT in 1944 - the first licensing trust established in New Zealand.

Photo Courtesy of The Southland Times

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An operating surplus (before tax) of

MILLION ILT FoundationAn operating surplus of

MILLION$4.64

Supporting our communityThere is no sector in our community which does not benefit from ILT or ILT Foundation funding and that’s exactly as it should be.

Over 400 organisations have been helped to achieve their respective goals this year. Below is merely a snapshot of some of these. Total grants of $9,477,000 were allocated ($3,463,000 from the Invercargill Licensing Trust and $6,014,000 from the ILT Foundation), compared to $8,553,000 last year.

In the ClassroomTertiary Scholarships: Over 170 Invercargill students currently receive an ILT scholarship to assist with their educational endeavours - both locally and abroad - with each receiving $2,000 annually for three years.

Trade Scholarships: The ILT and ILT Foundation, with support from the Southern Institute of Technology, developed Invercargill’s first trade scholarship programme based on awards for achievement. Up to 65 scholarships (valued at $1,000 each) will be on offer annually.

Invercargill Secondary Schools’ Network Trust: Giving student support to all Invercargill secondary schools, this initiative provides an education-led, multi-disciplinary service for at-risk students.

Youth Development Southland Region Trust: Kiwi Can is a positive child devel-opment programme designed to educate 5-12 year olds about practical life skills and values - such as honesty, teamwork and perseverance - with the aim of sup-porting them in their journey from child-hood to adulthood. It is currently being delivered in seven Southland schools.

Enrich@ILT: This innovative programme provides a unique learning environment for gifted and talented Invercargill primary school students.

On the Sporting PitchWe’re proud to be the major funders of sport and recreation in our city with every code receiving assistance.

Cycling Southland: The 2012 Junior World Track Championships showcased the velodrome to a global audience and reinforced the stellar job Cycling Southland continues to do for its

increasing membership.

Sporting scholarships: Almost 80 athletes achieving the title of New Zealand representative have benefited from our scholarship programme to assist them in their chosen pursuit.

Athletics Southland: Hosting the 2013 South Island Colgate Games at Surrey Park attracted over 1,000 of our future athletic stars to compete in the three-day event in January.

Southland Amateur Weightlifting Association: Sonia Maneana recently secured her second title at the Power Lifting World Championships held in Russia, setting a new record of 236kg and cementing her status as the best on the planet in her class.

For Art’s SakeSouthland Art Society - ILT Art Awards: Not only does the ILT provide the major funding for the annual ILT Art Awards, the ILT Foundation also provides on-going operating costs fo the City Gallery which displays the art works.

Children’s Art Experience! Trust: The stunning artwork emerging as a result of the programmes that this Trust runs for local children is testament to the talent just waiting to be uncovered.

ILT Kidzone: The inaugural festival held in 2005 was an overwhelming success and ILT Kidzone has grown exponentially to now be staged over six days in order to cater for up to 11,000 eager attendees - both young and old.

Murihiku Maori and Pasifika Cultural Trust: With the aim of empowering children by sharing Maori and Pasifika culture through song and dance, Polyfest is a highlight on the calendar and attracts thousands of participants each year.

Health, Welfare and Aged CareNeurological Foundation of New Zealand: We injected $150,000 into a campaign to purchase crucial equipment for both treatment and vital research which will result in improved outcome for patients as part of the Chair in Neurosurgery based in Dunedin. This is the closest centre for specialist neurological medical assistance for Invercargill residents.

Southland Foodbank Charitable Trust: Funding towards operating costs and the

purchase of a van for delivery and pick-up of food for families in need.

Grey Power Southland: We assist with operating expenses annually to support this valued organisation in supporting our older residents.

Community Facilities and EventsStadium Southland: We’ve been major funders of Stadium Southland and the adjacent velodrome since the concept was first mooted in the mid-1990’s and, like so many other people, we consider the complex our province’s most valuable asset. Both the ILT and ILT Foundation are contributing substantial sums throughout the rebuild project, including $450,000 and $700,000 respectively during the past year.

ICC Skate Park: Catering for a mix of ages and abilities, this multi-purpose facility will meet the community’s needs when it is constructed at the existing Elles Road site.

Southland Buskers Festival: Internationally-acclaimed performers entertained hundreds of families with their energetic and skilful shows, with our grants keeping ticket prices to a minimum and providing numerous free events.

Burt Munro Challenge: Each November motorbike enthusiasts from around the world rumble into Invercargill to experience ‘one huge weekend’ and celebrate the legend that is Burt Munro, all while providing our city with a significant economic boost.

LegislationImportant new legislation relating to alcohol reform was passed by Parliament during the year to produce the Sale and Supply of Alcohol Act 2012.

Whilst this Act did not go as far as many would have liked in terms of alcohol reform, it will nonetheless have important implications for our Trust as an operator of licensed premises as well as the community as a whole. The majority of changes enacted will come into effect on two specific dates during 2013 - June 18 and December 18.

It was pleasing to note the new Act followed the recommendations of the Law Commission Report and the provisions of the Alcohol Reform Bill in preserving the current structures and rights of licensing trusts - something we advocated strongly for to ensure the immense contribution the Invercargill Licensing Trust makes to its community would be maintained for future generations.

Last year we reported that there was wide spread concern on the proposal to remove the distribution function of gaming proceeds from organisations such as the ILT Foundation. It is pleasing to report that politicians have listened and it would appear that the Gambling (Gambling Harm Reduction) Amendment Bill is now of no threat to the ILT Foundation. We thank our community for its valuable support with this matter.

ILT AND ILT FOUNDATION GRANTS BY CATEGORY 2012/2103

Sport 40%

Community, Events & Recreation 7%

Health/Welfare 13% Education 16%

Arts/Culture 7%

Community Facilities 17%

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Our missionTo operate the best quality hospitality businesses, making it possible for us to

return significant benefits to the people of Invercargill.

To the FutureAs the 2013/14 financial year looms, we are not anticipating any significant improvement to the economic environment in which we operate. Our aim is simply to maintain profit levels similar to those achieved in the year under review.

In respect of the ILT Foundation, gaming revenue continues to decline and therefore the surplus it generates and the amount returned to the community is expected to reduce accordingly.

On a positive note, the rebuilt ILT Stadium Southland will once again open its doors and reclaim its rightful place at the heart of Southland sport. The impact its return will have on the community can not be underestimated with up to 10,000 users expected each week to engage in a host of endeavours ranging from sporting to cultural genres.

A world-class venue equipped with state-of-the-art technology, the national and international events it will attract will certainly add to the vibrancy of our city.

From the Trust’s perspective, we will continue to reinvest in our business ventures, reflecting the unwavering faith we have in the South’s future prosperity. The driving force behind any future initiatives we embark on is our desire to provide quality licensed premises for our customers to enjoy.

After all, behind everything we do is our vision … for Invercargill to grow and develop into the best place to live, work and play.

The BoardThe Invercargill Licensing Trust Board comprises: Alan Dennis (President), Mike Mika (Deputy President), Sean Bellew, Neville Cook, Angela Newell and John Young.

The Trustees of the ILT Foundation are: Alan Dennis (Chairman), Mike Mika, Sean Bellew, Neville Cook, Angela Newell, John Young, Chris Ward and Ray Harper.

Appreciation“You need to be aware of what others are doing, applaud their efforts, acknowledge their successes, and encourage them in their pursuits. When we all help one another, everybody wins.” - Jim Stovall, Olympic weightlifter

Teamwork plays an integral role in any success and we appreciate the unwavering dedication of every member of our Board, management and staff.

We wish to record our sincere thanks for the exceptional contribution each makes to our Trust.

Alan Dennis Greg MulveyPRESIDENT GENERAL MANAGER

Puppy love: It’s no wonder children adored these little cuties at ILT Kidzone.

Music to our ears: ILT funding continues to assist the Invercargill Garrison Band Society in achieving its goals.

Is she or isn’t she?: A performer at the Southland Buskers Festival attracts the curiosity of a passerby.

Tools of the Trade: SIT chief executive Penny Simmonds and ILT president Alan Dennis launch the new Trade Scholarships.

Happy snappers: Students at Enrich@ILT embark on another exciting project.

From Russia with love: Southland powerlifter Sonia Maneana with her haul of World Championship medals.

Full throttle: Competitors in the Burt Munro Challenge power their way down Oreti Beach.

Art for art’s sake: Children’s Art Experience! Trust

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Our visionFor Invercargill to grow and develop into the best place to live, work and play.

Financial Report

Reporting Disclosures

Summary Financial Statementsfor the year ended 31 March 2013This is a summary of the full Financial Statements included

in the Trust’s Annual Report for the year ended 31 March 2013. The full Financial Statements have been prepared in accordance with NZ GAAP and are based on the Invercargill Licensing Trust and Group being New Zealand profit-oriented entities. This summary has been prepared in accordance with FRS-43 - Summary Financial Statements and all values are presented in New Zealand dollars. It has been authorised for issue by G J Mulvey, General Manager, on 1 August 2013. An unmodified audit report was issued on the full Financial Statements. The summary financial statements cannot be expected to provide as complete an understanding of the financial performance, financial position and cash flows of the Group as the full Annual Report. A copy of the full Annual Report dated 1 August 2013 is available from the Head Office of the Invercargill Licensing Trust, 252 Dee Street, Invercargill.

Grants Expense (Change in Accounting Policy)Grants expense in these financial statements represents grants that have been approved and allocated by Trustees during the year less any grants returned during the year. Last year’s report included all of the ILT Foundation’s gaming profit as a grant expense. This was based on the Department of Internal Affairs gaming regulations which required that form of reporting. This has now changed to the policy stated above which has resulted in a decreased level of grants by $329,749 being recorded in the comparative 2012 Statement of Financial Performance. Grants for the Group were previously $8,883,054 in 2012 but are now restated as $8,553,305. This change has also resulted in reclassifying $1,213,421 as Equity, previously reported as a Current Liability in 2012.

Capital Commitments The Invercargill Licensing Trust (Parent) had no projects in progress at 31 March 2013 that involved a future capital commitment (2012: one project involving $186,000). The ILT Foundation had a future capital commitment for new gaming assets valued at $475,000 as at 31 March 2013 ($2012: nil)

Non-Capital Commitments As at 31 March 2013 there were no non-capital commitments (2012: nil)

Grant Commitments There was one future grant commitment of $30,000 as at 31 March 2013 (2012: $30,000)

Operating Lease Commitments (Lessee) The Invercargill Licensing Trust (Parent) lease one building under a non-cancellable operating lease. The future minimum lease payments payable within the next year are $7,000 (2012: $7,000)

Contingent Assets and Liabilities The Invercargill Licensing Trust (Parent) had in place a fidelity guarantee for $55,000 as at 31 March 2013 (2012: a $55,000 fidelity guarantee)

Related Parties The Invercargill Licensing Trust (Parent) has provided gaming machine rental, administration and other services to the ILT Foundation valued at $1,427,496 for the year (2012: $1,437,956)

The Invercargill Licensing Trust (Parent) purchases liquor products from it’s associate company, DB South Island Brewey Ltd, on commercial arms length terms and conditions. Annual purchases ranged between $12m and $13m over the 2012 and 2013 financial years. As at 31 March 2013 $1,088,000 was owing to DB South Island Brewery Ltd (2012: $1,004,000)

The Group’s Trustees are members of various Invercargill organisations who have had dealings with the Group. This has involved monetary grants totalling $2,809,000 (2012: $3,342,000). A Trustee’s legal firm has also provided legal services amounting to $26,458 (2012: $5,904).

STATEMENT OF COMPREHENSIVE INCOME Group Parent

For the year ended 31 March: 2013 2012 2013 2012

$ $ $ $Operating Income 90,485,522 90,455,973 82,486,011 81,668,239 Less Cost of Sales (47,904,748) (47,056,420) (47,904,748) (47,056,420)Add Finance Income 1,759,680 1,722,651 2,062,697 2,059,572 Add share of Profit of Associate Company 636,876 374,078 - - Less Finance Costs (22,856) (2,268) (22,856) (2,268)Less Operating Expenses (32,621,105) (32,605,503) (29,104,982) (28,824,626)Operating Surplus before Taxation and Grants 12,333,369 12,888,511 7,516,122 7,844,497 Less Current Year Taxation (1,407,832) (1,843,484) (1,407,832) (1,843,484)Operating Surplus after Taxation 10,925,537 11,045,027 6,108,290 6,001,013

Less Grants (9,476,579) (8,553,305) (3,462,547) (3,664,031)TOTAL COMPREHENSIVE INCOME 1,448,958 2,491,722 2,645,743 2,336,982

STATEMENT OF FINANCIAL POSITION Group Parent

As at 31 March: 2013 2012 2013 2012

$ $ $ $Current Assets 31,101,025 32,239,878 27,930,766 27,002,709 Non Current Assets 61,287,127 60,191,694 56,675,817 55,725,336 Total Assets 92,388,152 92,431,572 84,606,583 82,728,045

Current Liabilities 11,856,301 12,986,056 9,985,450 10,390,032 Non Current Liabilities 6,218,545 6,581,168 6,218,545 6,581,168 Total Liabilities 18,074,846 19,567,224 16,203,995 16,971,200

NET ASSETS 74,313,306 72,864,348 68,402,588 65,756,845

STATEMENT OF CHANGES IN EQUITY Group Parent

For the year ended 31 March: 2013 2012 2013 2012

$ $ $ $Equity at start of Year 72,864,348 70,372,626 65,756,845 63,419,863 Add Total Comprehensive Income 1,448,958 2,491,722 2,645,743 2,336,982

EQUITY AT END OF YEAR 74,313,306 72,864,348 68,402,588 65,756,845

Represented by: Retained Earnings 63,814,478 63,322,319 61,455,399 59,597,109 Reserves 6,197,540 6,028,194 2,645,901 2,645,901 Donations Reserve 4,301,288 3,513,835 4,301,288 3,513,835

STATEMENT OF CASH FLOWS Group Parent

For the year ended 31 March: 2013 2012 2013 2012

$ $ $ $Cash Flow from Operating Activities 2,444,215 6,557,258 4,002,124 6,140,105 Cash Flow from Investing Activities (7,999,782) (5,836,420) (10,078,311) (5,706,072)Cash Flow from Financing Activities (31,695) (32,037) (31,695) (32,037)Net Increase (Decrease) in Cash Held (5,587,262) 688,801 (6,107,882) 401,996

Add Opening Cash Brought Forward 12,352,846 11,664,045 9,732,245 9,330,249

ENDING CASH CARRIED FORWARD 6,765,584 12,352,846 3,624,363 9,732,245

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Independent Auditor’sReport

Summary Financial Statementsfor the year ended 31 March 2013

INCOME OVER THE LAST 5 YEARS

90,000,000

80,000,000

70,000,000

60,000,000

50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

0 2009 2010 2011 2012 2013

ILT Foundation Invercargill Licensing Trust

OPERATING PROFIT OVER THE LAST 5 YEARS(BEFORE DEDUCTING TAXATION AND GRANTS)

8,000,000

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0 2009 2010 2011 2012 2013

ILT Foundation Invercargill Licensing Trust

HOW EACH DOLLAR OF INVERCARGILL LICENSING TRUST (PARENT) INCOME IS DISTRIBUTED

Staffing Costs 21%

Sundry Operating Expenses 10%

Depreciation 3% Income Tax 2%Surplus available after Tax 7%

Cost of Goods for Sale 57%

HOW EACH DOLLAR OF ILT FOUNDATION INCOME IS DISTRIBUTED

Surplus available for Donations 50%

AdministrationCosts 2%

OperatingExpenses 20%

Depreciation 5%Gaming Machine Duty 23%

To the readers of Invercargill Licensing Trust and group’s summary financial statementsfor the year ended 31 March 2013

We have audited the summary financial statements as set out on pages 8 to 9, which were derived from the audited financial statements of the Invercargill Licensing Trust (the Trust) and group for the year ended 31 March 2013 on which we expressed an unmodified audit opinion in our report dated 1 August 2013.

The summary financial statements comprise the summary statement of financial position as at 31 March 2013, and summaries of the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and the notes to the summary financial statements that include accounting policies and other explanatory information.

Opinion

In our opinion, the information reported in the summary financial statements complies with FRS-43: Summary Financial Statements and is consistent in all material respects with the audited financial statements from which they have been derived.

Basis of opinion

The audit was conducted in accordance with the Auditor-General’s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand).

The summary financial statements and the audited financial statements from which they were derived, do not reflect the effects of events that occurred subsequent to our report dated 1 August 2013 on the audited financial statements.

The summary financial statements do not contain all the disclosures required for audited financial statements under generally accepted accounting practice in New Zealand. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of the Trust and group.

Responsibilities of the Trustees and the Auditor

The Trustees are responsible for preparing the summary financial statements in accordance with FRS-43: Summary Financial Statements. The Trustees are also responsible for the publication of the summary financial statements, whether in printed or electronic form. We are responsible for expressing an opinion on those statements, based on the procedures required by the Auditor-General’s auditing standards including, the International Standard on Auditing (New Zealand) 810: Engagements to Report on Summary Financial Statements.

Other that in our capacity as auditor we have no relationship with, or interest in, the Trust or any of its subsidiaries.

Ian Lothian

Audit New ZealandOn behalf of the Auditor-GeneralDunedin, New Zealand1 August 2013

9Invercargill Licensing Trust

Grants to the Community

Grants to the Community

2nd NZEF Club 60060s Up Movement 500Age Concern Southland 539All Saints Badminton Club 500Alzheimers Society Southland Inc 5,000Amputee Society of Otago & Southland Inc 600Appleby Cricket Club 3,000Arts in Focus 2,000Ascot Sports Club 1,000Athletics Southland 17,500Aurora College 1,000Autism New Zealand Inc 600Badminton Southland 18,500Blue Light Invercargill Branch Inc 16,000Bowls Southland 20,000Brigadiers Netball Club 782Cancer Society of NZ - Southland Division Inc 3,000Chamber Music NZ - Southland Branch 12,000Children’s Art Experience! Trust 10,000Citizens Advice Bureau 7,000City of Invercargill Highland Pipe Band 20,000Clifton Hunting & Fishing Club 1,200Clifton Pool Club 2,800Club Southland Inc 2,000Craftys United Softball 1,000Cycling Southland 80,000Dan Davin Literary Foundation 6,000Dance Southland Inc 500Diabetes Southland Inc 4,000Donelle Manihera - scholarship 1,000Dragons Dart Club 500Eastern Suburbs Rebels Pool Team 1,000Environment Southland 2,500Foveaux Toastmasters Club 500Gallop South 500Georgetown Bowling Club 500Glen 560 All Sports Club 1,500Glen Country Music Club 3,000Glengarry Piping & Dancing Society 500Golf Southland Inc 10,800Grasmere Netball Club 1,200Halberg Trust - Southland 4,910Hawaiian Delights Rugby Team 2,000Hearing Association Southland Branch 8,000Hockey Southland Inc 25,500Hospice Southland Charitable Trust 31,000ILT Education Conference 2013 20,000ILT Hotel Dart League 800ILT Tertiary Education Scholarships 374,129ILT Trade Scholarships 2013 65,000Invercargill Artificial Sports Surface Charitable Trust 20,000Invercargill Bowling Club 700Invercargill Christian Centre 20,000Invercargill City Charitable Trust 20,000 - 2013 Southland Buskers Festival Invercargill City Council 43,538 - Invercargill Schools’ Swimming Programme 2013 year - Peter Arnett Documentary - Celebration of the 20th Anniversary of the signing of the City Council’s sister city agreement with the City of Kumagaya - ‘Two Little Boys’ premier Invercargill Contract Bridge Club 6,500Invercargill Garrison Band/Ascot Park Brass of Invercargill 20,000Invercargill Gymnastic Club Inc 8,000Invercargill Hockey Association 8,000Invercargill Musical Theatre Inc 27,000Invercargill Old Boys’ Cricket Club 2,500Invercargill Primary Principals’ Association 12,000Invercargill Primary School Educational Initiatives Trust – enrich@ILT 125,000Invercargill Repertory Society Inc 12,500Invercargill Rugby Football Club 2,000Invercargill Secondary Schools’ Network Trust 50,000Invercargill Summer Festival Charitable Trust 12,500Invercargill Tap Dancing Association 4,000

Invercargill Truck Show & Parade 5,000Invercargill Working Men’s Club 4,200James Hargest College 10,750Justices of the Peace Association - Southland 500Koru Care Southland Charitable Trust 6,000Kumagaya Friendship Organisation 2,000Marist Brothers Old Boys’ Rugby Football Club 19,000Marist Cricket Club 2,500Meals on Wheels 2,258Murihiku Maori & Pasifika Cultural Trust 5,000Murihiku Swimming Club Inc 1,000National Youth & Local Government Leadership Conference 1,500Netball South Zone Inc 250,000Netball Southland 60,000Neurological Foundation of NZ - Southland Branch 51,000New Zealand Law Society - Southland Branch 500Newfield Dart Club 1,000Newfield Sports Club 800NZ Federation of Womens Institute - Southland Branch 1,500NZ Institute of Management - Southland 3,000NZIS - Southland Branch 1,500Old Boys’ Association Football Club 10,000Outward Bound 56,256Senior Citizens Christmas Dinner 29,449PACIFICA Invercargill Branch Womens Council 3,000Performing Arts Competitions Association of NZ Inc 17,000Phoenix Synchro (Southland) 17,500Pirates Old Boys’ Rugby Club 2,000Pregnancy Help Inc 3,500Probus Club Invercargill Central 500Queens Park Golf Club Inc 4,000Rape & Abuse Support Centre Southland Inc 5,000Rosedale Marching Teams 1,000Rotary Club of Invercargill North 2,500Rotary Club of Invercargill South 8,000Rotary International Zone 7B Institute 4,000Royal NZ Plunket Society - Invercargill Branch Inc 800Rugby Southland 405,652Save the Children Fund 3,500SBS Golf Invitational 1,700Soroptimist International of Invercargill 500South Centre Anglican Care Trust Southland 17,500South Island Post Office Golf Tournament 1,000Southern District Health Board 5,500Southern Film Makers Trust 15,000Southern Institute of Technology 2,000Southern Pastel Artists 4,000Southern Storytellers 2,806Southern Women’s Hockey Club 1,724Southland Art Society Inc 29,000Southland Basketball Association 205,000Southland Bowling Club 2,400Southland Boxing Association Inc 1,000Southland Boys’ High School 5,784Southland Cage Bird Club 2,000Southland Competitions Society Inc 4,500Southland Cricket Association 45,000Southland Deer Farmers Association 1,500Southland Evergreen Softball 2,500Southland Festival of Running Committee 4,000Southland Football Inc 31,322Southland Girls’ High School 23,000Southland Indoor Bowls Centre Inc 4,000Southland Indoor Leisure Centre Charitable Trust - Stadium Southland 450,000Southland Kindergarten Association 3,000Southland Literacy Association 8,000Southland Master Builders Association 2,000Southland Mathematical Association Inc 1,000Southland Multiple Sclerosis Society Inc 3,830Southland Otago Amateur Weightlifting Association 1,222Southland Piping & Drumming Development Trust 20,000Southland Riding for the Disabled 1,000Southland Rowing Association Inc 4,000Southland Santa Parade Charitable Trust 5,000Southland Science & Technology Fair 1,000Southland Secondary Principals’ Association 18,500Southland Secondary Schools’ Cultural Scholarship 4,500Southland Secondary Schools’ Sports

Association 13,000Southland Softball Association 15,000Southland Table Tennis Association Inc 1,000Southland Pool Club 1,000Southland Tennis Association Inc 20,449Southland Triathlon & Multisport Club 3,500Southland Warm Homes Trust 60,000Southland Water Polo 4,000Southland Womens’ Club 4,000Southland Youth One Stop Shop Trust Board 25,000Sport Southland 52,300Squash City Invercargill Inc 4,500Squash Southland 23,300St Catherine’s College Reunion 500St David’s Church Awesome Angels Playgroup 2,298St Mary’s Netball Club 5,348Stadium Southland - ILT Christmas Variety Show 8,000Star Rugby Football Club 2,000Swim Southland 17,000Te Rangi Bowling Club 900Te Wharekura O Arowhenua 500TOA Fighting Systems Southland Inc 5,000Touch Southland 10,000Venture Southland 46,100 - ILT Kidzone Festival - New Years Eve Party - Head Cases ExhibitionVerdon College 3,000Waihopai Rowing Club Inc 800Waikiwi Bowling Club 600Waikiwi Kindergarten 2,000Waikiwi Rugby Club 2,000Waverley Bowling Club 1,400Windsor Community Church 5,000Youth Development Southland Region Trust 2,000 Grants under $500 11,664Grants Refunded - Not Required (15,763) Total $3,462,547

Age Concern Southland 9,200 Alzheimers Society Southland Inc 18,000 Aqua Health Inc 2,250 Arts in Focus 2,000 Ascot Community School 93,642 - Invercargill Primary 2013 Interactive Whiteboard facilitator/equipment Athletics Southland 79,000 Athletics Southland - 3 scholarships 3,500 Aurora College 3,200 Autism New Zealand Inc 5,000 Awarua Boating Club 2,500 Awarua Social & Health Services 500 Badminton Southland 79,000 Badminton Southland - 2 scholarships 4,000 Barnardos NZ - Invercargill Branch 36,000 Blue Jay Marching Club 2,500 Blue Light Invercargill Branch Inc 10,000 Blues Indoor Bowling Club 400 Bluff Promotions - Skate Jam Festival 1,500 Bluff Rugby Club 2,000 Bluff Rugby League Club 1,215 Bluff School 570 Bluff Yacht Club 450 Bowls Southland 66,500 Bush Haven Native Bird Rehabilitation Trust 1,000 Calvary Hospital Southland Foundation 4,000 Cancer Society of NZ - Southland Division Inc 10,000 Child Matters 3,000 Children’s Art Experience! Trust 29,500 City of Invercargill Rugby League Club 2,200 City of Invercargill Highland Pipe Band 50,000 Coastguard Riverton Inc 1,500 Collegiate Hockey Club 1,770 Collegiate Netball Club 2,500

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Collegiate Rugby Football Club Inc 15,000 Conductive Education (Southland) Charitable Trust 12,000 CS Arts Charitable Trust 4,500 Cycling Southland 240,000 Cycling Southland - 8 scholarships 11,000 Dan Davin Literary Foundation 2,000 Dance Opportunities Inc - scholarship 2,000 Dance Southland Inc 20,000 Dance Southland Inc - scholarship 2,000 Deep South Debonaires 1,700 Demons Softball Club 3,000 Diabetes Southland Inc 7,000 Disabilities Resource Centre Southland Charitable Trust 12,500 Dodgers Softball Club - Invercargill 5,000 English Language Partners Southland Inc 6,500 Environment Southland - walking/cycling track 30,000 Epilepsy Association of NZ - Southland Branch 8,000 Excellence in Sport South Island 15,000 Foveaux Harmony Chorus Inc 4,000 Georgetown Bowling Club 10,350 Georgetown Indoor Bowls Club 500 Georgetown Piping & Dancing Society 1,000 Glengarry Piping & Dancing Society 1,800 Golf Southland Inc 30,000 Greenacres Country Club Inc 67,700 GRG Invercargill Support Group 200 Harvestfield Christian Centre 13,000 Head Injury Society of Southland Inc 10,000 HETTANZ Southland 600 Hockey Southland Inc 80,000 Hospice Southland Charitable Trust 50,000 Institute of Registered Music Teachers NZ - Southland 500 Invercargill Artificial Sports Surface Charitable Trust 20,000 Invercargill Christian Centre 80,000 Invercargill Citizens Bowling Club 4,500 Invercargill City Charitable Trust 20,000 - 2013 Southland Buskers Festival Invercargill City Council 214,716 - Invercargill Schools’ Swimming Programme 2013 year - Multi-purpose skate park; projection equipment hire - Mobile pool hoist; schools’ crossing patrols recognition Invercargill Diamonds Leisure Marching Team 600 Invercargill Garrison Band/Ascot Park Brass of Invercargill 45,000 Invercargill Garrison Band/Ascot Park Brass of Invercargill - 2 scholarships 3,000 Invercargill Golf Club Inc 18,250 Invercargill Gymnastic Club Inc 8,000 Invercargill Harness Racing Club Inc 15,000 Invercargill Indoor Bowls Sub Centre 1,500 Invercargill Irish Society 2,650 Invercargill Musical Theatre Inc 25,000 Invercargill Primary School Educational Initiatives Trust - enrich@ILT 270,000 Invercargill Repertory Society Inc 12,500 Invercargill Rifle Club 750 Invercargill Rowing Club 30,000 Invercargill Rugby Football Club 15,000 Invercargill Secondary Schools’ Network Trust 150,000 Invercargill Toy & Puzzle Library 2,500 James Hargest College 250 Jellicoe Sea Scouts 10,000 Jubilee Budget Advisory Service 15,000 Kew Bowling Club Inc 3,700 Machaceh Trust 1,600 Makarewa Bowling Club 350 Makarewa Playcentre 1,200 Makarewa Squash Club 1,000 Murihiku Maori & Pasifika Cultural Trust 21,000 - Polyfest Murihiku Swimming Club Inc 1,000 Mustangs Masters Softball Team 1,000 Myross Bush Netball Club 1,500 Nam Wah Pai Kung Fu Southland 500 Netball Southland 200,000 Neurological Foundation of NZ - Southland Branch 100,000 NZ Jet Boat Association - Southland Branch 2,500 OCC - Terrific Tots 2,000 Old Boys’ Association Football Club 3,812

Onslow Indoor Bowling Club 600 Orca Swimming Club Inc 3,000 Order of St John - Invercargill Area 4,800 Oreti Park Speedway 1998 35,000 Orphans Aid International Charitable Trust 500 Otago Southland Area of NZ Pony Club Association 250 Otago Southland Chinese Association - Invercargill Branch 200 Otatara Landcare Group 1,840 Otatara Netball Club 1,000 Otatara School 10,000 PACT Group - Invercargill 2,000 Panthers Softball Club 6,000 Parent to Parent 7,850 Performing Arts Competitions Association of NZ Inc 15,000 Phoenix Hockey Team 2,500 Phoenix Synchro (Southland) 35,000 Pirates Old Boys’ Rugby Club 27,000 Presbyterian Support Services - Family Works; Children’s Day 132,000 Probus Club Invercargill Central 400 Queens Park Ladies’ Golf Club 750 Rape & Abuse Support Centre Southland Inc 20,000 Rotary Club of Invercargill South 500 Royal Guards Leisure Marching Team 650 Royal NZ Ballet - Invercargill Performances 6,000 Royal NZ Foundation for the Blind - Invercargill Branch 2,000 Royal NZ Pipe Bands-Southland Branch - scholarship 2,000 RSPCA - Southland 225,000 Rugby Southland 350,000 Rugby Southland Referees Inc 2,000 Sacred Heart School 500 Samoan Methodist Church 400 SBS Golf Invitational 1,500 Shakespeare in the Park Charitable Trust 6,000 Southend United (2010) AFC Inc 5,500 Southend United Junior Football Club Inc 2,000 Southern City Church 10,000 Southern District Health Board 15,000 - Incubator Schools’ Programme Southern Institute of Technology - Trade scholarships 20,000 Southern Miniature Horse Club 800 Southern Models & Modellers Club 1,000 Southern Patchwork & Quilters Circle 400 Southland A & P Association 4,000 Southland ACC Advocacy Trust 5,000 Southland Aero Club Inc 4,200 Southland Art Foundation 4,500 Southland Art Society Inc 16,700 Southland Asthma Society 20,000 Southland Basketball Association 85,500 Southland Basketball Association - 2 scholarships 1,600 Southland Battalion Boys’ Brigade 15,000 Southland Beneficiaries and Community Rights 25,000 Southland Billiards and Snooker Association 3,250 Southland BMX Club 800 Southland Boys’ High School - 3 scholarships 3,000 Southland Canoe Club 2,576 Southland Clay Target Club 20,000 Southland Community House Charitable Trust 7,500 Southland Cook Island Christian Church 10,000 Southland Cricket Association 133,995 Southland Darts Association 2,000 Southland District Rugby Football League Inc 40,000 Southland Education 25,000 Southland Fire Service Museum Society 5,000 Southland Foodbank Charitable Trust 30,000 Southland Football Incorporated 75,000 Southland Football Incorporated - scholarship 1,000 Southland German Shepherd Dog Club 2,000 Southland Golf Club Inc 37,766 Southland History Fair 950 Southland Indoor Bowls Centre Inc 26,000 Southland Indoor Bowls Umpires Association 500 Southland Indoor Leisure Centre Charitable Trust (Stadium Southland) 700,000 Southland Kindergarten Association 21,800 Southland Life Education Community Trust 5,000 Southland Mature Employment Services 6,000 Southland Motorcycle Club Inc 50,000 - Burt Munro Challenge 2012 - National Road Race Motorcycle event

Southland Mountain Bike Club 5,000 Southland Mountain Bike Club - scholarship 2,000 Southland Multicultural Council Inc 8,000 Southland Multiple Sclerosis Society Inc 17,500 Southland Musicians Club 2,600 Southland Natural History Field Club Inc 1,626 Southland Olympic Weightlifting Inc 1,500 Southland Olympic Weightlifting Inc - 6 scholarships 1,550 Southland Otago Amateur Weightlifting Association 851 Southland Otago Amateur Weightlifting Association - 6 scholarships 9,000 Southland Piping & Drumming Development Trust 30,000 Southland Pony Club Inc 3,700 Southland Power Boat Club 5,000 Southland Primary Schools’ Cricket Team 2,000 Southland Racing Club 10,000 Southland Riding for the Disabled 11,700 Southland Rodeo Association Inc 5,000 Southland Rowing Association Inc 8,400 Southland Rowing Association Inc - 3 scholarships 3,300 Southland Rural Heritage Trust 6,000 Southland Santa Parade Charitable Trust 15,000 Southland Secondary Schools’ Sports Association 15,000 Southland Showjumping Association 1,000 Southland Ski Club - scholarship 700 Southland Society of Model Engineers Inc 2,000 Southland Softball Association 40,000 Southland Softball Association - 2 scholarships 2,500 Southland Sports Car Club 20,000 Southland Sports Car Club - scholarship 2,000 Southland Stock Car Drivers’ Association 45,500 Southland Stroke Club 11,000 Southland Table Tennis Association 36,000 Southland Taekwondo Alliance Inc 1,800 Southland Tennis Association Inc 65,000 Southland Triathlon & Multisport Club - 5 scholarships 3,500 Southland Warm Homes Trust 60,000 Southland Water Polo - scholarship 500 Southland Water Ski & Runabout Club 2,000 Southland Welsh Pony & Cob Club 2,000 Southland Women’s Club 4,000 Southland Youth One Stop Shop Trust Board 50,000 Special Olympics Southland 6,000 Sport Southland 183,800 Squash Southland 45,000 St Andrew’s Indoor Bowling Club 500 St John’s Anglican Parish 781 St Paul’s Harrier & Amateur Athletic Club Inc 400 Star Rugby Football Club 15,000 Strings of Southland Charitable Trust 2,500 Swim Southland 72,500 Swim Southland - scholarship 1,000 Te Kohanga Reo I Nga Hau E Wha 280 Te Tomairanga Society Inc 3,899 Thistle AFC Inc 10,500 Timeout Carers Southland Trust 5,000 Tisbury Primary School 1,885 Touch Southland 50,000 Touch Southland - 4 scholarships 3,000 Tuis Gym Inc 750 Venture Southland 116,000 - Kidzone 2012/2013; Search4stars 2012 - Southland Festival of the Arts 2013 - Southland Superstars Show 2013 Vital Signs Youth and Family Trust 12,500 Volleyball Southland Inc 30,000 Waihopai Association Football Club 5,000 Waihopai Bowling Club Inc 2,500 Waihopai Rowing Club Inc 30,000 Waikiwi Highland Piping and Dancing Society 980 Waikiwi Kindergarten 4,000 Waikiwi Rugby Club 15,000 Western FC 2,000 YMCA Charitable Trust Southland 35,000 Youth Development Southland Region Trust 23,000 Youthline Southland 5,000 Grants Refunded - Not Required (32,171) Total $6,014,032

$ $ $

11Returned to your community

$9.47 MILLION

PO Box 208, Invercargill 9840, New ZealandPhone 03 211 3640 Fax 03 214 4418Email: ilt@ilt.co.nzwww.ilt.co.nz

PO Box 1771, Invercargill 9840, New ZealandPhone 03 211 3640 Fax 03 214 4418Email: iltfoundation@ilt.co.nzwww.iltfoundation.org.nz

Craigs169683