The notice was submitted by Bryan Rush & Co at the request of Mr M Barrett, a member of the Club.

In accordance with the Club Rules, the Secretary placed a copy of the notice on the Club’s Notice Board.

Consistent with good corporate governance principles, the Committee then undertook some due diligence to check whether Bryan Rush & Co would be suitable to act as auditor of the Club. For example, under the Club Rules the auditor of the Club must be registered in accordance with section 1280(2) of the Corporations Act.  A search conducted of the register of auditors maintained by ASIC confirmed that the principal of Bryan Rush & Co, Mr David Conroy, is a registered auditor and meets this requirement.

However, during the week beginning 6 May 2013, it came to the attention of the Committee that Mr Conroy is in fact the Chairman of the Bowlers Club of New South Wales, which operates premises known as 99 On York.  The Bowlers Club of New South Wales is considered by the Committee to be a direct competitor of the Club.

Good corporate governance principles dictate that an auditor should not take part in an audit where a possible conflict of interest situation may arise or may be seen to arise – for example, where a reasonable person would or could conclude that the auditor, or a professional member of the audit team, may not be capable of exercising objective and impartial judgement in relation to the conduct of the audit of the Club.  Given Mr Conroy’s involvement with a competing club and the fact that the auditor would have access to confidential information about the City Tattersall’s Club, the Committee felt it was best to avoid any perceived conflict of interest and asked Mr Conroy to withdraw the consent of Bryan Rush & Co to act as auditor.

On 13 May 2013, after considering the Committee’s request, Mr Conroy withdrew the consent of Bryan Rush & Co to act as auditor of the Club, and accordingly Bryan Rush & Co will no longer be seeking appointment as the auditor of the Club.

Absent the above issue, the Committee see no reason why Bryan Rush & Co would not be capable of performing the role of auditor of the City Tattersalls Club, in accordance with the relevant professional standards expected.

Yours faithfully

Patrick Campion
Chairman
on behalf of the City Tattersalls Club Committee

The last paragraph of the Treasurers report should read as follows (corrected dates in bold):

Members wishing to ask questions regarding the 2012 Financial Report at the Annual General Meeting on 21^st May 2013 must submit their questions in writing to the Chief Executive Officer/Secretary by 5pm on 14^th May 2013. Members wishing to obtain a full copy of the 2012 Financial Report are asked to contact the Secretary’s office during business hours.

The Notice of Meeting for the AGM, also printed in the May – July 2013 edition of the Club magazine, refers to the correct dates.

The errors only appear in the Treasurer’s Report printed in hardcopy versions of the Club magazine.  The errors have been corrected on all electronic copies of the Treasurer’s Report.

We apologise for any inconvenience caused.

Patrick Campion
Chairman

I am pleased to be able to advise that our Club made a trading profit of $367,747 in 2012. That result needs to be qualified by the matters set out in the Treasurer’s Report and I refer you to the Treasurer’s Report in this magazine.

The Sydney CBD continued to be a tough trading environment throughout 2012. The Club faced many challenges from within and from outside, but despite that, our Club continues to trade reasonably well, but of course there is room for improvement.  Our key revenue driver, gaming, fell by 1%. This is not a huge fall, but we did not want it to become a trend. We have been aware for some time that our fleet of machines have needed renewal, but the uncertainty around the need for pre commitment technology as well as the Club’s finances made it necessary to delay the expenditure needed to do so. We have this year however made the commitment to that renewal to ensure that the decline is arrested and that the gaming revenue is reenergised.

A pleasing part of the 2012 results is our membership growth. Total new memberships grew by 47% over the 2011 figure and this growth filtered through to Catering and Fitness Centre revenue also.  Our street frontage promotions have been particularly successful and we are looking to build up that success in 2013.

We are looking forward to even stronger year of trading in 2013 and thank all members for your support.

Possible Airspace Development

Since 2004, the Club’s development plan has included the possibility of developing the Club’s airspace, and in 2012 the Committee decided that conditions were right to progress this.

The first step is to obtain pre-Development Application advice from the City of Sydney Council on whether a development would be likely to be approved and, if so, with what conditions. The application for this pre-DA advice will be lodged in June 2013 and I will report to members when it is received.

I emphasise that no decision to proceed with the development will be made without members’ approval.

Office of Gaming Liquor and Racing Investigation

The investigation into the Club by the Office of Liquor, Gaming & Racing (OLGR) continued throughout the second half of 2012 and was completed in April 2013. It was an expensive and time-wasting exercise. We were always confident that there would be no adverse findings against the Club or anyone associated with it, and this was confirmed when we were advised that OLGR intended to take no action and considered the matter finalised.

Corporate Governance

In 2012 the Committee sharpened the focus on corporate governance including:

a) Engaging the services of a consultant to advise on governance issues.

b) Prepared a Corporate Governance Policy document to guide the current Committee and future committees.

c) Setting measurable key performance indicators to better
measure the performance of senior executives.

d) Creating sub committees in such areas as finance, corporate
governance, marketing and remuneration to get a more
detailed understanding and to make recommendations to
the Committee.

This emphasis on good corporate governances will continue to be an important focus throughout 2013 and beyond.

Boonoona Ski Lodge

2012 was not a good year for Boonoona with total revenue seriously down, even in what was a reasonably good ski season. That performance made it imperative to change the business model for the Lodge.  As you are aware, the Committee made the decision to open bookings up to the public (which requires them to become a Gold member to secure a booking), but only after members have had a first chance to make their bookings.

This has worked well with bookings for the 2013 season already substantially ahead of where we were at this time last year and looking extremely promising for a good season.

Committee

I take this opportunity to thank the members of our Committee for their contributions throughout 2012.

The amount of work that has to be done and the time that has to be put in by Committee Members grows every year and there is no sign of that abating. New legislation is making the role a more onerous and difficult one.  Add to that the increasing issues facing all clubs and then add the particular challenges facing our Club.  It is a hard and time consuming task with no reward, other than the knowledge that it is done to preserve and benefit a great Club.

I also thank members for their support of the Committee and its decision.

Staff

I also thank our staff for their work throughout 2012 and for how they dealt with the various issues which impacted on them.  I encourage them to continue in their efforts to make our Club a welcoming venue that members and others want to return to.

Conclusion

I urge members to support our Club in 2013. No matter what the Committee and Management may decide and action, everything ultimately depends on the support and patronage of our Club’s loyal members.

Patrick Campion
Chairman

After a slow start in January, trading momentum has built throughout the quarter and I am pleased to say that Gaming has improved month on month. I also note that our restaurants have traded solidly throughout the quarter with members taking advantage of the membership renewal promotion. Another positive outcome has been the substantial reduction in creditors throughout the quarter.  All bank covenants have been met.  We are looking forward to an even stronger quarter as Winter approaches.

Annual General Meeting

Don’t forget that the Club’s Annual General Meeting (AGM) will be held in the Celebrity Room on Tuesday 21 May 2013 at 6:00pm.

If you are able to attend, please do so.  The Club’s Annual Report and Statement of Accounts for 2012 and the outlook for 2013 and beyond will be presented.

The Business of the 2013 Annual General Meeting is also advertised in this magazine.

Life Members Lunch

As usual, a resolution will be put to members at the AGM to elect new Life Members with 40 years continuous membership.  If carried, a celebratory lunch will be held for those 231 new Life Members in the Celebrity Room on Friday 24 May 2013 at 12:00pm.  At the lunch, Life Member badges will be presented.

This is always a wonderful occasion and our opportunity to recognise and thank those members for their loyalty and support over many years.

Committee Elections

The Committee elections will be held in May 2012.  This election will again be determined by a postal ballot and the results will be announced on Friday 24 May 2013.  I urge all Gold, Silver and Life members to cast your vote.

The nominations for the 2013 Committee Elections close at 5.00pm on Friday, 26 April 2013.  The notice in respect of Committee elections was published in the previous edition of the magazine.

Office of Liquor Gaming & Racing Investigation

I am pleased to advise that the Office of Liquor, Gaming & Racing (OLGR) investigation has been completed. We were always confident that there would be no adverse findings against the Club, the Chief Executive Officer, Mr Tony Guilfoyle, or anyone associated with the Club, and this was confirmed when we were advised that OLGR intended to take no action and considered the matter finalised.

This puts to an end this expensive and time-wasting distraction.

New Banking Arrangements

As you will be aware, since the global financial crisis banks have been tightening their security. National Australia Bank (NAB), with which we had banked for many years, made it clear to us earlier this year that it intended to extend its security from a mortgage over 194 Pitt Street to a charge over all the Club’s assets.

The Committee considered it prudent to explore what other banks might offer and we received an extremely attractive proposal from ANZ Bank. This offered us lower interest rates, less restrictive covenants, improved flexibility and certainty in return for a charge over the Club’s assets.

Consequently, the Committee resolved in February 2013 to transfer the Club’s banking arrangements to ANZ Bank from NAB. This change has allowed us to undertake the gaming upgrade which eventually should increase revenue.

We look forward to a long and rewarding relationship with ANZ Bank, and thank NAB for its past support.

Gaming Upgrade

Members will have noticed some new poker machines on the gaming floor.

Over the next several months, more new machines will be introduced as part of an overall fleet upgrade.

In addition to the new machines, the Club has purchased the ticket in/ticket out, card in/card out gaming system bringing the very latest gaming technology to the Club. Members will have the full benefits of this in late May 2013.

Airspace Development Update

The application for the Sydney City Council’s pre DA Advice is likely to be lodged in June 2013, rather than May 2013. You will appreciate that the application is a complex document involving the collaboration of many different disciplines. It is however, progressing satisfactorily and I will continue to update you on a regular basis, including at the upcoming AGM.

We will shortly be contacting key Club stakeholders to obtain their input on behalf of the various subsidiary Clubs.

Boonoona Ski Lodge Bookings

There are still vacancies at Boonoona Ski Lodge, but be quick.

All Gold, Silver and Life Members have access to City Tattersalls Club Boonoona Ski Lodge located at Perisher Valley in the beautiful Kosciusko National Park. The Lodge is conveniently located only moments away from the Skitube Terminal, Lifts and Perisher Centre.

Book now to experience an an exciting ski holiday for unbelievable value this winter.

For more information see page 12-13 or call the Customer Service Centre on 02 9267 9421.

Clubs NSW Chef’s Table Competition 2013

Once again two (2) Chefs from our Club have been recognised for their exceptional skills in the kitchen as part of a state-wide hunt to find the best club chefs.

Mr Julian Leather and Mr Ciarian Faherty were selected as one of fifteen (15) teams to reach the finals of the Clubs NSW 2013 Chef’s Table competition. Together they created an innovative and enticing three (3) course menu which will be showcased in the Esperanto Dining Room after the final event.

The ‘Chef’s Table’ competition was created by Clubs NSW to recognise the many talented chefs, cooks and apprentices in clubs across New South Wales.

We wish them the best of luck in the competition this year.

Rule Changes Proposed by 13 Members

The Committee has recently received a written requisition by thirteen (13) members for the Committee to convene a General Meeting for the purpose of considering resolutions involving Club Rule changes.

The requisition sought a total of eight (8) Rule changes.  Legal opinion received by the Committee was to the effect that only three (3) of the eight (8) proposed Rule changes were appropriate to be put to the members for voting on.  The Committee has resolved that these three (3) proposed Rule changes will be put to members.

Please see the Notice of General Meeting in this magazine giving full details.  The voting will be by postal vote.  The voting papers will be accompanied by short submissions for and against the proposals.  The Committee will not be supporting any of the three (3) proposals.

Conclusion

I ask all members who can make it to take the trouble to come along to the AGM in May, as the Club may be entering a very exciting phase.  I also encourage all members to participate in the postal elections for Committee in May 2013 and in respect of the proposed Rule changes sought by 13 members in June 2013.

Patrick Campion
Chairman

Trading in the run up to Christmas was good and I thank you for your support over that period.

The post Christmas/January period is typically slow. As always, I encourage you to continue to use the Club facilities as often as you can.

I am pleased to advise that CTC have met all Bank covenants and a full trading report will be included in the May 2013 magazine, in line with the Annual General Meeting financial information.

Annual General Meeting, Committee Elections and Life Members

The Annual General Meeting (AGM) for 2013 will be held on Tuesday 21 May 2013 at 6.00pm in the Celebrity Room.

The final date for Committee Election nominations is 26 April 2013. The Committee Election ballots will be determined by a postal vote by all eligible members.

The results of the Committee Election ballots will be announced on 22 May 2013.

As usual, the Committee will be putting forward a resolution at the AGM to elect members to Life Membership of CTC. This year 231 members have attained 40 continuous years as a Gold or Silver member.

If this resolution is passed, a celebratory luncheon will be held in the Club on Friday 24 May 2013 to present these members with their Life Membership badges.

Airspace & Information Evening

The Information Evening took place on Tuesday 4 December 2012. Sadly, it was very poorly attended. The possible development of our airspace is a very big issue for the Club and I ask members to take an interest.

A summary of the presentation given at the Information Evening will soon be put on the website for your information. I hope that there will be more interest at the next Information Evening (presently proposed for June 2013).

Following the Information Evening, the Committee unanimously passed a resolution that the Club obtain a Pre-Development Advice from the Sydney City Council at a cost to the Club not exceeding $100,000. That Advice is expected to be received in or about May 2013.

Armed with that advice, the Club will be in a strong position to ‘feel the market’ in relation to the airspace development proposal. Once this is received, the Club will update members at the Annual General Meeting and the next Information Evening.

Office of Liquor, Gaming & Racing (OLGR) Inquiry

There has still been no determination of this matter by the OLGR. We remain confident that there will be no adverse findings.

2013 Membership Renewals

As you will be aware, the renewal period is drawing to a close. I urge those members who have not renewed their membership to do this immediately.

Renewing your membership is easy, just go to www.citytatts.com.au. Your membership form allows you to select if you wish to continue to receive your quarterly magazine electronically or by post. City Tattersalls Club is dedicated to being environmentally friendly and sending the quarterly magazine electronically to members allows the Club to take advantage of a very cost effective measure. I encourage members to opt to receive the magazine electronically.

Members’ Badge Draw

I am pleased to announce the Club has introduced an exciting new Members’ Badge Draw where up to $30,000 cash can be won!

Members need to be present to win. The first badge draw takes place on Tuesday 5 March 2013, where you could win $5,000. This amount, if not won, will jackpot by $500 each draw until it’s won. Draws take place twice per week each Tuesday and Thursday evening at 6.30pm with the final draw on 29 August 2013, when a maximum of $30,000 cash could be won.

I encourage you not to miss out on the opportunity of winning!! You only need to be present at the draw to win, so make sure you come in. For more detailed information, please see page 7 of the magazine.

Boonoona Ski Lodge Bookings

As advised in the Chairman’s Message Update October 2012, the Club can no longer rely only on members to fill the Boonoona Ski Lodge.

Members had an exclusive booking period from 14 November 2012 to 14 January 2013 at member friendly rates. However, after 14 January 2013, the Club has been also selling bookings online through the Perisher Website. Members however should still book at the ‘member friendly’ rate through the Club website (www.citytatts.com.au).

I encourage all members to take advantage of this offer.

Children’s Christmas Party

The seventh annual Children’s Christmas Breakfast Party was held in Zest Restaurant on Tuesday 4 December 2012. The function was well attended and the focus was on two (2) inner Sydney charitable organisations; The East Sydney Community Based School and The Girls & Boys Brigade.

The children had a wonderful time. Santa was there. Presents were distributed and even the parents got some rewards. I thank CTC staff for doing a great job in providing breakfast for all. Our Club once again pledged $20,000 to each of these great charities which support children, youth and their families who often experience significant socio-economic challenges in their lives. I would also like to thank the following organisations who contributed to the success of the morning:

• MIXFM • Hong Australia • Foodlink • Haverick Meats • M&G Oyster Supplies

I think we can all be very proud of what our Club has done and continues to do in the charitable giving space.

Club Doctor

Negotiations are currently in progress with a new Doctor for the Club. Once these negotiations are concluded, information will be placed on the Club’s website advising full details of the new Doctor and his hours of operation. For newer members, the Club Doctor is located on Level 2 in the Administration area.

Men’s Fitness Centre Reconfiguration

Work on the Men’s Fitness Centre reconfiguration has now been completed. I urge members who possibly have not used the Men’s Fitness Centre for a while, or for those who are interested in seeing what the Club has to offer, to visit the Men’s Fitness Centre.

Conclusion

Best wishes to members for a prosperous and healthy 2013 and I encourage all members to support your Club throughout 2013.

Patrick Campion
Chairman

I encourage members to support the Club over this Christmas/New Year quarter so that we finish the year on a strong note.

Recent Publicity
The August newspaper articles concerning our Club were rejected by most members who have provided feedback.  The support for our Club following the publications was overwhelming and I thank you for it.  The week following the publications was the busiest in the Club for years as members flocked in to show their support.  The many letters and comments I received all supported the Committee, Management and our staff.

Report on Annual Planning Conference
For those who may not have seen it, I published a Chairman’s Message Update on the Club’s website and relating to the Planning Conference that happened in September.  I commend that Update to you.

Website
As I mentioned in that Update, I propose to publish further updates from time to time to keep members abreast of important issues.  I encourage members to check the Club website for updates throughout 2013.

Airspace
In my prior messages, I have advised that the Committee has undertaken preliminary investigations into how the Club might best develop and take advantage of its airspace asset.  All investigation results have been positive so far and we have reached the point where, if we are to keep this initiative moving forward, on the advice of Colliers we must seek clarification by Sydney City Council in regards to the essential planning elements affecting any proposed development.  To achieve this we must spend some money (up to $100,000) to obtain a Pre-Development Application advice from the Sydney City Council.  Colliers advise that it is in the Club’s best interest to obtain this advice from the Council prior to any discussions with potential development partners.

Before proceeding to obtain the Pre-DA advice, the Committee wants to let members know exactly where our investigations have taken us so far and what is being proposed for the purpose of the Pre-DA submission.  While the Committee is empowered under the Club Rules to authorise the expenditure of funds to obtain a Pre-DA Application advice from the Sydney City Council, we are particularly interested in members’ views and feedback before that decision is made.

We therefore intend to hold an informal meeting at 6:00pm in the Celebrity Lounge on Tuesday 4 December 2012 and I invite all interested members to attend.

Office of Liquor, Gaming & Racing (OLGR) Inquiry
In my August statement to members, I reported that owing to further agitation by a few members, the OLGR had instigated a further inquiry into the remuneration arrangements for senior executives, including the CEO.

The Committee received written advice from the independent Tax Accountant RSM Bird Cameron confirming that the salary sacrifice arrangements offered to the senior executives is not a loan to them.  The advice is entirely consistent with previous advice received from RSM Bird Cameron and is supportive of the Club’s position on this issue.  The advice has been forwarded to the OLGR as part of the Club’s continuing co-operation with the inquiry.

The OLGR has also recently served notices to provide information and documents on RSM Bird Cameron and the Club’s Auditor, KPMG.  Both of those organisations have forwarded documents and information to the OLGR in response to the notices. The information forwarded by RSM Bird Cameron again confirms that the salary sacrifice arrangements offered to the senior executives are not loans to them.

We had hoped that this matter could be quickly finalised, but that has not been the case.  The Club is now waiting to hear from the OLGR as to the matters raised.  Whilst the Club is hopeful of a determination soon, it remains to be seen whether the OLGR will require further information before the matter is finalised.

2013 Membership Renewals
As you will be aware, the renewal period is upon us.

As a valued Gold, Silver or Life Member renew before 30 November 2012 and you will receive a $25.00 dining voucher to use in either the Esperanto Dining Room or Zest Restaurant.  Social Members are welcome to upgrade to Gold or Silver memberships to receive this offer.  Conditions apply.

Renewing your membership is easy, just go to www.citytatts.com.au.  Your membership form also allows you to select if you wish to continue to receive your quarterly magazine via the post.  City Tattersalls Club is dedicated to being environmentally friendly and sending the quarterly magazine electronically to members allows the Club to introduce a very cost effective measure.  I encourage members to opt to receive the magazine electronically.

Member Get Member Offer
Take advantage of the new Gold Membership offer with your family and friends!

As a 2013 member, simply introduce a new Gold Member to join the Club and you will receive a $55.00 City Tattersalls Club gift voucher to spend within the Club.  This offer is only available from 1 December 2012 – 31 January 2013.  Refer to page 2 in the magazine for more details.

When joining a new Gold Member for $70.00 the new member receives a $100.00 gift voucher to use within the Club and one (1) month FREE Fitness Centre Membership.  Please see our website or talk to our friendly customer service staff for full details. Conditions apply.

Boonoona Ski Lodge
As stated in the Chairman’s Message Update, the occupancy at Boonoona Ski Lodge for the 2012 Ski Season was the worst to date, even though the skiing conditions were the best in the past decade.

As a result, Management has identified that the City Tattersalls Club skier database is no longer large enough to secure the required occupancy during the ski season.  Over the past 5 years the ballot has been undersubscribed and the occupancy levels have continued to decline.

As the Club has invested large capital expenditure in upgrading the facilities, adding bed licences and extending the lease at the Lodge, it is imperative that the Club now takes advantage of the Perisher website, in order to attract more skiers (and possibly more Club members).

City Tattersalls Club Members will be provided with a member friendly rate and an exclusive booking period from 14 November 2012 until 14 January 2013.

After this period, members may still book directly using the City Tattersalls Club website however, all remaining room nights will be listed online through the Perisher website.  All rates advertised through the Perisher website will include a Gold Club Membership to ensure Boonoona Ski Lodge remains a member’s only amenity.

For the 2013 Ski Season, changes will be as follows:

Ballot System
There will no longer be a ballot system for members to book accommodation at the Lodge.
All member reservations will be made through the City Tattersalls Club website or the Customer Service Team and bookings will be confirmed within one (1) working day.

Ski Season Prices
The Ski Season will now include low, shoulder and high periods and only one (1) rate will apply for children aged between 3 – 17 y/o. When booking within the Member exclusive period a non-refundable holding deposit of $50.00 per adult will be required at the time of booking, with a further 50% deposit required by 14 January 2013.  Any booking made after this period will require a 50% deposit, made within 7 days of booking.  Full payment is required 45 days prior to arrival.

Room Configuration
Boonoona Ski Lodge has 14 rooms with 50 bed licences. There will now be a minimum per person base applied to each room to ensure we maximise occupancy throughout the season. Room configurations will range from a minimum of 2 – 4 guests per room.

Booking Cancellation Periods
The booking cancellation period for members has been increased from 30 days to  45 days prior to arrival due to the Club not being able to resell accommodation within the 30 day period.  All bookings made through the Perisher Valley website will be subject to a 60 day cancellation policy.  We encourage members to take out travel insurance to cover any last minute cancellations within the 45 day period.
Full details regarding new rates, room configurations, holding deposits and booking cancellation policies will be available on the City Tattersalls Club website from 14 November 2012.

We appreciate your support and hope you value the benefits provided to you as a member.  Please book your Boonoona Ski Lodge experience between 14 November 2012 and 14 January 2013 to ensure your accommodation is secured.

Men’s Fitness Centre Reconfiguration
After research being undertaken and feedback from members, it has been identified that the Men’s Fitness Centre does not offer the variety of group fitness classes which is critical to today’s market offering.  I am pleased to advise that, in January 2013, the Club will be implementing the following changes to the Men’s Fitness Centre:

1^st Floor

• New floor covering of the Fitness Centre entrance.
• Maintenance of the lockers within the change room.
• Relocating the Manager’s office to the Massage Room and vice versa for easier access to the Manager.  This also allows the massage room to be more conducive and private for members’ benefit.

Basement

• Relocation of the current room layout to include all existing equipment and introducing a themed area focussing primarily on boxing.
• Implementing new wall mounted cardio boxing equipment and freestanding punching bags plus other equipment to allow for a new group boxing class workout.
• Cycle classes to be introduced which will be located in a dedicated carpeted room with noise control, lighting and music.  This room will be situated in what is currently the third racquetball court.

The Club discussed the introduction of the cycle classes with the Racquetball Subsidiary Club before making any decision.

I urge all Fitness Centre members to try the new cycle classes.  I have been informed that these classes are fantastic for shaping and toning your lower body and increasing the fitness level with low impact intensity.

There will be no changes to the current classes or times, inclusive of the racquetball schedule.  Official classes will now be offered Monday to Friday every morning and every evening with the new classes being implemented upon completion of the new work.  All work is scheduled to commence in early January 2013 and be completed by late January 2013 allowing for the least amount of inconvenience to members.

At no time during the work period will the Fitness Centre close.  However, access to the entrance will be relocated for a short period of time to allow the work to take place.  It is anticipated that minor inconvenience may occur to the Basement area in the early part of January along with some restriction of the racquetball courts reduced to only one in use for 3 weeks while the work is undertaken.

A schedule of all works will be displayed in the Fitness Centre area in late December 2012.  If members have any questions, please contact the Fitness Centre Manager.

I also advise that a Life Member, Mr Harold Cadell who passed away in May 2012, has left the Club $4,000 in his Will to be used in the Fitness Centre.  Mr Cadell was a regular in the Fitness Centre particularly in the boxing section.  The Committee have decided to put the $4,000 towards the cost of the renovations and to have a plaque installed in the new boxing area acknowledging Harold’s generosity.

Last but not least, the Committee have decided to name the two (2) Racquetball Courts after Mr John Healy (Court 1) and Mr Kevin Smith (Court 2) in recognition of their dedication to the Fitness Centre and to racquetball.

Ladies Fitness Centre Upgrade
In October 2012, the City Tattersalls Club upgraded a section of the Ladies Fitness Centre by purchasing new Keiser bikes and including 3 additional cycle classes to the class time table.

Employees of the 2^nd Quarter 2012
The employees of the 2^nd Quarter 2012 have been named.  The winners for the Front and Back of House quarter were:
Front of House – Ms Emma Heseltine
Back of House – Mr Paul Jennings

I congratulate the winners and all other employees who received nominations for these awards.

City Tattersall’s Club – Race Day
On Saturday 20 October 2012, the City Tattersall’s Club held its annual Race Day at Randwick Race Course with all attendees having a great day.

As stated in the September 2012 Advice to Members, I will report to members later in the year or early next year whether the Club has been able to reach an agreement with the Australian Turf Club for future years.

Club Grants
The Club Grants presentation was held on Wednesday 29 August 2012.  This year there were 43 successful charities receiving a total of $412,361 with the City Tattersalls Club donating $281,511 through the Local Committee and a further $99,622 donated through the Club Committee.

Further particulars of the donations can be found on the community pages of this magazine.

I take this opportunity to wish all members a wonderful Christmas, good health and prosperity in 2013.

Patrick Campion
Chairman

I intend to embrace that suggestion and what follows is a concise report of the recent conference.  I will use the Club’s website to report on other important matters as they arise, rather than having to wait for the quarterly Chairman’s Message in the Club magazine.

FORMAT

The Conference was held at the Club over the full day (until 5:00pm) on Saturday 15 September 2012.  Following that day, the Executive Team went to work over the following three (3) days (17 – 19 September 2012) considering and planning the decisions made and action items given by the Committee on the Saturday.  The proposals of the Executive Team were then brought before the Committee for consideration and discussion on Monday 24 September 2012.

BUDGET & FORECASTS

The first part of the Saturday was spent considering and discussing the revised budgets to the end of this year and a revised forecast budget for 2013 prepared by Management.  This involved detailed consideration of debt levels, cashflow, the overdraft, interest cover ratio and the performance of each department in the Club.

Particular emphasis was put upon the performances in the gaming, food and beverage areas and the performance of Boonoona Ski Lodge.  These areas are dealt with further below.

GAMING MACHINE ENTITLEMENTS

The Committee received a comprehensive report from an Industry Expert comparing our Club’s poker machine performance with other clubs and venues across Sydney.  The report related in particular to the number of machines in the venue and their performance profiles.

The report showed that profitability was not a reflection of the number of machines.  It concluded that our Club was “over machined”.  The reason for the number of machines we have is simply that our Club took as many gaming machines entitlements as it could get just prior to the NSW Government freeze in approximately 1999.  There was no ‘science’ applied to the number of entitlements we should have, just a belief that ‘more is best’.  The report received showed that a well run, cutting edge gaming venue with less machines is likely to do as well, if not better, than a venue with more machines and at substantially less cost both in capital expenditure and ongoing running costs.

In view of this, the decision was made to sell over the next six (6) months some of the Club’s entitlements that are in excess of its needs.

The Committee is confident that this will not adversely impact on our current and future gaming revenue and as some of the funds received are to be used to update the current fleet of machines and systems, it should in fact improve revenue.

RESTAURANTS & CAFE

The performance of and forecasts for the restaurants and cafe were considered and discussed at length.  This was a long session with a range of options discussed in relation to how performance might be improved.  Prior research was reviewed.

The conclusion was that the current model for the restaurants and cafe, in the current economic conditions of the CBD, cannot continue unchanged.  Management must come back to the Committee with possible alternatives and this will occur over the next six (6) months.  I will report further to members on this topic.

BOONOONA SKI LODGE

It was noted that it was our worst year for Boonoona Ski Lodge (and a bad one for the Australian ski fields generally).  The year was well down on 2011 and that year was well down on all previous years.  It was clear to the Committee that we can no longer rely only on members to fill our Lodge.  The issue was left with Management to take necessary steps to maximise Lodge placements, whether by members or by non-members with a view to keeping the Lodge a viable asset for the Club.

Management has come back with proposals and I will report on what has been done later.

GOVERNANCE IMPROVEMENTS

The Committee continued its strong focus on governance issues.

Consultgroup has been working assisting the Committee with the identification of key performance indicators (KPI’s) for the Chief Executive Officer and other senior executives and the processes for measuring performance against those KPI’s.  In the course of doing this work, Consultgroup has identified other areas of governance for the Committee’s consideration.

At the conference, the Committee considered a submission by Consultgroup in relation to the preparation of a comprehensive manual of governance policies to guide the Committee into the future.  The manual is to properly document existing verbal policies as well as provide additional protocols and policies for areas not adequately addressed in the current governance framework.

After due consideration and discussion, the Committee accepted the proposal and appointed Consultgroup to complete the work recommended in the submission.  These governance improvements will progress through the rest of this year and into 2013.  (Refer to point 4 in Letter to Members sent on 13 August 2012).

DISCUSSIONS WITH COLLIERS

The previous Chairman’s Message informing members that the Committee has had experts from Colliers advising about the feasibility of developing the airspace above the Club.

At the conference, the Committee received a further progress report from Colliers regarding the further investigations undertaken.  So far, the investigation findings have all been positive, but it is still early days.

The Committee decided to have Colliers continue their investigations including a more detailed enquiry of the Sydney City Council.   These further investigations remain preliminary and without cost to the Club.

As previously advised, no decision will be made concerning any development without the approval of members.  In this regard the Committee will be proposing to call a briefing meeting of members at the appropriate stage to fully appraise you of where and how things have progressed and invite comment and feedback.

I will have more detail in my message in the November Magazine Edition.

CONCLUSION

I will also continue to build upon the above issues and other important matters in future messages in the Club Magazine and by way of further website publications.

Patrick Campion
Chairman

We asked the ATC to have regard to the Club’s rich history with the Australian Jockey Club (AJC) and our Club’s long involvement with Randwick Racecourse and to reconsider what they were proposing in respect of our Club’s Race Day.

We are pleased to report that, after high level discussions with the ATC, the amended proposal for 2012 is acceptable.  Even though the ATC has halved the number of complimentary tickets available to members, we are confident that the vast majority of members wishing to attend on the day will be able to be catered for.

However, the ATC indicated that it will want to discuss with us a package for 2013 and beyond.  It is clear that the ATC intends to increase its prices, so I will report to you later this year or early next year whether we have been able to reach an agreement and, if so, the details of that agreement and the package.  We are reasonably confident that a satisfactory package will be negotiated.

Patrick Campion
Chairman

You may have read two articles in the Sydney Morning Herald, weekend edition (11-12 August 2012).

The Committee and management assure you that things are not as the articles would have you believe and the future of our Club is secure.

I can confirm to you that there are concerted efforts going into the effective management of the Club. These efforts have already given rise to a notable increase in Club membership this year reversing the trend of past years.

Dealing with the major issues in the articles, I advise you as follows:

1. The Club’s Overall Financial Position

The trading activities of the Club are in total operating at a healthy profit.

The purchase of 194 Pitt Street in 2007 (which members voted for) has resulted in holding costs and, if it were not for these, our profit last year would have been significantly in excess of $600,000.

While 194 Pitt Street is causing us some present pain, we remain strongly of the view that this acquisition was and remains a positive for our Club.

Our recent feasibility discussions with Colliers (see below) have revealed that the ownership of 194 Pitt Street is crucial to our ability to develop the airspace above our Club.

You should keep in mind that we can reasonably quickly sell the building should the need arise.

2. Discussions with Colliers

As stated in the most recent Chairman’s Message to members, we have been talking to experts (Colliers) about the feasibility of developing into the airspace. The discussions are only preliminary at this stage. There is no intention to sell any part of the Club’s land or buildings and nothing will be done without approval of members.

3. Cashflow and Creditors

As with many businesses, our Club is experiencing a current cashflow issue but it is managing creditors and suppliers and monitoring debt levels closely. Our bank remains fully supportive of the Club and we continue to meet all bank covenants. We have been looking at cashflow and are actively looking at ways to address this issue. I will be reporting to you in the future in this regard.

4. Committee Focus & Governance

The assertions about the CEO are incorrect. The Committee has confidence that he is managing the Club competently in difficult times.

Rule changes that were made about 5 years ago are nothing more than aligning the Club rules with modern principles of corporate governance.

Further, two months ago, the Committee engaged an independent consultant to assist the Committee to properly analyse and test the performance of the CEO and other executives. The same consultant is also advising and assisting us to improve our general governance framework.

I remind you that I have been the Chairman for only 15 months. I have been focussed on improving governance and the engagement of this consultant is the first major initiative in this direction.

5. Inquiry by Office of Liquor, Gaming & Racing (OLGR) re Payments to CEO

There was a previous inquiry on this issue which found no problem at all. Owing to further agitation by a few members, there is now a further inquiry into the same issue.

The Committee has arranged for written advice from the independent tax accountant RSM Bird Cameron confirming that the arrangement was not a loan to the CEO. This will be in addition to their previous advice. On receipt, this additional advice will be forwarded to the OLGR as part of our continuing cooperation with the objective of achieving a speedy determination.

6. Donations to Aboriginal Health Charity

Our Club donates in excess of $300,000 to charities each year. The Committee has discretion as to what charities will benefit and how much they might receive.

The Committee in 2007 received an application for a donation to assist the Pius X Medical Clinic in the memory of Dr. John Campion who served as the Club’s Doctor for over 25 years. This clinic, which Dr. Campion had been involved in establishing in the mid 1950′s, is concerned with aboriginal health in country NSW.

In view of my family connection (John Campion was my father and the application was made by my brother), I took no part in the consideration of the donation request. The Committee (with me abstaining from voting) approved the donation for what they regarded as a very worthwhile cause.

I would appreciate members’ feedback on this issue. If members think it is appropriate, the Committee is prepared to consider the introduction of a blanket ban on any relative or associate of a Committee member applying for a charitable donation.

7. Restaurant Losses

Our restaurants are benefits and services to members and are, and always have been, heavily subsidised. This is a usual business model for a Club and so should not be a surprise to anyone. We always try hard to run them as efficiently as possible. The Committee has been looking at how the restaurants might be changed to better serve members and achieve greater efficiencies.

8. Architect & Consultants

As the article states, there is nothing improper about the way the Club has used its architect and consultants. The Committee has at all times approved the use of these people.

The Club has and will continue to put the bigger jobs out to tender. However, for smaller jobs the Committee believes that using an architect and consultants with strong knowledge of the Club, the buildings and the Club’s culture is the most cost and time effective approach.

9. Business Planning Conference

The Committee has for the last several years had one planning weekend annually at an off-site venue. The weekends involve serious planning and business strategising. These conferences are an important part of the Committee’s education on current developments and evolving trends of the club industry generally and of modern governance in particular. The suggestion that they are ‘jaunts’ or ‘junkets’ is completely untrue.

Due to the cashflow issue referred to above, all non essential expenditure is being pared back and the proposed conference in Melbourne this year has been deferred.

10. Disgruntled Members

These members who have initiated the recent publicity have caused serious and time consuming distraction from the Committee’s and management’s real task of managing the Club. The damage and the financial costs to the Club are huge! The biggest single present threat to the survival of our Club is the activity of these members.

11. Conclusion

I want to assure you that, despite the difficult times, the future of our Club is secure.

The Committee is passionate about our Club and is focussed on providing the best possible member services to you while maintaining high standards of corporate governance.

For members who disagree with the Club’s current direction, please feel free to bring your concerns to the Committee. We definitely welcome your feedback. If you would like to discuss any matters with me directly, please call Jan Ellks on (02) 9287 6435 to arrange a mutually convenient time for us to meet.

The Committee thanks you for your support and continued patronage of the Club and we look forward to seeing you here.

Patrick Campion
Chairman