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Auditor warns on club's future

Ettalong Beach War Memorial Club auditor Mr David Bracey has warned of "a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern".

He stated in the club's annual report that while the company's bankers had provided financial support to date, they "have not indicated that this support of the company will be continuing due to the company's inability to comply with the terms of the financing agreements".

He stated, however, that the bankers were currently supporting a restructure of the business which would be based upon a report that was being prepared by a firm of external consultants.

"The report and the restructure will then be considered by the bankers and the company," Mr Bracey stated.

"These conditions, along with the matters as set forth in Note 1, indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern, and, therefore, whether the company will realise its assets and extinguish its liabilities in the normal course of business and the amounts stated in the financial report."

Mr Bracey also expressed concern about the valuation of the clubs assets, some of which were based upon the company achieving certain levels of net operating profit before interest and depreciation, which were not achieved.

"The land and buildings whilst included in the financial report at a carrying value which is lower than the said valuation, would be significantly reduced if a revaluation was carried out by the company," Mr Bracey said.

"The company has since 30 June 2007 requested a new valuation to be carried out but it has not occurred up until the date of signing the financial report.

"Therefore we are unable to form an opinion as to whether the amount disclosed in the financial report is a fair and reasonable valuation of the Land, New Clubhouse, and Stage 3 Car Park and Plant and Equipment."

Outgoing club chairman Mr John Houtman stated that the report identified that the Club needed to put in place "measures to ensure its future".

"The general manager will provide you with the facts and figures relative to the Club's operations in more detail at the annual general meeting," he said.

The annual meeting will be held at the club at 9am next Sunday, January 20.

General manager Cr Peter Hale, whose resignation will also be effective from the time of the annual meeting, echoed the comments, stating that the company "needed to put measures into place to correct its financial position".

Cr Hale cited the poker machine tax and non-smoking laws as reasons for a loss of $802,310 this year, but said that a staff supported restructure and increased use of the club's conference and function facilities would "positively affect the going forward rate quite significantly".



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