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LAKE EILDON COUNTRY CLUB LIMITEDABN 66 005 642 937

FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2010

FINANCIAL REPORT

CONTENTS Page

Directors' Report 1

Auditor's Independence Declaration under Section 307C of the Corporations Act 2001 5

Statement of Comprehensive Income 6

Statement of Financial Position 7

Statement of Changes in Equity 8

Statement of Cash Flows 9

Notes to the Financial Statements 10

Directors' Declaration 25

Independent Auditor's Report 26

FOR THE YEAR ENDED 30 JUNE 2010

LAKE EILDON COUNTRY CLUB LIMITED

Directors

Kerry O'Connor Derek Covill

Mike Guilmartin Robyn Cary

Barry Crittle

Ramy Filo

(alternate for R Filo)

Principal Activities

The principal activity of the company during the financial year was that of a timeshare resort operator.

Operating Results

No significant changes in the company’s state of affairs occurred during the financial year.

Dividends Paid or Recommended

Significant Changes in State of Affairs

Environmental Issues

Information on Directors

Appointed director in 1996. President since 2005. Mr O’Connor was a professional serviceman and is a veteran of the

Vietnam War. He qualified as a tradesman with the Army and after discharge was engaged in his own plumbing and

gas fitting business. He closed his business after being disabled in a tractor accident but continues to work in a full time

but honorary role assisting returned service claimants with their service pension. He is also a Director of the Returned

Services League and serves on their committee as Treasurer.

Carole Smith

Noel Phingsthorne

Mike Guilmartin

Director since 1996. Mr Guilmartin commenced in the insurance industry in 1958 and joined Alcoa of Australia in 1969

where he was Risk Manager and for a time Assistant Company Secretary. He qualified as a Fellow of the Australian

Insurance Institute. He was on the steering committee that formed the Victorian Chapter of what is now the Risk

Management Institution of Australasia and served on its National Executive for several years. He was the Association’s

president in 1981/82. He was Chief Executive Officer of the Victorian Managed Insurance Authority from 1997 until

2006.

No dividends have been paid or declared since the start of the financial year (2009: $nil).

No matters or circumstances have arisen since the end of the financial year which significantly affected or may

significantly affect the operations of the company, the results of those operations, or the state of affairs of the company

in future financial years.

Kerry O'Connor

The company's operations are not regulated by any significant environmental regulation under a law of the

Commonwealth or of a state or territory.

Qualified Tradesman.

The directors have reviewed operations for the year ended 30 June 2010 and report that operations have been

consistent with the 2010 operating budget, long term building maintenance and refurbishment requirements.

No significant change in the nature of these activities occurred during the year.

The result from operations was a profit/(loss) after tax for the year ended 30 June 2010 of $9,301

(30 June 2009: $68,971).


Directors' Report

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

30 June 2010

The names of the directors in office at any time during or since the end of the year are:

The directors present their report on the company for the financial year ended 30 June 2010.

Alan Morris

1


Directors' Report

30 June 2010

Information on Directors (cont)

Key Management Personnel Remuneration Policy

Diploma in Hospitality Management & Tourism Operations Management, FAICD.

Director since 1996. Mr Morris has held several middle to senior management positions with various companies

engaged in fire protection services. In 1985 he started, in partnership with other shareholders, a company specialising in

fire protection systems and has overseen the company’s growth to an annual turnover in excess of $25 million with

contracts in New Zealand, the Philippines and Australia. He was Managing Director of that company, ‘Entire Fire

Protection Pty Ltd’, from 1985 until he retired in 2001.

Alan Morris

The company's policy for determining the nature and amount of remuneration of key management is as follows:

Director since 2009. Over 20 years experience in the timeshare and tourism industry. Managing Director of Classic

Leisure Pty Ltd trading as Classic Holidays with responsibility for managing the day-to-day operations of 15 resorts/clubs

within the group. Director of Australian Timeshare and Holiday Ownership Council (National Timeshare Body) and

Hotel, Motel and Accommodation Association of Australia. Justice of the Peace.

Carole Smith

Diploma of Applied Science (Home Economics), RMIT, Post-graduate Diploma of Technology Education, University of

Melbourne and a Home Economics Post-Primary Teachers Certificate (NZ). Serves on Building Committee.

Robyn Cary

Director since 1999. Mr Covill has held both line and corporate management roles with P&L responsibility for over 40

years. He is a past Associate of the Institute of Management, the Marketing Institute and the Company Directors

Institute (NSW Chapter). He has been a Company Secretary/Director of various companies since 1976, including

positions as a Director Hanimex Australia Pty Ltd, CEO Color Services Pty Ltd, Managing Director Rabbit Photo

Holdings Ltd and Managing Director Photo Express Pty Ltd.

Director since 2000. Ms Cary is a retired teacher who has spent most of her career teaching in New Zealand, Canada

and Australia until 1993 during which time she served on curriculum committees involved in the development of the

Victorian Certificate of Education. She is currently engaged in the hospitality industry with her own accommodation

provider business.

Details of key management personnel remuneration is shown in Note 5 to the accounts.

Ramy Filo

Diploma of Business Administration. Company Secretary.

The remuneration structure for key management personnel is based on a number of factors, including length of service,

particular experience of the individual concerned, and overall performance of the company. The contracts for service

between the company and key management personnel are on a continuing basis, the terms of which are not expected to

change in the immediate future.

Director since 1998. Treasurer since 2008. Mr Crittle has spent most of his business career in administrative roles and

has held various management positions in asset financing. He was State Manager (Vic), Property Finance and later

State Manager, Group Credit for the ANZ subsidiary Esanda for a period of 13 years. Barry elected for early retirement

in 1997.

Barry Crittle

Serves on Building Committee.

Qualified Draftsman & Engineer.

2


Directors' Report

30 June 2010

Meetings of Directors

Name

9 9

Derek Covill 9 8

9 8

9 9

9 7

9 7

9 3

9 7

9 8

Likely Developments

Options

Indemnifying Officers or Auditor

Proceedings on Behalf of the Company

Number of meetings

attended

No options over issued shares or interests in the company were granted during or since the end of the financial year and

there were no options outstanding at the date of this report.

The company was not a party to any such proceedings during the year.

No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any

person who is or has been an auditor of the company.

No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings

to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of

those proceedings.

The company has agreements with each of the directors and officers of the company in office at the date of this report

indemnifying them against liabilities to any person other than the company that may arise from their acting as directors

or officers of the company. The indemnity applies, notwithstanding that they may have ceased to hold office, other than

where such liabilities arise out of conduct involving a wilful breach of duty, the improper use by the directors or officers of

their position or of information to gain an advantage for themselves or someone else or to cause detriment to the

company.

Alan Morris

Barry Crittle

Ramy Filo

Noel Phingsthorne

The directors have not included details of the nature of the liabilities covered or the amount of the premium paid in

respect of the directors' and officers' liability, as such disclosures are prohibited under the terms of the contract.

Kerry O'Connor

Number of meetings held

while a Director

Carole Smith

Mike Guilmartin

Robyn Cary

Likely developments in the operations of the company and the expected results of those operations in future financial

years have not been included in this report as the inclusion of such information is likely to result in unreasonable

prejudice to the company.

During the financial year, 9 meetings of directors were held. Attendances by each director during the year were as

follows:

3

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2010

Restated

NOTE 2010 2009

$ $

Revenue 2 1,014,165 1,013,954

Auditors' remuneration (9,775) (11,950)

Bad and doubtful debts - 17,792

Depreciation and amortisation expense (80,104) (65,958)

Employee benefits expenses (407,576) (398,676)

Operating expenses (290,719) (295,217)

Occupancy expenses (104,711) (100,736)

Office expenses (40,233) (38,942)

Other expenses (59,771) (51,296)

Profit/(Loss) before income tax 3 9,301 68,971

Income tax (expense)/revenue 4 - -

PROFIT/(LOSS) FOR THE PERIOD 9,301 68,971

OTHER COMPREHENSIVE INCOME FOR THE PERIOD - -

9,301 68,971


TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO

MEMBERS

The accompanying notes form part of these financial statements. 6

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010

Restated Restated

NOTE 2010 2009 1 July 2008

$ $ $

CURRENT ASSETS

Cash and cash equivalents 7 1,416,056 912,758 1,006,576

Trade and other receivables 8 404,920 342,155 218,702

Inventory 9 3,337 3,544 3,239

Other current assets 10 4,985 3,873 4,446

TOTAL CURRENT ASSETS 1,829,298 1,262,330 1,232,963

NON-CURRENT ASSETS

Trade and other receivables 8 12,226 100,309 164,628

Property, plant and equipment 11 456,533 429,478 310,185

TOTAL NON-CURRENT ASSETS 468,759 529,787 474,813

TOTAL ASSETS 2,298,057 1,792,117 1,707,776

CURRENT LIABILITIES

Trade and other payables 12 903,479 419,113 389,507

Short-term provisions 13 19,873 18,351 19,884

TOTAL CURRENT LIABILITIES 923,352 437,464 409,391

NON-CURRENT LIABILITIES

Long-term provisions 13 12,367 1,616 14,319

TOTAL NON-CURRENT LIABILITIES 12,367 1,616 14,319

TOTAL LIABILITIES 935,719 439,080 423,710

NET ASSETS 1,362,338 1,353,037 1,284,066

EQUITY

Retained earnings 1,362,338 1,353,037 1,284,066

TOTAL EQUITY 1,362,338 1,353,037 1,284,066



STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2010

Note

Retained

Earnings Total

$ $

Balance at 1 July 2008 1,345,351 1,345,351

Correction of error 6 (61,285) (61,285)

Re-stated total equity at the beginning of the financial year 1,284,066 1,284,066

Profit/(loss) for the period 96,895 96,895

Other comprehensive income - -

Correction of error 6 (27,924) (27,924)

68,971 68,971

Transactions with owners in their capacity as owners: - -

Balance at 30 June 2009 1,353,037 1,353,037

Balance at 1 July 2009 1,353,037 1,353,037

Total comprehensive income:Profit/(loss) for the period 9,301 9,301

Other comprehensive income - -

Total comprehensive income 9,301 9,301

Transactions with owners in their capacity as owners: - -

Balance at 30 June 2010 1,362,338 1,362,338


Total comprehensive income for the year as reported in the

2009 financial statements:

Restated total comprehensive income for the year


CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2010

NOTE 2010 2009

Inflows Inflows

(Outflows) (Outflows)

$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 1,386,952 932,271

Payments to suppliers and employees (770,378) (875,741)

Interest received 49,661 66,549

GST recovered/(paid) (55,779) (31,647)

NET CASH FROM/(USED IN) OPERATING ACTIVITIES 14 610,456 91,432

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (107,159) (185,250)

NET CASH FROM/(USED IN) INVESTING ACTIVITIES (107,159) (185,250)

NET CASH FROM/(USED IN) FINANCING ACTIVITIES - -

Net increase/(decrease) in cash held 503,297 (93,818)

Cash at the beginning of the year 912,758 1,006,576

CASH AT THE END OF THE YEAR 7 1,416,055 912,758

CHECK

(1)



LAKE EILDON COUNTRY CLUB LIMITEDNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010

NOTE 1 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

●

●

●

● Key Estimates — Impairment

Statement of Compliance

of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. International Financial Reporting

Standards form the basis of Australian Accounting Standards adopted by the AASB.

The Company has adopted the following amended Australian Accounting Standards as of 1 July 2009:

The financial report of Lake Eildon Country Club Limited complies with International Financial Reporting Standards

(IFRS) in their entirety.

AASB 101 Presentation of Financial Statements (revised 2007) effective 1 January 2009. The revised standard

separates owner and non-owner changes in equity. As there have been no non-owner changes in equity, the

adoption of the revised standard has had no impact on the reporting of the company, other than to change the name

of the primary statements. The company has elected to present all items of recognised income and expense in a

single Statement of Comprehensive Income.

The financial report was authorised for issue by the board of directors on 3 September 2010.

AASB 8 Operating Segments effective 1 January 2009. AASB 8 replaced AASB 114 Segment Reporting upon its

effective date. The company concluded that its operating segment determined in accordance with AASB 8 is the

same as the business segments previously identified under AASB 114.

The company has not adopted any amended accounting standards early and the future impact of amended accounting

standards currently released is not expected to be material to the company.

Reporting Entity

Basis of Preparation

Lake Eildon Country Club Limited ('the company') is an unlisted public company limited by guarantee incorporated and

domiciled in Australia. The financial report covers Lake Eildon Country Club Limited as an individual entity.

The company is primarily involved in the operation of a timeshare resort in Australia.

The financial report of Lake Eildon Country Club Limited is a general purpose financial report prepared in accordance

with Australian Accounting Standards including Australian Accounting Interpretations and other pronouncements

The following is a summary of the material accounting policies adopted by the company in the preparation of the

financial report. The accounting policies have been consistently applied, unless otherwise stated.

Reporting Basis and Conventions

The financial report is presented in Australian dollars.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised if the revision effects only that period, or in the period of the

revision and future periods if the revision affects both current and future periods. There were no key adjustments during

the year which required accounting estimates and judgements.

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation

of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has

been applied.

The company assesses impairment at each reporting date by evaluating conditions specific to the company that

may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is

determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key

estimates.

The estimates and judgments incorporated into the financial report are based on historical experiences and the best

available current information on current trends and economic data, obtained both externally and within the group.

The estimates and judgements made assume a reasonable expectation of future events but actual results may

differ from these estimates.

Critical Accounting Estimates and Judgments

The preparation of a financial report in conformity with Australian Accounting Standards requires management to make

judgements, estimates and assumptions that effect the application of policies and the reported amounts of assets,

liabilities, revenue and expenses.

10


NOTE 1 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

(a) Income Tax

(b) Inventories

(c) Property, Plant and Equipment

Property

Plant and equipment

Depreciation

Class of Fixed Asset

Motor vehicles

Plant and equipment

Buildings and Improvements 2.5%

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or

liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be

credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising

between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred

income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination,

where there is no effect on accounting or taxable profit or loss.

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.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available

against which deductible temporary differences can be utilised.

Depreciation rate

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.

Inventories are measured at the lower of cost and net realisable value.

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

20%

20%

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 income statement during

the financial period in which they are incurred.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the

recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash

flows which will be received from the assets employment and subsequent disposal. The expected net cash flows

have not been discounted to their present values in determining recoverable amounts.

The depreciable amount of all fixed assets including capitalised lease assets is depreciated on a straight line basis

over their useful lives to the company commencing 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.

Because of the principle of mutuality, only income arising from non-member activities is subject to income tax. The

company is able to identify all non-member income.

Plant and equipment are measured on the cost basis less depreciation and impairment losses.

The value of the land on which the resort has been constructed, being Lots 1, 2 and 3 and the buildings constructed

thereon are owned by the members as proprietors of their prescribed part interest in the land and therefore is not

reflected in the statement of financial position of the Club.

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated

depreciation and impairment losses.

The charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or

disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance

date.

11



(c) Property, Plant and Equipment (cont)

(d) Leases

(e) Financial Instruments

Recognition

Financial assets at fair value through profit and loss

Loans and receivables

Held-to-maturity investments

Available-for-sale financial assets

Financial liabilities

Fair value

Impairment

Lease payments for operating leases, where substantially all risks and benefits remain with the lessor, are charged

as expenses in the periods in which they are incurred as this represent the pattern of benefits derived from the

leased assets. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line

basis over the life of the lease term.

Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset, but not

legal ownership, are transferred to the entity are classified as finance leases. Finance leases are capitalised

recording an asset and a liability equal to the present value of the minimum lease payments, including any

guaranteed residual value. Leased assets are amortised on a straight-line basis over their estimated useful lives.

Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the

period.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or

losses are included in the income statement.

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.

A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or if so

designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial

Instruments. Realised and unrealised gains and losses arising from changes in the fair value of these assets are

included in the income statement in the period in which they arise.

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related

contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out

below.

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to

determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar

instruments and option pricing models.

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments

and amortisation.

Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-

sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are

taken directly to equity.

These investments have fixed maturities, and it is the company’s intention to hold these investments to maturity. Any

held-to-maturity investments held by the company are stated at amortised cost using the effective interest rate

method.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in

an active market and are stated at amortised cost using the effective interest rate method.

At each reporting date, the company assesses whether there is objective evidence that a financial instrument has

been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the

instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the

income statement.

12



(f) Impairment of Assets

(g) Employee Entitlements

(h) Provisions

(i) Cash and Cash Equivalents

(j) Revenue

(k) Finance Costs

(l) Goods and Services Tax (GST)

(m) Comparative Figures

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

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

Levy penalties are recognised as received.

Revenue from rental pool participation is recognised when the right to receive the payment is established.

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

financial assets.

Finance 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 of sale.

Provision is made for the company's liability for employee entitlements arising from services rendered by employees

to balance date. Employee entitlements expected to be settled within one year together with entitlements arising

from wages and salaries, and annual leave which will be settled after one year, have been measured at their

nominal amount. Other employee entitlements payable later than one year have been measured at the present

value of the estimated future cash outflows to be made for those entitlements.

Where required by Accounting Standards comparative figures have been adjusted to conform with changes in

presentation for the current financial year.

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 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.

All other finance costs are recognised in income in the period in which they are incurred.

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.

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.

Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the

recoverable amount of the cash-generating unit to which the asset belongs.

At each reporting date, the company reviews the carrying values of its tangible and intangible assets to determine

whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable

amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the

asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the

income statement.

Revenue is measured at the fair value of considered received or receivable, net of discounts. Revenue is

recognised to the extent that it is probable that economic benefits will flow to the company, and revenue can be

realiably measured.

Levy revenue is recognised on a straightline basis over the financial year to which it relates.

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

13



(n) Receivables

(o) Trade Creditors and Accruals

(p) Statement of Cash Flows

(q) Membership Fees

The Club holds a high number of relinquished titles. The accounts therefore only reflect membership fees for

"active" shares at collectable levels.

For the purposes of the statement of cash flows, cash includes cash on hand and in banks and investments in

money market instruments, net of any outstanding bank overdrafts.

A liability is recorded for goods and services received prior to balance date, whether invoiced or not. Trade creditors

are settled in accordance with supplier payment terms.

Levies are included in “Levies receivable” and are recorded at the balance date. Receivable amounts are due within

30 days of invoice. Levies are billed in June each year for the coming July to June period.

14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010

2010 2009

NOTE 2 - REVENUE $ $

Levy income 870,350 850,105

Levy penalties 2,784 9,963

Interest received 60,860 88,797

Rental income 48,758 22,230

Gain on sale of fixed assets - 1,091

Other income 31,413 41,768

1,014,165 1,013,954

NOTE 3 - PROFIT/(LOSS) BEFORE INCOME TAX

Expenses

Auditors' remuneration

- Auditing or reviewing the financial report 7,205 9,995

- Assistance with financial report preparation 2,570 1,955

Bad and doubtful debts

- Trade receivables - (17,792)

Superannuation expense 30,902 31,000

2,790 20,691

- Amounts excluded under Principle of Mutuality (7,657) 1,654

- Other taxable/(non-taxable) amounts (3,032) (24,963)

- Deferred tax assets not brought to account 7,899 2,618

Income tax attributable to operating profit - -

- Losses 89,373 81,762

- Timing differences 3 5,644

89,376 87,406

Prima facie tax payable on profit/(loss) before income tax at 30% (2009: 30%)

Deferred tax assets, the benefits of which will only be realised if the conditions for

deductibility of tax losses set out in Note 1 occur based on corporate tax rate of 30%

(2009: 30%)


Profit/(Loss) before income tax expense has been determined after:

Increase/(decrease) in income tax expense due to:

The prima facie tax payable on profit/(loss) before income tax is reconciled to the

income tax expense as follows:

NOTE 4 - INCOME TAX

15



NOTE 5 - KEY MANAGEMENT PERSONNEL REMUNERATION

Directors

Kerry O'Connor Derek Covill

Mike Guilmartin Robyn Cary

Alan Morris Barry Crittle

Ramy Filo Noel Phingsthorne

Carole Smith (alternate for R Filo)

Post-employ.

Benefits Total

Fees Super Other

Non-cash

Benefits

Long Service

Leave

$ $ $ $ $ $

30 June 2010

Kerry O'Connor 1,420 - - - - 1,420

Derek Covill 2,170 - - - - 2,170

Mike Guilmartin 670 - - - - 670

Robyn Cary 670 - - - - 670

Alan Morris 670 - - - - 670

Barry Crittle 670 - - - - 670

Ramy Filo 670 - - - - 670

Noel Phingsthorne 1,420 - - - - 1,420

Carole Smith - - - - - -

Total compensation 8,360 - - - - 8,360

NOTE 6 - PRIOR PERIOD ERROR

The directors' remuneration paid during the year was as follows:

The directors of the company are directly accountable and responsible for the strategic direction and operational

management of the company. During the year there were no executives of the company.

The directors acted in an honorary capacity and did not receive any remuneration during the 2009 year.

Short-term Benefits

During the year the ATO issued four (4) Interpretive Decisions (ATOID 2010/18, 19, 20 and 23) in respect of the

application of the GST legislation by the timeshare industry. As a result of applying the Interpretive Decisions and other

GST legislation the company has identified that GST was incorrectly charged to members on various supplies and the

company has over claimed a portion of Input Tax Credits on various purchases. Consequently expenditure recorded in

the Statement of Comprehensive Income and expenditure on non-current assets recorded in the Statement of Financial

Position, has been under stated.

In accordance with the GST legislation the company is required to define the over claimed Input Tax Credits and re-state

BAS returns submitted to the ATO for a period of four (4) years. Over claimed Input Tax Credits must then be repaid to

the ATO. The company has also undertaken to seek a GST Refund from the ATO on behalf of members for amounts

previously remitted to the ATO in relation to GST paid on levies for the past four (4) years. The company will be required

refund the relevant members by way of credit to their account and then recover the GST refunded amount from the

ATO. A portion of the GST refund may need to be recovered from each member by way of a special levy to facilitate the

repayment of over claimed Input Tax Credits to the ATO.

16



NOTE 6 - PRIOR PERIOD ERROR (CONT)

2009

Restatement - 30 June 2009 2009 Adjustment Restated

$ $ $

Trade and other receivables 162,995 179,160 342,155

TOTAL CURRENT ASSETS 1,083,170 179,160 1,262,330

Property, plant and equipment 396,944 32,534 429,478


TOTAL ASSETS 1,580,423 211,694 1,792,117

Trade and other payables 118,212 300,901 419,113



Retained earnings 1,442,244 (89,207) 1,353,037

TOTAL EQUITY 1,442,244 (89,207) 1,353,037

Depreciation and amortisation expense (61,810) (4,148) (65,958)

Other expenses (27,520) (23,776) (51,296)

PROFIT/(LOSS) FOR THE PERIOD 96,895 (27,924) 68,971

1 July 2008

Restatement - 1 July 2008 1 July 2008 Adjustment Restated

$ $ $

Trade and other receivables 115,243 103,459 218,702

TOTAL CURRENT ASSETS 1,129,504 103,459 1,232,963

Property, plant and equipment 292,206 17,979 310,185


TOTAL ASSETS 1,586,338 121,438 1,707,776

Trade and other payables 206,784 182,723 389,507



Retained earnings 1,345,351 (61,285) 1,284,066

TOTAL EQUITY 1,345,351 (61,285) 1,284,066

2010 2009

NOTE 7 - CASH AND CASH EQUIVALENTS $ $

Cash on hand 450 450

Cash at bank 915,606 412,308

Short-term deposits 500,000 500,000 1,416,056 912,758

1,416,056 912,758

Balance as per statement of cash flows 1,416,056 912,758

Reconciliation of cash

Cash and cash equivalents

The error has been corrected by restating each of the affected financial statement line items in the statement of

comprehensive income and statement of financial position for previous periods as follows:

Cash at bank is invested with Westpac Banking Corporation and Rabo Bank and earns

interest at the current variable rates. Cash on short-term deposit is currently invested

with Macquarie Bank and earns interest at 6%.

Cash at the end of the financial year as shown in the statement of cash flows is

reconciled to items in the statement of financial position as follows:

17



CHECK NOTE 8 - TRADE AND OTHER RECEIVABLES 2010 2009

$ $

Current

Levies receivable 28,116 37,095

Other receivables 279,092 209,321

Deferred compensation 97,712 95,739

404,920 342,155

Non-current

Deferred compensation 12,226 100,309

417,146 442,464

NOTE 9 - INVENTORY

Goods held for resale, at lower of cost and net realisable value 3,337 3,544

NOTE 10 - OTHER ASSETS

CurrentPrepayments and deposits 4,985 3,873

NOTE 11 - PROPERTY, PLANT AND EQUIPMENT

Buildings and improvements, at cost 215,838 215,838

Less accumulated depreciation (8,930) (4,061)

206,908 211,777

Plant and equipment, at cost 1,768,053 1,660,894

Less accumulated depreciation (1,525,035) (1,455,982)

243,018 204,912

Motor vehicles, at cost 42,265 42,265

Less accumulated depreciation (35,658) (29,476)

6,607 12,789

Total property, plant and equipment 456,533 429,478

Movements in Carrying Amounts

Buildings &

Improvements

Motor

Vehicles

Plant &

Equipment Total

30 June 2010 $ $ $ $

211,777 12,789 204,912 429,478

- - 107,159 107,159

- (6,182) (69,053) (80,104)

206,908 6,607 243,018 456,533

30 June 2009

138,784 24,843 148,779 312,406

77,054 - 108,196 185,250

(3,148) (5,583) (53,079) (61,810) 212,690 19,260 203,896 435,846

Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end

of the current financial year:

Written down value at the beginning of the year

Written down value at the end of the year

Depreciation Expense

Written down value at the beginning of the year

Additions

Depreciation Expense

Additions

Deferred compensation represents the amount outstanding in terms of the

Management Rights Payment Agreement which has been discounted to net present

value.

Written down value at the end of the year

18



2010 2009

NOTE 12 - TRADE AND OTHER PAYABLES $ $

Current

Trade creditors 28,364 22,325

Sundry creditors and accruals 173,351 149,324

Income received in advance 701,764 247,464

903,479 419,113

NOTE 13 - PROVISIONS

Current

Employee entitlements 19,873 18,351

Non-Current

Employee entitlements 12,367 1,616

32,240 19,967

Provision for Long-term Employee Entitlements

2010 2009

NOTE 14 - CASH FLOW INFORMATION $ $

Net profit/(loss) after income tax 9,301 68,971

Adjustment for non cash items

Depreciation 80,104 65,958

(Interest received)/paid - Management Rights Payment Agreement (9,629) (24,734)

Management fee credited to Management Rights Payment Agreement 95,739 91,791

Adjustment for changes in assets and liabilities

Decrease/(increase) in:

Levy debtors 8,979 59,304

Other debtors (53,286) (13,395)

Inventories 207 (305)

Other current assets (1,112) 573

Increase/(decrease) in:

Trade & other creditors 13,580 4,798

Unearned revenue 454,300 (50,894)

Provision for employee entitlements 12,273 (14,236)

Provision for impairment of receivables - (96,399)

Net cash from/(used in) operating activities 610,456 91,432

In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave

being taken is based upon historical data. The measurement and recognition criteria for employee entitlements has

been included in Note 1.

A provision has been recognised for non-current employee entitlements relating to long service leave for employees.

Reconciliation of net cash from operating activities to net profit/(loss) after income tax:

19



NOTE 15 - RELATED PARTY TRANSACTIONS

(a) Directors' Names

Kerry O'Connor 4 Derek Covill 1

Mike Guilmartin 4 Robyn Cary 1

Alan Morris 12 Barry Crittle 4

Ramy Filo# 1 Noel Phingsthorne 2

# Held as nominee for Classic Property Management Pty Ltd

(b) Shares and Share Options

2010 2009

No options have been issued by the company.

Shares 115 105

(c) Transactions with directors and director related entities:

(i)

(ii)

(iii)

(iv)

(v)

(vi)

2010 2009

NOTE 16 - OPERATING LEASE COMMITMENTS $ $

Minimum lease payments payable:

- not later than 12 months 13,014 13,014

- between 12 months and 5 years 29,146 42,160

- after 5 years - -

42,160 55,174

42,160 55,174

Carole Smith (alternate for Ramy

Filo) # 1

Fees for other services totalling $95 (2009: $nil) were paid in the ordinary course of business to Classic

Leisure Pty Ltd, a company of which Ramy Filo and Carole Smith are directors.

Telephone equipment

The names of directors who have held office during the financial year and their interest in timeshares are:

The direct, indirect, and beneficial holdings of directors and their director-related entities in holiday shares of the

company as at 30 June 2010 are shown below.

Reservations, Bookkeeping and IT fees of $68,419 (2009: $66,541) were paid in the ordinary course of

business to Classic Leisure Pty Ltd, a company of which Ramy Filo and Carole Smith are directors.

Debt Collection Fees totalling $nil (2009: $1,896) were paid in the ordinary course of business to Classic


Management fees totalling $87,035 (2009: $84,619) were paid in the ordinary course of business to Classic


Fees for IT Support services totalling $45 (2009: $450) were paid in the ordinary course of business to

Classic Leisure Pty Ltd, a company of which Ramy Filo and Carole Smith are directors.

Rental and advertising commissions totalling $75 (2009: $258) were paid in the ordinary course of business

to Classic Leisure Pty Ltd, a company of which Ramy Filo and Carole Smith are directors.

Non-cancellable operating leases contracted for but not capitalised in the financial

statements

20



NOTE 17 - FINANCIAL INSTRUMENTS

Financial Risk Management

i. Treasury Risk Management

ii. Financial Risks

Interest rate risk

Cash flow sensitivity analysis for variable rate instruments

The company does not have any derivative instruments at 30 June 2010.

There has been no change to the company's exposure to interest rate risk or the manner in which it manages and

measures the risk from the previous year.

The main risks the company is exposed to through its financial instruments are interest rate risk, liquidity risk and

credit risk.

Risk management policies are approved and reviewed by the Board of Directors on a regular basis. These include the

credit risk policies and future cash flow requirements. The main purpose of non-derivative financial instruments is to

manage cash flow for operations.

The directors’ overall risk management strategy seeks to assist the company in meeting its financial targets, whilst

minimising potential adverse effects on financial performance.

The company’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable

and accounts payable.

At 30 June 2010, if the interest rates had changed by 1% from the period-end rates with all other variables held constant,

post-tax profit for the year for the company would have been $8,984 lower/higher mainly as a result of lower/higher

interest income on cash and cash equivalents.

The directors of the company meet on a regular basis to review interest rates and to evaluate treasury

management strategies in the context of the most recent economic conditions and forecasts.

The sensitivity analysis has been determined based on the exposure of the company to interest rates for non-derivative

financial instruments at the reporting date and the stipulated change taking place at the beginning of the financial year

and held constant throughout the reporting period. A 1% increase or decrease is used when reporting interest rates

internally to key management personnel and represents management’s assessment of the possible change in interest

rates.

Interest rate risk is managed by with a mixture of fixed and floating rate bank accounts and deposits.

21



NOTE 17 - FINANCIAL INSTRUMENTS (CONT)

Weighted

Average

Interest

RateFloating

Interest Rate

Fixed Interest

rate maturing

within 1 to 5

years

Non-Interest

Bearing Total

% $ $ $ $

Financial Assets

Cash and Cash Equivalents 4.68% 915,606 500,000 450 1,416,056

Trade and other receivables - 109,938 307,208 417,146 Total Financial Assets 915,606 609,938 307,658 1,833,202

Financial Liabilities

Trade and other payables - - 201,715 201,715 Total Financial Liabilities - - 201,715 201,715

Financial Assets

Cash and Cash Equivalents 3.31% 912,308 500,000 450 1,412,758

Trade and other receivables - 196,048 246,416 442,464 Total Financial Assets 912,308 696,048 246,866 1,855,222

Financial Liabilities

Trade and other payables - - 171,649 171,649 Total Financial Liabilities - - 171,649 171,649

Foreign currency risk

The company is not exposed to fluctuations in foreign currencies.

Liquidity risk

30 June 2010

$ $ $ $ $

Trade and other payables 201,715 201,715 201,715 - -

30 June 2009

$ $ $ $ $

Trade and other payables 171,649 171,649 171,649 - -

Less than one

year 1-5 years

Trade payables are short term in nature. The company is not exposed to any significant liquidity risk. The following are

contractual maturities of financial liabilities:

The company manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash reserves are

maintained.

Contractual cash

flows over 5 years

Contractual cash

flows

Less than one

year 1-5 years

2009

2010

over 5 years

Carrying

amount

Carrying

amount

The company’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result

of changes in market interest rates, is as follows:

22



NOTE 17 - FINANCIAL INSTRUMENTS (CONT)

Credit risk

Gross Impairment Gross Impairment

$ $ $ $

Not Past due (current) 417,146 - 436,549 -

Past due 0-30 days ( 30 day ageing) - - 5,915 -

Past due 31-60 days ( 60 day ageing) - - - -

Past due more than 60 days ( +90 day ageing) - - - - 417,146 - 442,464 -

None of the receivables at 30 June 2010 were impaired.

Price risk

The company is not exposed to any material commodity price risk.

Capital risk management

Net Fair Values

NOTE 18 - CONTINGENT LIABILITIES

The company has no contingent liabilities at the date of this report.

NOTE 19 - EVENTS AFTER THE REPORTING DATE

No material events occurred after balance date and to the date of this report requiring disclosure.

NOTE 20 - OPERATING SEGMENT

NOTE 21 - MEMBER'S GUARANTEE

2010

The company is limited by guarantee. If the company is wound up, the articles of association state that each member is

required to contribute a maximum of $50 each towards meeting any outstanding obligations of the company. At 30 June

2010, the number of members was 985 owning 1,974 shares (30 June 2009: 987 members owning 1,974 shares).

The company operates in one operating segment being a timeshare resort operator in Australia.

2009

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,

represents the company's maximum exposure to credit risk without taking account of the value of any collateral

obtained.

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the

company. The company does not have any significant credit risk exposure to any single counterparty or any group of

counterparties having similar characteristics.

The directors manage the capital to ensure that the company is able to continue as a going concern to be able to satisfy

future capital needs of the resort, through the optimisation of debt and equity balances.

The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the

statement of financial position and in the notes to the financial statements.

Capital risk management policies remain unchanged from the prior year.

The board reviews this structure and the associated risks with each class of capital on a regular basis.

The net fair values of financial assets and liabilities approximate their carrying value. No financial assets and financial

liabilities are readily traded on organised markets in standardised form.

The capital structure of the company consists of cash and cash equivalents and equity comprising of share capital,

reserves and retained earnings.

The ageing of the company's trade and other receivables at the reporting date was:

23



NOTE 22 - COMPANY DETAILS

T/as MANSFIELD COUNTRY RESORT

Banumum Road

MANSFIELD VIC 3722

Lake Eildon Country Club Limited

The registered office and principle place of business is:

24

INDEPENDENT AUDITOR'S REPORT

Report on the Financial Report

Auditor's Responsibility

Independence

Total Financial Solutions

To the members of Lake Eildon Country Club Limited

We have audited the accompanying financial report of Lake Eildon Country Club Limited (the company) which

comprises the balance sheet as at 30 June 2010, and the income statement, statement of changes in equity and cash flow

statement for the year then ended, a summary of significant accounting policies and other explanatory notes, and the

directors' declaration.

The directors of the company are responsible for the preparation and fair presentation of the financial report in

accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the

Corporations Act 2001 . This responsibility includes establishing 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 directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial

Statements , that compliance with the Australian equivalents to International Financial Reporting Standards ensures

that the financial report, comprising the financial statements and notes, complies with International Financial Reporting

Standards.

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.

The Responsibility of The Directors for The Financial Report

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

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 judgement, 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.

Member Crowe Horwath International

WHK Horwath Brisbane

Level 16, WHK Horwath Centre 120 Edward Street

Brisbane Queensland 4000 Australia

GPO Box 736 Brisbane Queensland 4001 Australia

Telephone +61 7 3233 3555 Facsimile +61 7 323 3567

Email [email protected]

www.whkhorwath.com.au

A WHK Group firm

WHK Pty Ltd trading as WHK Horwath Brisbane is a member of Crowe Horwath International

Association, a Swiss verein. Each member firm of Crowe Horwath is a separate and independent legal

entity.

26

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